Auditor’s Report for Y2025
I. Auditor’s Report
II. Audited Financial Statements
1. Consolidated Balance Sheet
2. Balance Sheet
3. Consolidated Income Statement
4. Income Statement
5.Consolidated Cash Flow Statement
6.Cash Flow Statement
7. Consolidated Statement of Change in Owners’ Equity
8. Statement of Change in Owners’ Equity
9. Notes to the Financial Statements
10.Supplementary information to the financial statementsI. Independent Auditor’s Report
Unqualified Opinion with a Paragraph on Material
Type of the independent auditor’s opinion
Uncertainty Related to Going Concern
Date of signing this report April 27 2026
ShineWing Certified Public Accountants (Special General
Name of the independent auditor
Partnership)
Reference number of audit report XYZH/2026SZAA8B0071
Name of the certified public accountants Gu Fanqiu Liu Lihong
Main body of the audit report
Audit Report
XYZH/2026SZAA8B0071
Konka Group Co. Ltd.To all shareholders of Konka Group Co. Ltd.:
I. Auditor's Opinion
We have audited the financial statements of Konka Group Co. Ltd. (hereinafter referred to
as the "Konka Group") including the consolidated and parent company's balance sheet as
at December 31 2025 the consolidated and parent company's income statement
consolidated and parent company's statement of cash flows consolidated and parent
company's statement of changes in shareholders' equity as well as the related notes to
the financial statements for the year then ended.In our opinion the attached financial statements are prepared in all material respects in
accordance with the Accounting Standards for Business Enterprises and fairly present the
consolidated and the Company's financial position of Konka Group Co. Ltd. as at
December 31 2025 and the consolidated and the parent company's operating results and
cash flows for the year then ended.II. Basis for the Audit Opinion
We have conducted our audit in accordance with the Chinese Auditing Standards for
Certified Public Accountants. Our responsibilities under these standards are further
described in the "Certified Public Accountant's Responsibilities for the Audit of Financial
Statements" section of the audit report. In accordance with the independence
requirements of the Independence Standards for Certified Public Accountants of China
and the Code of Ethics for Certified Public Accountants of China applicable to the auditing
of financial statements of public interest entities we are independent of Konka Group Co.Ltd. and have fulfilled our other responsibilities in terms of independence and professional
ethics. We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our audit opinion.III. Material Uncertainty Related to Going Concern
We draw the attention of the users of the financial statements to the fact that as stated in
Note III. 2 to the financial statements the consolidated net profit of Konka Group Co. Ltd.for the year 2025 was RMB -12.238 billion and as of December 31 2025 Konka Group
Co. Ltd.'s net assets in the consolidated financial statements were RMB -5.860 billion
with a debt-to-asset ratio of 126.22%. The aforesaid matters or conditions along with
others set forth in Note III.2 to the financial statements indicate the material uncertainty
that may cast significant doubt on the Group's ability to continue as a going concern. Such
matter does not affect the audit opinion that has been expressed.IV.Key Audit Matters
Key audit matters are those matters that in our professional judgment are of most
significance in our audit of the financial statements of the current period. These matters
are addressed in the context of our audit of the financial statements as a whole and in
forming our opinion thereon and we do not provide a separate opinion on these matters.
1. Revenue Recognition
Key Audit Matters Responses in Audit
For relevant information disclosure please refer to the (1) Evaluated and tested the effectiveness of the
accounting policies described in Note "IV. Significant designing and operation of key internal control related to
Accounting Policies and Accounting Estimates 34" and "VI. revenue recognition;
Notes to Major Items in the Consolidated Financial (2) Obtained the executed sales contracts analyzed the
Statements 49" of the financial statements. relevant terms of the sales contracts and evaluated
Konka Group Co. Ltd. recognized operating revenue of whether the revenue recognition policies of Konka Group
RMB 9.835 billion yuan in its consolidated financial Co. Ltd. comply with the provisions of the Accounting
statements for the year 2025 which mainly consisted of Standards for Business Enterprises;
revenue from businesses such as color TVs white goods (3) Obtained the list of product sales customers of Konka
printed circuit boards and semiconductors. Due to the Group Co. Ltd. and identified whether there is a related-
significance of revenue to the financial statements as a party relationship between the customers and Konka
whole and the risk of material misstatement that Group Co. Ltd. by means such as checking the
management may manipulate revenue recognition to industrial and commercial information of the customers;
achieve specific goals or expectations we identified revenue (4) Performed analytical procedures on revenue and
recognition as a key audit matter. costs to evaluate the rationality of changes in sales
revenue and gross profit margin on sales;
(5) Checked documents such as significant sales
contracts orders invoices certificates of transfer of
property rights and bank receipts to verify the
authenticity completeness and accuracy of the revenue;
(6) Performed cut-off tests on sales revenue.
2. Impairment of External Financial Assistance Funds
Key Audit Matters Responses in Audit
For relevant information disclosure please refer to the (1) Understood evaluated and tested the designing and
accounting policies described in Note "IV. Significant operating effectiveness of the Management's key internal
Accounting Policies and Accounting Estimates 11" and "VI. controls related to external financial assistance;
Notes to Major Items in the Consolidated Financial (2) Obtained the relevant review documents loan
Statements 7" and "VI. Notes to Major Items in theConsolidated Financial Statements 10" to the financial contracts equity pledge contracts minutes of meetings
statements. and other original documents relating to the external
The external financial assistance by Konka Group Co. Ltd. financial assistance with Konka Group Co. Ltd. and
was mainly the shareholders' financial assistance funds checked whether the lending process of such external
receivable from associates. As of December 31 2025 the financial assistance was compliant;
balance of such financial assistance funds was RMB 2.102 (3) For the overdue financial assistance payments
billion with a provision for bad debts of RMB 1.290 billion. consulted with the Management of Konka Group on the
Given the significance of the external financial assistance to operating conditions of the relevant investees and the
the financial statements as a whole and that provision for Company's follow-up plans;
impairment of the related assets involved significant (4) For the amounts of external financial assistance with
management judgments and estimates we identified the indications of impairment obtained the information on
impairment of external financial assistance as a key audit the Management's estimated recoverable amount and
matter. brought in valuation experts from the accounting firms to
assist in reviewing key parameters and assumptions
adopted by the Management in evaluating expected
credit losses as well as checking the accuracy of the
calculation of the recoverable amount;
(3) Evaluated the competence professionalism and
objectivity of the external valuation experts engaged by
the Management; and
(6) Examined the presentation and disclosure of
information relating to impairment of external financial
assistance in the financial statements.
3. Impairment of long-term assets
Key Audit Matters Responses in Audit
For relevant information disclosure please refer to the (1) Understood and assessed the internal control of
accounting policies stated in Note IV. Significant Accounting Konka Group Co. Ltd. related to identifying indicators of
Policies and Accounting Estimates (Items 20 21 22 23 26 impairment of each long-term assets and measuring
and 27) and Note VI. Notes to Major Items of Consolidated recoverable amounts and tested the effectiveness of key
Financial Statements (Items 12 14 15 16 and 18) in the internal control;
financial statements. (2) Discussed with the Management of Konka Group
The significant long-term assets of Konka Group include Co. Ltd. to understand whether the management's
long-term equity investments investment properties fixed business strategies for the relevant long-term assets
assets construction in progress and intangible assets. As of have changed and analyzed whether there is any inter-
December 31 2025 the total carrying amount of the period and over-accrual of provision for impairment of
aforesaid assets amounted to 8.587 billion yuan with long-term assets;
accumulated impairment provisions of 6.985 billion yuan (3) For assets or asset groups with indications of
accrued. Given the overall materiality of these long-term impairment obtained the information on the
assets to the financial statements and the fact that the Management's estimated recoverable amount and
accrual of relevant asset impairment provisions involves brought in valuation experts from the accounting firms to
significant management judgments and estimates we have assist in reviewing key parameters such as the
identified the impairment of long-term assets as a key audit measurement model based on which the recoverable
matter. amount was measured the fair value the disposal costs
the projected data of future cash flows and the discount
rate as well as checking the accuracy of the calculation
of the recoverable amount;
(4) Evaluated the competence professionalism and
objectivity of the external valuation experts engaged by
the Management; and
(5) Examined the presentation and disclosure of
information relating to impairment of assets in the
financial statements.V. Other information
The Management of Konka Group Co. Ltd. (hereinafter referred to as the Management) is
responsible for other information. Other information includes information covered in the
2025 Annual Report of Konka Group Co. Ltd. but excludes the financial statements and
our audit report.Our audit opinion on the financial statements does not cover the other information and we
do not express any form of assurance conclusion thereon.In connection with our audit of the financial statements our responsibility is to read the
other information and in doing so consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained during the audit or
otherwise appears to be materially misstated.If based on the work we have performed we conclude that there is a material
misstatement of the other information we are required to report that fact. We have nothing
to report in this regard.VI. Responsibilities of the Management and Governance Executives for Financial
Statements
The Management is responsible for preparing the financial statements in accordance with
the requirements of the Accounting Standards for Business Enterprises to achieve a fair
presentation and for designing implementing and maintaining internal control that is
necessary to ensure that the financial statements are free from material misstatements
whether due to fraud or errors.In preparing the financial statements the Management is responsible for assessing the
going-concern ability of Konka Group Co. Ltd. disclosing matters related to going concern
(if applicable) and applying the going concern basis unless the management plans to
liquidate Konka Group Co. Ltd. terminate its operations or has no other realistic
alternative.The governance executives are responsible for overseeing the financial reporting process
of Konka Group Co. Ltd.VII. Responsibilities of Certified Public Accountants for the Audit of Financial
Statements
Our objectives are to obtain reasonable assurance about whether the financial statements
as a whole are free from material misstatement whether due to fraud or error and to issue
an audit report that includes our opinion. Reasonable assurance is a high level of
assurance but is not a guarantee that an audit conducted in accordance with the audit
standards will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if individually or in aggregate theycould reasonably be expected to influence the economic decisions of users taken on the
basis of the financial statements.We have exercised professional judgment and maintained professional skepticism in
performing our audit under the auditing standards. At the same time we also perform the
following work:
(1) Identify and assess the risks of material misstatement of the financial statements
whether due to fraud or error design and perform audit procedures responsive to those
risks and obtain audit evidence that is sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement resulting from fraud is higher
than for one resulting from error as fraud may involve collusion forgery intentional
omissions misrepresentations or the override of internal control.
(2) Understand the internal control related to the audit so as to design appropriate audit
procedures.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the management.
(4) Draw conclusions on the appropriateness of the management's use of the going
concern basis. Meanwhile based on the audit evidence obtained a conclusion is drawn as
to whether there is a material uncertainty in events or circumstances that may give rise to
significant doubt about the going concern ability of Konka Group Co. Ltd. If we conclude
that a material uncertainty exists we are required to in our audit report draw the attention
of the users of statements to the related disclosures in the financial statements; if such
disclosures are inadequate we should modify our opinion. Our conclusions are based on
the audit evidence obtained up to the date of our audit report. However future events or
circumstances may cause Konka Group Co. Ltd. to cease to continue as a going concern.
(5) Evaluate the overall presentation structure and content of the financial statements and
whether the financial statements fairly reflect the relevant transactions and events.
(6) Obtain sufficient and appropriate audit evidence regarding the financial information of
the entities or business activities within Konka Group Co. Ltd. to express an opinion on
the financial statements. We are responsible for the direction supervision and
performance of the group audit and we remain solely responsible for our audit opinion.We communicate with those charged with governance regarding the planned scope and
timing of the audit significant audit findings and other matters including any significant
deficiencies in internal control that we identify during our audit.We also provide those charged with governance with a statement that we have complied
with relevant ethical requirements regarding independence and communicate with them
all relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.From the matters communicated with those charged with governance we determine those
matters that were of most significance in the audit of the financial statements of this period
and are therefore the key audit matters. We describe these matters in the audit report
unless laws and regulations prohibit public disclosure of these matters or in extremely rare
circumstances if it is reasonably expected that the negative consequences of
communicating a matter outweigh the benefits to the public interest we determine not to
do so.ShineWing Certified Public Accountants Certified Public Accountant of China:
(Special General Partnership) (Engagement partner)
Certified Public Accountant of China:
Beijing China April 27 2026II. Financial Statements
Currency unit for the financial statements and the notes thereto: RMB
1. Consolidated Balance Sheet
Prepared by Konka Group Co. Ltd.December 31 2025
Unit: RMB
Item Ending balance Beginning balance
Current assets:
Monetary funds 6313941885.05 4115767247.73
Settlement reserve
Interbank loans granted
Trading financial assets 202027000.00 286648129.34
Derivative financial assets
Notes receivable 77316985.56 169675176.16
Accounts receivable 1086929012.15 1315222656.92
Receivables financing 155957556.43 63943324.53
Prepayments 96105739.60 124748412.59
Premiums receivable
Reinsurance receivables
Reinsurance contract reserve
receivable
Other receivables 942267792.91 989245120.86
Including: Interest receivable
Dividends receivable
Financial assets purchased under
resale agreements
Inventories 1662246630.58 2694648186.93
Including: data resources
Contract assets 1892306.30 2630508.60
Assets held for sale
Current portion of non-current assets
Other current assets 761567941.76 2168400012.47
Total current assets 11300252850.34 11930928776.13
Non-current assets:
Loans and advances to customers
Debt investments
Other debt investments
Long-term Receivables
Long-term equity investments 2026038156.99 5921501427.49
Other equity instrument investments 10213810.20 16114932.00
Other non-current financial assets 1161781213.03 1802409887.89
Investment properties 866051475.13 1650843239.51Item Ending balance Beginning balance
Fixed assets 4405958959.37 5005836928.31
Construction in progress 516337481.93 873042499.04
Productive biological assets
Oil and gas assets
Right-of-Use Assets 130076544.83 178185679.35
Intangible assets 772231958.52 988045525.76
Including: data resources
Development costs
Including: data resources
Goodwill 22196735.11
Long-term deferred expenses 453962117.69 532181161.63
Deferred tax assets 106993555.63 1392239301.87
Other non-current assets 601006137.59 1148677970.47
Total non-current assets 11050651410.91 19531275288.43
Total assets 22350904261.25 31462204064.56
Current liabilities:
Short-term borrowings 4575915552.66 5741171468.26
Borrowings from the central bank
Interbank loans obtained
Financial liabilities held for trading
Derivative financial liabilities
Notes payable 943817767.91 1150310856.70
Accounts payable 1977736371.29 2774615788.24
Advances from customers 3426361.65 3481262.87
Contract liabilities 256506499.39 623555669.97
Financial assets sold under
repurchase agreements
Customer deposits and interbank
deposits
Payables for acting trading of
securities
Payables for underwriting of
securities
Employee benefits payable 223175513.10 243731849.78
Taxes payable 71276255.42 94612710.58
Other payables 6565100788.16 3502796381.63
Including: interest payable
Dividends Payable
Handling charges and commissions
payable
Reinsurance payables
Liabilities directly associated with
assets held for saleItem Ending balance Beginning balance
Non-current liabilities maturing within 3650840615.21 6655534395.19
one year
Other current liabilities 46377272.29 69876531.91
Total current liabilities 18314172997.08 20859686915.13
Non-current liabilities:
Insurance contract reserve
Long-term borrowings 6537926737.54 5530649801.93
Bonds payable 1596674876.37 2295193501.05
Including: preferred shares
Perpetual bonds
Lease liabilities 96858968.75 146561588.52
Long-term payables 2033227.02 5504548.24
Long-term employee benefits 4519491.87 4608659.47
payable
Provisions 852722866.97 428433732.19
Deferred income 408175795.51 393437007.37
Deferred tax liabilities 114475054.80 133299175.48
Other non-current liabilities 283739354.36 207378781.21
Total non-current liabilities 9897126373.19 9145066795.46
Total Liabilities 28211299370.27 30004753710.59
Owners’ equity:
Share capital 2407945408.00 2407945408.00
Other equity instruments 5000000000.00
Including: preferred shares
Perpetual bonds 5000000000.00
Capital reserves 406579870.80 512840575.73
Less: Treasury shares
Other comprehensive income -1866392.91 -9040290.32
Specific reserve 17197144.62 11249678.53
Surplus reserves 1244180364.24 1244180364.24
General risk reserve
Undistributed profits -15157108084.70 -2574708227.90
Total equity attributable to owners of -6083071689.95 1592467508.28
the parent company
Non-controlling interests 222676580.93 -135017154.31
Total owners’ equity -5860395109.02 1457450353.97
Total liabilities and owners’ equity 22350904261.25 31462204064.56
Legal representative: Wu Chief finance officer: Yu Head of accounting agency:
Jianjun Huiliang Wang Lihu2. Balance sheet of the parent company
Unit: RMB
Item Ending balance Beginning balance
Current assets:
Monetary funds 4870422479.05 2310021016.85
Trading financial assets 202027000.00 286648129.34
Derivative financial assets
Notes receivable 18077864.64
Accounts receivable 3546031483.05 2783399610.31
Receivables financing
Prepayments 3312810262.72 5060895887.42
Other receivables 6564549497.34 8210096432.41
Including: Interest receivable
Dividends receivable 394828312.64 397729468.60
Inventories 165333867.28 143981116.62
Including: data resources
Contract assets
Assets held for sale
Current portion of non-current assets
Other current assets 287171986.89 1621740187.04
Total current assets 18948346576.33 20434860244.63
Non-current assets:
Debt investments
Other debt investments
Long-term Receivables
Long-term equity investments 7947033374.38 9995056051.55
Other equity instrument investments 10213810.20 10213810.20
Other non-current financial assets 202032067.00 396353137.96
Investment properties 586120252.57 873925486.40
Fixed assets 375367331.52 413605136.94
Construction in progress 13474434.20 12762103.76
Productive biological assets
Oil and gas assets
Right-of-Use Assets 347027.65
Intangible assets 23160095.54 36845184.32
Including: data resources
Development costs
Including: data resources
Goodwill
Long-term deferred expenses 20782020.29 32966195.77
Deferred tax assets 667646526.22
Other non-current assets 1467871.30 969222.30Total non-current assets 9179998284.65 12440342855.42
Total assets 28128344860.98 32875203100.05
Current liabilities:
Short-term borrowings 1519153294.44 2312074875.00
Financial liabilities held for trading
Derivative financial liabilities
Notes payable 25163192.12 94034764.53
Accounts payable 3796563874.96 6342200859.52
Advances from customers
Contract liabilities 2699707593.73 2503838527.97
Employee benefits payable 37672994.15 27648867.42
Taxes payable 25675833.17 5299228.44
Other payables 7700994198.52 5638650473.74
Including: interest payable
Dividends Payable
Liabilities directly associated with assets held for sale
Non-current liabilities maturing within one year 3387594563.88 6441534654.07
Other current liabilities 7497034.93 11512394.96
Total current liabilities 19200022579.90 23376794645.65
Non-current liabilities:
Long-term borrowings 5535100000.19 4371231706.59
Bonds payable 1596674876.37 2295193501.05
Including: preferred shares
Perpetual bonds
Lease liabilities 367441.04
Long-term payables
Long-term employee benefits payable
Provisions 346428842.60 346376800.41
Deferred income 33164619.14 42829889.81
Deferred tax liabilities 42603809.42 34882051.56
Other non-current liabilities 52346890.08 44189363.15
Total non-current liabilities 7606686478.84 7134703312.57
Total Liabilities 26806709058.74 30511497958.22
Owners’ equity:
Share capital 2407945408.00 2407945408.00
Other equity instruments 5000000000.00
Including: preferred shares
Perpetual bonds 5000000000.00
Capital reserves 214160914.80 339889142.56
Less: Treasury shares
Other comprehensive income -1360579.00 -1281096.83
Specific reserveSurplus reserves 1260024039.76 1260024039.76
Undistributed profits -7559133981.32 -1642872351.66
Total owners’ equity 1321635802.24 2363705141.83
Total liabilities and owners’ equity 28128344860.98 32875203100.05
3. Consolidated income statement
Unit: RMB
Item Year 2025 Year 2024
I. Total revenue 9835474916.53 11114763969.59
Including: operating revenue 9835474916.53 11114763969.59
Interest income
Premiums earned
Handling charge and commission income
II. Total operating costs 11943907187.59 13545420123.09
Including: cost of sales 9430717918.20 10861823991.19
Interest expense
Service fee and commission expense
Surrender payments
Net claims paid
Net change in insurance contract reserves
Expenditure on policy dividends
Reinsurance premium expense
Taxes and surcharges 111476592.07 125957334.99
Selling expenses 647219068.47 774298036.87
Administrative expenses 564170838.00 651947833.46
R&D expense 386105836.96 416405840.34
Finance costs 804216933.89 714987086.24
Including: Interest expenses 871624731.68 953199337.05
Interest income 134366718.80 215619251.81
Add: Other income -544180545.00 110600310.12
Return on investment (“-” for loss) 277402566.69 -40606278.44
Including: Investment income from associates and joint
ventures -379192413.39 -134541620.49
Income from the derecognition of financial assets at
amortized cost -3484892.68 -4519585.64
Exchange gains ("-" for loss)
Net gains on exposure hedges (“-” for loss)
Gains from fair value changes (“-” for loss) -460420971.18 -363008154.15
Credit impairment loss (“-” for loss) -1520599233.40 -405967710.66
Asset impairment loss (“-” for loss) -6176184308.20 -999416234.21
Gains on disposal of assets (“-” for loss) 24500775.05 13572230.63
III. Operating profit ("-" for loss) -10507913987.10 -4115481990.21
Add: Non-operating income 23053295.76 36502107.29
Less: Non-operating expenses 459512872.49 165575114.70
IV. Total profit ("-" for total loss) -10944373563.83 -4244554997.62
Less: Income tax expense 1293239956.02 69552329.00V. Net profit ("-" for net loss) -12237613519.85 -4314107326.62
(I) By operating continuity
1. Net profit from continuing operations (“-” for net loss) -12237613519.85 -4314107326.62
2. Net profit from discontinued operations (“-” for net loss)
(II) By ownership
1. Net profit attributable to owners of the parent company -12582399856.80 -3725557221.78
2. Net profit attributable to non-controlling interests 344786336.95 -588550104.84
VI. Other comprehensive income (net of tax) 20737108.06 -2130878.00
Net of tax of other comprehensive income attributable to
owners of the parent company 7173897.41 4403268.12
(I) Other comprehensive income not reclassified to
gains/losses -5901121.80
1. Remeasurement of defined benefit plans
2. Other comprehensive income that will not be
reclassified to gains/losses under the equity method
3. Changes in the fair value of investments in other equity
instruments -5901121.80
4. Changes in fair value arising from changes in own
credit risk
5. Others
(II) Items that will be reclassified to gains/losses 13075019.21 4403268.12
1. Other comprehensive income that will be reclassified to
gains/losses under the equity method 1776376.21 1923432.88
2. Changes in the fair value of investments in other debt
obligations
3. Other comprehensive income arising from the
reclassification of financial assets
4. Credit impairment allowance for investments in other
debt obligations
5. Reserve for cash flow hedges
6. Differences arising from the translation of foreign
currency-denominated financial statements 11298643.00 2479835.24
7. Others
Other comprehensive income attributable to non-
controlling interests (net of tax) 13563210.65 -6534146.12
VII. Total comprehensive income -12216876411.79 -4316238204.62
Total comprehensive income attributable to owners of the
parent company -12575225959.39 -3721153953.66
Total comprehensive income attributable to non-
controlling interests 358349547.60 -595084250.96
VIII. Earnings per share
(i) Basic earnings per share -5.2254 -1.5472
(ii) Diluted earnings per share -5.2254 -1.5472
Legal representative: Wu Chief Accounting Officer: Yu Head of Accounting
Jianjun Huiliang Agency: Wang Lihu4. Income statement of the parent company
Unit: RMB
Item Year 2025 Year 2024
I. Operating revenue 1487823908.56 1908123924.10
Less: Cost of sales 1446499439.75 1974494601.29
Taxes and surcharges 15156638.24 16346162.85
Selling expenses 67925310.67 96063419.94
Administrative expenses 170375206.05 185596812.40
R&D expense 21951046.63 27710971.97
Finance costs 662683255.63 548355214.80
Including: Interest expenses 796095346.77 821872300.41
Interest income 202015820.38 252748895.39
Add: Other income -93932230.64 8811847.96
Return on investment (“-” for loss) 594647384.74 31201053.12
Including: Investment income from associates and joint -72737179.87 -29330307.37
ventures
Income from the derecognition of financial assets at -226103.98 -1332512.07
amortized cost (“-” for loss)
Net gains on exposure hedges (“-” for loss)
Gains from fair value changes (“-” for loss) -14563367.28 -166949370.96
Credit impairment loss (“-” for loss) -2953870112.05 -139627123.83
Asset impairment loss (“-” for loss) -1888551900.26 -278537119.21
Gains on disposal of assets (“-” for loss) 11634852.64 2842206.14
II. Operating profit (“-” for loss) -5241402361.26 -1482701765.93
Add: Non-operating income 1838690.46 11728990.17
Less: Non-operating expenses 1345966.57 71044286.57
III. Profit before tax (“-” for loss) -5240909637.37 -1542017062.33
Less: Income tax expense 675368284.08 484375831.98
IV. Net profit (“-” for net loss) -5916277921.45 -2026392894.31
(I) Net profit from continuing operations (“-” for net loss) -5916277921.45 -2026392894.31
(II) Net profit from discontinued operations (“-” for net
loss)
V. Other comprehensive income (net of tax) -79482.17 118274.81
(I) Other comprehensive income not reclassified to
gains/losses
1. Remeasurement of defined benefit plans
2. Other comprehensive income that will not be
reclassified to gains/losses under the equity method
3. Changes in the fair value of investments in other equity
instruments
4. Changes in fair value arising from changes in own
credit risk
5. Others
(II) Items that will be reclassified to gains/losses -79482.17 118274.811. Other comprehensive income that will be reclassified to -79482.17 118274.81
gains/losses under the equity method
2. Changes in the fair value of investments in other debt
obligations
3. Other comprehensive income arising from the
reclassification of financial assets
4. Credit impairment allowance for investments in other
debt obligations
5. Reserve for cash flow hedges
6. Differences arising from the translation of foreign
currency-denominated financial statements
7. Others
VI. Total comprehensive income -5916357403.62 -2026274619.50
VII. Earnings per share
(i) Basic earnings per share
(ii) Diluted earnings per share
5. Consolidated Statement of Cash Flows
Unit: RMB
Item Year 2025 Year 2024
I. Cash flows from operating activities:
Cash received from sale of goods and rendering of 8541247523.81 10525465272.93
services
Net increase in customer deposits and interbank deposits
Net increase in borrowings from the central bank
Net increase in loans from other financial institutions
Premiums received on original insurance contracts
Net proceeds from reinsurance
Net increase in deposits and investments of policyholders
Interest service fee and commissions received
Net increase in interbank loans obtained
Net increase in proceeds from repurchase transactions
Net proceeds from acting trading of securities
Tax rebates 117771372.96 203389517.86
Cash generated from other operating activities 375127689.39 464756959.63
Subtotal of cash generated from operating activities 9034146586.16 11193611750.42
Cash paid for purchase of goods and services 8243073801.04 8054236938.71
Net increase in loans and advances to customers
Net increase in deposits in the central bank and in
interbank loans granted
Payments in cash for claims on original insurance
contracts
Net increase in interbank loans granted
Interest service fee and commissions paid
Policy dividends paidCash paid to and for employees 1381510575.23 1561187041.71
Taxes paid 265972133.63 402970523.26
Cash used in other operating activities 754590197.45 1001328403.75
Subtotal of cash used in operating activities 10645146707.35 11019722907.43
Net cash generated from/used in operating activities -1611000121.19 173888842.99
II. Cash flows from investing activities:
Cash received from recovery of investments 1408421673.50 441500809.51
Cash received from investment income 16052167.04 37170842.27
Net cash received from disposal of fixed assets intangible 129662812.26 59667217.18
assets and other long-term assets
Net cash received from disposal of subsidiaries and other
business units
Cash generated from other investing activities 37622486.48 186665829.14
Subtotal of cash generated from investing activities 1591759139.28 725004698.10
Payments in cash for the acquisition of fixed assets 291907848.36 620482495.13
intangible assets and other long-lived assets
Cash paid for investments 131920867.57 1400000.00
Net increase in pledged loans granted
Net payments for the acquisition of subsidiaries and other
business units
Cash used in other investing activities 25451163.26 134327401.00
Subtotal of cash used in investing activities 449279879.19 756209896.13
Net cash generated from/used in investing activities 1142479260.09 -31205198.03
III. Cash flows from financing activities:
Capital contributions received 5003000000.00 167597297.30
Including: Capital contributions by non-controlling 3000000.00 167597297.30
interests to subsidiaries
Cash received from borrowings 12475924439.29 11581264358.29
Cash generated from other financing activities 5239756771.19 898936642.13
Subtotal of cash generated from financing activities 22718681210.48 12647798297.72
Cash paid for repayment of borrowings 16411751361.52 13426379153.79
Cash payments for distribution of dividends profit or 579368680.06 577370283.16
repayment of interest
Including: Dividends and profits paid to minority 926283.41 1204669.38
shareholders by subsidiaries
Cash paid for other financing activities 3024390098.41 1686969576.16
Subtotal of cash outflows from financing activities 20015510139.99 15690719013.11
Net cash from financing activities 2703171070.49 -3042920715.39
IV. Effect of exchange rate changes on cash and cash 2641824.42 8630197.33
equivalents
V. Net increase in cash and cash equivalents 2237292033.81 -2891606873.10
Add: Cash and cash equivalents at the beginning of the 2783177476.45 5674784349.55
period
VI. Cash and cash equivalents at the end of the period 5020469510.26 2783177476.456. Cash Flow Statement of the Parent Company
Unit: RMB
Item Year 2025 Year 2024
I. Cash flows from operating activities:
Cash received from sale of goods and rendering of 3375468923.21 6398186209.22
services
Tax rebates 12249617.84 60530397.37
Cash generated from other operating activities 110856652.54 141831895.20
Subtotal of cash generated from operating activities 3498575193.59 6600548501.79
Cash paid for purchase of goods and services 4545537654.60 5971237961.40
Cash paid to and for employees 124225722.04 179067665.39
Taxes paid 20546050.48 39982463.72
Cash used in other operating activities 369257212.81 307674460.32
Subtotal of cash used in operating activities 5059566639.93 6497962550.83
Net cash generated from/used in operating activities -1560991446.34 102585950.96
II. Cash flows from investing activities:
Cash received from recovery of investments 1383353674.50 250174642.36
Cash received from investment income 14638976.67 32599531.28
Net cash received from disposal of fixed assets intangible 27317929.79 7077472.58
assets and other long-term assets
Net cash received from disposal of subsidiaries and other
business units
Cash generated from other investing activities 1159341746.08 5599069603.94
Subtotal of cash generated from investing activities 2584652327.04 5888921250.16
Payments in cash for the acquisition of fixed assets 7679658.14 28198069.47
intangible assets and other long-lived assets
Cash paid for investments 132180867.57 770369387.85
Net payments for the acquisition of subsidiaries and other
business units
Cash used in other investing activities 1087593344.00 5493614221.91
Subtotal of cash used in investing activities 1227453869.71 6292181679.23
Net cash generated from/used in investing activities 1357198457.33 -403260429.07
III. Cash flows from financing activities:
Capital contributions received 5000000000.00
Cash received from borrowings 10674181738.88 9062107916.66
Cash generated from other financing activities 10067901149.24 9436937293.60
Subtotal of cash generated from financing activities 25742082888.12 18499045210.26
Cash paid for repayment of borrowings 14237314671.01 10898013880.45
Cash payments for distribution of dividends profit or 575823196.24 564145163.75
repayment of interest
Cash paid for other financing activities 8084015832.13 9422438355.78
Subtotal of cash outflows from financing activities 22897153699.38 20884597399.98
Net cash from financing activities 2844929188.74 -2385552189.72
IV. Effect of exchange rate changes on cash and cash 1566083.68 4656657.45equivalents
V. Net increase in cash and cash equivalents 2642702283.41 -2681570010.38
Add: Cash and cash equivalents at the beginning of the 1581749278.38 4263319288.76
period
VI. Cash and cash equivalents at the end of the period 4224451561.79 1581749278.387. Consolidated Statement of Changes in Owners’ Equity
Current period amount
Unit: RMB
Year 2025
Equity attributable to owners of the parent company
Non-
Item Other equity instruments Less: Gener TotalOther controllin
Share Preferre Capital Treasur Specific Surplus al risk Undistribut Other owners’
Perpetual Other comprehensi Subtotal gcapital d reserves y reserve reserves reserv ed profits s equity
bonds s ve income interests
shares shares e
I. Balance at
the end of 2407945408. 512840575. -9040290.32 11249678. 1244180364.-
1797506898.02369668838.1
-
135017154.2234651683.7
the previous 00 73 53 24 8 0 31 9
year
Add:
Adjustment
for change in
accounting
policy
Correction of
prior period -777201329.82 -777201329.82 -777201329.82
errors
Others
II. Balance at
the 2407945408. 512840575. - -
0073-9040290.32
11249678.1244180364.
53242574708227.9
1592467508.2135017154.1457450353.9
beginning of 0 8 31 7
the year
III. Change
amount
during the 5000000000. - - -106260704. 7173897.41 5947466.0 12582399856. 7675539198.2 357693735.-
7317845462.9
current 00 93 9 80 3 24 9period (use “-” forYear 2025
Equity attributable to owners of the parent company
Non-
Item Other equity instruments Less: Gener TotalOther controllin
Share Preferre Capital Treasur Specific Surplus al risk Undistribut Other owners’
capital Perpetual Other
comprehensi Subtotal g
d reserves y reserve reserves reserv ed profits s equity
bonds s ve income interests
shares shares e
decreases)
(I) Total - -
comprehensi 7173897.41 12582399856. 12575225959. 358349547.-
6012216876411.
ve income 80 39 79
(II) Capital
increase and -
106260704.-106260704.93-
reduction by 93 1790696.08
-108051401.01
owners
1. Ordinary
shares
3000000.003000000.00
contributed
by owners
2. Capital
contributed
by holders of
other equity
instruments
3. Amount of
share-based
payments
included in
owners’
equity
-
4. Other 106260704. -106260704.93 -4790696.08 -111051401.0193
(III) Profit
-926283.41-926283.41
distributionYear 2025
Equity attributable to owners of the parent company
Non-
Item Other equity instruments Less: Gener TotalOther controllin
Share Preferre Capital Treasur Specific Surplus al risk Undistribut Other owners’
Perpetual Other comprehensi Subtotal gcapital d reserves y reserve reserves reserv ed profits s equity
bonds s ve income interests
shares shares e
1. Transfer to
surplus
reserve
2. Transfer to
general risk
reserve
3.
Distributions
to owners (or -926283.41 -926283.41
shareholders
)
4. Other
(IV) Internal
transfers
within
owners’
equity
1. Capital
increase (or
share
capital) from
capital
reserve
2. Capital
increase (or
share
capital) fromYear 2025
Equity attributable to owners of the parent company
Non-
Item Other equity instruments Less: Gener TotalOther controllin
Share Preferre Capital Treasur Specific Surplus al risk Undistribut Other owners’
Perpetual Other comprehensi Subtotal gcapital d reserves y reserve reserves reserv ed profits s equity
bonds s ve income interests
shares shares e
surplus
reserve
3. Losses
offset by
surplus
reserve
4. Changes
in defined
benefit plans
transferred to
retained
earnings
5. Other
comprehensi
ve income
transferred to
retained
earnings
6. Others
(V) Special 5947466.0
9 5947466.09 2061167.13 8008633.22reserves
1.
Appropriated 7743491.9
6 7743491.96 2912692.75 10656184.71in the current
period
2. Used in 1796025.8 1796025.87 851525.62 2647551.49
the current 7Year 2025
Equity attributable to owners of the parent company
Non-
Item Other equity instruments Less: Gener TotalOther controllin
Share Preferre Capital Treasur Specific Surplus al risk Undistribut Other owners’
Perpetual Other comprehensi Subtotal gcapital d reserves y reserve reserves reserv ed profits s equity
bonds s ve income interests
shares shares e
period
(VI) Others 5000000000. 5000000000.0 5000000000.000 0 0
IV. Balance
at the end of 2407945408. 5000000000. 406579870. - - --1866392.91 17197144. 1244180364. 15157108084. 6083071689.9 222676580. 5860395109.0
the current 00 00 80 62 24 70 5 93 2
periodAmount of previous period
Unit: RMB
Year 2024
Equity attributable to owners of the parent company
Item Other equity instruments Less: Gener Non- TotalOther
Share Preferre Capital Treasur Specific Surplus al risk Undistribute Other controlling owners’
Perpetu Other comprehensi Subtotalcapital d reserves y reserve reserves reserv d profits s interests equity
al bonds s ve income
shares shares e
I. Balance at
the end of the 2407945408. 526499506.00 76 -13443558.44
4657488.21244180364.1474561975.85644401184.262221679.5906622864.
4245654914
previous year
Add:
Adjustment
for change in
accounting
policy
Correction of
prior period -347232776.81 - -347232776.81 347232776.81
errors
Others
II. Balance at
the beginning 2407945408. 526499506. -13443558.44 4657488.2 1244180364. 1127329199.0 5297168407. 262221679. 5559390087.00 76 4 24 4 84 49 33
of the year
III. Change
amount
during the -
current 13658931.0 4403268.12 6592190.2
----
93702037426.93704700899.397238833.4101939733.period (use “- 3 4 56 80 36” for
decreases)
(I) Total - - - -4403268.12 3725557221.7 3721153953. 595084250. 4316238204.comprehensi 8 66 96 62Year 2024
Equity attributable to owners of the parent company
Item Other equity instruments Less: Gener Non- TotalOther
Share Preferre Capital Treasur Specific Surplus al risk Undistribute Other controlling owners’
Perpetu Other comprehensi Subtotalcapital d reserves y reserve reserves reserv d profits s interests equity
al bonds s ve income
shares shares e
ve income
(II) Capital
increase and -
13658931.0 -13658931.03 196281483.71 182622552.68reduction by 3
owners
1. Ordinary
shares 167597297.
30 167597297.30contributed
by owners
2. Capital
contributed
by holders of
other equity
instruments
3. Amount of
share-based
payments
included in
owners’
equity
-
4. Other 13658931.0 -13658931.03 28684186.41 15025255.383
(III) Profit
23519794.8423519794.84-1168043.6422351751.20
distribution
1. Transfer to
surplus
reserveYear 2024
Equity attributable to owners of the parent company
Item Other equity instruments Less: Gener Non- TotalOther
Share Preferre Capital Treasur Specific Surplus al risk Undistribute Other controlling owners’
Perpetu Other comprehensi Subtotalcapital d reserves y reserve reserves reserv d profits s interests equity
al bonds s ve income
shares shares e
2. Transfer to
general risk
reserve
3.
Distributions
-1168043.64-1168043.64
to owners (or
shareholders)
4. Other 23519794.84 23519794.84 23519794.84
(IV) Internal
transfers
within
owners’
equity
1. Capital
increase (or
share capital)
from capital
reserve
2. Capital
increase (or
share capital)
from surplus
reserve
3. Losses
offset by
surplus
reserveYear 2024
Equity attributable to owners of the parent company
Item Other equity instruments Less: Gener Non- TotalOther
Share Preferre Capital Treasur Specific Surplus al risk Undistribute Other controlling owners’
capital Perpetu Other
comprehensi Subtotal
d reserves y reserve reserves reserv d profits s interests equity
al bonds s ve income
shares shares e
4. Changes
in defined
benefit plans
transferred to
retained
earnings
5. Other
comprehensi
ve income
transferred to
retained
earnings
6. Others
(V) Special 6592190.2
9 6592190.29 2731977.09 9324167.38reserves
1.
Appropriated 7881927.4 7881927.49 3279715.07 11161642.56
in the current 9
period
2. Used in
the current 1289737.20 1289737.20 547737.98 1837475.18
period
(VI) Others
IV. Balance
at the end of 2407945408. 512840575. - -
0073-9040290.32
11249678.1244180364.
53242574708227.9
1592467508.
28135017154.
1457450353.
the current 0 31 97
period8. Statement of Changes in Owners’ Equity of the parent company
Current period amount
Unit: RMB
Year 2025
Other equity instruments
Item Less: Other TotalShare Capital Specific Surplus Undistributed
Preferred Perpetual Treasury comprehensive Others owners’capital Others reserves reserve reserves profits
shares bonds shares income equity
I. Balance at the
end of the previous 2407945408.00 339889142.56 -1281096.83 1260024039.76 -1199867554.61 2806709938.88
year
Add: Adjustment
for change in
accounting policy
Correction of prior
-443004797.05-443004797.05
period errors
Others
II. Balance at the
beginning of the 2407945408.00 339889142.56 -1281096.83 1260024039.76 -1642872351.66 2363705141.83
year
III. Change amount
during the current
5000000000.00-125728227.76-79482.17-5916261629.66
-
period (use “-” for 1042069339.59
decreases)
(I) Total
comprehensive -79482.17 -5916277921.45 -5916357403.62
income
(II) Capital increase
and reduction by 5000000000.00 -125728227.76 4874271772.24
owners
1. Ordinary shares
contributed byYear 2025
Other equity instruments
Item Less: Other TotalShare Capital Specific Surplus Undistributed
Treasury comprehensive Others owners’
capital Preferred Perpetual Others reserves reserve reserves profits
shares bonds shares income equity
owners
2. Capital
contributed by
5000000000.005000000000.00
holders of other
equity instruments
3. Amount of
share-based
payments included
in owners’ equity
4. Other -125728227.76 -125728227.76
(III) Profit
16291.7916291.79
distribution
1. Transfer to
surplus reserve
2. Distribution to
owners (or
shareholders)
3. Others 16291.79 16291.79
(IV) Internal
transfers within
owners’ equity
1. Capital increase
(or share capital)
from capital
reserve
2. Capital increase
(or share capital)
from surplusYear 2025
Other equity instruments
Item Less: Other TotalShare Capital Specific Surplus Undistributed
Preferred Perpetual Treasury comprehensive Others owners’capital Others reserves reserve reserves profits
shares bonds shares income equity
reserve
3. Losses offset by
surplus reserve
4. Changes in
defined benefit
plans transferred to
retained earnings
5. Other
comprehensive
income transferred
to retained
earnings
6. Others
(V) Special
reserves
1. Appropriated in
the current period
2. Used in the
current period
(VI) Others
IV. Balance at the
end of the current 2407945408.00 5000000000.00 214160914.80 -1360579.00 1260024039.76 -7559133981.32 1321635802.24
period
Amount of previous period
Unit: RMB
Year 2024
Item
Share Other equity instruments Capital Less: Other Specific Surplus Undistributed Others Total
capital reserves Treasury comprehensive reserve reserves profits owners’
shares income equityPreferred Perpetual
Others
shares bonds
I. Balance at the end
2407945408.00341229750.75-1399371.641260024039.76550788846.444558588673.31
of the previous year
Add: Adjustment for
change in accounting
policy
Correction of prior
-190788098.63-190788098.63
period errors
Others
II. Balance at the
2407945408.00341229750.75-1399371.641260024039.76360000747.814367800574.68
beginning of the year
III. Change amount
during the current
-1340608.19118274.81-2002873099.47-
period (use “-” for 2004095432.85
decreases)
(I) Total
comprehensive 118274.81 -2026392894.31 -2026274619.50
income
(II) Capital increase
and reduction by -1340608.19 -1340608.19
owners
1. Ordinary shares
contributed by owners
2. Capital contributed
by holders of other
equity instruments
3. Amount of share-
based payments
included in owners’
equity
4. Other -1340608.19 -1340608.19Year 2024
Other equity instruments
Item Less: Other TotalShare Capital Specific Surplus Undistributed
Preferred Perpetual Treasury comprehensive Others owners’capital Others reserves reserve reserves profits
shares bonds shares income equity
(III) Profit distribution 23519794.84 23519794.84
1. Transfer to surplus
reserve
2. Distribution to
owners (or
shareholders)
3. Others 23519794.84 23519794.84
(IV) Internal transfers
within owners’ equity
1. Capital increase (or
share capital) from
capital reserve
2. Capital increase (or
share capital) from
surplus reserve
3. Losses offset by
surplus reserve
4. Changes in defined
benefit plans
transferred to retained
earnings
5. Other
comprehensive
income transferred to
retained earnings
6. Others
(V) Special reserves
1. Appropriated in theYear 2024
Other equity instruments
Item Less: Other TotalShare Capital Specific Surplus Undistributed
capital Preferred Perpetual
Treasury comprehensive Others owners’
Others reserves reserve reserves profits
shares bonds shares income equity
current period
2. Used in the current
period
(VI) Others
IV. Balance at the end
2407945408.00339889142.56-1281096.831260024039.76-1642872351.662363705141.83
of the current periodNotes to Financial Statements of Konka Group Co. Ltd.From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
I. Company Profile
1. Konka Group Co. Ltd. (hereinafter referred to as the “Company” or the “Group” when
including subsidiaries) is a joint-stock limited company reorganized from the former
Shenzhen Konka Electronic Co. Ltd. in August 1991 upon approval of the People’s
Government of Shenzhen Municipality and has its ordinary shares (A-share and B-share)
listed on Shenzhen Stock Exchange with prior consent from the People’s Bank of China
Shenzhen Special Economic Zone Branch. On August 29 1995 the Company was
renamed “Konka Group Co. Ltd.” (Unified Social Credit Code: 914403006188155783)
with its main business in the electronic industry. Now the headquarters is located at No. 28
No. 12 Keji South Road Science & Technology Park Yuehai Street Nanshan District
Shenzhen Guangdong Province.
2. Share capital
After the distribution of bonus shares allotments increase in share capital and issuance of
new shares over the years as of December 31 2025 the Company has issued a total of
2407945408.00 shares (denomination of RMB1 per share) with a registered capital of
RMB2407945408.00.
3. The nature of the Company's business and main operating activities
The Group is mainly engaged in consumer electronics and semiconductor businesses
conducting the production and sales of color TVs white goods optoelectronic displays
storage and printed circuit boards etc.
4. The financial statements were approved by the board of directors of the Company for
disclosure on April 27 2026.II. Scope of the Consolidated Financial Statements
The scope of the Group's consolidated financial statements covers 104 subsidiaries such
as Shenzhen Konka Electronics Technology Co. Ltd. Anhui Konka Electronics Co. Ltd.and Dongguan Konka Electronics Co. Ltd. Compared with the previous year the Group
lost control over its subsidiary Kangrong Jiayuan Technology (Zhejiang) Co. Ltd. due to
an equity transfer during the current year.For details please refer to Note VIII “Changes in the Consolidation Scope” and Note IX
“Equity in Other Entities” herein.Checklist of Company Name and Abbreviation in this Report
No. Company name Abbreviation
1 Shenzhen Konka Electronics Technology Co. Ltd. Electronics Technology
2 Nantong Haimen Konka Smart Technology Co. Ltd. Haimen Konka
3 Chengdu Konka Electronics Co. Ltd. Chengdu Konka Electronics
35Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
No. Company name Abbreviation
4 Nantong Konka Smart Technology Co. Ltd. Nantong Kangdian
Shenzhen Kangcheng Technology Innovation and Development Co.
5 Shenzhen Kangcheng
Ltd.
6 Shenzhen Xiaojia Technology Co. Ltd. Xiaojia Technology
7 Liaoyang Kangshun Smart Technology Co. Ltd. Liaoyang Kangshun Intelligent
8 Liaoyang Kangshun Renewable Resources Co. Ltd. Liaoyang Kangshun Renewable
9 Nanjing Konka Electronics Co. Ltd. Nanjing Konka
Chuzhou Konka Precision Intelligent Manufacturing Technology Co.
10 Chuzhou Konka
Ltd.
11 Guangdong Xingda Hongye Electronics Co. Ltd. Xingda Hongye
12 Shenzhen Konka Circuit Co. Ltd. Konka Circuit
13 Suining Konka Flexible Electronic Technology Co. Ltd. Konka Flexible Electronics
14 Suining Konka Hongye Electronics Co. Ltd. Kangjia Hongye Electronics
15 Boluo Konka Precision Technology Co. Ltd. Bokang Precision
16 Anhui Konka Tongchuang Electrical Appliances Co. Ltd. Anhui Tongchuang
17 Jiangsu Konka Smart Electrical Appliances Co. Ltd. Jiangsu Konka Smart
18 Anhui Konka Electrical Appliance Technology Co. Ltd. Anhui Electrical Appliance
19 Henan Frestec Refrigeration Appliance Co. Ltd. Frestec Refrigeration
20 Henan Frestec Electrical Appliances Co. Ltd. Frestec Electrical Appliances
21 Henan Frestec Household Appliances Co. Ltd. Frestec Household Appliances
22 Henan Frestec Smart Home Technology Co. Ltd. Frestec Smart Home
23 Shenzhen Konka Investment Holding Co. Ltd. Konka Investment
24 Yibin Konka Technology Park Operation Co. Ltd. Yibin Konka Industrial Park
25 Shenzhen Konka Capital Equity Investment Management Co. Ltd. Konka Capital
26 Konka Suiyong Investment (Shenzhen) Co. Ltd. Konka Suiyong
27 Shenzhen Konka Shengxing Industrial Co. Ltd. Shengxing Industrial
28 Shenzhen Konka Zhitong Technology Co. Ltd. Zhitong Technology
29 Konka Electronic Material Technology (Shenzhen) Co. Ltd. Konka Electronic Material
30 Beijing Konka Electronic Co. Ltd. Beijing Konka Electronics
31 Tianjin Konka Technology Co. Ltd. Tianjin Konka
32 Suining Konka Industrial Park Development Co. Ltd. Suining Konka Industrial Park
Suining Electronic Technology
33 Suining Konka Electronic Technology Innovation Co. Ltd.
Innovation
36Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
No. Company name Abbreviation
34 Shanghai Konka Industrial Co. Ltd. Shanghai Konka
35 Yantai Kangjin Technology Development Co. Ltd. Yantai Kangjin
Development of science and
36 Shenzhen Konka Technology Industry Development Co. Ltd.
technology industry
37 Sichuan Konka Smart Terminal Technology Co. Ltd. Sichuan Konka
38 Yibin Konka Smart Technology Co. Ltd. Yibin Smart
39 Shenzhen Konka Semiconductor Technology Co. Ltd. Shenzhen Konka Semiconductor
40 Chongqing Konka Technology Development Co. Ltd. Chongqing Konka
41 Konka Xinying Semiconductor Technology (Shenzhen) Co. Ltd. Xinying Semiconductor
Xinying Semiconductor (Hong
42 Konka Xinying Semiconductor Technology (Hong Kong) Co. Ltd.
Kong)
43 Konka ChipCloud Semiconductor Technology (Yancheng) Co. Ltd. Konka Xinyun Semiconductor
44 Konka Cross-border (Hebei) Technology Development Co. Ltd. Konka Cross-border (Hebei)
45 Shenzhen Nianhua Enterprise Management Co. Ltd. Shenzhen Nianhua
46 Konka Huazhong (Hunan) Technology Co. Ltd. Konka Central China
Shenzhen Chuangzhi Electrical
47 Shenzhen Konka Chuangzhi Electrical Appliances Co. Ltd.
Appliances
48 Suining Jiarun Property Co. Ltd. Suining Jiarun Property
49 Anhui Konka Electronics Co. Ltd. Anhui Konka
50 Anhui Kangzhi Trade Co. Ltd. Kangzhi Trade
51 Shenzhen Konka Telecommunications Technology Co. Ltd. Telecommunication Technology
Hong Kong Konka
52 Hong Kong Konka Telecommunications Co. Ltd.
Communications
53 Dongguan Konka Electronics Co. Ltd. Dongguan Konka
54 Suining Konka Smart Technology Co. Ltd. Suining Konka Intelligent
Chongqing Optoelectronic
55 Chongqing Konka Optoelectronics Technology Co. Ltd.
Technology
56 Yibin Kangrun Environmental Technology Co. Ltd. Yibin Kangrun
57 Yibin Kangrun Medical Waste Centralized Treatment Co. Ltd. Yibin Kangrun Medical
Ningbo Kanghanrui Electric
58 Ningbo Kanghanrui Electric Appliances Co. Ltd.
Appliances
59 Jiangxi Konka New Material Technology Co. Ltd. Jiangxi Konka
60 Jiangxi High Transparent Substrate Material Technology Co. Ltd. Jiangxi High Transparent Substrate
61 Jiangxi Xinfeng Microcrystalline Jade Co. Ltd. Xinfeng Microcrystal
62 Shaanxi Konka Smart Home Appliance Co. Ltd. Shaanxi Konka Intelligent
37Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
No. Company name Abbreviation
63 Shenzhen Konka Pengrun Technology & Industry Co. Ltd. Pengrun Technology
64 Jiaxin Technology Co. Ltd. Jiaxin Technology
65 Kangrong Jiayuan Technology (Zhejiang) Co. Ltd. Kangrong Jiayuan
66 Shenzhen Konka Unifortune Technology Co. Ltd. Konka Unifortune
67 Jiali International (Hong Kong) Limited Jiali International
68 Hebei Kangjiatong Technology Co. Ltd. Konka Communication
69 Nanjing Konka Smart Electric Co. Ltd. Nanjing Konka Smart
70 Hainan Konka Technology Co. Ltd. Hainan Konka Technology
71 Konka Venture Development (Shenzhen) Co. Ltd. Konka Venture
72 Yibin Konka Incubator Management Co. Ltd. Yibin Konka Incubator
73 Yantai Konka Healthcare Industry Startup Service Co. Ltd. Yantai Konka
74 Guiyang Konka Startup Service Co. Ltd. Konka Enterprise Service
75 Ji'an Konka Technology Industry Development Co. Ltd. Ji'an Konka
76 Konka (Europe) Co. Ltd. Konka Europe
77 Hong Kong Konka Co. Ltd. Hong Kong Konka
78 Kangdian International Trade Co. Ltd. Kangdian Trading
79 Konka North America LLC Konka North America
80 Kanghao Technology Co. Ltd. Kanghao Technology
81 Hongdian Investment Development Co. Ltd. Kangdian Investment
82 Zhongkang Storage Technology Co. Ltd. Zhongkang Storage Technology
Zhongkang Semiconductor
83 Chain Kingdom Semiconductor (Shaoxing) Co. Ltd.
(Shaoxing)
84 Hongjet (Hong Kong) Co. Ltd. Kangjet
85 Chongqing Xinyuan Semiconductor Co. Ltd. Chongqing Xinyuan Semiconductor
86 Anlu Konka Industry Operation Service Co. Ltd. Anlu Konka
Shenzhen Kanghong Dongsheng Investment Partnership (Limited
87 Kanghong Dongsheng
Partnership)
Guizhou Konka New Material
88 Guizhou Konka New Materials Technology Co. Ltd.
Technology
89 Konka Smart Home (Shanxi) Industry Development Co. Ltd. Shanxi Smart Home Appliance
90 Guizhou Kanggui Materials Co. Ltd. Guizhou Kanggui Materials
91 Nantong Kanghai Technology Industry Development Co. Ltd. Nantong Kanghai
92 Chongqing Kangyiyun Business Operation Management Co. Ltd. Chongqing Kangyiyun
38Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
No. Company name Abbreviation
93 Jiangxi Konka Technology Park Operation and Management Co. Ltd. Jiangxi Konka Technology Park
Shangrao Konka Electronic
94 Shangrao Konka Electronic Technology Innovation Co. Ltd.
Technology Innovation
95 Zhejiang Konka Electronics Co. Ltd. Zhejiang Konka Electronics
Zhejiang Konka Technology
96 Zhejiang Konka Technology Industry Development Co. Ltd.
Industries
97 Xi'an Konka Intelligent Home Appliance Co. Ltd. Xi'an Konka Intelligent
98 Xi'an Konka Network Technology Co. Ltd. Xi'an Konka Network
Xi'an Kanghong Technology
99 Xi'an Kanghong Technology Industry Development Co. Ltd.
Industry
100 Xi'an Konka Intelligent Technology Development Co. Ltd. Xi'an Konka Intelligent Technology
101 Songyang Konka Smart Industry Operation Management Co. Ltd. Songyang Industry Operation
102 Shenzhen Kangyan Technology Co. Ltd. Kangyan Technology
103 Songyang Konka Intelligent Technology Development Co. Ltd. Songyang Konka Intelligent
104 Konka North China (Tianjin) Technology Co. Ltd. Konka North China
105 Shenzhen Konka Digital Technology Development Co. Ltd. Digital technology
III. Basis for the Preparation of Financial Statements
1. Basis for the Preparation
The Group's financial statements were prepared based on actual transactions and events
in accordance with the Accounting Standards for Business Enterprises promulgated by the
Ministry of Finance as well as its application guidelines interpretations and other related
regulations (hereinafter collectively referred to as the "Accounting Standards for Business
Enterprises") as well as the disclosure regulations of the General Provisions on Financial
Reporting No. 15 for Companies Publicly Issuing Securities (revised in 2023) by the CSRC.
2. Going Concern
The consolidated net profit of Konka Group in 2025 was RMB -122.38 hundred million. As
of December 31 2025 the Group's net assets in the consolidated financial statements
were RMB -58.60 hundred million with a debt-to-asset ratio of 126.22%.In view of the above when assessing the Group's ability to continue as a going concern
the Board of Directors of the Group has prudently considered the Group's future strategic
adjustments and business strategies operating conditions working capital and available
sources of financing. The Group has formulated the following plans and measures to
reduce the pressure on working capital and improve its financial position:
(1) On December 29 2025 the National Development and Reform Commission and the
Ministry of Finance officially issued the "Notice on the Implementation of the Policy for
39Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Large-scale Equipment Renewal and Consumer Goods Trade-in in 2026" which provides
special financial subsidies for the renewal of six major categories of home appliances and
equipment. The Group will take this opportunity to accelerate the transformation and
upgrading of its home appliance business to effectively promote the improvement of its
operating performance.
(2) The Group will adhere to the long-term value-oriented business guideline focus on the
development of its main business optimize asset allocation and enhance lean
management. On the one hand with focus on the optimization and reshaping of existing
businesses the Group will comprehensively enhance the efficiency of the entire chain of
R&D production supply sales and service to achieve significant loss reduction in existing
businesses; on the other hand the Group will deepen research and analysis around the
"9+6" strategic emerging industries to seek innovative drivers for its high-quality
development.
(3) Take active measures to revitalize various stock resources and accelerate the recovery
of funds. The Group established a specific department engaged in promoting the exit and
divestment of "non-core and non-advantageous" businesses and assets and utilizing
external resources to shorten the disposal and revitalization period of inefficient assets.
(4) Bank credit lines are relatively stable. The Group will continue to deepen its strategic
cooperation with commercial banks actively expand financing channels and alleviate the
pressure on working capital.After fully considering the various measures mentioned above that the Group is
implementing or plans to implement the Board of Directors of the Group believes that it is
appropriate to prepare these financial statements on a going concern basis for at least 12
months from December 31 2025. However future events or circumstances may result in
significant uncertainty in the implementation of the above-mentioned measures including
the effectiveness of measures such as exiting non-core businesses and revitalizing
existing assets. The renewal of bank credit loans and acquisition of new financing depend
on the Group's communication with commercial banks. If the relevant improvement
measures of the Group fail to be implemented as planned or achieve the expected results
the Company may cease to continue as a going concern hence the uncertainty about the
going-concern ability.IV. Significant Accounting Policies and Accounting Estimates
Specific accounting policies and accounting estimates: The specific accounting policies
and accounting estimates formulated by the Group according to the actual production and
operation characteristics include provisions for bad debts of accounts receivable
provisions for inventory depreciation depreciation of fixed assets revenue recognition and
40Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
measurement etc.
1. Statement of Compliance with the Accounting Standards for Business
Enterprises
The financial statements prepared by the Group are in compliance with the Accounting
Standards for Business Enterprises which factually accurately and completely present the
Company's and the Group's financial positions as of December 31 2025 business results
and cash flows and other relevant information for 2025.
2. Fiscal period
The Group's fiscal period starts from January 1 to December 31 of the Gregorian calendar.
3. Operating cycle
The normal operating cycle refers to the period from the purchase of assets for processing
to the realization of cash or cash equivalents by the Group. An operating cycle for the
Group is 12 months which is also the classification criterion for the liquidity of its assets
and liabilities.
4. Recording currency
The Company uses RMB as the recording currency. Subsidiaries of the Group determine
their functional currency according to the main economic environment in which they
operate. When preparing the financial statements the Group converts them into RMB
according to the method described in IV.10(2) Conversion of foreign currency financial
statements.
5. Determination methods and selection basis for materiality threshold
The Group prepares and discloses financial statements adhering to the principle of
materiality. The disclosures in the notes to the financial statements cover matters involving
judgments about materiality criteria the methods for determining materiality thresholds
and the bases for selecting these criteria:
Disclosures involving materiality Location of disclosure of this matter Methodology for Determining
standard judgments in the notes to the present financial Materiality Criteria and Basis forstatements Selection
Significant individually bad debt Individual amount exceeding
Note VI.4. Accounts receivable (2)
provisioned receivables RMB50 million
Receivables with significant amount
Individual amount exceeding
of bad debt provision recovered or Note VI.4. Accounts receivable (3)
RMB10 million
reversed during the year
Write-off of significant receivables in Individual amount exceeding
Note VI.4. Accounts receivable (4)
the year RMB10 million
Significant accounts payable aged Individual amount exceeding
Note VI.26. Accounts payable
over 1 year RMB10 million
Significant receipts in advance and Note VI.28; note VI.29; note VI.39; note Individual amount exceeding
contractual liabilities/projected VI.27; RMB10 million
liabilities/other payables aged over 1
41Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Disclosures involving materiality Location of disclosure of this matter Methodology for Determining
standard judgments in the notes to the present financial Materiality Criteria and Basis forstatements Selection
year
Increase or decrease in a single
Significant construction in progress
Note VI.16. Construction in progress (2) asset during the year or a balance
projects
exceeding RMB100 million
6. Accounting Treatments for Business Combinations Under Common Control and
Those Not Under Common Control
(1) Business combinations under common control
A business combination involving entities under common control is a business combination
in which all of the combining enterprises are ultimately controlled by the same party or
parties both before and after the combination and that control is not transitory.As the combining party the assets and liabilities obtained by the Group in a business
combination under the same control shall be measured on the basis of their book value in
the final controlling party on the combining date. The difference between the book value of
the net assets acquired and the book value of the consideration paid for the combination
(or the total par value of the shares issued) is used to adjust the capital reserves; in case
the capital reserves are insufficient to cover the difference the retained earnings will be
adjusted.
(2) Business combinations not under common control
A business combination involving entities not under common control is a business
combination in which all of the combining enterprises are not ultimately controlled by the
same party or parties both before and after the combination.As purchaser the identifiable assets liabilities and contingent liabilities of the acquiree
acquired in the business combination not under common control shall be measured at fair
value on the acquisition date. The difference of the combination costs in excess of the fair
value of the identifiable net assets acquired from the acquiree shall be recognized as
goodwill; if the combination costs are less than the fair value of the identifiable net assets
acquired from the acquiree in the combination the fair values of the identifiable assets
liabilities and contingent liabilities acquired from the combination as well as the
combination costs shall be reviewed first. After review if the combination costs are still
less than the fair value the difference shall be included in the current non-operating
revenue of the combination.
7. Criteria for Judging Control and Methods for Preparing Consolidated Financial
Statements
The scope of consolidation for the consolidated financial statements of the Group is based
42Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
on control including the Company and all its subsidiaries (including enterprises divisible
parts of investees and structured entities controlled by the Company). The Group
assesses control based on whether it has power over the investee has exposure or rights
to variable returns from its involvement with the investee and has the ability to use its
power over the investee to affect the amount of the investor's returns.The financial statements of subsidiaries are adjusted in accordance with the accounting
policies and accounting period of the Group during the preparation of the consolidated
financial statements where the accounting policies and the accounting periods are
inconsistent between the Group and subsidiaries.The impact of internal transactions between the Company and its subsidiaries as well as
between subsidiaries and each other is offset in consolidation. The shares of the
subsidiary's owner's equity that do not belong to the parent Group and the shares of
minority shareholders' equity in current net gains/losses other comprehensive income and
total comprehensive income shall be respectively listed in the consolidated financial
statement "Minority shareholders' equity minority shareholders' net gains/losses other
comprehensive income that belongs to minority shareholders and total comprehensive
income that belongs to minority shareholders".For subsidiaries acquired through business combinations under the same control their
operating results and cash flows are included in the consolidated financial statements from
the beginning of the current combination period. When preparing the comparative
consolidated financial statements the relevant items in the financial statements of the
previous year shall be adjusted as if the consolidated reporting entity had existed since the
final controlling party began to control it.Where the equity of an investee under common control is acquired in stages through
multiple transactions ultimately resulting in a business combination when preparing the
consolidated financial statements adjustments are made as if the entity had existed in its
current state from the time the ultimate controlling party obtained control. When preparing
comparative financial statements the relevant assets and liabilities of the acquiree are
consolidated into the Group's comparative consolidated financial statements limited to a
point in time not earlier than when both the Group and the acquiree were under the control
of the same ultimate controlling party. The net assets increased as a result of the
combination are used to adjust the relevant items under owner's equity in the comparative
financial statements. To avoid double-counting the value of the acquiree's net assets for
any long-term equity investment held by the Group before the combination is achieved the
related gains/losses other comprehensive income and other changes in net assets
recognized from the later of the date the original equity was acquired and the date the
43Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Company and the acquiree came under the control of the same ultimate controlling party
up to the combination date shall be offset against the opening retained earnings and
current gains/losses of the comparative reporting period respectively.For subsidiaries acquired through business combination under different control the
operating results and cash flow shall be included in the consolidated financial statements
from the date when the Group obtains the control right. When preparing the consolidated
financial statements the financial statements of the subsidiaries shall be adjusted on the
basis of the fair value of the identifiable assets liabilities and contingent liabilities
determined on the acquisition date.For a business combination achieved in stages where equity interests in the acquiree are
obtained through multiple transactions and ultimately result in a business combination not
under common control the previously held equity interest shall be remeasured at its fair
value on the acquisition date. Any difference between the fair value and its carrying
amount shall be recognized in current investment income; with respect to the previously
held equity interest in the acquiree any amounts recognized in other comprehensive
income under the equity method as well as other changes in owners’ equity other than net
gains/losses other comprehensive income and profit distributions shall be reclassified to
current investment income in the period of the acquisition date. However this excludes
other comprehensive income arising from remeasurement of the net defined benefit
liability or asset of the investee.When the Group disposes of a portion of its long-term equity investment in a subsidiary
without losing control the difference in the consolidated financial statements between the
proceeds from the disposal and the subsidiary's share of net assets calculated
continuously from the acquisition date or combination date corresponding to the disposed
long-term equity investment is adjusted against capital premium or share premium. If the
capital reserve is insufficient to absorb the difference retained earnings are adjusted.If the Group loses control over an investee due to reasons such as the disposal of a
portion of its equity investment when preparing the consolidated financial statements the
remaining equity is remeasured at its fair value on the date of loss of control. The
difference between the total of the consideration received from the disposal of equity and
the fair value of the remaining equity minus the share of the original subsidiary's net
assets calculated continuously from the acquisition or combination date based on the
original shareholding percentage is recognized in investment income for the period in
which control is lost and goodwill is derecognized at the same time. Other comprehensive
income and other items related to the original equity investment in the subsidiary are
reclassified to investment income for the current period upon loss of control.
44Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
If the Group disposes of its equity investment in a subsidiary in stages through multiple
transactions until control is lost and if these transactions are part of a single transaction
package all transactions shall be accounted for as a single transaction of disposing of a
subsidiary and losing control; however the difference between the disposal proceeds and
the share of net assets of the subsidiary corresponding to the investment disposed of for
each disposal prior to the loss of control shall be recognized as other comprehensive
income in the consolidated financial statements and shall be reclassified to investment
income in the period in which control is lost.
8. Classification of Joint Venture Arrangements and Accounting Treatments for
Joint Operations
The Group's joint arrangements include joint operations and joint ventures. For a joint
operation the Group as a joint operator recognizes the assets and liabilities that it holds
and bears in the joint operation and recognizes the jointly-held assets and jointly-borne
liabilities according to the Group’s stake in the joint operation; recognizes relevant income
and expense according to the Group’s stake in the joint operation. When the Group
purchases from or sells to the joint operation assets that do not constitute a business the
Group only recognizes the share of the other joint operators in the gains/losses arising
from the transaction.
9. Cash and Cash Equivalents
Cash in the Group's statement of cash flows refers to cash on hand and unrestricted
deposits. For the purpose of the statement of cash flows cash equivalents refer to highly
liquid investments that are readily convertible to known amounts of cash and which are
subject to an insignificant risk of change in value with a holding period of not more than 3
months.
10. Foreign Currency Businesses and Translation of Foreign Currency Financial
Statements
(1) Foreign Currency Transactions
Foreign currency transactions of the Group are initially recognized at the exchange rate at
the beginning of the month of the transaction date (usually referring to the middle rate of
the foreign exchange rate announced by the People's Bank of China on the day the same
below) converting the foreign currency amount into the functional currency amount. On
the balance sheet date the monetary items in foreign currency were converted into RMB
at the spot exchange rate on balance sheet date. Except the exchange difference arising
from special foreign-currency borrowing for the purpose of construction or production of
assets meeting capitalization conditions treated in the principle of capitalization the
45Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
conversion difference was directly included in the current gains/losses.
(2) Translation of Foreign Currency Financial Statements
When preparing the consolidated financial statements the Group translates the financial
statements of overseas operations into RMB in which: assets and liabilities in the foreign
currency balance sheet are translated at the spot exchange rate on the balance sheet date;
owners' equity items except for "undistributed profits" are translated at the spot exchange
rate when the business occurs; the income and expense items in the income statement
are translated at the average exchange rate of the current period (the average exchange
rate of the month) on the date when the transactions occur. The conversion difference of
foreign currency statements arising from the aforementioned conversion is presented in
other comprehensive income item. The foreign currency cash flow is converted at the
average exchange rate for the period (monthly average exchange rate) of the cash flow
occurrence date. The amount of exchange rate change influence on cash is independently
presented in the cash flow statement.
11. Financial Instruments
(1) Recognition and derecognition of financial instruments
The Group recognizes a financial asset or financial liability when it becomes a party to the
contractual provisions of a financial instrument.If the following conditions are met a financial asset (or a part of a financial asset or a part
of a group of similar financial assets) shall be derecognized that is the previously
recognized financial asset shall be transferred from the balance sheet: 1) the right to
receive the cash flows of the financial asset expires; 2) When the financial assets are
transferred the Group has transferred almost all the risks and rewards of ownership of the
financial assets; 3) When a financial asset is transferred the Group neither transfers nor
retains substantially all the risks and rewards of ownership of the financial asset nor
retains control over the financial asset.When the current obligation of financial liabilities (or partial financial liabilities) has been
completely or partially discharged derecognition of such financial liabilities (or partial
financial liabilities) is conducted by the Group. If the Group (borrower) concludes an
agreement with the lender to replace existing financial liabilities with new ones and
contractual terms of new financial liabilities are different from those of existing financial
liabilities derecognition of existing financial liabilities and recognition of new financial
liabilities shall be conducted. When there is a material alteration of contractual terms of
existing financial liabilities (partial financial liabilities) by the Group derecognition of
existing financial liabilities and recognition of new financial liabilities as per modified terms
shall be conducted. The difference between the book value of the derecognized part and
46Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
the consideration paid is included in the current gains/losses.All regular acquisitions or sales of financial assets are recognized and derecognized on a
transaction date basis.
(2) Classification and Measurement of Financial Assets
At initial recognition the Group's financial assets are classified into 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
gains/losses according to the Group's business model for managing financial assets and
the contractual cash flow characteristics of financial assets. All affected related financial
assets will be reclassified if and only when the Group changes its business model for
managing financial assets.The Group classifies the financial assets meeting the following conditions simultaneously
as financial assets measured at amortized cost: * The business model for managing the
financial assets aims at collecting contractual cash flows. * The contractual terms of the
financial assets stipulate that the cash flows generated on specified dates solely represent
payments of principal and interest based on the outstanding principal amount. These
financial assets are initially measured at fair value and relevant transaction costs are
included into the initially recognized amount; subsequent measurement is carried out at
amortized cost. Except for those designated as hedge items the difference between the
initial recognized amount and the amount due shall be amortized at actual interest rate
and their amortization impairment and exchange gains/losses as well as gains or losses
arising from derecognition shall be recorded into the current gains/losses.The Group classifies the financial assets meeting the following conditions simultaneously
as financial assets measured at fair value through other comprehensive income: * the
business model for managing this financial asset aims at both collecting contractual cash
flows and selling the financial asset. * The contractual terms of the financial assets
stipulate that the cash flows generated on specified dates solely represent payments of
principal and interest based on the outstanding principal amount. These financial assets
are initially measured at fair value and relevant transaction costs are included into the
initially recognized amount. Except for those designated as hedge items any other gains
or losses arising from such financial assets except for credit impairment losses or gains
exchange gains/losses and interest on the financial asset calculated using the effective
interest rate method are included in other comprehensive income; when financial assets
are derecognized the accumulated gains or losses previously included in other
comprehensive income shall be transferred from other comprehensive income and
included in the current gains/losses.
47Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
The Group recognizes interest income according to the effective interest rate method.Interest income is calculated and determined according to the book balance of the
financial asset multiplied by the actual interest rate except for the following circumstances:
* For the financial asset with credit impairment that has been purchased or originated
from the initial recognition the interest income is calculated and determined according to
the amortized cost of the financial asset and the actual interest rate adjusted by credit. *
For financial assets purchased or originated that have not suffered credit impairment but
have suffered credit impairment in subsequent periods the interest income shall be
calculated and determined according to the amortized cost and actual interest rate of the
financial assets in subsequent periods.The Group designates non-trading equity instrument investments as financial assets
measured at fair value through other comprehensive income. Such designation once
made may not be revoked. The non-trading equity instrument investments designated by
the Group to be measured at fair value through other comprehensive income are initially
measured at fair value and the relevant transaction costs are included in the initial
recognition amount; except for dividends obtained (except for the recovery of investment
costs) which are included in the current gains/losses other relevant gains and losses
(including exchange gains/losses) are included in other comprehensive income and shall
not be subsequently transferred to the current gains/losses. When they are derecognized
the cumulative gains or losses previously recognized in other comprehensive income are
transferred from other comprehensive income to retained earnings. Equity instrument
investments measured at fair value through other comprehensive income include: Equity
investments to be held in the long term as planned by the Group for strategic purpose with
no control joint control or significant influence and with no active market quotation.Financial assets other than those classified as financial assets measured at amortized cost
and financial assets measured at fair value through other comprehensive income. The
Group classifies them as financial assets measured at fair value through current
gains/losses. These financial assets are initially measured at fair value and the relevant
transaction costs are directly included in the current gains/losses. Gains or losses arising
from these financial assets are recorded into the current gains/losses.The contingent consideration recognized by the Group in a business combination not
under the same control which constitutes a financial asset is classified as financial assets
measured at fair value through current gains/losses.
(3) Classification Recognition and Measurement of Financial Liabilities
The Group’s financial liabilities are on initial recognition classified into financial liabilities
measured at fair value through current gains/losses and other financial liabilities.
48Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Financial liabilities measured at fair value through current gains/losses include held-for-
trading financial liabilities and financial liabilities designated at initial recognition to be
measured at fair value through current gains/losses. Subsequent measurement is carried
out at fair value and gains or losses arising from changes in fair value as well as dividends
and interest expenses related to the financial liability are included in current gains/losses.Other financial liabilities are subsequently measured at amortized cost using the effective
interest rate method. The Group classifies financial liabilities except for the following items
as financial liabilities measured at amortized cost: * Financial liabilities measured at fair
value through current gains/losses including held-for-trading financial liabilities (including
derivative instruments belonging to financial liabilities) and financial liabilities designated to
be measured at fair value through current gains/losses. * Financial liabilities arising from
the transfer of financial assets not meeting the derecognition conditions or continuous
involvement in the transferred financial assets. * Financial guarantee contracts not
belonging to cases of above * or * and loan commitments at an interest rate lower than
the market rate not belonging to the case in * .The Group treats the financial liability arising from contingent consideration recognized as
the purchaser in a business combination not under the same control as measured at fair
value and changes thereof shall be recorded into current gains/losses.
(4) Impairment of financial instruments
Based on expected credit loss the Group recognizes impairment and provisions for losses
on financial assets measured at amortized cost debt investments measured at fair value
with changes in fair value recognized in other comprehensive income contract assets
lease receivables loan commitments and financial guarantee contracts.
1) Measurement of expected credit loss
Expected credit loss refers to the weighted average of the credit losses of financial
instruments weighted by the risk of default. Credit loss refers to the difference between all
contractual cash flows receivable under the contract and all expected cash flows to be
collected discounted by the Group using the original effective interest rate i.e. the
present value of all cash shortfalls.Expected credit loss over the entire lifespan refers to the expected credit loss caused by
all possible default events that may occur during the expected lifespan of a financial
instrument. Expected credit loss in the next 12 months refers to the expected credit loss
caused by a financial instrument default event that may occur within 12 months after the
balance sheet date (if the expected lifespan of the financial instrument is less than 12
months the actual expected lifespan applies) which is a part of the expected credit loss
over the entire lifespan.
49Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
For accounts receivable notes receivable receivables financing contract assets and other
receivables arising from daily operating activities such as sales of goods and rendering of
labor services if they do not contain significant financing components the Group adopts a
simplified measurement method to measure the loss provision at the amount equivalent to
the expected credit loss over the entire lifespan.For lease receivables receivables containing significant financing components and
contract assets the Group adopts the simplified measurement method to measure the loss
provision at the amount equivalent to the expected credit loss over the entire lifespan.For financial assets (such as debt investments other debt investments and other
receivables) loan commitments and financial guarantee contracts other than those
measured with the above-mentioned simplified measurement method the Group adopts
the general method (three-stage method) to accrue the expected credit loss. On each
balance sheet date the Group assesses whether there is a significant increase in credit
risk since initial recognition. If the credit risk has not increased significantly since initial
recognition it is in the first stage. In this case the Group accrues the loss provision at the
amount equivalent to the expected credit loss in the next 12 months and calculates the
interest income according to the book balance and the effective interest rate; if the credit
risk has increased significantly since initial recognition but credit impairment has not
occurred it is in the second stage. In this case the Group accrues the loss provision at an
amount equivalent to the expected credit loss over the entire lifespan and calculates the
interest income according to the book balance and the effective interest rate; if a credit
impairment occurs after initial recognition it is in the third stage. In this case the Group
accrues the loss provision at an amount equivalent to the expected credit loss over the
entire lifespan and calculates the interest income at amortized cost and effective interest
rate.For financial instruments with low credit risk on the balance sheet date the Group
assumes that there is no significant increase in their credit risk since initial recognition.Regarding the Group's criteria for determining significant increases in credit risk and the
definition of assets with credit impairment please refer to Note XI.1(2) for disclosure.When the Group uses the expected credit loss model to assess the impairment of financial
instruments and contract assets the expected changes in the debtors' credit risk are
inferred based on historical repayment data and in combination with economic policies
macroeconomic indicators industry risks and other factors. Different estimates may affect
the provision for impairment therefore the provision for impairment already made may not
be equal to the actual amount of impairment loss in the future.
2) Portfolio category and determination basis of provision for impairment made by
50Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
portfolio with credit risk characteristics
The Group assesses the expected credit loss of financial instruments on an individual and
portfolio basis. When assessing on a portfolio basis the Group divides financial
instruments into different groups based on common credit risk characteristics. The
common credit risk characteristics adopted by the Group include: type of financial
instrument credit risk rating and aging of receivables.
3) Judgment criteria for individual provision for impairment of bad debts based on
individual basis
If the credit risk characteristics of a certain customer are significantly different from those
of other customers in the portfolio or if the credit risk characteristics of that customer have
changed significantly such as amounts due from related parties; receivables that are in
dispute with the counterparty or involve litigation or arbitration; receivables for which there
are clear indications that the debtor is highly unlikely to be able to fulfill its repayment
obligations etc.
4) Write-off of provision for impairment
When the Group no longer reasonably expects to recover all or part of the cash flows from
financial asset contracts the Group directly reduces the carrying amount of the financial
asset. If the written-down financial assets are recovered later they are included in the
current gains/losses as the reversal of the impairment loss.
(5) Recognition and Measurement of Financial Asset Transfers
The Group derecognizes the financial assets that meet one of the following conditions: *
the contractual right to receive the cash flow from the financial assets is terminated; * The
financial assets have been transferred and the Group has transferred almost all the risks
and rewards of ownership of the financial assets; * The financial assets have been
transferred and the Group has neither transferred nor retained almost all risks and
rewards of ownership of the financial assets nor has it retained control over the financial
assets.If the overall transfer of financial assets fulfills the requirements for derecognition the
difference between the book value of the transferred financial assets and the sum of the
consideration received due to the transfer and the corresponding derecognition part of the
accumulated amount of fair value changes originally directly included in other
comprehensive income (the contract terms involving the transferred financial assets
stipulate that the cash flow generated on a specific date is only the payment of the
principal and interest based on the unpaid principal amount) shall be included in the
current gains/losses.If the partial transfer of financial assets satisfies the conditions for derecognition the entire
51Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
book value of the transferred financial assets will be apportioned between the
derecognition portion and the non-derecognition portion according to their relative fair
values and the consideration received for the transfer and the amount corresponding to
the derecognition of the cumulative amount of changes in fair value originally included in
other comprehensive income that should be apportioned to the derecognition part (the
contractual terms of the transferred financial asset stipulate that cash flows generated on
specific dates are solely payments of principal and interest based on the outstanding
principal amount) and the difference between the total book value of the aforesaid financial
assets allocated is included in the current gains/losses.
(6) The Distinction Between Financial Liabilities and Equity Instruments and Related
Treatment Methods
The Group distinguishes the financial liabilities and equity instruments according to the
following principles: (1) If the Group cannot unconditionally avoid performing a contractual
obligation by delivering cash or other financial assets the contractual obligation meets the
definition of financial liabilities. Although some financial instruments do not explicitly
include the terms and conditions of the obligation to deliver cash or other financial assets
they may indirectly form contractual obligations through other terms and conditions. (2) If a
financial instrument must be settled with or can be settled with the Group's own equity
instrument it is necessary to consider whether the Group's own equity instrument used to
settle the instrument is used as a substitute for cash or other financial assets or to enable
the holder of the instrument to enjoy the residual equity in the assets of the issuer after
deducting all liabilities. If the former the instrument is a financial liability of the issuer; if the
latter the instrument is an equity instrument of the issuer. In some cases a financial
instrument contract requires the Group to use or be able to use its own equity instrument
to settle the financial instrument in which the amount of contractual rights or contractual
obligations is equal to the number of its own equity instruments available or to be delivered
multiplied by its fair value at the time of settlement regardless of whether the amount of
contractual rights or obligations is fixed or entirely or partially based on changes in
variables other than the market price of the Group's own equity instruments (such as
interest rates prices of certain commodities or prices of certain financial instruments) the
contract shall be classified as a financial liability.In classifying financial instruments (or their components) in the consolidated statement the
Group has taken into account all terms and conditions reached between the Group
members and the holders of financial instruments. If the Group as a whole undertakes the
obligation to deliver cash other financial assets or settle accounts in other ways that cause
the instrument to become a financial liability due to the instrument the instrument shall be
52Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
classified as a financial liability.If financial instruments or their components are financial liabilities the Group will include
interest dividends gains or losses and gains or losses arising from redemption or
refinancing etc. in the current gains/losses.If financial instruments or their components are equity instruments when they are issued
(including refinancing) repurchased sold or cancelled the Group will treat them as
changes in equity and will not recognize changes in the fair value of equity instruments.
(7) Offset of Financial Assets and Financial Liabilities
The Group’s financial assets and liabilities shall be separately presented in the balance
sheet and not set off each other. However when the following conditions are met
simultaneously the net amount after mutual offset is presented in the balance sheet: (1)
the Group has the legal right to offset the recognized amount and such legal right is
currently enforceable; (2) the Group plans to settle them on a net basis or realize the
financial assets and settle the financial liabilities at the same time.
12. Notes Receivable
For notes receivable the Group shall measure the provision for loss based on the
expected credit loss amount over the entire period of existence. According to the credit risk
characteristics thereof except those with separate evaluation of credit risk notes
receivable can be divided into different combinations:
Item Basis for Combination Determination
Bank acceptance bills The accepter shall be a bank with high credit level and low risks
Commercial acceptance bills Classified by credit risk of accepters (the same as accounts receivable)
13. Accounts receivable
For accounts receivable and contract assets excluding significant financing composition
the Group shall measure the provision for loss according to the expected credit loss
amount over the entire period of existence.For accounts receivable contract assets and lease payment receivable including
significant financing composition the Group shall always measure the provision for loss
according to the expected credit loss amount over the period of existence.Except the accounts receivable and contract assets whose credit risks shall be separately
evaluated the Group shall divide them into different combinations based on the specific
credit risks:
Item Basis for Combination Determination
Aging Combination This portfolio is accounts receivable with aging as the credit risk feature
Related party portfolio The accounts receivable from the other entities within the consolidation scope
53Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
14. Receivables Financing
The Group’s receivables financing is based on expected credit losses and provision is
made for impairment reserves in accordance with the expected credit loss measurement
method for notes receivable.
15. Other Receivables
The Group measures the provision for losses of other receivables as below: * for financial
assets with no significant increase in credit risk since initial recognition the Group
measures the provision for loss according to the amount of expected credit loss in the next
12 months; * for financial assets whose credit risk has increased significantly since initial
recognition the Group measures the provision for loss at an amount equivalent to the
expected credit loss of the financial instrument during the entire lifespan; * for purchased
or internally generated financial assets which have undergone credit impairment the
Group measures the provision for loss at an amount equivalent to the expected credit loss
over the entire lifespan. Except other receivables whose credit risks shall be separately
evaluated the Group shall divide them into different combinations based on the specific
credit risk features:
Item Basis for Combination Determination
Aging Combination This portfolio consists of other receivables with aging as the credit risk feature.This portfolio's credit risk characteristics are other receivables with extremely low risk such as
Low-risk portfolio
petty cash security deposits and deposits.Related party portfolio This portfolio consists of other receivables from entities within the Group's consolidation scope.
16. Long-term Receivables
By determining whether the credit risk of long-term receivables increases remarkably after
the initial recognition the Group shall measure the impairment loss based on the specific
expected credit loss in the following 12 months or during the entire period of existence.Except for long-term receivables whose credit risks shall be separately evaluated the
Group shall divide them into different combinations based on the specific credit risk
features:
Item Basis for Combination Determination
Financing Lease
Uses long-term receivables related to the financing lease as the credit risk characteristics.Combination
17. Inventories
The Group's inventories mainly include raw materials products in process semi-finished
products products on hand and entrusted processing materials.The perpetual inventory system is adopted and inventories are valued at actual cost upon
acquisition; the actual cost of inventories that have undergone requisition or dispatch is
54Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
determined using the weighted average method. Low-value consumables and packaging
are amortized through the one-off charge-off method.For merchandise inventories directly for sale such as finished goods goods in process
and materials for sale their net realizable values are determined at the estimated selling
prices of the inventories minus the estimated selling expenses and relevant taxes and
surcharges; the net realizable value of material inventory held for production purposes is
determined by subtracting the estimated costs to be incurred until completion estimated
sales expenses and related taxes from the estimated selling price of the finished products
produced. For inventories with large quantity and low unit price the provision for inventory
depreciation is made according to the inventory category; for inventories related to the
product series produced and sold in the same area with the same or similar end use or
purpose and difficult to be measured separately from other items the provision for
inventory depreciation is made on a consolidated basis.The net realizable value refers in the ordinary course of business to the amount after
deducting the estimated cost of completion estimated sale expenses and relevant taxes
from the estimated sale price of inventories. The net realizable value of inventories shall
be fixed on the basis of valid evidence as well as under consideration of the purpose of
inventories and the effect of events after the balance sheet date.After recognizing the provision for inventory depreciation if the factors which caused a
write-down of inventories have disappeared causing the net realizable value of inventories
to be higher than their book value the amount of the write-down shall be reversed within
the original amount of provision for inventory depreciation. The reversed amount shall be
included in the current gains/losses.
18. Contract Assets
(1) Recognition methods and standards for contract assets
Contract assets refer to the right of the Group to receive consideration after transferring
goods to customers and this right depends on factors other than the passage of time. If
the Group sells two clearly distinguishable products to customers it has the right to
receive payment because one of the products has been delivered but the payment is also
dependent on the delivery of the other product the Group recognizes the right to receive
payment as a contract asset.
(2) Determination Method and Accounting Treatment Method of Expected Credit
Loss of Contract Assets
The method for determining the expected credit losses of contract assets involves
measuring the impairment losses of contract assets by referencing the method used for
the impairment loss measurement of receivables as previously described.
55Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
The Group calculates the expected credit loss of contract assets on the balance sheet
date. If the expected credit loss is greater than the book amount of the current provision for
impairment of contract assets the Group recognizes the difference as an impairment loss
by debiting “impairment loss on assets” and crediting “provision for impairment of contractassets”. On the contrary the Group recognizes the difference as an impairment gain and
makes the opposite accounting records.If the Group actually incurs a credit loss and determines that the relevant contract assets
cannot be recovered and the write-off is approved the "provision for impairment of
contract assets" is debited and the "contract assets" is credited according to the approved
write-off amount. If the write-off amount is greater than the provision for losses that has
been made the difference is debited to "losses from asset impairment".
19. Assets relating to contract costs
(1) Method for determining the amount of assets relating to contract costs
The Group’s assets related to contract costs include contract performance costs and
contract acquisition costs.Contract performance cost refers to the cost incurred by the Group to perform a contract. If
the contract performance cost does not fall within the scope of other accounting standards
for business enterprises and meets the following conditions at the same time it is
recognized as an asset under contract performance cost: this cost is directly related to a
current or expected contract including direct labor direct materials manufacturing
expenses costs clearly borne by the customer as well as other costs incurred only due to
this contract; this cost increases the Group's future resources to meet its performance
obligations; this cost is expected to be recovered.Contract acquisition cost refers to the incremental cost incurred by the Group to obtain the
contract that is expected to be recovered. It is recognized as an asset under contract
acquisition cost; if the amortization period of the asset does not exceed one year the
asset is included in the current gains/losses when the amortization occurs. Incremental
cost refers to the cost (such as sales commission etc.) that the Group will not incur
without obtaining the contract. The Group's expenses incurred in obtaining the contract
other than the expected recoverable incremental cost (such as travel expenses incurred
regardless of whether the contract is obtained etc.) are included in the current
gains/losses when they are incurred except when clearly borne by the customer.
(2) Amortization of assets relating to contract costs
The Group’s assets related to contract costs are amortized on the same basis as the
commodity revenue recognition related to the asset and included in the current
gains/losses.
56Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
(3) Impairment of assets relating to contract costs
When determining the impairment loss of assets related to contract costs the Group first
determines the impairment loss of other assets related to the contract recognized in
accordance with other relevant accounting standards for business enterprises; if its book
value is higher than the difference between the remaining consideration expected to be
obtained by the Group from the transfer of the goods related to the asset and the
estimated cost to be incurred for the transfer of the relevant goods the excess shall be
provided for impairment and recognized as asset impairment loss.If the impairment factors of the previous period have changed and the aforementioned
difference is higher than the book value of the asset the original provision for asset
impairment shall be reversed and included in the current gains/losses but the book value
of the asset after the reversal shall not exceed assuming no provision for impairment is
made the book value of the asset on the date of reversal.
20. Long-term equity investments
The Group's long-term equity investments are mainly investments in subsidiaries and
associates.The Group’s judgment on joint control is based on the fact that all participants or a
combination of participants collectively control the arrangement and that the policies of the
activities related to the arrangement shall be unanimously agreed by those participants
who collectively control the arrangement.The Group is generally considered to have a significant influence on the investee when it
owns directly or indirectly through a subsidiary above 20% but below 50% of the voting
rights of the investee. If the Group holds less than 20% of the voting rights of the investee
it also needs to judge whether the Group has a significant influence on the investee by
taking into account the facts and circumstances such as having representatives on the
Board of Directors or similar authority of the investee or participating in the process of
formulating financial and operating policies of the investee or having major transactions
with the investee or sending management personnel to the investee or providing key
technical information to the investee.If control over the investee is formed it is a subsidiary of the Group. For long-term equity
investment acquired through business combination under the same control the initial
investment cost of the long-term equity investments is recorded at the merger date based
on the acquisition of the merged party's share of the book value of the net assets of the
ultimate controller in the consolidated financial statements. If the book value of the net
assets of the merged party on the merger date is negative the cost of long-term equity
investments is determined as zero.
57Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
If the business combination that is ultimately formed through multiple transactions to
acquire the equity of the investee under the same control belongs to a package deal the
Group shall conduct accounting treatment to treat each transaction as a single transaction
to acquire control. If the transaction is not a package deal the initial investment cost of the
long-term equity investment is based on the share of the book value of the net assets of
the merged party in the consolidated financial statements of the ultimate controller at the
merger date. The difference between the initial investment cost and the sum of the book
value of the long-term equity investment before the merger plus the book value of the new
consideration paid for further acquisition of shares at the merger date shall offset against
capital reserve; and where capital reserve is insufficient to be offset the retained earnings
shall be adjusted.For long-term equity investment acquired through business combination not under the
same control the initial investment cost shall be the consolidation cost.If the business combination that is ultimately formed through multiple transactions to
acquire the equity of the investee not under the same control belongs to a package deal
the Group will conduct accounting treatment to treat each transaction as a single
transaction to acquire control. If the transaction is not a package deal the sum of the book
value of the equity investment originally held plus the cost of the new investment shall be
the initial investment cost calculated in accordance with the cost method. If the equity held
prior to the purchase date is accounted for by the equity method the relevant other
comprehensive income accounted for by the original equity method shall not be adjusted.The same basis of accounting as that used for the direct disposal of the related assets or
liabilities by the investee is used for the disposal of the investment. If the equity held
before the purchase date is designated as the financial assets measured at fair value
through other comprehensive income the cumulative gains or losses of the equity
originally recognized in other comprehensive income shall be transferred from other
comprehensive income and recognized in retained earnings; if it is a financial asset
measured at fair value through current gains/losses the gains or losses of the equity
originally included in the gains/losses from changes in fair value need not be transferred to
investment income. If the equity held prior to the purchase date is an investment for other
equity instruments the changes in fair value of the equity investment accumulated in other
comprehensive income before the purchase date shall be transferred to the retained
earnings.Except for the above long-term equity investments obtained through business
combinations long-term equity investments obtained through cash payments are
recognized as investment costs based on the actual purchase price paid; for long-term
58Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
equity investments acquired by issuing equity securities the fair value of the issued equity
securities is taken as the investment cost; for long-term equity investments invested by
investors the value agreed in the investment contract or agreement shall be taken as the
investment cost.The Group calculates its investments in subsidiaries through the cost method and its
investments in joint ventures and associates through the equity method.For long-term equity investments calculated by the cost method for subsequent
measurement the book value of the cost of long-term equity investments shall be
increased by the fair value of the cost amount paid for the additional investment and
relevant transaction costs incurred when the additional investment is made. Cash
dividends or profits declared by the investee are recognized as investment income for the
current period in accordance with the due amount.For the long-term equity investment whose subsequent measurement adopts the equity
method the book value of the long-term equity investment will increase or decrease
accordingly with the change of the owner's equity of the investee. In recognizing the share
of net gains/losses of an investee the fair value of the identifiable assets of the investee at
the time of investment acquisition is used as the basis for recognizing the net profit of the
investee in accordance with the Group's accounting policies and accounting periods with
the offsetting of the portion of gains/losses on internal transactions with associates and
joint ventures that are attributable to the investor based on the proportion of the investor's
ownership interest and the net profit of the investee is recognized after adjustments are
made to the net profit of the investee.For the disposal of a long-term equity investment the difference between its book value
and the actual proceeds is included in the current investment income. For long-term equity
investments accounted for using the equity method the relevant other comprehensive
income accounted for using the original equity method shall be accounted for on the same
basis as the investee's direct disposal of relevant assets or liabilities when the equity
method is terminated. The owner's equity recognized due to other changes in owner's
equity of the investee other than net gains/losses other comprehensive income and profit
distribution shall be fully transferred into the current investment income when the equity
method is terminated.If common control or significant influence over an investee is lost due to the disposal of a
portion of the equity investment etc. the remaining equity interest after disposal is
reclassified to be accounted for in accordance with the relevant provisions of the
guidelines for the recognition and measurement of financial instruments and the
difference between the fair value of the remaining equity interest at the date of the loss of
59Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
common control or significant influence and its book value is recognized in current
gains/losses. Any other comprehensive income previously recognized under the equity
method for the original equity investment is accounted for on the same basis as if the
investee had directly disposed of related assets or liabilities once the equity method
ceases to apply and is carried forward proportionally. The owner's equity recognized due
to other changes in owner's equity of the investee other than net gains/losses other
comprehensive income and profit distribution shall be proportionally transferred into the
current investment income.In case that the control over the investee is lost due to the disposal of part of the long-term
equity investments if the remaining equity after disposal can exercise joint control or
significant influence on the investee the accounting method is changed to the equity
method. The difference between the book value of the disposed equity and the disposal
consideration shall be included in the investment income and the remaining equity is
adjusted as if it were accounted for using the equity method from the time of acquisition; if
the remaining equity after disposal is insufficient for exercising joint control or significant
influence on the investee accounting treatment shall be made in accordance with the
relevant provisions of the recognition and measurement standards for financial instruments.The difference between the book value of the disposed equity and the disposal
consideration shall be included in the investment income and the difference between the
fair value and the book value of the remaining equity on the date of loss of control is
included in the current gains/losses.If the Group's transactions of step-by-step disposal of equity to loss of control do not
belong to a package deal accounting treatment shall be carried out for each transaction
separately. If it is a "package deal" each transaction will be treated as a transaction of
disposal of subsidiaries and loss of control. However before the loss of control the
difference between the disposal price of each transaction and the book value of the long-
term equity investment corresponding to the disposed equity will be recognized as other
comprehensive income and when the control is lost it will be transferred to the current
gains/losses of loss of control.
21. Investment properties
The term "investment property" refers to the real estate held for generating rent and/or
capital appreciation. Investment properties include leased land use rights land use rights
held for transfer upon appreciation and leased buildings etc. In addition if the Board of
Directors (or similar organizations) makes a written resolution to use the vacant buildings
held by the Group for operating lease and the holding intention will not change in a short
time they will also be listed as investment properties.
60Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
The initial measurement of the investment property shall be made at its cost. For
subsequent expenses related to the investment property if the economic benefits related
to the asset are likely to flow in and the cost can be measured reliably they are included in
the cost of the investment property. Other subsequent expenses are included in the
current gains/losses when incurred.The Group adopts the cost model for the subsequent measurement of investment
properties and depreciates or amortizes them in accordance with a policy consistent with
that for buildings or land use rights.For details of impairment test method and withdrawal method of impairment provision of
investment properties please refer to Note IV. 27. "Long-term assets impairment".The Group's investment properties adopt the average life method for depreciation or
amortization. The expected service life net residual value rate and annual depreciation
(amortization) rate of all kinds of investment properties shall refer to the depreciation policy
for buildings under fixed assets and the amortization policy for land use rights under
intangible assets.When owner-occupied real estate or inventories are changed into investment property or
investment property is changed into owner-occupied real estate the book value prior to
the change shall be the entry value after the change.When an investment property is changed to an owner-occupied real estate it would be
transferred to fixed assets or intangible assets at the date of such change. When an
owner-occupied real estate is changed to be held to earn rental or for capital appreciation
the fixed asset or intangible asset is transferred to investment property at the date of such
change. When a property is converted to an investment property measured using the cost
model the book value before conversion is taken as the entry value after conversion;
when a property is converted into an investment property measured at fair value the fair
value on the conversion date is recognized as the entry value after conversion.An investment property is derecognized on disposal or when the investment property is
permanently withdrawn from use and no future economic benefits are expected from its
disposal. The amount of proceeds on sale transfer retirement or damage of an
investment property less its carrying amount and related taxes and expenses is
recognized in the current gains/losses in the period in which it is incurred.
22. Fixed assets
The Group’s fixed assets are tangible assets held for the production of goods provision of
services rental or operation management and have a useful life of more than one year.Fixed assets should be recognized when it is probable that the economic benefits
associated with them will be incorporated into the Group and their cost can be measured
61Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
reliably. The Group’s fixed assets include buildings and constructions machinery and
equipment electronic equipment transportation equipment and other equipment.The Group depreciates all fixed assets by the straight-line method except for fully
depreciated fixed assets that continue to be used and land that is separately valued. The
straight-line depreciation method (SLD) is adopted. The classified depreciation life
estimated net residual value rate and depreciation rate of the Group's fixed assets are as
follows:
No. Category Depreciation method Depreciation period Expected residual
Annual
(year) value rate (%) depreciation rate(%)
Housing and Straight-line
120-405-10.002.25-4.75
building depreciation
Machinery Straight-line
25-105-10.009.00-19.00
Equipment depreciation
Electronic Straight-line
33-55-10.0018.00-31.67
Equipment depreciation
Transportation Straight-line
43-55-10.0018.00-31.67
equipment depreciation
Straight-line
5 Other equipment 5 5-10.00 18.00-19.00
depreciation
The estimated useful life estimated net salvage value and depreciation method of fixed
assets are reviewed at the end of each year. Accounting estimate changes are applied
when changes are required.
23. Construction in progress
The cost of construction in progress is determined based on actual project expenditures
including all necessary project expenditures incurred during construction borrowing costs
to be capitalized before the project reaches its predetermined usable state and other
related expenses etc.On the date when the construction in progress reaches its intended usable state fixed
assets are carried forward at the estimated value based on the project budget cost or
actual cost of the project etc. Depreciation starts from the following month and the
difference in the original value of fixed assets is adjusted after the completion of the final
accounting procedures.Construction in progress is transferred to fixed assets upon reaching the predetermined
usable state with the criteria as follows:
Item Criteria for carrying forward fixed assets
The main construction project and ancillary projects are substantially completed meeting
the predetermined design requirements. Upon joint acceptance by the Company’s
Housing and building Engineering Department and units responsible for surveying design construction
supervision etc. and government departments such as the Fire Services Department and
the Housing Authority and reaching the predetermined usable state following process
62Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Item Criteria for carrying forward fixed assets
approval it is transferred to fixed assets.The equipment management department and the equipment manufacturer are jointly
responsible for the installation and commissioning of the equipment including hardware
Machinery Equipment
debugging process conditions debugging etc. Upon completion of debugging and reaching
the predetermined usable state following process approval it is transferred to fixed assets.
24. Borrowing costs
The Group capitalizes borrowing costs directly attributable to the acquisition construction
or production of qualifying assets as part of the cost of those assets and other borrowing
costs are included in the current gains/losses. The assets that meet the capitalization
conditions determined by the Group include the borrowing costs of fixed assets
investment real estate and inventories that need more than one year of acquisition and
construction or production activities to reach the expected serviceable or marketable
status. Capitalization starts when asset expenditures have been incurred borrowing costs
have been incurred and necessary purchasing construction or production activities have
begun to bring the assets to their intended usable or marketable status; when the acquired
and constructed or produced assets that meet the capitalization conditions have reached
the working condition for their intended use or sale the capitalization is ceased and the
borrowing costs incurred thereafter are included in the current gains/losses. If there is an
abnormal interruption in the acquisition construction or production of assets that meet the
capitalization conditions and the interruption lasts for more than 3 consecutive months the
capitalization of borrowing costs will be suspended until the acquisition construction or
production of assets starts again.During each accounting period within the capitalization process the Group recognizes the
capitalization amount of borrowing costs using the following method: for specialized
borrowings the capitalization amount is based on the actual interest expenses incurred in
the current period after deducting the interest income earned from unused borrowing
funds deposited in the bank or investment income earned from temporary investments;
where general borrowings are used they shall be determined by multiplying the weighted
average of asset disbursements of the part of accumulated asset disbursements
exceeding specialized borrowings by the capitalization rate of used general borrowings
and the capitalization rate is calculated and determined according to the weighted average
interest rate of the general borrowings.
25. Right-of-use assets
The right-of-use assets refer to the right of the Group as the lessee to use the leased
assets during the lease term.
63Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
(1) Initial Measurement
On the commencement date of the lease term the Group uses the cost for initial
measurement of right-of-use assets. The cost includes the following four items: * initial
measurement amount of the lease liabilities; * lease payment amount paid on or before
the start date of the lease term. If there is any lease incentive the lease incentive amounts
that have been enjoyed are deducted; * the initial direct costs incurred i.e. the
incremental costs incurred in obtaining the lease agreement; * the cost expected to be
incurred for dismantling and removing the leased assets restoring the site where the
leased assets are located or restoring the leased assets to the state agreed upon in the
lease terms except for those incurred for the production of inventory.
(2) Subsequent Measurement
After the commencement date of the lease term the Group adopts the cost model to carry
out subsequent measurement of the right-of-use assets that is the right-of-use assets are
measured at cost less accumulated depreciation and accumulated impairment losses. If
the Group re-measures the lease liabilities according to the relevant provisions of the
lease standards the book value of the right-of-use assets shall be adjusted accordingly.
(3) Depreciation of right-of-use assets
From the commencement date of the lease term the Group accrues depreciation on the
right-of-use assets. Right-of-use assets are usually depreciated from the month when the
lease term begins. The accrued depreciation amount is included in the cost of related
assets or current gains/losses according to the use of the right-of-use assets.When determining the depreciation method of the right-of-use assets the Group makes a
decision based on the expected consumption mode of the economic benefits related to the
right-of-use assets and accrues depreciation for the right-of-use assets using the straight-
line method.When determining the depreciation life of right-of-use assets the Group follows the
following principles: if it can be reasonably determined that the ownership of the leased
assets will be obtained at the expiration of the lease term the depreciation is accrued over
the remaining service life of the leased assets; if it cannot be reasonably determined that
the ownership of the leased asset can be obtained at the expiration of the lease term the
depreciation is accrued over the shorter of the lease term or the remaining service life of
the leased asset.
(4) Impairment of right-of-use assets
If the right-of-use assets are impaired the Group carries out subsequent depreciation
according to the book value of the right-of-use assets after deducting the impairment loss.
26. Intangible assets
64Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Intangible assets of the Group include land use rights patented technologies non-
patented technologies etc. They are measured at the actual cost on acquisition.Specifically for purchased intangible assets the actual price paid and other relevant
expenses are taken as the actual cost; for intangible assets invested by investors the
value agreed in the investment contract or agreement is taken as the actual cost. However
if the value agreed in the contract or agreement is not fair the actual cost is determined
according to the fair value; for intangible assets such as patents acquired from a merger
not under the same control if they were owned by the acquired party but not recognized in
its financial statements they shall be recognized as intangible assets at fair value upon
initial recognition of the acquired party's assets.
（1） Service life and its determination basis estimation amortization method or
review procedure
Intangible assets of the Group include land use rights patented technologies non-
patented technologies etc. They are measured at the actual cost on acquisition.Specifically for purchased intangible assets the actual price paid and other relevant
expenses are taken as the actual cost; for intangible assets invested by investors the
value agreed in the investment contract or agreement is taken as the actual cost. However
if the value agreed in the contract or agreement is not fair the actual cost is determined
according to the fair value; for intangible assets such as patents acquired from a merger
not under the same control if they were owned by the acquired party but not recognized in
its financial statements they shall be recognized as intangible assets at fair value upon
initial recognition of the acquired party's assets.
（2） Scope of R&D expenditures and related accounting treatments
The scope of the Group's R&D expenditures includes salaries of R&D personnel
direct input costs depreciation and amortization design fees equipment testing fees fees
for R&D outsourced to external parties and other expenses.The Group classifies its internal research and development project expenditures into
expenditure on the research phase and expenditure on the development phase based on
the nature of the expenditures and the degree of uncertainty in whether the R&D
activities will result in an intangible asset. Expenditure on the research phase is
recognized in current gains/losses when incurred. Expenditure on the development phase
is capitalized when all of the following conditions are met:
The Group has assessed the technical feasibility of completing the intangible asset so that
it will be available for use or sale;
The Group intends to complete the intangible asset and use or sell it;
It is probable that the intangible asset will generate future economic benefits;
65Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
The Group has the adequate technical financial and other resources to complete the
development and to use or sell the intangible asset;
The expenditure attributable to the development phase of the intangible asset can be
measured reliably. Development phase expenditures not meeting these capitalization
criteria are recognized in current gains/losses for the period when incurred.
27. Impairment of long-term assets
For non-current non-financial assets of fixed assets projects under construction intangible
assets with limited service life investment property measured using the cost model and
long-term equity investments in subsidiaries joint ventures and associates the Group
shall assess at the balance sheet date whether there is any indication of impairment. If
such indication exists the recoverable amount shall be estimated and an impairment test
conducted. Goodwill intangible assets with indefinite service life and intangible assets not
yet available for use shall be tested for impairment at the end of each year regardless of
whether there is any indication of impairment.
（1） Impairment of non-current assets other than financial assets (except goodwill)
If the impairment test result shows that the recoverable amount of an asset is less than its
book value an impairment provision for the difference shall be made and recorded in
impairment losses. The recoverable amount is the higher of the net amount of the asset's
fair value less disposal costs and the present value of the asset's estimated future cash
flows. The fair value of the asset is determined according to the sales agreement price in
an arm's length transaction; if there is no sales agreement but there is an active market for
the asset the fair value is determined based on the buyer's offer for the asset; if there is
neither a sales agreement nor an active market for the asset the fair value is estimated
based on the best available information. Disposal costs include legal fees related taxes
freight charges and other direct costs incurred to bring the asset to a saleable condition.The present value of the asset's estimated future cash flows is determined by discounting
the asset's estimated future cash flows during continued use and upon disposal using an
appropriate discount rate. Impairment provisions for assets are calculated and recognized
on the basis of individual assets. If it is difficult to estimate the recoverable amount of an
individual asset the recoverable amount is determined for the asset group to which the
asset belongs. An asset group is the smallest combination of assets that generates cash
inflows independently.
（2） Impairment of goodwill
In the impairment test the book value of goodwill presented separately in the financial
statements is allocated to the asset group or groups of asset groups expected to benefit
from the synergies of the business combination. If the impairment test result shows that
66Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
the recoverable amount of the asset group or groups of asset groups containing the
allocated goodwill is less than its book value the corresponding impairment loss is
recognized. The amount of impairment loss is first used to reduce the book value of
goodwill allocated to the asset group or groups of asset groups and then the book value of
other assets is reduced proportionately based on their respective book values within the
asset group or groups of asset groups (excluding goodwill).The methodology parameters and assumptions for the goodwill impairment test are
detailed in Note VI.19.Once recognized the above impairment losses on assets shall not be reversed in
subsequent accounting periods.
28. Long-term deferred expenses
The Group's long-term deferred expenses include renovation costs mold costs and so on.These expenses are amortized evenly over the benefit period. If a long-term deferred
expense item cannot generate benefits for future accounting periods the unamortized
value of the item shall be fully transferred to current gains/losses.
29. Contract liabilities
Contract liabilities refer to the obligation of the Group to transfer goods to customers for
consideration received or receivable from customers. Before the transfer of goods if the
customer has paid the consideration or if the Group has obtained the right to
unconditionally collect the contract consideration the contract liabilities shall be
recognized based on the amount received or receivable at the earlier of the customer's
actual payment date or the payment due date.
30. Employee compensation
Employee compensation of the Group includes short-term compensation post-
employment benefits termination benefits and other long-term benefits.Short-term compensation mainly includes wages bonuses allowances and subsidies
employee welfare expenses medical insurance maternity insurance employment injury
insurance housing provident fund labor union expenses staff education expenses and
non-monetary benefits. During the accounting period when employees provide services
the actual short-term compensation is recognized as a liability and included in current
gains/losses or the cost of related assets depending on the beneficiary.The post-employment benefits mainly include the basic endowment insurance etc. They
are divided into defined contribution plans and defined benefit plans in accordance with the
risks and obligations undertaken by the Group. According to the defined contribution plan
the deposit paid to a separate entity in exchange for the services provided by the
employees during the accounting period on the balance sheet date is recognized as
67Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
liabilities and shall be included in the current gains/losses or the cost of related assets
according to the beneficiary. If the Group has a defined benefit plan the specific
accounting method should be explained.When terminating labour relations before expiration of contract or layoffs with
compensations and the Group cannot unilaterally withdraw the plan for terminating labour
relations or layoff proposal the liabilities arising from dismissal welfare shall be recognized
and included in current gains/losses at the earlier of the date the related costs of dismissal
welfare in connection with a restructuring are recognized or the date when the dismissal
welfare cannot be withdrawn unilaterally. However dismissal welfare not fully paid within
12 months after Reporting Period should be handled the same as other long-term
employees’ payrolls.The internal employee retirement plan is treated by adopting the same principle as the
above dismissal welfare. The Group would record the salary and the social security
insurance fees paid and so on from the employee’s service termination date to normal
retirement date into current gains/losses (dismissal welfare) under the condition that they
meet the recognition conditions of estimated liabilities.The other long-term welfare that the Group offers to the staffs if meeting the defined
contribution plan should be accounting disposed according to the defined contribution
plan while the rest should be disposed according to the defined benefit plan.
31. Lease liabilities
(1) Initial Measurement
The Group initially measures the lease obligation at the present value of the lease
payments outstanding at the lease commencement date.
1) Lease payments
Lease payment amount refers to the amount paid by the Group to the lessor in relation to
the right to use the leased asset during the lease term including: * fixed payment amount
and substantially fixed payment amount with lease incentives (if any) deducted from the
relevant amount; * The amount of variable lease payments that depend on an index or
ratio which is determined at the time of initial measurement based on the index or ratio at
the commencement date of the lease term; * the exercise price of the purchase option
when the Group reasonably determines that the purchase option will be exercised; * The
amount needs to be paid for exercising the lease termination option when the lease term
reflects that the Group will exercise the option to terminate the lease; * The amount
expected to be paid according to the residual value of the guarantee provided by the
Group.
2) Rate of discount
68Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
When calculating the present value of the lease payments the Group uses the interest
rate implicit in lease as the rate of discount which is the interest rate at which the sum of
the present value of the lessor's lease receipts and the present value of the unsecured
residual value equals the sum of the fair value of the leased asset and the lessor's initial
direct expenses. If the Group fails to determine the interest rate implicit in lease the
incremental borrowing rate will be used as the rate of discount. The incremental borrowing
rate shall mean the interest rate payable by the Group to borrow funds under similar
mortgage conditions during similar periods to acquire assets close to the value of the right-
of-use assets under similar economic circumstances. The interest rate is related to the
following matters: * the Group's own situation that is the company's solvency and credit
status; * The term of the "borrowing" i.e. the lease term; * the amount of "borrowed"
funds i.e. the amount of the lease liability; * "collateral conditions" i.e. the nature and
quality of the subject assets; * economic circumstances including the jurisdiction in which
the lessee is located pricing currency time of contract signing etc. The incremental
borrowing rate is based on the Group's latest asset-based lending interest rate for similar
assets and adjusted to take into account the above factors.
(2) Subsequent Measurement
After the lease commencement date the Group measures the lease liability in accordance
with the following principles: * when recognizing the interest on the lease liability the
carrying amount of the lease liability is increased; * when the lease payment is made the
book amount of the lease liability is reduced; * when the lease payment changes due to
revaluation or lease change the book value of the lease liability is re-measured.The Group calculates the interest expenses of the lease obligations during each period of
the lease term at a fixed periodic interest rate and includes them (except those that shall
be capitalized) in current gains/losses. Periodic rate refers to the rate of discount adopted
by the Group when initially measuring lease liabilities or the revised rate of discount
adopted by the Group when lease liabilities need to be remeasured according to the
revised rate of discount due to changes in lease payments or lease changes.
(3) Re-measurement
After the lease commencement date the Group re-measures the lease liability based on
the present value of the changed lease payment and adjusts the book value of the right-of-
use assets accordingly when the following circumstances occur. If the carrying amount of
the right-of-use asset has been reduced to zero but the lease liability still needs to be
further reduced the Group recognizes the remaining amount in current gains/losses. *
there have been changes in substantially fixed payments (in which case the original
discount rate is adopted); * there have been changes in the estimated payable amount of
69Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
the guarantee residual value (in which case the original discount rate is adopted); * there
have been changes in the index or ratio used to determine the lease payments (in which
case the revised discount rate is adopted); * there have been changes in the valuation
results of the purchase option (in which case the revised discount rate is adopted); *
there have been changes in the evaluation results or actual exercise of the option to renew
or terminate the lease (in which case the revised discount rate is adopted).
32. Provisions
When an obligation related to a contingency meets the following conditions simultaneously
it is recognized as an estimated liability: (1) the obligation is a present obligation
undertaken by the Group; (2) the performance of the obligation is likely to result in an
outflow of economic benefits; (3) the amount of the obligation can be reliably measured.The provisions are initially measured in accordance with the optimal estimate of the
necessary expenses for the fulfillment of the current obligation with the risks related to
contingent matters uncertainty the time value of money and other factors taken into
consideration. The Group reviews the current best estimate of provisions at the balance
sheet date and adjusts the carrying amount of the provision as necessary.When all or some of the expenses necessary for the liquidation of provisions are expected
to be compensated by a third party the compensation should be separately recognized as
an asset only when it is virtually certain that the reimbursement will be obtained. Besides
the amount recognized for the reimbursement should not exceed the book value of the
estimated liabilities.
33. Preferred shares perpetual bonds and other financial instruments
Preferred shares and perpetual debt classified as debt instruments shall be initially
measured at their fair value less transaction costs and subsequently measured at
amortized cost using the effective interest rate method. Interest expenses or dividend
distributions thereon shall be accounted for in accordance with borrowing costs. Gains or
losses arising from their repurchase or redemption shall be recognized in current
gains/losses.For preferred shares and perpetual bonds classified as equity instruments the
consideration received upon issuance net of transaction costs is added to owners' equity.Their interest expense or dividend distributions are treated as profit distribution and any
repurchase or cancellation is treated as a change in equity.
34. Principles of revenue recognition and measurement methods
(1) General principles
The Group has fulfilled the performance obligations in the contract that is when the
customer obtains control of the relevant goods or services revenue is recognized.
70Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Obtaining control over related goods or services means being able to lead the use of the
goods or the provision of such services and obtain almost all of the economic benefits from
it.Performance obligation refers to the Group's commitment in a contract to transfer clearly
distinguishable goods to the customer. A performance obligation of the Group is deemed
as an obligation to be fulfilled within a certain period of time if one of the following
conditions is met; otherwise the performance obligation is satisfied at a point in time:
* The customer obtains and consumes the economic benefits brought by the Group's
performance at the same time as the Group performs the contract;
* The customer is capable of controlling the goods under construction during the
performance of the Group;
* The goods produced during the performance of the Group have irreplaceable uses and
the Group has the right to receive payment for the performance accumulated to date
throughout the contract period.For performance obligations performed within a certain period of time the Group
recognizes revenue according to the performance progress during that period. When the
performance progress cannot be reasonably determined if the cost incurred by the Group
is expected to be compensated the revenue shall be recognized according to the amount
of the cost incurred until the performance progress can be reasonably determined.For performance obligations performed at a certain point in time the Group recognizes
revenue at the point in time when the customer obtains control of the relevant goods or
services. When determining whether a customer has obtained control over goods the
Group considers the following indications:
* The Group has the current right to receive the payment for the goods that is the
customer has the current obligation to pay for the goods;
* The Group has transferred the legal ownership of the goods to the customer that is the
customer already has legal ownership of the goods;
* The Group has physically transferred the goods to the customer that is the customer
has physically taken possession of the goods;
* The Group has transferred the significant risks and rewards pertaining to the ownership
of the goods to the customer that is the customer has obtained the significant risks and
rewards;
* The customer has accepted the goods or services etc.;
* Other signs indicating that the customer has gained control of the goods.The Group's right to consideration in exchange for goods or services that the Group has
transferred to a customer is presented as a contract asset. An impairment loss is
71Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
recognized for contract assets based on expected credit losses. The Group's unconditional
right to receive consideration from a customer is presented as a receivable. The Group's
obligation to transfer goods or services to a customer for which the Group has received
consideration from the customer is presented as a contract liability.
(2) Principles of revenue measurement
1) If the contract contains two or more performance obligations at the commencement
date of the contract the Group will allocate the transaction price to each single
performance obligation based on the relative proportion of the stand-alone selling price of
the goods or services promised under each single performance obligation. Revenue is
measured at the transaction price of each single performance obligation.
2) The transaction price is the amount of consideration that the Company expects to be
entitled to receive due to the transfer of goods or services to customers excluding
payments collected on behalf of third parties and payments expected to be returned to
customers. The transaction price recognised by the Group does not exceed the amount for
which it is highly probable that cumulative revenue already recognised will not be
significantly reversed when the related uncertainties are resolved. Amounts expected to be
refunded to the customer are treated as a liability and not included in the transaction price.
3) Where a contract contains variable consideration such as cash discounts and price
protection included in certain contracts between the Group and its customers the Group
determines the best estimate of variable consideration using the expected value method or
the most likely amount method. However the transaction price including variable
consideration is constrained to an amount that in relation to the cumulative revenue
already recognised is highly probable not to result in a significant reversal when the
related uncertainties are resolved.
4) For consideration payable to a customer the Group deducts such consideration from
the transaction price and reduces current revenue at the later of when the related revenue
is recognised and when the consideration is paid (or promised to be paid) to the customer
unless the consideration payable is in exchange for other distinct goods or services
obtained from the customer.
5) For sales with sales return clauses when the customer obtains control of the relevant
goods the Group recognizes the revenue at the amount of consideration expected to be
received due to the transfer of goods to the customer and recognizes the amount
expected to be refunded due to sales return as estimated liabilities; in addition the
balance of the expected book value of the returned goods at the time of transfer less the
expected cost of recovering the goods (including the impairment of the value of the
returned goods) is recognized as an asset i.e. the return cost receivable. The net amount
72Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
of the above asset cost is carried forward according to the book value of the transferred
goods at the time of assignment. On each balance sheet date the Group re-estimates the
future sales returns and re-measures the aforementioned assets and liabilities.
6) If there is a significant financing component in the contract the Group shall determine
the transaction price according to the payable amount that is assumed to be paid in cash
by the customer when the customer obtains the right of control over goods or services.The difference between the transaction price and the promised consideration in the
contract is amortized over the contract period using the effective interest method with the
discount rate being the one that discounts the nominal amount of the contract
consideration to the cash selling price of the goods. On the starting date of the contract
the Group expects that the time between the customer's acquisition of control of the goods
or services and the customer's payment of the price will not exceed one year regardless
of the significant financing components in the contract.
7) According to contractual agreements legal provisions etc. the Group provides quality
assurance for the products sold and the assets built. For guarantee-type quality assurance
to assure customers that the goods sold meet the established standards the Group
conducts accounting treatment in accordance with "contingent events-estimated liabilities".For service-type quality assurance where a separate service is provided in addition to the
assurance to the customer that the goods sold meet the established standards the Group
treats it as a single performance obligation and apportions a portion of the transaction
price to the service-type quality assurance based on the relative proportions of the
separate selling prices of the goods and the service-type quality assurance provided and
recognizes revenue when the customer obtains control of the service. When assessing
whether the quality assurance provides a separate service in addition to ensuring that the
products sold meet the established standards the Group considers whether the quality
assurance is a legal requirement the quality assurance period and the nature of the
Group's commitment to perform the tasks.
8) When a contract modification occurs between the Group and a customer: * if the
modification adds distinct construction services and the contract price increases by an
amount that reflects the standalone selling price of the additional construction services the
Group accounts for the contract modification as a separate contract; * If the contract
modification does not meet the criteria in * and the construction services transferred
before the modification date are distinct from those not yet transferred the Group accounts
for the modification as a termination of the original contract. The remaining performance
obligations of the original contract and the modification are combined and treated as a new
contract. * If the contract modification does not meet the criteria in * and the
73Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
construction services transferred before the modification date are not distinct from those
not yet transferred the Group accounts for the modification as part of the original contract.The effect of the modification on revenue previously recognized is recognized as an
adjustment to revenue in the period in which the modification occurs.
(3) Specific methods
The revenue of the Group mainly consists of the income from main business and the
income from other businesses.* Revenue Recognized at a Point in Time
The Group's sales of household appliances electronic components etc. belong to the
performance obligation performed at a certain point in time.Recognition conditions for income from domestic sales of goods and overseas direct sales
of goods: The Group has delivered the product to the customer in accordance with the
contract and the customer has received the product the payment has been recovered or
the receipt of payment has been obtained and the relevant economic benefits are likely to
flow in. The main risks and rewards have been transferred and the legal ownership of the
goods has been transferred.Conditions for confirming the income of exported goods: The Group has declared the
products for export according to the contract obtained the bill of lading and delivered the
goods to the carrier entrusted by the purchaser. The payment has been recovered or the
receipt of payment has been obtained and relevant economic benefits are likely to flow in.The main risks and rewards of commodity ownership have been transferred and the legal
ownership of commodities has been transferred.* Revenue Recognized Over Time
The Group's business contracts with customers for project construction operating leases
etc. are performance obligations performed within a certain period of time and revenue is
recognized according to the progress of the performance.
35. Government grants
The government grants of the Group are divided into asset-related government grants and
income-related government grants. Specifically asset-related government grants refer to
the government grants obtained by the Group for the purpose of purchasing constructing
or otherwise forming long-term assets; income-related government grants refer to those
other than asset-related government grants. If the beneficiaries are not specified in
government documents the Group will make the distinction according to the aforesaid
principle. Beneficiaries which are difficult to categorize shall be classified as income-
related government grants as a whole.If the government subsidies are monetary assets they shall be measured at the amount
74Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
actually received. For a subsidy allocated according to a fixed quota standard or when
there is conclusive evidence at the end of the year that the relevant conditions stipulated in
the financial support policies can be met and the financial support funds are expected to
be received the subsidy shall be measured according to the amount receivable; if the
government grants are non-monetary assets they are measured at fair value. Where the
fair value cannot be reliably obtained the grant is measured at a nominal amount (RMB 1).Asset-related grants shall be used to offset the book value of related assets or presented
as deferred income and shall over the life of the related asset be included in the current
gains/losses by the equal amortization method.If the related asset is sold transferred scrapped or damaged before the end of its useful
life its deferred income that has not been distributed shall be transferred to the current
gains/losses of asset disposal.Income-related grants that are used to compensate related costs or losses in subsequent
periods shall be deemed as deferred income and shall be included in the current
gains/losses during the period when the related costs or losses are recognized.Government grants related to routine activities shall be included in other income in
accordance with the nature of the transaction. Government grants not related to routine
activities shall be included in non-operating revenue and expenditure.The Group obtains interest grants on policy-related concessional loans in two different
ways: the interest subsidy funds are allocated by the government either to the lending
bank or directly to the Group. The respective accounting treatment is carried out as follows:
(1) Where the government allocates the funds to the lending bank and the bank provides
a loan to the Group at a policy-related preferential interest rate the actual amount of the
loan received is taken as the entry value and the borrowing costs are calculated based on
the loan principal and the policy-related preferential interest rate.
(2) Where the government allocates the funds directly to the Group the grants are offset
against borrowing costs.Where the government grants that the Group has recognized in accounting need to be
returned the accounting treatment in the current period is carried out as follows:
1) If the book value of an asset is offset on initial recognition the book value will be
adjusted.
2) If there is deferred income the book balance of the deferred income will be offset and
the excess will be included in current gains/losses;
3) Under any other circumstances the grants will be included in current gains/losses.
36. Deferred tax assets and deferred tax liabilities
The Group's deferred tax assets and deferred tax liabilities are calculated and recognized
75Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
based on the difference (temporary difference) between the tax base and the carrying
value of the assets and liabilities. In the case of deductible losses that can be deducted
from taxable income in subsequent years in accordance with the provisions of the tax laws
the corresponding deferred tax assets are recognized. In the case of temporary
differences arising from the initial recognition of goodwill the corresponding deferred
income tax liabilities are not recognized. With respect to temporary differences arising from
the initial recognition of an asset or liability in a transaction which is not a business
combination and which affects neither accounting profit nor taxable income (or deductible
losses) the corresponding deferred tax assets and deferred tax liabilities are not
recognized. On the balance sheet date the deferred tax assets and deferred tax liabilities
are measured at the tax rate applicable to the period during which the assets are expected
to be recovered or the liabilities are expected to be settled.The Group recognizes deferred tax assets to the extent of the taxable income which it is
most likely to obtain and which can be deducted from deductible temporary differences
deductible losses and tax credits.
37. Leasing
(1) Identification of leases
The term "lease" refers to a contract whereby the lessor transfers the right of use
regarding the leased asset(s) to the lessee within a specified time in exchange for
consideration. On the commencement date of the contract the Group assesses whether
the contract is a lease or contains a lease. If a party to the contract transfers the right
allowing the control over the use of one or more assets that have been identified within a
certain period in exchange for consideration such contract is a lease or includes a lease.In order to determine whether a party to the contract transfers the right allowing the control
over the use of the identified assets for a certain period of time the Group assesses
whether the customers in the contract are entitled to obtain almost all the economic
benefits arising from the use of the identified assets during the use period and have the
right to dominate the use of the identified assets during the use period.If a contract contains multiple single leases at the same time the Group will split the
contract and conduct accounting treatment of each single lease respectively. If a contract
contains both lease and non-lease parts at the same time the Group will split the lease
and non-lease parts for accounting treatment.
(2) The Group as a lessee
1) Lease Recognition
On the lease commencement date the Group recognizes the right-of-use assets and
lease liabilities in respect of the lease. For the recognition and measurement of right-of-
76Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
use assets and lease liabilities please refer to Note IV "25. Right-of-use assets" and "31.Lease liabilities".
2) Lease Modification
A lease modification refers to a change in the scope consideration and term of lease
outside the original contract clauses including the addition or termination of the right to
use one or more leased assets and the extension or reduction of the lease term specified
in the contract. The effective date of lease modification refers to the date when both
parties reach an agreement on the lease modification.If there is any modification in the lease and the following conditions are met at the same
time the Group shall account for the lease modification as a separate lease: * the lease
modification expands the lease scope or extends the lease term by adding the right to use
one or more leased assets; * The increased consideration is equivalent to the amount of
the separate price of the expanded part of the lease scope or the extended part of the
lease term adjusted according to the contract situation.If the lease modification is not accounted for as a separate lease on the effective date of
the lease modification the Group amortizes the consideration of the contract after the
modification in accordance with the relevant provisions of the lease standards and re-
determines the lease term after the modification; and discounts the changed lease
payments using the revised discount rate to remeasure the lease liabilities. When
calculating the present value of the lease payment after the modification the Group uses
the interest rate implicit in the lease for the remaining lease period as the discount rate; if
the interest rate implicit in the lease for the remaining lease term cannot be determined
the Group adopts the lessee's incremental borrowing rate on the effective date of the lease
modification as the discount rate. With regard to the impact of the above-mentioned lease
liability adjustment the Group distinguishes the following situations for accounting
treatment: * If the lease modification narrows the lease scope or shortens the lease term
the lessee shall reduce the book value of the right-of-use assets accordingly and include
the relevant gains/losses of partial or complete termination of the lease in the current
gains/losses. * If other lease modifications result in the re-measurement of lease liabilities
the lessee correspondingly adjusts the book value of the right-of-use assets.
3) Short-term and Low-value Asset Leases
For short-term leases with a lease term not exceeding 12 months and low-value asset
leases with lower value when single leased assets are brand new assets the Group
chooses not to recognize right-of-use assets and lease liabilities. The Group includes the
lease payments of short-term leases and low-value asset leases in the cost of relevant
assets or current gains/losses on a straight-line basis over each period of the lease term.
77Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
(3) The Group as a lessor
On the basis that (1) the contract assessed is a lease or includes a lease the Group as
the lessor classifies leases into finance leases and operating leases on the lease
commencement date.If a lease substantially transfers virtually all risks and rewards associated with ownership of
the leased asset the lessor classifies the lease as a finance lease and leases other than
finance leases as operating leases.If a lease falls in one or more of the following circumstances the Group usually classifies it
as a finance lease: * the ownership of the leased asset will be transferred to the lessee at
the expiration of the lease term; * the lessee has the option to purchase the leased asset
and the purchase price is low enough compared with the fair value of the leased asset
when the option is expected to be exercised so it can be reasonably determined that the
lessee will exercise the option on the lease commencement date; * Although the
ownership of the asset will not be transferred the lease term covers most of the service
life of the leased asset; * On the lease commencement date the current value of the
lease receipts is almost equal to the fair value of the leased assets; * The leased asset
can only be used by the lessee if no major modification is made due to its special nature. If
a lease has one or more of the following signs the Group may also classify it as a finance
lease: * If the lessee cancels the lease the losses caused to the lessor by the
cancellation of the lease are to be borne by the lessee; * Gains or losses arising from
fluctuations in the fair value of the residual value of the asset are attributable to the lessee;
* The lessee has the ability to continue the lease to the next period at a rent far below the
market level.
1) Accounting Treatment for Finance Leases
Initial Measurement
On the commencement date of the lease term the Group recognizes the finance lease
receivables for the finance lease and derecognizes the leased asset of the finance lease.When initially measuring the finance lease receivables the Group recognizes the net
investment in the lease as the entry value of the finance lease receivables.The net investment in the lease is the sum of the unguaranteed residual value and the
present value of the lease receipts not received at the commencement date of the lease
term discounted at the interest rate implicit in the lease. Lease receipts refer to the amount
that the lessor shall collect from the lessee due to the transfer of the right to use the leased
asset during the lease term including: * fixed payments and substantially fixed payments
to be paid by the lessee; if there are lease incentives the relevant amount of lease
incentives shall be deducted; * The amount of variable lease payments dependent on an
78Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
index or ratio. This amount is determined at the time of initial measurement based on the
index or ratio at the commencement date of the lease term; * The exercise price of the
call option provided that it can be reasonably determined that the lessee will exercise the
option; * The amount to be paid by the lessee for exercising the option to terminate the
lease provided that the lease term reflects that the lessee will exercise the option to
terminate the lease; * The residual value of the guarantee provided by the lessee the
party related to the lessee or an independent third party economically capable of fulfilling
the guarantee obligation to the lessor.Subsequent Measurement
The Group calculates and confirms the interest income at a fixed periodic rate in each
period in the lease term. The periodic rate refers to the rate of discount implicit in lease
adopted to determine the net investment in the lease (in the case of sublease if the
interest rate implicit in lease of sublease cannot be determined the rate of discount implicit
in original lease is adopted (adjusted according to the initial direct expenses related to
sublease)) or the revised rate of discount determined in accordance with the relevant
provisions where the change of the finance lease is not accounted for as a separate lease
and meets the condition that the lease will be classified as a finance lease if the change
became effective on the lease commencement date.Accounting Treatment of Lease Change
If there is a change in a finance lease and the following conditions are met at the same
time the Group shall account for the change as a separate lease: * The change expands
the scope of the lease by adding the right to use one or more leased assets; * The
increased consideration is equivalent to the amount of the separate price of the expanded
part of the lease scope adjusted according to the contract situation.If the change of finance lease is not accounted for as a separate lease and the condition
that the lease will be classified as an operating lease if the change takes effect on the
lease commencement date is met the Group will account for it as a new lease from the
effective date of the lease change and take the net lease investment before the effective
date of the lease change as the book value of the leased asset.
2) Accounting treatment of operating leases
Treatment of rent
During each period of the lease term the Group recognizes lease receipts from operating
leases as rental income on a straight-line basis.Incentives provided
If the Group provides a rent-free period it allocates the total rentals over the entire lease
term without deducting the rent-free period by the straight-line method and also
79Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
recognizes rental income during the rent-free period. If certain expenses of the lessee are
borne the Group allocates the balance of rental income over the lease term after such
expenses are deducted from the gross rental income.Initial direct expenses
Initial direct expenses incurred by the Group in connection with operating leases shall be
capitalized to the cost of the leased underlying asset and recorded in the current
gains/losses in stages over the lease term on the same basis of recognition as rental
income.Depreciation
For fixed assets in assets under operating lease the Group adopts the depreciation policy
for similar assets to accrue depreciation; for other assets under operating lease a
systematic and reasonable method is adopted for amortization.Variable lease payments
The variable lease payments related to operating leases obtained by the Group that are
not included in the lease receipts are included in the current gains/losses when actually
incurred.Change of operating leases
If an operating lease changes the Group will regard it as a new lease for accounting
treatment from the effective date of the change. The advance receipt or the lease
receivable related to the lease prior to the change is recognized as the lease receipts of
the new lease.
38. Fair value measurement
The Group measures equity instrument investments at fair value on each balance sheet
date. Fair value refers to the price that can be received from selling an asset or paid to
transfer a liability in an orderly transaction between market participants on the
measurement date.For assets and liabilities measured or disclosed at fair value in the financial statements
the fair value level to which they belong is determined according to the lowest level input
that is significant to the fair value measurement as a whole: Level 1 inputs refer to
unadjusted quoted prices in the active market for the same assets or liabilities that can be
obtained on the measurement date; level 2 inputs refer to inputs other than Level 1 inputs
that are directly or indirectly observable for the relevant assets or liabilities; level 3 inputs
are the unobservable inputs of related assets and liabilities.On each balance sheet date the Group re-evaluates the assets and liabilities continuously
measured at fair value recognized in the financial statements to determine whether there is
a conversion between the levels of fair value measurement.
80Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
39. Changes in significant accounting policies and accounting estimates
(1) Major changes in accounting policies
The Group has no changes in significant accounting policies during the current year.
(2) Major changes in accounting estimates
The Group has no significant changes in accounting estimates during the year.V. Taxes
1. Main types of taxes and tax rates
Category of taxes Tax basis Tax rate
Calculated the output tax at the tax rate and
paid the VAT by the amount after deducting
the deductible input VAT in the current
VAT 1% 3% 5% 6% 9% 13%
period of which the VAT applicable to easy
collection won’t belong to the deductible input
VAT.Urban maintenance and 5% 7% / See 2. Tax Preferences for
The circulating tax actually paid
construction tax details
Education surcharge The circulating tax actually paid 3% / See 2. Tax Preferences for details
Local education surcharge The circulating tax actually paid 2% / See 2. Tax Preferences for details
Enterprise income tax Taxable income 25%/ See 2. Tax Preferences for details
The main taxpayers of different corporate income tax rates are explained as follows:
Name of entity Income tax rate
Electronic Technology Anhui Konka Anhui Tongchuang Shaanxi Konka Xingda
Hongye Bokang Precision Jiangsu Konka Smart Chengdu Konka Electronic 15%
Chongqing Optoelectronic Technology
Hong Kong Konka Kongdian Trading Jiali International Kongjietong Jiaxin
Technology Kongdian Investment Hong Kong Communications Zhongkang Storage 16.5%
Technology Xinying Semiconductor (Hong Kong)
Konka Europe 15%
Kanghao Technology 22.5%
Konka North America 21%
The parent company and other subsidiaries 25%
Remarks: According to the Temporary Provisions of Income Tax of Trans-boundary Tax
Payment Enterprises by State Taxation Administration resident enterprises without
business establishment or places of legal persons should be tax payment enterprises withthe administrative measures of income tax of “unified computing level-to-leveladministration local prepayment liquidation summary and finance transfer”. It came into
force from January 1 2008. According to the above methods the Company’s sales branch
companies in each area will hand in the corporate income taxes in advance from January
1 2008 and will be final settled uniformly by the Company at the year-end.
81Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
2. Tax incentives
(1) According to the announcement of the State Taxation Administration No. 12 of 2023:
small low-profit enterprises shall reduce the taxable income amount by 25% and pay the
corporate income tax at the tax rate of 20% which shall be continued until 31 December
2027. Resource tax (excluding water resource tax) urban maintenance and construction
tax property tax urban land use tax stamp duty (excluding stamp duty on securities
transactions) farm land occupation tax education surcharge and local education
surcharge shall be levied by half on small-scale VAT taxpayers small low-profit
enterprises and individually-owned businesses from January 1 2023 to December 31
2027. The Company's subsidiaries Konka Entrepreneurship Service Yibin Konka
Incubator Yibin Wisdom Anlu Konka Konka Tong Zhongkang Semiconductor (Shaoxing)
Shengxing Industrial Konka Suiyong Nantong Konka Digital Technology Xiaojia
Technology Shanghai Konka Guizhou Konka New Materials Ji'an Konka Nanjing Konka
Smart Appliance Xi'an Konka Intelligent Chongqing Konka Yiyun Zhejiang Konka
Electronics Zhejiang Konka Technology Industry Konka North China Zhitong Technology
and Shenzhen Nianhua enjoyed the aforementioned tax incentive policies during the
Reporting Period.
(2) On October 28 2025 Anhui Konka a subsidiary of the Company obtained the
Certificate of High-Tech Enterprise jointly issued by the Department of Science and
Technology of Anhui Province the Department of Finance of Anhui Province and the
Anhui Provincial Tax Service of the State Taxation Administration with the certificate
number GR202534004181 which is valid for three years. According to relevant tax
regulations Anhui Konka will enjoy the relevant tax incentives for high-tech enterprises for
three consecutive years from 2025 to 2027 paying enterprise income tax at a preferential
rate of 15%.
(3) On October 16 2023 Chongqing Optoelectronic Technology a subsidiary of the
Company obtained the Certificate of High-Tech Enterprise jointly issued by the Chongqing
Municipal Science and Technology Bureau the Chongqing Municipal Finance Bureau and
the Chongqing Municipal Tax Service of the State Taxation Administration with the
certificate number GR202351100426 which is valid for three years. According to relevant
tax regulations Chongqing Optoelectronic Technology will enjoy the relevant tax
incentives for high-tech enterprises for three consecutive years from 2023 to 2025 paying
enterprise income tax at a preferential rate of 15%.
(4) On October 28 2025 Anhui Tongchuang a subsidiary of the Company obtained the
Certificate of High-Tech Enterprise jointly issued by the Department of Science and
Technology of Anhui Province the Department of Finance of Anhui Province and the
82Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Anhui Provincial Tax Service of the State Taxation Administration with the certificate
number GR202534002702 which is valid for three years. According to relevant tax
regulations Anhui Tongchuang will enjoy the relevant tax incentives for high-tech
enterprises for three consecutive years from 2025 to 2027 paying enterprise income tax at
a preferential rate of 15%.
(5) On December 19 2025 Bokang Precision a subsidiary of the Company obtained the
Certificate of High-Tech Enterprise jointly issued by the Department of Science and
Technology of Guangdong Province the Department of Finance of Guangdong Province
and the Guangdong Provincial Tax Service of the State Taxation Administration with the
certificate number GR202544008694 which is valid for three years. According to relevant
tax regulations Bokang Precision will enjoy the relevant tax incentives for high-tech
enterprises for three consecutive years from 2025 to 2027 paying enterprise income tax at
a preferential rate of 15%.
(6) On December 25 2025 Electronic Technology a subsidiary of the Company received
the Certificate of High-Tech Enterprise jointly issued by the Shenzhen Science and
Technology Innovation Committee the Shenzhen Finance Bureau and the Shenzhen Tax
Service of the State Taxation Administration with the certificate number GR202544205959
which is valid for three years. According to relevant tax regulations Electronic Technology
will enjoy the relevant tax incentives for high-tech enterprises for three consecutive years
from 2025 to 2027 paying enterprise income tax at a preferential rate of 15%.
(7) On November 19 2024 Xingda Hongye a subsidiary of the Company obtained the
Certificate of High-Tech Enterprise jointly issued by the Department of Science and
Technology of Guangdong Province the Department of Finance of Guangdong Province
and the Guangdong Provincial Tax Service of the State Taxation Administration with the
certificate number GR202444002600 which will be valid for three years. According to
relevant tax regulations Xingda Hongye is entitled to relevant preferential tax policies for
high-tech enterprises for three consecutive years from 2024 to 2026 and pays enterprise
income tax at a preferential tax rate of 15%.
(8) On November 29 2023 Shaanxi Konka a subsidiary of the Company obtained the
Certificate of High-Tech Enterprise jointly issued by the Department of Science and
Technology of Shaanxi Province the Department of Finance of Shaanxi Province and the
Shaanxi Provincial Tax Service of the State Taxation Administration with the certificate
number GR202361002167 which is valid for three years. According to relevant tax
regulations Shaanxi Konka will enjoy the relevant tax incentives for high-tech enterprises
for three consecutive years from 2023 to 2025 paying enterprise income tax at a
preferential rate of 15%.
83Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
(9) On November 6 2023 Jiangsu Konka Smart a subsidiary of the Company obtained
the Certificate of High-Tech Enterprise jointly issued by the Department of Science and
Technology of Jiangsu Province the Department of Finance of Jiangsu Province and the
Jiangsu Provincial Tax Service of the State Taxation Administration with the certificate
number GR202332008044 which is valid for three years. According to relevant tax
regulations Jiangsu Konka Smart will enjoy the relevant tax incentives for high-tech
enterprises for three consecutive years from 2023 to 2025 paying enterprise income tax at
a preferential rate of 15%.
(10) In accordance with the Announcement on the Renewal of the Enterprise Income Tax
Policy for Western Development Enterprises (Ministry of Finance State Taxation
Administration National Development and Reform Commission Announcement No. 23 of
2020) an enterprise established in the western region who is mainly engaged in an
industry specified in the Catalogue of Encouraged Industries in the Western Region and
whose main business income accounts for over 60% of its gross income in the current
year is entitled to a reduced corporate income tax rate of 15%. Chengdu Konka
Electronics a subsidiary of the Company enjoys the preferential tax policy for Western
Development.
(11) According to the CS [2011] No. 100 published by the Ministry of Finance and the
State Taxation Administration for the VAT general taxpayers who sell their self-developed
and produced software products the VAT shall be levied at the rate of 13% and then the
portion of the actual VAT burden exceeding 3% shall be refunded immediately upon
collection. The Company’s subsidiaries Electronic Technology and Anhui Tongchuang all
enjoy this preferential policy.VI. Notes to major items in the consolidated financial statements
Unless otherwise noted for the financial statement data disclosed below "beginning of the
year" refers to January 1 2025 "end of the year" refers to December 31 2025 "the
current year" refers to the period from January 1 2025 to December 31 2025 and "last
year" refers to the period from January 1 2024 to December 31 2024. The monetary unit
is renminbi.
1. Monetary funds
Item Ending balance Beginning balance
Cash on hand 208.19
Bank deposits 5169889627.52 2942927002.53
Other monetary assets 1144052257.53 1172840037.01
Total 6313941885.05 4115767247.73
84Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Item Ending balance Beginning balance
Of which: Total amount of funds deposited
overseas 1131315.16 16326669.23
Remarks: the ending balance of other monetary funds is mainly the balance of pledged
time deposits margin deposits and account balance on WeChat Alipay and other
platforms. For details of restricted funds please refer to "Note VI. 23. Assets with restricted
ownership or use right".
2. Trading financial assets
Item Ending balance Beginning balance
Financial assets measured at fair value through current
gains/losses 202027000.00 286648129.34
Of which: Investment in equity instruments 202027000.00 286648129.34
Total 202027000.00 286648129.34
3. Notes receivable
(1) Presentation of notes receivable by category
Item Ending balance Beginning balance
Bank acceptance bills 50977695.45 148019004.66
Commercial acceptance bills 26339290.11 21656171.50
Total 77316985.56 169675176.16
(2) Classified and listed by provision methods for bad debts
Ending balance
Balance Provision for bad debts
Category Provision Book value
Amount Percentage(%) Amount percentage(%)
Provision for bad debts by
single item
Provision for bad debts by
portfolio 77865496.73 100.00 548511.17 0.70 77316985.56
Of which: Bank acceptance
bills 50977695.45 65.47 50977695.45
Commercial acceptance bills 26887801.28 34.53 548511.17 2.04 26339290.11
Total 77865496.73 100.00 548511.17 0.70 77316985.56
(Continued)
Beginning balance
Balance Provision for bad debts
Category
Percentage Provision Book valueAmount (%) Amount percentage(%)
85Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Beginning balance
Balance Provision for bad debts
Category
Amount Percentage
Provision Book value
(%) Amount percentage(%)
Provision for bad debts by
single item
Provision for bad debts by
portfolio 170126162.18 100.00 450986.02 0.27 169675176.16
Of which: Bank acceptance
bills 148019004.66 87.01 148019004.66
Commercial acceptance
bills 22107157.52 12.99 450986.02 2.04 21656171.50
Total 170126162.18 100.00 450986.02 0.27 169675176.16
Provision for expected credit losses on commercial acceptance bills based on aging in the
portfolio
Ending balance
Name
Balance Provision for bad debts Provisionpercentage (%)
Within 1 year 26887801.28 548511.17 2.04
Total 26887801.28 548511.17 2.04
(3) Provision for bad debts of notes receivable made recovered or reversed during
the year
Change in the current year
Category Beginning Recovered orbalance Ending balanceProvision Written-off Others
Reversed
Commercial
acceptance bills 450986.02 822371.39 724846.24 548511.17
Total 450986.02 822371.39 724846.24 548511.17
(4) Notes receivable pledged at year-end
No notes receivable were pledged at the end of the year.
(5) Notes receivable endorsed or discounted but not yet matured as at the balance
sheet date at year-end
Item Amount derecognized at the end of Amount not derecognized at thethe year end of the year
Bank acceptance bills 873146000.21
Commercial acceptance bills 25720556.07
86Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Item Amount derecognized at the end of Amount not derecognized at thethe year end of the year
Total 873146000.21 25720556.07
(6) Notes receivable actually written off during the year
No notes receivable were actually written off in the current year.
4. Accounts receivable
(1) Accounts receivable aged analysis
Aging Ending book balance Beginning book balance
Within 1 year (including 1 year) 872534288.66 985155712.60
1-2 years 33230346.13 467086582.23
2-3 years 416551776.82 112149892.90
3-4 years 92779205.23 117756261.01
4-5 years 114178358.99 255011480.57
Over 5 years 1445571151.66 1217501924.55
Total 2974845127.49 3154661853.86
(2) Accounts receivable classified and listed by provision methods for bad debts
Ending balance
Balance Provision for bad debts
Category
Percentage Provision Book valueAmount (%) Amount percentage(%)
Provision for bad
debts by single item 1573873380.74 52.91 1537243420.22 97.67 36629960.52
Provision for bad
debts by portfolio
Of which: Aging
portfolio 1400971746.75 47.09 350672695.12 25.03 1050299051.63
Subtotal of portfolio 1400971746.75 47.09 350672695.12 25.03 1050299051.63
Total 2974845127.49 100.00 1887916115.34 63.46 1086929012.15
(Continued)
Beginning balance
Balance Provision for bad debts
Category
Percentage Provision Book valueAmount (%) Amount percentage(%)
Provision for bad
debts by single item 1612578129.18 51.12 1530953048.13 94.94 81625081.05
87Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Beginning balance
Balance Provision for bad debts
Category
Provision Book value
Amount Percentage(%) Amount percentage(%)
Provision for bad
debts by portfolio
Of which: Aging
portfolio 1542083724.68 48.88 308486148.81 20.00 1233597575.87
Subtotal of portfolio 1542083724.68 48.88 308486148.81 20.00 1233597575.87
Total 3154661853.86 100.00 1839439196.94 58.31 1315222656.92
1) Provision for bad debts of accounts receivable made by individual item
Beginning balance Ending balance
Name
Balance Provision for
Provision Reasons
bad debts Balance
Provision for
bad debts percentage for the(%) provision
CEFC
Not
Shanghai
expected to
International 298855950.30 298855950.30 298280558.37 298280558.37 100.00 be
Group
recoverable
Limited
Hongtu Not
Sanpower expected to
Technology 200000000.00 200000000.00 200000000.00 200000000.00 100.00 be
Co. Ltd. recoverable
Not
Loxia Group expected to
Co. Ltd. 159702611.45 159702611.45 159702611.45 159702611.45 100.00 be
recoverable
Shenzhen Not
Yaode expected to
Technology 147734652.40 147734652.40 144454581.31 144454581.31 100.00 be
Co. Ltd. recoverable
Guang'an
Ouqishi Expected to
Electronic 113139940.86 110965942.46 113139940.86 110965942.46 98.08 be difficult to
Technology recover
Co. Ltd.Zhongfu
Not
Tiangong
expected to
Construction 71289096.65 71289096.65 71289096.65 71289096.65 100.00 be
Group Co.recoverable
Ltd.CCCC First
Not
Harbor
expected to
Engineering 65221300.00 65221300.00 65221300.00 65221300.00 100.00 be
Company
recoverable
Ltd.
88Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Beginning balance Ending balance
Name
Balance Provision for Provision for
Provision Reasons
bad debts Balance bad debts percentage for the(%) provision
Gome
Custom Not
(Tianjin) expected to
Home 57021975.73 57021975.73 57021975.73 57021975.73 100.00 be
Appliance recoverable
Co. Ltd.Xingda Not
Hongye expected to
(Hong Kong) 51902301.95 51902301.95 51902301.95 51902301.95 100.00 be
Limited recoverable
Dongguan
Not
High Energy
expected to
Polymer 50699037.70 32893535.66 50699037.70 32893535.66 64.88 be fully
Materials
recoverable
Co. Ltd.Expected to
Others 397011262.14 335365681.53 362161976.72 345511516.64 95.40 be difficult to
recover
Total 1612578129.18 1530953048.13 1573873380.74 1537243420.22 — —
2) Provision set aside for bad debts of accounts receivable by portfolio
Ending balance
Aging
Balance Provision for bad debts Provisionpercentage (%)
Within 1 year 865171957.96 17649507.97 2.04
1-2 years 18535526.42 1857259.78 10.02
2-3 years 226009181.96 51281483.38 22.69
3-4 years 32376527.37 21005890.95 64.88
4-5 years 88929117.03 88929117.03 100.00
Over 5 years 169949436.01 169949436.01 100.00
Total 1400971746.75 350672695.12 25.03
(3) Provision for bad debts of accounts receivable set aside recovered or reversed
in the current year
Change in the current year
Category Beginning balance
Provision Recovered or reversed
Provision for bad debts of accounts
receivable 1839439196.94 84972783.90 31101240.08
Total 1839439196.94 84972783.90 31101240.08
(Continued)
89Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Change in the current year
Category Ending balance
Written-off Others
Provision for bad debts of accounts
receivable -5394625.42 1887916115.34
Total -5394625.42 1887916115.34
Note: Among other changes for the year there was a decrease of RMB 4047995.42 due
to foreign exchange rate fluctuations and a decrease of RMB 1346630.00 due to loss of
control.Among them the provision for bad debts recovered or reversed in the current year with
significant amounts are:
Basis and rationality
of determining the
Unit Recovered or Recoveryreversed amount Reason for reversal method proportion of originalprovision for bad
debts
Received insurance
compensation from China
Export & Credit Insurance Insurance CDM has been written
12048547.66 Corporation and compensation off so the full amountCDM MIAMI INC
transferred 85% of the transfer of of the unpaid amount
creditor's rights and creditor's rights has been provided for
interests to the insurance
company
Total 12048547.66 — — —
(4) Accounts receivable actually written off in the current year
No accounts receivable were actually written off in the current year.
(5) Top five accounts receivable and contract assets in the ending balance
categorized by debtors
The total amount of accounts receivable with top five Ending balance categorized by
debtors in the current year was RMB 1152138381.74 accounting for 38.73% of the total
Ending balance of accounts receivable. The total Ending balance of provision for bad
debts correspondingly set aside was RMB 848821590.70.
5. Contract assets
(1) Details of contract assets
Ending balance Beginning balance
Item
Balance Provision forbad debts Book value Balance
Provision for
bad debts Book value
Warranty 2194100.57 301794.27 1892306.30 2867437.14 236928.54 2630508.60
Total 2194100.57 301794.27 1892306.30 2867437.14 236928.54 2630508.60
(2) Classified presentation of contract assets by provisioning methods of bad debts
90Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Ending balance
Balance Provision for bad debts
Category
Percenta Provision Book valueAmount ge (%) Amount percentage(%)
Provision for bad debts by single
item
Provision for bad debts by
portfolio
Of which: Aging portfolio 2194100.57 100.00 301794.27 13.75 1892306.30
Subtotal of portfolio 2194100.57 100.00 301794.27 13.75 1892306.30
Total 2194100.57 100.00 301794.27 13.75 1892306.30
(Continued)
Beginning balance
Balance Provision for bad debts
Category
Percentage Provision Book valueAmount (%) Amount percentage(%)
Provision for bad debts by
single item
Provision for bad debts by
portfolio
Of which: Aging portfolio 2867437.14 100.00 236928.54 8.26 2630508.60
Subtotal of portfolio 2867437.14 100.00 236928.54 8.26 2630508.60
Total 2867437.14 100.00 236928.54 8.26 2630508.60
(3) Provision set aside for bad debts of contract assets by portfolio
Ending balance
Name
Balance Provision for bad Provision percentagedebts (%)
Within 1 year 561956.93 11463.92 2.04
1-2 years 631436.80 63269.97 10.02
2-3 years 1000706.84 227060.38 22.69
Total 2194100.57 301794.27 13.75
(Continued)
Beginning balance
Name
Balance Provision for bad Provision percentagedebts (%)
Within 1 year 631436.80 12881.31 2.04
1-2 years 2236000.34 224047.23 10.02
91Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Beginning balance
Name
Balance Provision for bad Provision percentagedebts (%)
Total 2867437.14 236928.54 8.26
(4) Provision for bad debts of contract assets
Change in the current year
Charge-
Beginning End of the
Item The current
Recovered
or reversed off/Write- Others year ReasonBalance year
in the off in the Balance
Provision current year current
Change
year
Warranty 236928.54 64865.73 301794.27
Total 236928.54 64865.73 301794.27
(5) Contract assets actually written off in the current year
There were no contract assets actually written off in the current year.
6. Receivables financing
Item Ending balance Beginning balance
Notes receivable 155957556.43 63943324.53
Total 155957556.43 63943324.53
7. Other receivables
Item Ending balance Beginning balance
Interest receivable
Dividends receivable
Other receivables 942267792.91 989245120.86
Total 942267792.91 989245120.86
7.1 Other receivables
(1) Classified by account nature
Nature of funds Ending book balance Beginning book balance
Deposits guarantees and down payments 333603706.26 344822666.77
Amounts due from minority shareholders and
related parties arising from business 173714171.72 182764171.72
combinations not under common control
Energy-saving subsidies receivable 152399342.00 152399342.00
Amounts due from related parties 3691383944.24 2253362393.92
Others 1022177199.12 1035865828.21
92Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Nature of funds Ending book balance Beginning book balance
Total 5373278363.34 3969214402.62
(2) Other receivables listed by aging
Aging Ending book balance Beginning book balance
Within 1 year (including 1 year) 1467251543.63 394812584.95
1-2 years 348839519.04 206901565.92
2-3 years 204016070.83 110433169.22
3-4 years 110032898.45 683019991.91
4-5 years 670561586.84 771766144.27
Over 5 years 2572576744.55 1802280946.35
Total 5373278363.34 3969214402.62
(3) Classified presentation of other receivables by provisioning methods of bad
debts
Ending balance
Balance Provision for bad debts
Category
Provision Book value
Amount Percentage(%) Amount percentage(%)
Provision for bad debts
by single item 4975343588.38 92.59 4221263474.95 84.84 754080113.43
Provision for bad debts
by portfolio
Of which: Aging
portfolio 174594933.66 3.25 155935224.70 89.31 18659708.96
Low-risk portfolio 223339841.30 4.16 53811870.78 24.09 169527970.52
Subtotal of portfolio 397934774.96 7.41 209747095.48 52.71 188187679.48
Total 5373278363.34 100.00 4431010570.43 82.46 942267792.91
(Continued)
Beginning balance
Balance Provision for bad debts
Category
Amount Percentage
Provision Book value
(%) Amount percentage(%)
Provision for bad debts
by single item 3524335366.36 88.79 2773496740.31 78.70 750838626.05
Provision for bad debts
by portfolio
Of which: Aging portfolio 204938477.00 5.16 168912851.74 82.42 36025625.26
93Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Beginning balance
Balance Provision for bad debts
Category
Percentage Provision Book valueAmount (%) Amount percentage(%)
Low-risk portfolio 239940559.26 6.05 37559689.71 15.65 202380869.55
Subtotal of portfolio 444879036.26 11.21 206472541.45 46.41 238406494.81
Total 3969214402.62 100.00 2979969281.76 75.08 989245120.86
1) Provision set aside for bad debts of other receivables by portfolio
Ending balance
Aging
Balance Provision for bad debts Provisionpercentage (%)
Within 1 year 30987870.02 455455.39 1.47
1-2 years 108683542.17 3436732.32 3.16
2-3 years 4943343.38 882664.64 17.86
3-4 years 66847734.22 20375026.96 30.48
4-5 years 5156520.25 3281451.25 63.64
Over 5 years 181315764.92 181315764.92 100.00
Total 397934774.96 209747095.48 52.71
2) Provision set aside for bad debts of other receivables by the general expected
credit loss model
Phase I Phase II Phase III
Expected credit
Provision for bad debts Expected credit loss throughout
Expected credit loss
Total
loss for the next the duration throughout the
12 months (without credit duration (with credit
loss) impairment)
Balance as of January 1
20251712968.68204759572.772773496740.312979969281.76
Balance as of January 1
2025 in the current year
-- Transfer to Stage II -1112942.99 1112942.99
-- Transfer to Stage III -16067075.02 16067075.02
-- Reversal to Stage II
-- Reversal to Stage I
Provision in the current year 455455.39 39231080.91 1442626944.96 1482313481.26
Reversal in the current year 600025.69 14470376.18 612914.96 15683316.83
94Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Phase I Phase II Phase III
Expected credit
Provision for bad debts Expected credit loss throughout
Expected credit loss
Total
loss for the next the duration throughout the
12 months (without credit duration (with credit
loss) impairment)
Charge-off in the current
year
Write-off in the current year
Other changes -5274505.38 -10314370.38 -15588875.76
Balance as of December 31
2025455455.39209291640.094221263474.954431010570.43
Remarks: The first stage is that credit risk has not increased significantly since initial
recognition. For other receivables with an aging portfolio and a low-risk portfolio within one
year the loss provision is measured according to the expected credit losses in the next 12
months.The second stage is that credit risk has increased significantly since initial recognition but
credit impairment has not yet occurred. For other receivables with an aging portfolio and a
low-risk portfolio that exceed one year the loss provision is measured based on the
expected credit losses for the entire duration.The third stage is credit impairment after initial recognition. For other receivables with
credit impairment that have occurred the loss provision is measured according to the
credit losses that have occurred throughout the duration.
(4) Provision for bad debts of other receivables set aside recovered or reversed in
the current year
Change in the current year
Category Beginning balance
Provision Recovered or reversed
Provision for bad debts of 1482313481.26 15683316.83
other receivables 2979969281.76
Total 2979969281.76 1482313481.26 15683316.83
(Continued)
Change in the current year
Category Ending balance
Written-off Others
Provision for bad debts of
other receivables -15588875.76 4431010570.43
Total -15588875.76 4431010570.43
Remarks: The amount of other changes during the year includes a decrease of RMB
15588875.76 resulting from foreign exchange rate movements.
95Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
(5) Other receivables actually written off in the current year
No other receivables were actually written off in the current year.
(6) Other receivables with top five year-end balances categorized by debtors
The total amount of other receivables with top five ending balance categorized by debtors
in the current year was RMB 3395479797.88 accounting for 63.19% of the total ending
balance of other receivables. The total ending balance of provision for bad debts
correspondingly set aside was RMB 2975828359.15.
8. Prepayments
(1) Age of prepayments
Ending balance Beginning balance
Item
Amount Percentage (%) Amount Percentage (%)
Within 1 year 43005753.50 44.75 101180248.89 81.11
1-2 years 52405587.00 54.53 2820065.05 2.26
2-3 years 122638.58 0.13 565293.20 0.45
Over 3 years 571760.52 0.59 20182805.45 16.18
Total 96105739.60 100.00 124748412.59 100.00
Remarks: The amount of prepayments of the Group aged over one year at the end of the
period was RMB 53099986.10 accounting for 55.25% of the total ending balance of
prepayments which are mainly unsettled payments.
(2) Top five prepayments in the ending balance categorized by payees
The total amount of the top five prepayments in the year-end balance categorized by
payees in the current year was RMB 83210809.70 accounting for 86.58% of the total
year-end balance of prepayments.
9. Inventories
(1) Inventories Classification
Ending balance
Item
Balance Provision for impairment Book value
Raw materials 535044975.99 161547556.59 373497419.40
Semi-finished products 110173191.36 61564204.04 48608987.32
Finished goods 1946864898.54 893886141.81 1052978756.73
Commissioned
processing materials 1248253.88 1248253.88
Development costs 30197755.10 13632674.11 16565080.99
Development products 207777173.26 38429041.00 169348132.26
Total 2831306248.13 1169059617.55 1662246630.58
96Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
(Continued)
Beginning balance
Item
Balance Provision for impairment Book value
Raw materials 665144044.54 108024878.82 557119165.72
Semi-finished products 110372128.69 42305974.41 68066154.28
Finished goods 2189720769.60 491936445.95 1697784323.65
Commissioned
processing materials 2235269.96 262121.44 1973148.52
Development costs 26677475.24 26677475.24
Development products 346650809.82 3622890.30 343027919.52
Total 3340800497.85 646152310.92 2694648186.93
(2) Provision for inventory depreciation
Increase in the current year
Item Beginning balance
Provision or reversal Others
Raw materials 108024878.82 94066987.03
Semi-finished products 42305974.41 24271959.05
Finished goods 491936445.95 579056873.57
Commissioned
processing materials 262121.44 -256822.62
Development costs 13632674.11
Development products 3622890.30 38429041.00
Total 646152310.92 749200712.14
(Continued)
Decrease in the current year
Item Ending balance
Write-off Others
Raw materials 39318412.96 1225896.30 161547556.59
Semi-finished products 5005089.41 8640.01 61564204.04
Finished goods 167023674.38 10083503.33 893886141.81
Commissioned
processing materials 5298.82
Development costs 13632674.11
Development products 3622890.30 38429041.00
Total 214970067.05 11323338.46 1169059617.55
Note: Other decreases in the current year were caused by changes in exchange rates.Specific basis for determining the net realizable value and reasons for reversal or write-off
97Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
of provision for inventory depreciation and impairment provision for contract performance
costs during the current year:
Item Specific basis for provision for inventory Reasons for write-off of provision for
depreciation inventory impairment in the current year
Raw materials The net realizable value was lower than the Sold or used in the current year
book value
Semi-finished products The net realizable value was lower than the Sold or used in the current year
book value
Finished goods The net realizable value was lower than the Sold in the current year
book value
Development products The net realizable value was lower than the Sold in the current year
book value
10. Other current assets
Item Ending balance Beginning balance
Prepaid taxes deductible input tax and export tax refund
receivable 619195913.75 525546353.28
Principal and interest of entrusted loans to associated
enterprises 235601218.08 1590781482.74
Deferred expenses 14313545.63 18606081.90
Cost of goods returned receivable 10287129.13 14460748.65
Others 434578.55 19005345.90
Less: Impairment provision for other current assets 118264443.38
Total 761567941.76 2168400012.47
98Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
11. Investments in other equity instruments
Changes in the current year Reason for
Accumulated Accumulated designation to
Dividend gains included losses included measure at fair
Losses
Beginning Gains included Ending income in other in other value withItem balance Increase in Decrease in in other
included in
balance recognized comprehensiv comprehensive changes
investment investment comprehensive other Others in the e income at income at the included in
income comprehensive current year the end of the end of the otherincome current year current year comprehensive
income
Beijing Huyu
Entertainment 5901121. Long-term
Digital 5901121.80 6000000.00 holding based on
Technology 80 strategic purpose
Co. Ltd.Feihong Long-term
Electronics Co. 1300000.00 holding based on
Ltd. strategic purpose
Shenzhen
Association of Long-term
Enterprises with 100000.00 holding based on
Foreign strategic purpose
Investment
Shenzhen
Chuangce Long-term
Investment 485000.00 holding based on
Development strategic purpose
Co. Ltd.Shenzhen
Tianyilian Long-term
Science & 4800000.00 holding based on
Technology strategic purpose
Co. Ltd.
99Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Changes in the current year Reason for
Accumulated Accumulated designation to
Dividend gains included losses included measure at fair
Beginning Gains included
Losses income in other in other value with
Item Increase in Decrease in in other included in
Ending
balance balance recognized comprehensiv comprehensive changes
investment investment comprehensive other Others in the e income at income at the included in
income comprehensive current year the end of the end of the otherincome current year current year comprehensive
income
Shanlian
Information 1860809. 186080 Long-term
Technology 3139190.80 holding based on
Engineering 20 9.20 strategic purpose
Center Co. Ltd.Shenzhen
Long-term
Zhongcailian 953000.0 953000.
200000.00 holding based onTechnology 0 00 strategic purpose
Co. Ltd.Shanghai
National
2400000. 240000 Long-termEngineering
holding based on
Research 00 0.00 strategic purpose
Center of Digital
TV Co. Ltd.Guangdong
Bohua Ultra HD 5000001. 500000
Long-term
holding based on
Innovation 00 1.00 strategic purpose
Center Co. Ltd.
16114932.102138
Total 5901121.80 16024190.80 —
0010.20
100Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
12. Long-term equity investments
(1) Long-term equity investments
Changes in the current year
Beginning Provision for
Investee balance
impairment
Gains/losses on
(Book value) Beginning Adjustments tobalance Increase in Decrease in investment other
investment investment recognized underthe equity comprehensive
method income
Associates:
Kangkong Venture Capital (Shenzhen) Co. Ltd. 5128914.49 51878.52
Nanjing Zhihuiguang Information Technology
Research Institute Co. Ltd. 2004044.10 13842.09
Feidi Technology (Shenzhen) Co. Ltd. 15120554.12 7208123.71
Shenzhen Kangyue Industrial Co. Ltd. 24977328.88
Kangkai Technology Service (Chengdu) Co.Ltd. 87650.74 -6537.65
Puchuang Jiakang Technology Co. Ltd. 3560497.42 2736994.29
Shenzhen Jielunte Technology Co. Ltd. 89059544.64 -8894353.34
Orient Excellent (Zhuhai) Asset Management
Co. Ltd. 8608429.66 7754.30
Oriental Jiakang No. 1 (Zhuhai) Private Equity
Investment Fund (Limited Partnership) 334610872.32 -169719987.28
Tongxiang Wuzhen Kunyu Venture Capital Co.Ltd. 3527959.96 2057.10
Shenzhen RF-Link Technology Co. Ltd. 85656027.35
Anhui Kaikai Shijie E-commerce Co. Ltd. 365522727.56 118401234.06 -9110307.96 57037.58
101Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Changes in the current year
Beginning Provision for
Investee balance
impairment
Gains/losses on
(Book value) Beginning investment Adjustments tobalance Increase in Decrease in recognized under otherinvestment investment the equity comprehensive
method income
Kunshan Kangsheng Investment Development
Co. Ltd. 78658851.02 -5388016.54
Shaanxi Silk Road Yunqi Intelligent Technology
Co. Ltd. 3467934.60 -3315263.80
Shenzhen Kanghongxing Intelligent Technology
Co. Ltd. 12660222.73
Shenzhen Zhongkang Beidou Technology Co.Ltd.Shenzhen Yaode Technology Co. Ltd. 214559469.35
Wuhan Tianyuan Group Co. Ltd. 545842155.57 239447355.00
Chuzhou Konka Technology Industry
Development Co. Ltd. 31309842.61 -7016776.39
Chuzhou Kangjin Health Industry Development
Co. Ltd. 195156840.19 -32283182.56
Nantong Konka Technology Industrial Park
Operation Management Co. Ltd. 106686557.81 -37886034.26
Chuzhou Kangxin Health Industry Development
Co. Ltd. 178678863.47 -1841318.73
Dongguan Guankang Yuhong Investment Co.Ltd. 482685139.04 -25665481.43
Shenzhen Morsemi Semiconductor Technology
Co. Ltd.Econ Technology Co. Ltd. 847418693.43 347737910.02 -5557305.38
Dongguan Kangjia New Materials Technology
Co. Ltd. 6231919.24 -1323182.99
Chongqing Ypfun Technology Co. Ltd. 2148608242.28 91766541.43 200000000.00
102Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Changes in the current year
Beginning Provision for
Investee balance
impairment
Gains/losses on
(Book value) Beginning Adjustments tobalance Increase in Decrease in investment
investment investment recognized under
other
the equity comprehensive
method income
Yantai Kangyun Industrial Development Co. Ltd. 60639840.23 -60639840.23
E3 (Hainan) Technology Co. Ltd. 11378307.99 14000000.00 14803698.26
Shenzhen Konka Jiapin Intelligent Electrical
Apparatus Technology Co. Ltd. 5896518.07 -3447912.19
Shenzhen Konka E-display Intelligent
Technology Co. Ltd. 93484210.07 3564368.70 -136519.75
Chongqing Yuanlv Benpao Real Estate Co. Ltd. 25740000.00
Shenzhen Kangpeng Digital Technology Co.Ltd. 1310766.92 -330466.61
Yantai Kangtang Construction Development Co.Ltd. 1268280.88 -144860.18
Dongguan Kangzhihui Electronics Co. Ltd. 18648646.28 -5142877.00
Beijing Kangjia Jingyuan Technology Co. Ltd. 687957.04 -66429.68
Chongqing Liangshan Enterprise Management
Co. Ltd. 229695.25 80612.23
Shenzhen Kangxi Technology Innovation
Development Co. Ltd. 1041325.74 9567.70
Shandong Kangfei Intelligent Electrical
Appliances Co. Ltd. 245911.63
Guangdong Kangyuan Semiconductor Co. Ltd. 7360542.07 -1359249.83
Chongqing Kangyiqing Technology Co. Ltd. 635826.26 -490401.87
Zhejiang Kangying Semiconductor Technology
Co. Ltd. 16838151.45 13432626.55 1855858.38
103Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Changes in the current year
Beginning Provision forimpairment
Investee balance
Beginning Gains/losses on(Book value) balance Increase in Decrease in investment
Adjustments to
investment investment recognized under
other
the equity comprehensive
method income
Zhisheng Hong Kong Co. Ltd. 1594091.44 7878.01
Chongqing Kangjian Photoelectric Technology
Co. Ltd. 3277417.20 -3277417.20
Anhui Kangta Supply Chain Management Co.Ltd. 16781006.43 -232448.87
Wuhan Kangtang Information Technology Co.Ltd. 15853661.78 -14876432.16
Sichuan Chengrui Real Estate Co. Ltd. 23989768.27 -1632580.79
Jiakang Industrial Development (Wuhan) Co.Ltd. 38684412.72 -817183.89
Hefei Kangxinwei Storage Technology Co. Ltd. 90223618.55 -6163287.96
Xi'an Kangan Intelligent Storage Technology
Co. Ltd. 5766552.98 6000000.00 233447.02
Sichuan Hongxinchen Real Estate Development
Co. Ltd. 53934595.60
Konka Huanjia Environmental Protection
Technology Co. Ltd. 91800000.00
Kangrong Jiayuan Technology (Zhejiang) Co.Ltd. 1000000.00 2643.86
Total 5921501427.49 1027544645.45 201000000.00 260251053.26 -379277342.69 1776376.21
104Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
(Continued)
Changes in the current year
Ending balance Provision for
Investee impairment
Cash dividends (Book value) Ending balance
Changes in other or profits Provision for
equity declared to be impairment Others
distributed
Associates:
Kangkong Venture Capital (Shenzhen) Co. Ltd. 5180793.01
Nanjing Zhihuiguang Information Technology
Research Institute Co. Ltd. 2017886.19
Feidi Technology (Shenzhen) Co. Ltd. 913190.37 21415487.46
Shenzhen Kangyue Industrial Co. Ltd. 24977328.88
Kangkai Technology Service (Chengdu) Co.Ltd. 81113.09
Puchuang Jiakang Technology Co. Ltd. 6297491.71
Shenzhen Jielunte Technology Co. Ltd. 80165191.30
Orient Excellent (Zhuhai) Asset Management
Co. Ltd. 8616183.96
Oriental Jiakang No. 1 (Zhuhai) Private Equity
Investment Fund (Limited Partnership) 164890885.04
Tongxiang Wuzhen Kunyu Venture Capital Co.Ltd. 3530017.06
Shenzhen RF-Link Technology Co. Ltd. 85656027.35
Anhui Kaikai Shijie E-commerce Co. Ltd. 329481474.22 26987982.96 447882708.28
Kunshan Kangsheng Investment Development
Co. Ltd. 73270834.48
Shaanxi Silk Road Yunqi Intelligent Technology
Co. Ltd. 152670.80
105Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Ending balance Provision for
Investee Changes in the current year impairment
(Book value) Ending balance
Shenzhen Kanghongxing Intelligent Technology
Co. Ltd. 12660222.73
Shenzhen Zhongkang Beidou Technology Co.Ltd.Shenzhen Yaode Technology Co. Ltd. 214559469.35
Wuhan Tianyuan Group Co. Ltd. 8618395.70 -297776404.87
Chuzhou Konka Technology Industry
Development Co. Ltd. 24293066.22 24293066.22
Chuzhou Kangjin Health Industry Development
Co. Ltd. 162873657.63
Nantong Konka Technology Industrial Park
Operation Management Co. Ltd. 68800523.55 68800523.55
Chuzhou Kangxin Health Industry Development
Co. Ltd. 176837544.74 176837544.74
Dongguan Guankang Yuhong Investment Co.Ltd. 457019657.61 457019657.61
Shenzhen Morsemi Semiconductor Technology
Co. Ltd.Econ Technology Co. Ltd. 123382687.03 718478701.02 471120597.05
Dongguan Kangjia New Materials Technology
Co. Ltd. 4908736.25 4908736.25
Chongqing Ypfun Technology Co. Ltd. 301193.49 1876737405.93 2174869.26 474346899.10 1968503947.36
Yantai Kangyun Industrial Development Co.Ltd.E3 (Hainan) Technology Co. Ltd. 3425390.27 14000000.00
Shenzhen Konka Jiapin Intelligent Electrical
Apparatus Technology Co. Ltd. 2448605.88
Shenzhen Konka E-display Intelligent
Technology Co. Ltd. 309651.05 97221710.07
Chongqing Yuanlv Benpao Real Estate Co.Ltd. 25740000.00
106Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Ending balance Provision for
Investee Changes in the current year impairment
(Book value) Ending balance
Shenzhen Kangpeng Digital Technology Co.Ltd. 980300.31
Yantai Kangtang Construction Development
Co. Ltd. 1123420.70
Dongguan Kangzhihui Electronics Co. Ltd. -21516.38 13484252.90
Beijing Kangjia Jingyuan Technology Co. Ltd. 621527.36
Chongqing Liangshan Enterprise Management
Co. Ltd. 310307.48
Shenzhen Kangxi Technology Innovation
Development Co. Ltd. 1050893.44
Shandong Kangfei Intelligent Electrical
Appliances Co. Ltd. 245911.63
Guangdong Kangyuan Semiconductor Co. Ltd. 6001292.24
Chongqing Kangyiqing Technology Co. Ltd. 145424.39
Zhejiang Kangying Semiconductor Technology
Co. Ltd. 32126636.38
Zhisheng Hong Kong Co. Ltd. 1601969.45
Chongqing Kangjian Photoelectric Technology
Co. Ltd.Anhui Kangta Supply Chain Management Co.Ltd. 16548557.56
Wuhan Kangtang Information Technology Co.Ltd. 977229.62
Sichuan Chengrui Real Estate Co. Ltd. 22357187.48 22357187.48
Jiakang Industrial Development (Wuhan) Co.Ltd. 37867228.83 37867228.83
Hefei Kangxinwei Storage Technology Co. Ltd. 17959051.24 102019381.83
Xi'an Kangan Intelligent Storage Technology
Co. Ltd.Sichuan Hongxinchen Real Estate Development
Co. Ltd. 53934595.60 53934595.60
107Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Ending balance Provision for
Investee Changes in the current year impairment
(Book value) Ending balance
Konka Huanjia Environmental Protection
Technology Co. Ltd. 91800000.00
Kangrong Jiayuan Technology (Zhejiang) Co.Ltd. 68208.71 1070852.57 -
Total 18260244.73 9531586.07 3175620107.46 -291819801.96 2026038156.99 4203164752.91
Note: Other changes in the current year were caused by the conversion of long-term equity investments accounted for by the equity
method in Wuhan Tianyuan Group Co. Ltd. to financial assets the deregistration of E3 (Hainan) Technology Co. Ltd. and unrealized
profits from downstream transactions.
108Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
(2) Impairment test for long-term equity investments
1) The recoverable amount is determined at the net amount of the fair value minus the
disposal expenses
Item Book value Recoverable amount Impairment Amount
Yifang 2351084，305.03 474346899.10 1876737405.93
Guan Kang Yuhong 457019657.61 457019，657.61
Chuzhou Kangxin 176837544.74 176837544.74
Total 2984941507.38 474346899.10 2510594608.28
(Continued)
Item Determination method of fair Key Basis for determining keyvalue and disposal costs parameters parameters
Fair value is recognized by the
Disposal expenses: in accordance
income approach; disposal
with the property rights transfer
expenses shall be charged in Fair value
Yifang fee standards of Shanghai United
accordance with the business fee disposal costs
Assets and Equity Exchange Co.standards of the property rights
Ltd.exchange.The fair value of the asset is
Guan Kang Yuhong Asset-based approach Fair value estimated on the basis of the best
available information
The fair value of the asset is
Chuzhou Kangxin Asset-based approach Fair value estimated on the basis of the best
available information
Total — — —
2) The recoverable amount is determined based on the present value of the estimated
future cash flows
Item Book value Recoverable amount Impairment Amount
Kaikai Shijie 356469457.18 26987982.96 329481474.22
Yikang Technology Co. Ltd. 841861388.05 718478701.02 123382687.03
Total 1198330845.23 745466683.98 452864161.25
(Continued)
Basis for
Item Years of Forecast Key parameters for Key Parameters in Determination of KeyPeriod the forecast period Stabilization Phase Parameters in the
Stabilization Period
The above key
After-tax discount rate After-tax discount rate indicators are
2026 to 2030 7.44%; calculated 7.44%; calculated determined based on
Kaikai Shijie (followed by a based on projected based on projected historical experience
stabilization period) revenue costs revenue costs and forecasts of market
expenses etc. expenses etc. development
109Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Basis for
Item Years of Forecast Key parameters for Key Parameters in Determination of KeyPeriod the forecast period Stabilization Phase Parameters in the
Stabilization Period
The revenue growth
The growth rate for the
rate in the stabilization
forecast period is 0% The stable period
period is 0.00% and
Yikang 2026 to 2043 the profit margin of the growth rate is 0% the
the profit margin and
Technology (followed by a construction business profit margin is 15%
discount rate are
Co. Ltd. stabilization period) in the forecast period is and the pre-tax
consistent with the last
15% and the return on discount rate is 9.40%
year of the forecast
capital is 6.5%
period
Total — — — —
13. Other non-current financial assets
Item Ending balance Beginning balance
Kunshan Xinjia Emerging Industry Equity Investment Fund
Partnership (Limited Partnership) 119414203.99 230264035.04
China Asset Management - Jiayi Overseas Designated Plan 200732067.00 200732067.00
Tongxiang Wuzhen Jiayu Digital Economy Industry Equity
Investment Partnership (Limited Partnership) 178532220.44 197621072.79
Yibin OCT Sanjiang Properties Co. Ltd. 175054364.03 174599313.55
Chongqing Kangxin Equity Investment Fund Partnership (Limited
Partnership) 145591716.60 144028481.56
Yancheng Kangyan Information Industry Investment Partnership
(Limited Partnership) 135763664.30 139166271.83
Daye Trust - Huilibao No. 19 100000000.00
CCB Trust - Caidie No. 6 Property Rights Trust Plan 300000.00 66080293.70
Yibin Kanghui Electronic Information Industry Equity Investment
Partnership (Limited Partnership) 58967986.53 59264288.31
Chuzhou Jiachen Information Technology Consulting Service
Partnership (Limited Partnership) 58296141.16
Tianjin Property No. 8 Enterprise Management Partnership
(Limited Partnership) 28540777.26
Tianjin Huacheng Property Development Co. Ltd. 1000000.00 1000000.00
Shenzhen Kanghuijia Technology Co. Ltd. 1033.45 1033.45
Subtotal of equity investments 1015357256.34 1399593775.65
Shenzhen Gaohong Enterprise Consulting Management
Partnership (Limited Partnership) 120874956.69 120874956.69
Nanjing Kangfeng Dejia Asset Management Partnership (Limited
Partnership) 100000000.00
Shenzhen Zitang No. 1 Enterprise Consulting Management
Partnership (Limited Partnership) 99000000.00
Shenzhen Beihu Technology Partnership (Limited Partnership) 15000000.00 59735232.88
Xi'an Bihuijia Enterprise Management Consulting Partnership
(Limited Partnership) 7520520.00 14685194.12
110Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Item Ending balance Beginning balance
Shanxi Kangmengrong Enterprise Management Consulting
Partnership (Limited Partnership) 3028480.00 8520728.55
Subtotal of debt investments 146423956.69 402816112.24
Total 1161781213.03 1802409887.89
14. Investment properties
(1) Investment properties measured at the cost mode
Item Houses and buildings Land use right Total
I. Original Book Value
1. Beginning Balance 1715988662.48 172115175.84 1888103838.32
2. Increase in the Current Year 12236594.06 249409.16 12486003.22
(1) Purchase 1225721.11 249409.16 1475130.27
(2) Transfer-in of inventories\fixed
assets\construction in 11010872.95 11010872.95
progress\intangible assets
3. Decrease in the Current Year 40928563.62 75154029.62 116082593.24
(1) Disposal 39320464.65 39320464.65
(2) Other transfer-out 1608098.97 75154029.62 76762128.59
4. Ending Balance 1687296692.92 97210555.38 1784507248.30
II. Accumulated depreciation and
accumulated amortization
1. Beginning Balance 212582498.12 24678100.69 237260598.81
2. Increase in the Current Year 53859884.41 2861554.41 56721438.82
(1) Provision or amortization 53859884.41 2861554.41 56721438.82
3. Decrease in the Current Year 18325185.92 844000.32 19169186.24
(1) Disposal 4399911.15 4399911.15
(2) Other transfer-out 13925274.77 844000.32 14769275.09
4. Ending Balance 248117196.61 26695654.78 274812851.39
III. Provision for Impairment
1. Beginning Balance
2. Increase in the Current Year 602125392.90 41517528.88 643642921.78
(1) Provision 602125392.90 41517528.88 643642921.78
3. Decrease in the Current Year
(1) Disposal
(2) Other transfer-out
4. Ending Balance 602125392.90 41517528.88 643642921.78
111Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Item Houses and buildings Land use right Total
IV. Book value
1. Ending book value 837054103.41 28997371.72 866051475.13
2. Book value at the beginning of the
year 1503406164.36 147437075.15 1650843239.51
Note: The other assets transferred in the decreases amount from investment properties in
the current period was reclassified according to the purpose of holding and transferred into
fixed assets.
(2) Impairment test of investment properties measured at cost
In 2025 the Group conducted impairment tests on the investment properties of its
headquarters Xi'an Kanghong Yibin Konka Industrial Park Suining Konka Industrial Park
etc.. The recoverable amount was determined as the higher of fair value less costs of
disposal and the present value of estimated future cash flows. A total asset impairment
loss of RMB 643642921.78 was recognized.
1) The recoverable amount is determined at the net amount of the fair value minus the
disposal expenses
Item Book value Recoverable amount Impairment Amount
Xi'an Kanghong 100206506.24 88833134.00 11373372.24
Total 100206506.24 88833134.00 11373372.24
(Continued)
Determination method of Basis for
Item fair value and disposal Key parameters determining key
costs parameters
Comparable unit price of
investment property to be
appraised = Price of
comparable instance after
establishing comparison
The comparable
benchmark × Trading Comparable instance price trading
instance price is
Xi'an Kanghong correction coefficient × correction coefficient location
defined through
Trading time adjustment adjustment coefficient etc.inquiry records.coefficient × Location
adjustment coefficient ×
Physical condition
adjustment coefficient ×
Equity adjustment coefficient
Total — — —
2) The recoverable amount is determined based on the present value of the estimated
future cash flows
Item Book value Recoverable amount Impairment Amount
Guangming Technology 540352724.57 320593149.91 219759574.66
112Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Item Book value Recoverable amount Impairment Amount
Center
Yibin Konka Industrial Park 105369207.16 70346651.37 35022555.79
Suining Konka Industrial Park 238797042.25 77853042.25 160944000.00
Total 884518973.98 468792843.53 415726130.45
(Continued)
Years of Forecast Key parameters Key Parameters
Basis for
Item for the forecast in Stabilization Determination of KeyPeriod period Phase Parameters in theStabilization Period
Rent increase Rent increase
Guangming 2026 to 2043 (followed Based on forecasts of
(decrease) rate of (decrease) rate of
Technology Center by a stabilization period) market trends.
2%; vacancy rate. 2%; vacancy rate.
The real estate value is
determined based on
the market price of
Annual total Annual total similar real estate
income from real income from real transactions on the
Yibin Konka Industrial 2026 to 2068 (followed estate; annual estate; annual valuation base date the
Park by a stabilization period) total expenses; total expenses; location and physical
discount rate; discount rate; condition of the real
useful life. useful life. estate to be valued and
the development trend
of the real estate market
in the area.Refer to the leasing
Rent increase Rent increase market conditions and
Suining Konka 2026 to 2035 (followed
(decrease) rate; (decrease) rate; historical operational
Industrial Park by a stabilization period)
vacancy rate. vacancy rate. data of the project in the
region.Total — — — —
(3) Investment properties measured by fair value
The Group had no investment properties measured at fair value.
(4) Investment properties converted and measured at fair value in the current year
There was no conversion of investment property measured at fair value in the current year.
113Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
(5) Investment properties for which property right certificates have not yet been
issued
Item Book value Reason for incompleteproperty rights certificate
The project has not yet
Suining Konka Electronic Product Standard
64185293.61 completed the completionFactory Project
registration
Houses and buildings of Xi'an Kanghong 88833134.00 In progress
Yantai Kangjin's properties and buildings 19180060.44 In progress
(6) Investment properties with restricted ownership or use right
Item Book value Reason for restriction
Guangming Technology Center 320593149.91 Mortgaged for loan
Houses and buildings of Xi'an Kanghong 88833134.00 Mortgaged for loan
Properties and buildings of Shaanxi Konka
35900372.54 Mortgaged for loanIntelligent
Total 445326656.45
15. Fixed assets
Item Ending balance Beginning balance
Fixed assets 4405958959.37 5005836928.31
Liquidation of fixed assets
Total 4405958959.37 5005836928.31
114Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
(1) Fixed assets
Item Properties and Machinery Equipment Electronic TransportationBuildings Equipment equipment Other equipment Total
I. Original Book Value
1. Beginning Balance 3961200953.13 3483070002.32 293459158.90 52749559.59 191290520.96 7981770194.90
2. Increase in the Current
Year 83720909.97 152827832.87 8201922.73 978033.36 2689438.82 248418137.75
(1) Purchase 5419166.63 59698021.58 7518709.54 978033.36 2643088.24 76257019.35
(2) Transfer-in of
construction in progress 3415007.15 90314292.77 656040.70 16646.02 94401986.64
(3) Increase in business
combination
(4) Other increase 74886736.19 2815518.52 27172.49 29704.56 77759131.76
3. Decrease in the Current
Year 28877649.03 150089536.69 7625549.27 5262438.25 5006499.64 196861672.88
(1) Disposal or write-off 20018497.00 142382023.11 7522156.72 5262094.31 3442760.66 178627531.80
(2) Decrease for loss of
control 1537858.92 1537858.92
(3) Other decreases 8859152.03 7707513.58 103392.55 343.94 25880.06 16696282.16
4. Ending Balance 4016044214.07 3485808298.50 294035532.36 48465154.70 188973460.14 8033326659.77
II. Accumulated Depreciation
1. Beginning Balance 798169871.19 1638817015.47 211617889.35 41521906.29 133797222.94 2823923905.24
2. Increase in the Current
Year 127570622.20 233980199.22 24631683.84 2490034.69 12837212.21 401509752.16
(1) Provision 113645347.43 233980199.22 24631683.84 2429168.38 12837212.21 387523611.08
(2) Other increase 13925274.77 60866.31 13986141.08
115Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Item Properties and Electronic TransportationBuildings Machinery Equipment Equipment equipment Other equipment Total
3. Decrease in the Current
Year 11354398.09 117211383.36 6659070.08 4554463.34
3371962.88143151277.75
(1) Disposal or write-off 11349847.93 116602091.32 6634514.23 4554153.80 2923696.83 142064304.11
(2) Decrease for loss of
control 390776.95 390776.95
(3) Other decreases 4550.16 609292.04 24555.85 309.54 57489.10 696196.69
4. Ending Balance 914386095.30 1755585831.33 229590503.11 39457477.64 143262472.27 3082282379.65
III. Provision for Impairment
1. Beginning Balance 24030941.23 121076848.24 847936.84 832646.14 5220988.90 152009361.35
2. Increase in the Current
Year 148077476.05 246408788.21 2643277.81 1127523.75 6518543.55 404775609.37
(1) Provision 148077476.05 246408788.21 2643277.81 1127523.75 6518543.55 404775609.37
(2) Other increase
3. Decrease in the Current
Year 11486338.13 51233.10 20675.15 141403.59 11699649.97
(1) Disposal or write-off 11486338.13 51233.10 20675.15 141403.59 11699649.97
(2) Decrease for loss of
control
(3) Other decreases
4. Ending Balance 172108417.28 355999298.32 3439981.55 1939494.74 11598128.86 545085320.75
IV. Book value
1. Ending book value 2929549701.49 1374223168.85 61005047.70 7068182.32 34112859.01 4405958959.37
2. Book value at the
beginning of the year 3139000140.71 1723176138.61 80993332.71 10395007.16 52272309.12 5005836928.31
116Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Note * : The decrease in properties and buildings and machinery and equipment due to disposal or write-off this year was mainly
attributable to the disposal and auction of some outdated equipment of Frestec Refrigeration after Frestec Smart Home was put into
operation and the disposal of some idle equipment by Anhui Konka. * : The decrease in properties and buildings due to other reasons
this year was attributable to the transfer to investment properties.
117Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
(2) Temporarily idle fixed assets
Item Original book value Accumulated Provision fordepreciation impairment Book value
Machinery
Equipment 977416205.13 630494531.01 301239093.89 45682580.23
Housing and
building 364676775.60 220860420.94 106439814.25 37376540.41
Electronic
Equipment 8054959.87 7154053.85 387915.49 512990.53
Transportation
equipment 3663604.17 3385905.95 85993.19 191705.03
Other equipment 15124041.99 13436100.85 1539050.28 148890.86
Total 1368935586.76 875331012.60 409691867.10 83912707.06
(3)Fixed assets leased out through operating leases
Item Ending book value
Housing and building 166315497.45
Machinery Equipment 10853396.97
Electronic Equipment 139076.29
Transportation equipment 312.63
Other equipment 198247.64
Total 177506530.98
(4) Fixed assets without certificate of title
Item Book value Reason for incompleteproperty rights certificate
Fenggang Konka Smart TV Project 404194048.10 In progress
Anhui Konka properties and buildings 162429987.67 In progress
The project has not yet
Standard electronic product plant in
140289781.57 completed the completionSuining
registration
Yikang Building property 31087304.59 In progress
Frestec Smart Home properties and
buildings 404194048.10
In progress
(5) Impairment test of fixed assets
In 2025 impairment tests were conducted on the fixed assets of the Group’s headquarters
Jiangxi Konka Dongguan Konka etc.. The recoverable amounts were determined based
on the net amounts of fair value less costs of disposal and a total asset impairment loss of
RMB 404775609.37 was recognized.
118Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Item Book value Recoverable amount Impairment Amount
Properties and buildings of the
Group's headquarters 128113966.02 86868433.00 41245533.02
Equipment of Dongguan
Konka 29162230.62 1179269.91 27982960.71
Jiangxi Konka 379736152.62 80311836.13 299424316.49
Total 537012349.26 168359539.04 368652810.22
(Continued)
Item Determination method of fairvalue and disposal costs Key parameters
Basis for determining key
parameters
Market value = Market price of
Market price of Representative transaction examples
Properties and comparable instances × Transaction
comparable from similar real estate transacted in
buildings of the condition correction coefficient ×
instances recent periods are selected as
Group's Transaction date adjustment
correction comparable instances for the
headquarters coefficient × Real estate condition
coefficient evaluated real estate.adjustment coefficient
1. The recovery unit price is
determined by the net proceeds from
the disposal of waste materials
Recovery unit (demolition and transportation costs
Fair value = Recovery unit price × price equipment are borne by the recycling unit); 2. The
Equipment of
Equipment quantity; disposal cost = quantity equipment quantity is determined
Dongguan Konka
Intermediary service fee intermediary through on-site inventory counts; 3.service fee The intermediary service fee mainly
includes evaluation fees and the
intermediary fees of the trading
platform.* Residual value/Fair value of The texture or weight of the recyclable
assets = Weight of recyclable materials with recycling value in the
materials with recycling value in assets to be dismantled was
assets to be dismantled (reasonable estimated or calculated mainly based
loss deducted) × Market unit price of on the corresponding materials
the corresponding materials; provided by the Company and the on-
* Relocatable equipment = Asset site survey results; the asset
acquisition cost × Comprehensive
Weight of acquisition cost was mainlycondition rate - Relocation
recyclable determined through direct inquiry todismantling expenses - Dismantling
materials asset dealers or manufacturers or withloss;
Jiangxi Konka acquisition cost reference to merchants' price lists
assets * Non-relocatable equipment = adjusted unit price information published on
Market value of the physical assets price relevant professional websites as well
in the equipment to be dismantled comprehensive as possible price fluctuations; while
after being disassembled into condition rate collecting comparable transaction
components - Equipment cases a number of recent comparable
disassembly cost transaction cases with similar uses
* Fair value of land use rights = and similar locations to the evaluated
evaluated unit price × land area; land use rights were compared with
evaluated unit price = (Adjusted unit the evaluated land use rights.price of Case 1 + Adjusted unit price Following the corrections for factors
of Case 2 + Adjusted unit price of such as transaction details
Case N) ÷ N transaction date and real estate
119Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Item Determination method of fairvalue and disposal costs Key parameters
Basis for determining key
parameters
condition the corrected adjusted price
was acquired.Total — — —
(6) Fixed assets with restricted ownership or use right
Item Ending book value Reason for restriction
Anhui Konka properties and buildings 571493720.58 Mortgaged for loan
Properties and buildings of Shaanxi Konka
Intelligent 357369651.51
Mortgaged for loan
Buildings and machinery and equipment of
Frestec Smart Home 231338364.12
Mortgaged for loan
Buildings of Chongqing Konka 147489012.28 Mortgaged for loan
Housing and buildings of Anhui Tongchuang 130401949.70 Mortgage for invoicing
Housing and buildings of Frestec Refrigeration 69933241.57 Mortgaged for loan
Buildings of Konka Group 49376036.91 Mortgaged for loan
Buildings of Jiangsu Konka Intelligent 30159089.35 Mortgaged for loan
Housing and buildings of XingDa HongYe 24149230.30 Mortgaged for loan
Machinery and equipment of Xinfeng
As collateral for finance lease
Microcrystalline 6300273.41
Original shareholder guarantee
Housing and buildings of Jiangxi Konka 1627384.41 mortgage
Machinery and equipment of Bokang Precision 86548.67 Litigation involved
Total 1619724502.81
120Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
16. Construction in progress
(1) Construction in progress situation
Ending balance Beginning balance
Item
Balance Provision forimpairment Book value Balance
Provision for
impairment Book value
Jiangxi High-permeability
Crystallisation Kiln 246576748.57 245645748.57 931000.00 246576748.57 56387538.57 190189210.00
Construction of Suining
Electronic Industrial Park 159521528.40 79545109.40 79976419.00 177739108.43 177739108.43
Workshops
Suining Konka Hongye Plant
Decoration Project 119870565.87 119870565.87 84574481.80 84574481.80
Production Line Renovation
Project of Jiangxi Konka 77761891.85 71639231.85 6122660.00 85354578.78 17688178.78 67666400.00
Construction and Decoration
Project of Phase I of
Dongguan Konka Science and 41073754.17 41073754.17 53096645.21 53096645.21
Technology Industrial Park
Other projects 352832974.12 84469891.23 268363082.89 333576197.93 33799544.33 299776653.60
Total 997637462.98 481299981.05 516337481.93 980917760.72 107875261.68 873042499.04
121Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
(2) Changes in major projects under construction in the current year
Increase in the Decrease in the current yearName Beginning balance current year Ending balanceTransfer to fixed assets Other decreases
Construction of Suining Electronic Industrial
Park Workshops 177739108.43 440698.68 18658278.71 159521528.40
Suining Konka Hongye Plant Decoration
Project 84574481.80 35296084.07 119870565.87
Total 262313590.23 35736782.75 18658278.71 279392094.27
(Continued)
Proportion of the Accumulated Including: Amount Capitalization
project EngineeringName Budget amount of of interest rate of the Source ofaccumulative input Progress interest capitalized in the interests in the funds
in budget (%) capitalization current year current year (%)
Construction of Suining Electronic own funds
Industrial Park Workshops 76342.22 95.00 95.00
Suining Konka Hongye Plant self-owned
Decoration Project 13774.10 87.00 87.00 funds and
bank loans
Total 90116.32
Note: Other decreases in the current year are mainly due to the adjustment of construction in progress costs based on settlement.
(3) Provision set aside for impairment of construction in progress in the current year
Category Beginning balance Increase in the current Decrease in theyear current year Ending balance Reason for provision
Work has been
Jiangxi High-permeability Crystallisation suspended and there are
Kiln Project 56387538.57 189258210.00 245645748.57 no future development
plans
Jiangxi High Transparent Substrate 33795466.66 17760843.60 44563.08 51511747.18 Work has been
122Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Category Beginning balance Increase in the current Decrease in theyear current year Ending balance Reason for provision
Production Line Project suspended and there are
no future development
plans
Work has been
Jiangxi Konka Production Line Renovation suspended and there are
Project 17688178.78 55820730.44 1869677.37 71639231.85 no future development
plans
Work has been
Suining Konka Flexible FPC Plant suspended and there are
Equipment Installation 32860823.52 32860823.52 no future development
plans
Construction of Suining Electronic Industrial
79545109.40 79545109.40 Not yet ready for usePark Workshops
Work has been
suspended and there are
Other projects 4077.67 93242.86 97320.53 no future development
plans
Total 107875261.68 375338959.82 1914240.45 481299981.05 —
(4) Impairment test of construction in progress
1) The recoverable amount is determined at the net amount of the fair value minus the disposal expenses
Item Book value Recoverable amount Impairment
Determination
Amount method of fair value Key parameters
Basis for determining key
and disposal costs parameters
Economic depreciation rate = (1 -
Recoverable amount (capacity of equipment expected to be
Jiangxi High-
= replacement costs × utilized / original design capacity of
permeability Economic
(1 - economic equipment) ^ economy of scale index)
Crystallisation Kiln 190189210.00 931000.00 189258210.00 depreciation rate
depreciation rate) - x 100%. Economy of scale index i.e.Project
disposal costs empirical data takes the value of 0.7
for the processing industry in general.
123Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Determination
Item Book value Recoverable amount Impairment method of fair value Key parameters Basis for determining keyAmount and disposal costs parameters
Economic depreciation rate = (1 -
Recoverable amount (capacity of equipment expected to be
Jiangxi High
= replacement costs × utilized / original design capacity of
Transparent Economic
Substrate Production 28330153.60 10569310.00 17760843.60
(1 - economic equipment) ^ economy of scale index)
depreciation rate
depreciation rate) - x 100%. Economy of scale index i.e.Line Project
disposal costs empirical data takes the value of 0.7
for the processing industry in general.Economic depreciation rate = (1 -
Recoverable amount (capacity of equipment expected to be
Jiangxi Konka = replacement costs × utilized / original design capacity of
Economic
Production Line 61943390.44 6122660.00 55820730.44 (1 - economic equipment) ^ economy of scale index)depreciation rate
Renovation Project depreciation rate) - x 100%. Economy of scale index i.e.disposal costs empirical data takes the value of 0.7
for the processing industry in general.Realisation coefficient = influence
coefficient of property right integrity ×
Suining Konka Recoverable amount influence coefficient of social demand
Flexible FPC Plant = replacement cost × Realisation and current policy × influence
Equipment 77448423.52 44587600.00 32860823.52 realisation coefficient coefficient coefficient of equipment type ×
Installation - disposal expenses influence coefficient of proposed
disposal method × influence coefficient
of disposal time limit
Economic depreciation rate = (1 -
Recoverable amount (capacity of equipment expected to be
= replacement costs × utilized / original design capacity of
Economic
Other projects 434289.76 341046.90 93242.86 (1 - economic equipment) ^ economy of scale index)depreciation rate
depreciation rate) - x 100%. Economy of scale index i.e.disposal costs empirical data takes the value of 0.7
for the processing industry in general.Total 358345467.32 62551616.90 295793850.42 — — —
124Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
2) The recoverable amount is determined based on the present value of the estimated future cash flows
Key
Item Book value Recoverable Impairment Years of
Key parameters Parameters in Basis for Determination of Key
amount Amount Forecast Period for the forecastperiod Stabilization Parameters in the Stabilization PeriodPhase
The discount rate adopts the weighted
average cost of capital (WACC) which is
the expected total return on investment
and the weighted average of the expected
Construction of
From June 1 return on equity and the after-tax return on
Suining Electronic After-tax Discount After-tax
Industrial Park 159521528.40 79976419.00 79545109.40
2026 to May 17 debt. This valuation estimates the
Rate Discount Rate
2070 expected return on investment of the
Workshops
enterprise where the construction in
progress and related land use rights are
located by selecting comparable
companies for analysis and calculation.Total 159521528.40 79976419.00 79545109.40 — — — —
125Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
17. Right-of-use assets
Right-of-Use Assets
Item Properties and Machinery ElectronicBuildings Equipment Equipment Total
I. Original Book Value
1. Beginning Balance 283992075.23 428197.71 329550.15 284749823.09
2. Increase in the
Current Year 12583212.22 2878728.21 367441.04 15829381.47
(1) Leased-in 12583212.22 2878728.21 367441.04 15829381.47
(2) Others
3. Decrease in the
Current Year 26963263.68 26963263.68
(1) Decrease for Loss of
Controlling Right 13614794.47 13614794.47
(2) Others 13348469.21 13348469.21
4. Ending Balance 269612023.77 3306925.92 696991.19 273615940.88
II. Accumulated
Depreciation
1. Beginning Balance 106211054.04 171279.11 181810.59 106564143.74
2. Increase in the
Current Year 50550632.05 674823.81 94062.82 51319518.68
(1) Provision 50550632.05 674823.81 94062.82 51319518.68
(2) Others
3. Decrease in the
Current Year 14344266.37 14344266.37
(1) Decrease for Loss of
Controlling Right 4524918.34 4524918.34
(2) Others 9819348.03 9819348.03
4. Ending Balance 142417419.72 846102.92 275873.41 143539396.05
III. Provision for
Impairment
1. Beginning Balance
2. Increase in the
Current Year
(1) Provision
3. Decrease in the
Current Year
(1) Disposal
4. Ending Balance
IV. Book value
126Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Item Properties and Machinery ElectronicBuildings Equipment Equipment Total
1. Ending book value 127194604.05 2460823.00 421117.78 130076544.83
2. Book value at the
beginning of the year 177781021.19 256918.60 147739.56 178185679.35
Remarks: The other decreases in original value and accumulated depreciation are mainly
due to the termination of leases.
127Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
18. Intangible assets
(1) List of intangible assets
Item Land use right Trademark right Patent and know-how Franchise rights
Right to use software and
others Total
I. Original Book Value
1. Beginning Balance 817198544.35 72197456.33 112424969.79 192998879.51 161769606.35 1356589456.33
2. Increase in the Current
Year 1072899.29 10298099.42 11370998.71
(1) Purchase 6044338.78 6044338.78
(2) Transfer-in of
construction in progress 4228288.94 4228288.94
(3) Other reasons 1072899.29 25471.70 1098370.99
3. Decrease in the Current
Year 6976554.62 4144403.75 25471.70 771835.35 11918265.42
(1) Disposal or write-off 6976554.62 4144403.75 771835.35 11892793.72
(2) Decrease for loss of
control
(3) Other reasons 25471.70 25471.70
4. Ending Balance 811294889.02 72197456.33 108280566.04 192973407.81 171295870.42 1356042189.62
II. Accumulated
amortization
1. Beginning Balance 108080921.57 23419142.45 67302648.17 22265157.50 101732539.26 322800408.95
2. Increase in the Current
Year 16861440.77 4163515.94 43200.00 10747059.76 20103235.16 51918451.63
(1) Provision 16861333.57 4163515.94 43200.00 10747059.76 20103235.16 51918344.43
(2) Others 107.20 107.20
128Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Item Land use right Trademark right Patent and know-how Franchise rights
Right to use software and
others Total
3. Decrease in the Current
Year 1130460.24 1243321.14 615384.62 2989166.00
(1) Disposal or write-off 1130460.24 1243321.14 615384.62 2989166.00
4. Ending Balance 123811902.10 27582658.39 66102527.03 33012217.26 121220389.80 371729694.58
III. Provision for
Impairment
1. Beginning Balance 564705.88 44943521.62 235294.12 45743521.62
2. Increase in the Current
Year 13304591.99 155930200.00 3305.52 169238097.51
(1) Provision 13304591.99 155930200.00 3305.52 169238097.51
3. Decrease in the Current
Year 2901082.61 2901082.61
(1) Disposal or write-off 2901082.61 2901082.61
4. Ending Balance 13304591.99 564705.88 42042439.01 155930200.00 238599.64 212080536.52
IV. Book value
1. Ending book value 674178394.93 44050092.06 135600.00 4030990.55 49836880.98 772231958.52
2. Book value at the
beginning of the year 709117622.78 48213608.00 178800.00 170733722.01 59801772.97 988045525.76
Note 1: The impairment of intangible assets during the Reporting Period was due to the provision for impairment of the land use right of
Suining Konka Industrial Park and the franchise right of Yibin Kangrun.Note 2: The decrease in land use rights due to disposal or retirement this year was mainly attributable to the sale of the land use right for
the third floor of Block A Jingyuan Building by the Group's headquarters.
129Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
(2) Land use right with certificate of title uncompleted
The Group did not have land use rights for which no title deeds had been issued.
(3) Impairment test of intangible assets
In 2025 impairment tests were conducted on the intangible assets of Suining Konka
Industrial Park Yibin Kangrun Medical etc.. Their recoverable amounts were determined
based on the present value of estimated future cash flows and a total asset impairment
loss of RMB 169238097.51 was recognized.Item Book value Recoverable amount Impairment Amount
Land use right of the FPC plant at
Suining Konka Industrial Park 5429547.08 2523060.30 2906486.78
Land use right of the sewage
treatment plant at Suining Konka 16978563.97 9438484.97 7540079.00
Industrial Park
Franchise right of Yibin Kangrun
Medical 160349282.90 4419066.57 155930200.00
Total 182757393.95 16380611.84 166376765.78
(Continued)
Years of Key parameters Key Parameters in Basis for Determination of KeyItem Forecast Period for the forecast Stabilization Phase Parameters in the Stabilizationperiod Period
1. The estimated growth rate of rent
during the growth period based on the
industry survey and the lease
1. The unit price of rent in
contracts signed by the principal and
the stabilization period
the evaluated entity for self-operated
remains constant based on
Land use industrial parks; 2. The appraisers'
Pre-tax discount the estimated growth rate in
right of the comprehensive analysis and
From 2026 to rate: 5.95%; the growth period; 2. The
FPC plant at determination of the lease vacancy
2070 (expiring calculated based vacancy rate in the
Suining rate in the stabilization period based
on January 12 on projected stabilization period is based
Konka on the investigation and
2070) revenue costs on the forecast; 3. Relevant
Industrial understanding of the leasing and
expenses etc. administrative expenses
Park actual use of similar properties within
remain constant with
the area of the evaluated target; and
reference to the Company's
3. The principal and the evaluated
overall budget management.entity's comprehensive budget
management data and other
materials.
1. The PCB industrial
Land use sewage treatment plant with
right of the the capacity of daily average 1. Pollutant Discharge Permit; 2. The
Pre-tax discount
sewage of 3000 cubic meters of Entrusted Operation Contract signed
From 2026 to rate: 8.61%;
treatment sewage from the self-owned by the property rights holder and the
2070 (expiring calculated based
plant at park and external parks; 2. operating unit for Section I of Phase II
on May 17 on projected
Suining Assumption that the of the PCB Base Industrial
2070) revenue costs
Konka Pollutant Discharge Permit Wastewater Treatment Plant (Konka
expenses etc.Industrial obtained for Section I of Industrial Sewage Plant).Park Phase II of the PCB Base
Industrial Wastewater
Treatment Plant (Konka
130Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Years of Key parameters Key Parameters in Basis for Determination of KeyItem Forecast Period for the forecast Stabilization Phase Parameters in the Stabilizationperiod Period
Industrial Sewage Plant)
held by the property rights
holder will be renewed upon
expiration without other
factors preventing such
renewal; 3. Assumption that
the Entrusted Operation
Contract signed by the
property rights holder and
the operating unit for
Section I of Phase II of the
PCB Base Industrial
Wastewater Treatment Plant
(Konka Industrial Sewage
Plant) will continue to sign
subsequent annual
entrusted operation service
matters according to the
original contract at the end
of the agreed operation
period.The Concession Agreement for the
Centralized Treatment Project of
Medical Wastes in Gao County Yibin
City the Circular of Yibin
Development and Reform
Commission Yibin Health
Commission and Yibin Ecology and
Pre-tax discount Environment Bureau on Defining the
Franchise From 2026 to rate: 6.87%; Pre-tax discount rate: Charging Standards for Medical
right of Yibin 2040 (expiring calculated based 6.87%; calculated based on Waste Disposal the Circular of Yibin
Kangrun on October 31 on projected projected revenue costs Development and Reform
Medical 2040) revenue costs expenses etc. Commission Yibin Health
expenses etc. Commission and Yibin Ecology and
Environment Bureau on Continuing to
Extend the Trial Period of the
Charging Standards for Medical
Waste Disposal (YFDRF [2026] No.
20) and the Medium- and Long-Term
Plan for Population Development in
Yibin City.Total — — — —
(4) Significant intangible assets
Item
Ending book value Remaining amortization period(year)
Land use right of Dongguan Konka 177693814.67 43.67
Land use right of Shaanxi Konka Intelligent 109657495.91 45.58
Land use right of Frestec Smart Home 86406223.51 44.75
131Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Item
Ending book value Remaining amortization period(year)
Total 373757534.09 —
(5) Intangible assets with restricted ownership or use right
Item Ending book value Reason for restriction
Land use right of Dongguan Konka 177693814.67 Mortgaged for loan
Land use right of Shaanxi Konka
109657495.91 Mortgaged for loanIntelligent
Land use right of Frestec Refrigeration 59941753.88 Mortgaged for loan
Land use right of Anhui Konka 51473396.00 Mortgaged for loan
Land use right of Chongqing Konka 42632871.92 Mortgaged for loan
Land use right of Anhui Tongchuang 16477106.80 Mortgaged for loan
Land use right of Jiangsu Konka
Intelligent 12805114.62
Mortgaged for loan
Land use right of Xingda Hongye 12176062.85 Mortgaged for loan
Land use right of Konka Group in
3506913.18 Mortgaged for loanGuangming
Total 486364529.83
19. Goodwill
(1) Original book value of goodwill
Increase in the Decrease in the
current year current year
Formed
Investee Beginning balance through Ending balance
business Others Disposal Otherscombinatio
ns
Jiangxi Konka 340111933.01 340111933.01
Xingda Hongye 44156682.25 44156682.25
Total 384268615.26 384268615.26
(2) Provision for impairment of goodwill
Increase in the current year Decrease in thecurrent year
Investee Beginning balance Ending balance
Provision Others Disposal Others
Jiangxi Konka 340111933.01 340111933.01
Xingda 21959947.14 22196735.11 44156682.25
Hongye
Total 362071880.15 22196735.11 384268615.26
(3) Relevant information on the asset group or portfolio of asset groups of the
132Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
goodwill belongs to
Name Composition and basis of the asset group or combination Whether consistentof asset groups with previous years
It consists of all operating tangible assets and recognizable
intangible assets related to goodwill from the corresponding
subsidiary's main business as reflected in its balance sheet
Xingda Hongye asset group (excluding working capital and non-operating assets) based Yes
on whether the main cash inflows generated by the asset
group are independent from those generated by other assets
or asset groups.
(4) Specific determination method of recoverable amount
The Company's management performed an impairment test of goodwill at the end of the
year and recognized Xingda Hongye as a whole as a single asset group which is
consistent with prior years.Future cash flows are determined based on the financial budget for 2026 to 2030
approved by management and a discount rate of 11.81% is used. The cash flows of
Xingda Hongye for periods over 5 years are calculated based on a growth rate of 0%. The
Company engaged an appraisal institution Shenzhen Pengxin Asset Appraisal Land and
Real Estate Appraisal Co. Ltd. to evaluate the asset group of Xingda Hongye containing
goodwill using the income approach and took the present value of the estimated future
cash flows of the assets in the asset group as its recoverable amount. On April 23 2026 it
issued the Recoverable Amount of the Asset Group Containing Goodwill Formed by the
Merger and Acquisition of Guangdong Xingda Hongye Electronic Co. Ltd. in Relation to
the Goodwill Impairment Test to be Conducted by Konka Group Co. Ltd. (PXZPBZ [2026]
No. S0276) with December 31 2025 as the valuation reference date. The present value of
the asset group of Xingda Hongye on the valuation reference date was RMB 161140000.The book value of the asset group adjusted by fair value (including overall goodwill) was
RMB 205988400 of which the book value of goodwill (including minority shareholders)
was RMB 43523000. The recoverable amount of the asset group is less than the book
value of the asset group including goodwill. Therefore a goodwill impairment of RMB
22.1967 million was recognized in the current period based on the shareholding ratio in
Xingda Hongye.
20. Long-term deferred expenses
Item Beginning Increase in the Amortization in
Other decreases
balance current year the current year in the current Ending balanceyear
Decoration
expenses 296854146.58 6755139.70 60262379.95 1145902.08 242201004.25
Shop
expense 30536411.17 29463550.58 43464650.78 16535310.97
133Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Item Beginning Increase in the Amortization in
Other decreases
balance current year the current year in the current Ending balanceyear
Others 204790603.88 66031329.47 72234790.80 3361340.08 195225802.47
Total 532181161.63 102250019.75 175961821.53 4507242.16 453962117.69
21. Deferred tax assets and deferred tax liabilities
(1) Deferred tax assets without offset
Ending balance Beginning balance
Item Deductible Deferred tax Deductibletemporary assets temporary Deferred tax assetsdifferences differences
Deductible losses 115441836.02 24185449.41 4072599866.74 821192030.16
Provision for asset
impairment 33348876.81 7518088.66 1711958350.44 383396704.79
Deferred income 126029904.75 26299979.55 165698149.55 36951815.16
Accrued expenses 79260.20 19815.05 154175886.01 30405673.44
Unrealized internal
transaction profits 23159179.99 5789795.00 21418121.43 5354530.36
Lease liabilities 128733917.69 31923273.77 190036774.82 46680049.35
Others 47323319.31 11257154.20 303824133.13 68258498.61
Total 474116294.77 106993555.63 6619711282.12 1392239301.87
(2) Deferred tax liabilities without offset
Ending balance Beginning balance
Item Taxable temporary Deferred tax Taxable temporary Deferred tax
differences liabilities differences liabilities
Asset revaluation
appreciation from a
business combination 131234455.38 28976378.21 148603098.25 32684086.93
not under common
control
Prepaid interest 16906513.97 4226628.50 21809373.23 5452343.31
Accelerated
depreciation of fixed 2198376.27 443840.17
assets
Financial assets
measured at fair value
through current 165075229.25 41268807.31 164553726.22 41138431.56
gains/losses
Right-of-Use Assets 125148918.49 31020361.63 177009862.45 43672811.85
Others 53694103.36 8982879.15 57798900.95 9907661.66
Total 492059220.45 114475054.80 571973337.37 133299175.48
134Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
(3) Details of unconfirmed deferred tax assets
Item Ending balance Beginning balance
Deductible losses 10631764118.90 5076924357.43
Deductible temporary differences 14733642383.21 4057061699.25
Total 25365406502.11 9133986056.68
(4) Deductible losses from unrecognized deferred tax assets will be expired in the
following years
Year Ending balance Beginning balance Remarks
2025252950466.34
2026403268956.95313956730.12
20271334876912.27307074252.94
2028980877535.65710259863.04
20291311131269.351491466390.36
2030 and beyond 6601609444.68 2001216654.63
Total 10631764118.90 5076924357.43 —
22. Other non-current assets
Ending balance
Item
Balance Provision forimpairment Book value
Prepayment for land purchase 1029457502.92 517841855.90 511615647.02
Prepayment for construction
equipment and other long-term 89390490.57 89390490.57
assets
Total 1118847993.49 517841855.90 601006137.59
(Continued)
Beginning balance
Item
Balance Provision forimpairment Book value
Prepayment for land purchase 1029457502.92 1029457502.92
Prepayment for construction
equipment and other long-term 119220467.55 119220467.55
assets
Total 1148677970.47 1148677970.47
135Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
23. Assets with restricted ownership or use rights
End of the year
Item
Balance Book value Type of restriction Restriction details
Among them RMB 525901180.93
is margin deposits which are
pledged for borrowings or issuing
bank acceptance bills; RMB
Margin time 612670635.63 represents time
Monetary funds 1293472374.79 1293472374.79 deposits etc. deposits that are not available for
early withdrawal and are pledged as
collateral for borrowings; RMB
154900558.23 is restricted for
other reasons.Accounts
1479824.68 1448244.31 Pledge Pledge loanreceivable
Inventories 213889093.11 161827378.00 Mortgage Mortgaged for loan
Investment
789216793.66 445326656.45 Mortgage Mortgaged for loanproperties
Mortgage for finance lease
Fixed assets 2159388777.59 1619724502.81 Mortgage mortgage loans and former
shareholder guarantee
Intangible
Mortgage Mortgaged for loan
assets 567108433.14 486364529.83
Total 5024555296.97 4008163686.19 — —
(Continued)
Beginning
Item
Balance Book value Type ofrestriction Restriction details
Among them RMB 556608881.87 is
margin deposits which are pledged for
borrowings or issuing bank
acceptance bills; RMB
Time deposits 567478893.23 represents time
Monetary funds 1332589771.28 1332589771.28 margins etc. deposits that are not available for
early withdrawal and are pledged as
collateral for borrowings; RMB
208501996.18 is restricted for other
reasons.Accounts
receivable 1837337.71 1798852.71
Pledge Pledge loan
Notes Pledged for the issuance of bank
receivable 15900000.00 15900000.00
Pledge
acceptance bills
Inventories 383413182.26 379790291.96 Mortgage Mortgaged for loan
Investment
790608780.11 712454010.27 Mortgage Mortgaged for loanproperties
Fixed assets 1832372199.20 1551889522.63 Mortgage
Mortgage for finance lease mortgage
loans and former shareholder
136Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Beginning
Item
Balance Book value Type ofrestriction Restriction details
guarantee
Intangible Mortgage for finance lease and
assets 664764256.55 587351084.33
Mortgage
mortgage loans
Total 5021485527.11 4581773533.18 — —
24. Short-term borrowings
(1) Classification of short-term borrowings
Type of borrowings Ending balance Beginning balance
Credit loan 3736619333.91 4709049751.78
Guaranteed loan 449087810.41 629950527.05
Mortgaged for loan 390208408.34 402171189.43
Total 4575915552.66 5741171468.26
(2) Outstanding short-term borrowings overdue
There were no outstanding short-term borrowings overdue at the end of the current year.
25. Notes payable
Type of note Ending balance Beginning balance
Bank acceptance bills 653949070.29 850916858.18
Commercial acceptance bills 289868697.62 299393998.52
Total 943817767.91 1150310856.70
Note: There were no notes payable that were due but unpaid at the end of the current year.
26. Accounts payable
(1) Presentation of accounts payable
Item Ending balance Beginning balance
Within 1 year 1392600370.15 2295798887.75
1 to 2 years 252209408.86 194600008.24
2 to 3 years 130867724.12 101677548.46
Over 3 years 202058868.16 182539343.79
Total 1977736371.29 2774615788.24
(2) Significant accounts payable aging more than one year or overdue
Unit Ending balance Reason for Non-repayment orCarry-over
Company A 111159114.76 Pending Settlement
Final payment for the project not
Company B 77027260.07 yet settled
137Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Unit Ending balance Reason for Non-repayment orCarry-over
Final payment for the project not
Company C 42192153.10 yet settled
Company D 34189624.82 Pending Settlement
Company E 30327400.00 In Litigation
Company F 30159458.13 Pending Settlement
Company G 25779987.00 Pending Settlement
Company H 10600000.00 Pending Settlement
Total 361434997.88
(3) Whether there are any overdue payments to small and medium-sized enterprises
(applicable to SZSE)
Number of Overdue Contracts 325
Amount of Overdue Contracts 703656073.35
Overdue and Unpaid Amount 253541028.01
27. Other payables
Item Ending balance Beginning balance
Interest Payable
Dividends Payable
Other payables 6565100788.16 3502796381.63
Total 6565100788.16 3502796381.63
(1) Other payables presented based on the nature of the funds
Nature of funds Ending balance Beginning balance
Expenses Payable 792764274.26 775131170.51
Security Deposit Down Payment and
Deposit 272858608.90 283501144.00
Trading Funds 1163502426.04 489457474.93
Advance Payment 3860617.67 7758315.35
Related Party Borrowing 2395873661.72 221405227.76
Equity Payable 1870346451.75 1615155483.71
Others 65894747.82 110387565.37
Total 6565100788.16 3502796381.63
138Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
(2) Significant other payables with an age of more than one year or overdue
Unit Ending balance Reason for Non-repayment orCarry-over
Equity repurchase amount and
Company I 1469134969.86 interest arising from the Ypfun IPO
VAM agreement
Company J 235788807.29 Accrue patent fees
Company K 66082529.10 Pending Settlement
Company L 65077215.48 Unsettled construction payments
Company M 30000000.00 Performance bond
Company N 20301936.47 Pending Settlement
Company O 18000000.00 Pending Settlement
Company P 15646109.30 Unsettled rent
Company Q Compensation for installment14925006.90 payments
Company R Compensation for installment14279584.10 payments
Company S 13618181.08 Payment conditions not met
Company T 12780275.13 Pending Settlement
Total 1975634614.71 -
28. Advances from customers
Category Ending balance Beginning balance
Rent 3426361.65 3481262.87
Total 3426361.65 3481262.87
29. Contract liabilities
(1) Contract liabilities
Item Ending balance Beginning balance
Sales advances received 256506499.39 623555669.97
Total 256506499.39 623555669.97
Remarks: Contract liabilities over one year are detailed in "VI.41.Other non-current
liabilities" in this note.
(2) Significant contract liabilities with an age of more than one year
There were no significant contract liabilities with an age of more than one year in the
current year.
(3) Significant changes in book value in the current year
The significant decrease in the balance of contract liabilities compared with the end of the
previous year was mainly due to the fact that the advance payments for pre-sale
139Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
properties of Nantong Konghai and the payment for goods early collected by Hongkong
Konka met the revenue recognition conditions in the current period and were carried
forward to operating revenue.
30. Employee benefits payable
(1) Categories of employee benefits payable
Item Beginning Increase in the Decrease in thebalance current year current year Ending balance
Short-term
remuneration 237237008.22 1228905430.20 1253392987.78 212749450.64
Post-employment
benefits - defined 1032772.61 119675904.48 119573826.35 1134850.74
contribution plans
Dismissal benefits 5462068.95 19267545.40 15438402.63 9291211.72
Total 243731849.78 1367848880.08 1388405216.76 223175513.10
(2) Short-term remuneration
Item Beginning Increase in the Decrease in thebalance current year current year Ending balance
Salaries bonuses
allowances and subsidies 230731246.88 1073263791.23 1097064848.08 206930190.03
Employee welfare
expenses 3334946.15 47356378.18 48119491.70 2571832.63
Social insurance
premiums 533555.71 50622958.45 50622051.59 534462.57
Including: medical
insurance premiums 387627.84 44641995.31 44634078.56 395544.59
Work injury insurance
premiums 77640.15 4453636.93 4459752.19 71524.89
Maternity insurance
premiums 68287.72 1527326.21 1528220.84 67393.09
Housing fund 507627.65 44148060.73 44107422.86 548265.52
Labour union fees and
employee education fees 1563130.18 11097538.02 10571609.08 2089059.12
Others 566501.65 2416703.59 2907564.47 75640.77
Total 237237008.22 1228905430.20 1253392987.78 212749450.64
(3) Defined contribution plans
Item Beginning balance Increase in the Decrease in thecurrent year current year Ending balance
Basic pension
insurance 904488.43 115008760.46 114840773.11 1072475.78
Unemployment
insurance premiums 128284.18 4667144.02 4733053.24 62374.96
Total 1032772.61 119675904.48 119573826.35 1134850.74
140Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
31. Taxes payable
Item Ending balance Beginning balance
VAT 41389783.89 18304436.27
Property tax 7873067.23 11724042.19
Stamp duty 5189868.71 8598131.85
Land value increment tax 4541408.65 643627.96
Land use tax 2955305.79 3640999.21
Enterprise income tax 2902794.24 46039928.61
Personal income tax 2404290.78 2590216.18
Tariff 1544659.31 1584862.54
City construction and maintenance tax 1090729.63 455815.56
Education fees and local education
surcharge 804441.46 384461.10
Others 579905.73 646189.11
Total 71276255.42 94612710.58
32. Non-current liabilities maturing within one year
Item Ending balance Beginning balance
Bonds payable due within one year 1997255226.21 2510473199.20
Long-term borrowings due within one year 1610967861.49 4099941220.89
Lease liabilities due within one year 42617527.51 44667151.05
Long-term payables due within one year 452824.05
Total 1997255226.21 2510473199.20
33. Other current liabilities
Item Ending balance Beginning balance
Input tax to be carried forward 9709568.79 39793570.78
Refunds payable 10947147.43 17262340.52
Accounts payable paid by endorsement of
outstanding notes at the end of the reporting period 25720556.07 12820620.61
Total 46377272.29 69876531.91
141Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
34. Long-term borrowings
Type of borrowings Ending balance Beginning balance
Guaranteed loan 1255126167.17 3426786189.06
Credit loan 5466646895.34 2407276815.65
Entrusted borrowings 2125382964.61
Mortgaged for loan 1044296964.74 1271960335.66
Pledge loan 382824571.78 399184717.84
Less: Amount due within one year
(see Note VI.32) 1610967861.49 4099941220.89
Total 6537926737.54 5530649801.93
35. Bonds payable
(1) Categories of bonds payable
Item Ending balance Beginning balance
Corporate bonds 3593930102.58 4805666700.25
Less: Bonds payable due within one
year (see Note VI.32) 1997255226.21 2510473199.20
Total 1596674876.37 2295193501.05
142Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
(2) Changes in bonds payable
Par value Issue Whether
Bond name Total par value BondInterest Issue amount Beginning balance
Issuance in the Accrue interest by Amortization of Repayment in the Ending balance
rate Date
maturity current year par value premium/discount current year Default
22 Konka 01
1200000000.00 3.23% 2022/7/14 3 years 1195800000.00 1218719622.62 19380000.00 660377.36 1238759999.98 No
(note * )
22 Konka 03
600000000.00 3.30% 2022/9/8 3 years 597900000.00 606159748.49 13200000.00 440251.57 619800000.06 No
(note * )
22 Konka 05
600000000.00 3.50% 2022/10/18 3 years 597900000.00 604754717.04 15750000.00 495282.92 620999999.96 No
(note * )
24 Konka 01
1500000000.00 4.00% 2024/1/29 3 years 1495200000.00 1552452830.14 60000000.00 1509434.00 60000000.00 1553962264.14 No
(note * )
24 Konka 02
400000000.00 4.00% 2024/3/18 3 years 398720000.00 411742557.65 15999999.96 402515.72 16000000.00 412145073.33 No
(note * )
24 Konka 03
400000000.00 4.03% 2024/3/18 3 years 398720000.00 411837224.31 16119999.96 402515.72 16120000.00 412239739.99 No
(Note * )
25 Konka 01
410000000.00 3.50% 2025/6/23 3 years 408688000.00 408688000.00 7493888.87 374930.84 416556819.71 No
(Note * )
25 Konka 03
790000000.00 2.80% 2025/7/4 3 years 787472000.00 787472000.00 10937111.09 617094.32 799026205.41 No
(Note * )
Total 5900000000.00 — — — 5880400000.00 4805666700.25 1196160000.00 158880999.88 4902402.45 2571680000.00 3593930102.58 —
Note * : On July 14 2022 the Company issued RMB1.2 billion of public placement corporate bonds with a duration of three years an annual interest rate of 3.23% and a maturity date of July 14 2025.Note * : On September 8 2022 the Company issued RMB600 million of private placement corporate bonds with a duration of three years an annual interest rate of 3.30% and a maturity date of
September 8 2025.Note * : On October 18 2022 the Company issued RMB600 million of private placement corporate bonds with a duration of three years an annual interest rate of 3.50% and a maturity date of October
182025.
Note * : On January 29 2024 the Company issued RMB 1.5 billion of private placement corporate bonds with a duration of three years (with an issuer's option to adjust the coupon rate and an investor's
put option at the end of the second year) an annual interest rate of 4.00% and a maturity date of January 29 2027.Note * : On March 18 2024 the Company issued RMB 400 million of private placement corporate bonds with a duration of three years (with an issuer's option to adjust the coupon rate and an investor's
put option at the end of the second year) an annual interest rate of 4.00% and a maturity date of March 18 2027.Note * : On March 18 2024 the Company issued RMB400 million of private placement corporate bonds with a duration of three years an annual interest rate of 4.03% and a maturity date of March 18
2027.
Note * : On June 23 2025 the Company issued RMB 410 million of private placement corporate bonds with a duration of three years (with an issuer's option to adjust the coupon rate and an investor's
put option at the end of the second year) an annual interest rate of 3.50% and a maturity date of June 23 2028.Note * : On July 4 2025 the Company issued RMB 790 million of private placement corporate bonds with a duration of three years (with an issuer's option to adjust the coupon rate and an investor's put
option at the end of the second year) an annual interest rate of 2.80% and a maturity date of July 4 2028.Note * : China Resources Inc. provides a full unconditional and irrevocable joint and several liability guarantee for the due payment of these public and private placement corporate bonds.
143Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
36. Lease liabilities
Item Ending balance Beginning balance
Lease liabilities 139476496.26 191228739.57
Less: Lease liabilities due within one year (see
Note VI.32) 42617527.51 44667151.05
Total 96858968.75 146561588.52
37. Long-term payables
Item Ending balance Beginning balance
Payable finance lease payments 2113713.86 6314362.65
Less: Unrecognized financing expenses 80486.84 356990.36
Amount above due within one year (see Note VI.32) 452824.05
Total 2033227.02 5504548.24
38. Long-term employee benefits payable
Item Ending balance Beginning balance
Post-employment benefits - net liabilities of defined
benefit plans 4519491.87 4608659.47
Total 4519491.87 4608659.47
39. Provisions
Item Ending balance Beginning balance Reason for formation
Performance compensation or
contingent consideration 346222251.09 346222251.09
After-sales services for
Product quality assurance 57824544.20 80603137.10 household appliances
Pending litigation 446591769.85 206591.51
Disposal expenses 2084301.83 1401752.49
Total 852722866.97 428433732.19 —
40. Deferred income
(1) Categories of deferred income
Item Beginning balance Increase in the Decrease in thecurrent year current year Ending balance
Reason for
formation
Government Related to
grants 393437007.37 72028772.87 57289984.73 408175795.51 assets/income
Total 393437007.37 72028772.87 57289984.73 408175795.51 —
144Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
(2) Government subsidy items
Subsidies Amount Amount Amount of
Beginning recognized as recognized as cost offset Others End of the year Related to
Government Grant Projects increased inthe current non-operating other income in the assets/incoBalance
year revenue in the in the current current
Change Balance me
current year year year
Plant construction subsidy for Related to
Yibin Konka Industrial Park 101225904.13 2319532.32 98906371.81 assets
Medical waste centralized
Related to
treatment project in Gaoxian 27430784.61 5000000.00 1730503.55 30700281.06 assets
County Yibin City
Rewards and subsidies for
Special Project for Supporting
the Development of Advanced Related to
Manufacturing and Modern 31510328.22 2458697.27 29051630.95 assets
Service Industry of Henan
Frestec Smart Home
Shenzhen Industrial Investment
Related to
Project Support Program for 6787857.01 16180000.00 521936.40 22445920.61 assets
Konka Group Headquarters
Industrial support funds for Related to
Suining Konka Industrial Park 19776548.54 239936.88 19536611.66 assets
Industrial rewards and subsidies Related to
of Henan Frestec Smart Home 19734932.95 481353.47 19253579.48 assets
Shaanxi Konka Smart's
equipment renewal supported by Related to
ultra-long-term special treasury 19060000.00 19060000.00 assets
bonds
Returned payments for land by Related to
Chongqing Konka 17541818.31 392727.24 17149091.07 assets
145Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Subsidies Amount Amount Amount of
Beginning increased in recognized as recognized as cost offset Others End of the year Related toGovernment Grant Projects the current non-operating other income in the assets/incoBalance revenue in the in the current current Change Balanceyear mecurrent year year year
Plant decoration subsidy for
Related to
Yibin Konka Science and 8635292.92 3000000.00 1863457.86 9771835.06 assets
Technology Industrial Park
Related to
Other government subsidies
related to assets/income 160793540.68 28788772.87 27193011.11 17400.00 -20071428.63 142300473.81
assets/incom
e
Total 393437007.37 72028772.87 37201156.10 17400.00 -20071428.63 408175795.51
146Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
41. Other non-current liabilities
Item Ending balance Beginning balance
Contract liabilities over one year 283739354.36 207378781.21
Total 283739354.36 207378781.21
42. Share capital
Increase/decrease (+/-) in the current year
Capital
Item Beginning balance New Bonus reserves Ending balance
issues shares converted Others Subtotalinto share
capital
Total shares 2407945408.00 2407945408.00
43. Other equity instruments
Outstanding financial Beginning Increase in the current year
instruments Quantity Book value Quantity Book value
Perpetual bonds 5000000000.00 5000000000.00
Total 5000000000.00 5000000000.00
(Continued)
Outstanding financial Decrease in the current year End of the year
instruments Quantity Book value Quantity Book value
Perpetual bonds 5000000000.00 5000000000.00
Total 5000000000.00 5000000000.00
Note: On December 16 2025 the Company issued perpetual bonds to its controlling
shareholder Panshi Runchuang (Shenzhen) Information Management Co. Ltd. According
to the relevant contract the aforementioned perpetual bonds have no definite maturity
date and the Company has the right to defer interest payments. At the same time the
Company has the sole discretion to redeem the perpetual bonds and has no contractual
obligation to deliver cash or other financial assets. Therefore they are recognized as other
equity instruments.
44. Capital reserves
Item Beginning balance Increase in the Decrease in thecurrent year current year Ending balance
Other capital
reserves 512840575.73 19768716.32 126029421.25 406579870.80
Total 512840575.73 19768716.32 126029421.25 406579870.80
Note: The reasons for the increase and decrease in capital reserves - other capital
reserves for the current year are as follows:
147Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
* The conversion of the originally listed long-term equity investment (Wuhan Tianyuan
Group Co. Ltd.) to financial assets held for trading resulted in a decrease in other capital
reserves of RMB 126029421.25 due to the change in accounting method;
* The equity incentives of the associate Chongqing Ypfun Technology Co. Ltd. resulted
in an increase in other capital reserves of RMB 301193.49;
* The deregistration of the associate E3info (Hainan) Technology Co. Ltd. resulted in an
increase of RMB 1508471.59 in other capital reserves;
* The capital increase and share expansion of the associate Hefei Kangxinwei Storage
Technology Co. Ltd. by introducing strategic investors resulted in an increase of RMB
17959051.24 in other capital reserves.
148Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
45. Other comprehensive income
Amount incurred in the current year
Less: Amount Less: Amount
recognized as recognized as
other othercomprehensive
Beginning comprehensive income in the Less: Attributable to the Attributable to End of the yearItem
Balance Amount incurred income in the Income
before income tax previous period previous period tax parent company
minority Balance
shareholders
and transferred and transferredto retained expense
after tax after tax
to gains/losses
in the Reporting earnings in the
Period ReportingPeriod
I. Other
comprehensive
income that cannot -6398878.20 -5901121.80 -5901121.80 -12300000.00
be reclassified to
gains/losses
Including: Changes in
fair value of other
equity instrument -6398878.20 -5901121.80 -5901121.80 -12300000.00
investments
II. Other
comprehensive
income reclassified to -2641412.12 26638229.86 13075019.21 13563210.65 10433607.09
gains/losses
Including: Other
comprehensive
income that can be
transferred to -2192546.02 1776376.21 1776376.21 -416169.81
gains/losses under
the equity method
149Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Amount incurred in the current year
Less: Amount Less: Amount
recognized as recognized as
other othercomprehensive
Beginning comprehensive
Item Amount incurred income in the income in the
Less: Attributable to the Attributable to End of the year
Balance Income minority Balance
before income tax previous period previous period parent companyand transferred tax after tax shareholdersand transferred to retained expense after taxto gains/losses
in the Reporting earnings in the
Period ReportingPeriod
Translation
differences of foreign
currency financial -448866.10 24861853.65 11298643.00 13563210.65 10849776.90
statements
Total of other
comprehensive -9040290.32 20737108.06 7173897.41 13563210.65 -1866392.91
income
150Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
46. Specific reserve
Item Beginning balance Increase in the Decrease in thecurrent year current year Ending balance
Safety production
fund 11249678.53 7743491.96 1796025.87 17197144.62
Total 11249678.53 7743491.96 1796025.87 17197144.62
47. Surplus reserves
Item Beginning balance Increase in the
Decrease in
current year the current Ending balanceyear
Statutory surplus
reserve 1005961774.19 1005961774.19
Discretionary surplus
reserve 238218590.05 238218590.05
Total 1244180364.24 1244180364.24
48. Retained earnings
Item The current year Last year
Undistributed profit at the end of last year before
adjustment -1797506898.08 1474561975.85
Adjustment to total undistributed profits at the beginning
of the year (+ for increase and - for decrease) -777201329.82 -347232776.81
Including: retroactive adjustment to the Accounting
Standards for Business Enterprises and relevant new
regulations
Change in accounting policies
Correction of significant prior period errors -777201329.82 -347232776.81
Changes in the scope of consolidation under common
control
Adjusted undistributed profit at the beginning of the year -2574708227.90 1127329199.04
Add: Net profit attributable to owners of the parent
company in the current year -12582399856.80 -3725557221.78
Others 23519794.84
Loss offset by surplus reserves
Capital reserves used to offset losses
Less: Appropriation of statutory surplus reserve
Appropriation of discretionary surplus reserve
Appropriation to general risk reserves
Ordinary share dividends payable
Ordinary share dividends transferred to capital stock
Ending balance of the current year -15157108084.70 -2574708227.90
151Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
49. Operating revenue and cost of sales
(1) Operating revenue and cost of sales
Amount incurred in the current year Amount incurred last year
Item
Income Cost Income Cost
Principal
activity 9222377316.60 8993917477.41 10417600703.11 10306208764.64
Other 613097599.93 436800440.79 697163266.48 555615226.55
Total 9835474916.53 9430717918.20 11114763969.59 10861823991.19
(2) Information on the breakdown of operating revenue and cost of sales
Amount incurred in the current year Amount incurred last year
Category of contracts Operating Cost of sales OperatingRevenue Revenue Cost of sales
Business type
Including: Colour TV 4192163402.41 4280594033.28 5027758205.02 5238743506.77
business
White goods business 3815259215.10 3605987282.66 4127243310.93 3837066870.14
PCB business 529852068.40 484651274.02 480868974.92 428530129.53
Semiconductor and memory 162222125.34 176738680.35 170202408.61 256853882.82
chip business
Other 1135978105.28 882746647.89 1308691070.11 1100629601.93
Total 9835474916.53 9430717918.20 11114763969.59 10861823991.19
Classified by operating
region
Of which: Domestic 6753418875.25 6471030228.87 7903700862.49 7725612592.83
Overseas 3082056041.28 2959687689.33 3211063107.10 3136211398.36
Total 9835474916.53 9430717918.20 11114763969.59 10861823991.19
(3) Information in relation to the transaction price apportioned to the residual
contract performance obligation
At the end of the current year the revenue corresponding to the performance obligations
that have been signed but not yet performed or not yet fully performed is RMB
474728784.63 of which RMB 439643788.42 is expected to be recognized as revenue
in 2026 RMB 25750507.96 is expected to be recognized in 2027 and RMB 9334488.25
is expected to be recognized in 2028 and later years.
50. Taxes and surcharges
Item Amount incurred in the current year Amount incurred last year
Property tax 45555795.92 46155747.46
Stamp duty 28182133.01 39993676.00
152Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Item Amount incurred in the current year Amount incurred last year
Land use tax 17603998.17 19447128.15
Land value increment tax 8090412.22 4601595.90
Urban maintenance and construction tax 6194307.57 8067589.84
Education surcharge 2873255.31 3697149.73
Local education surcharge 1920673.28 2464766.48
Water conservancy fund 786979.37 925768.34
Others 269037.22 603913.09
Total 111476592.07 125957334.99
51. Selling expenses
Item Amount incurred in the currentyear Amount incurred last year
Employee compensation 306011654.51 346592018.83
Promotional activities expenses 90063910.51 142882509.25
Advertising expenses 76765634.35 107677304.60
Logistics expenses 55201268.85 69134847.32
Agency commissions 26086639.29 5470657.32
Travel expenses 17341756.89 21923991.20
Market service fees 16481201.63 10848646.14
Insurance expenses 10323067.04 10893622.99
Depreciation of fixed assets 9996730.17 5636281.47
Others 38947205.23 53238157.75
Total 647219068.47 774298036.87
52. Administrative expenses
Item Amount incurred in the currentyear Amount incurred last year
Employee compensation 276527007.66 314459207.37
Depreciation expenses 198768764.61 215615082.76
Intermediary fees 23695009.51 37100613.46
Water and electricity expenses 12935695.59 12036310.67
Travel expenses 4568062.61 7023438.59
Loss on scrapping of inventories 1841100.79 3905406.48
Others 45835197.23 61807774.13
Total 564170838.00 651947833.46
53. R& D expe
153Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Item Amount incurred in the currentyear Amount incurred last year
Salary 200826276.67 226287518.69
Depreciation and amortization expenses 116768922.25 105315963.39
New product trial production expense 17187524.66 18169936.41
Material expense 6034945.14 3315736.07
Patent fee 2156329.48 20011198.25
Testing expense 1599584.39 3046117.93
Others 41532254.37 40259369.60
Total 386105836.96 416405840.34
54. Finance costs
Item Amount incurred in the currentyear Amount incurred last year
Interest expense 871624731.68 953199337.05
Less: Interest income 134366718.80 215619251.81
Add: Exchange loss 45235956.80 -51329032.40
Other expenses 21722964.21 28736033.40
Total 804216933.89 714987086.24
55. Other income
Sources of other income Amount incurred in the currentyear Amount incurred last year
Transfer of deferred income 37201156.10 42154230.53
Tax rebates on software 14455781.19 4681629.92
Support funds 9435900.00 14923388.00
Rewards and subsidies 9107772.06 34231995.98
Subsidies for L/C exports 2876243.00 1250714.67
Tax and fee reductions 2423581.02 10191356.70
Post subsidies 1585184.87 1895971.87
Others -621266163.24 1271022.45
Total -544180545.00 110600310.12
56. Income from changes in fair value
Sources of gains from changes in the fair Amount incurred in the current
value year Amount incurred last year
Financial assets measured at fair value
through current gains/losses -460420971.18 -267484270.45
Estimated contingent consideration -95523883.70
154Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Sources of gains from changes in the fair Amount incurred in the current
value year Amount incurred last year
Total -460420971.18 -363008154.15
57. Investment income
Item Amount incurred in the Amount incurred lastcurrent year year
Returns on long-term equity investments calculated by the
equity method -379192413.39 -134541620.49
Return on investment arising from the disposal of long-term
equity investments -60235.73 101946531.33
Investment income from financial assets held for trading
during the holding period 420553.86 4240444.62
Investment income from disposal of financial assets measured
at fair value with changes included in current gains/losses -1807577.63 -26511417.25
Interest income from debt investments during the holding
period 5860451.37 19239106.21
Income from the derecognition of financial assets at amortized
cost -3484892.68 -4519585.64
Gains from debt restructuring -459737.22
Conversion of long-term equity investments accounted for by
the equity method to financial assets 655666680.89
Gains from remeasurement of residual equity at fair value
after losing control
Others
Total 277402566.69 -40606278.44
58. Credit impairment loss
Item Amount incurred in the currentyear Amount incurred last year
Bad debt loss of notes receivable -97525.15 -130021.70
Bad debt loss of accounts receivable -53871543.82 -125736732.85
Bad debt loss of other accounts receivable -1466630164.43 -280100956.11
Total -1520599233.40 -405967710.66
59. Asset impairment loss
Item Amount incurred in the currentyear Amount incurred last year
Impairment loss of long-term equity
investments -3175620107.46 -516085087.12
Inventory depreciation loss and contract
fulfillment cost impairment loss -749200712.14 -445305312.35
Provision for impairment of investment
property -643642921.78
Provision for impairment of other non-
current assets -517841855.90
155Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Item Amount incurred in the currentyear Amount incurred last year
Impairment loss of construction in progress -375338959.82 -17000002.50
Impairment loss on fixed assets -404775609.37 -20834518.11
Impairment loss on intangible assets -169238097.51
Provision for impairment of other current
assets -118264443.38
Provision for goodwill impairment -22196735.11
Contract asset impairment loss -64865.73 -191314.13
Total -6176184308.20 -999416234.21
60. Gains from disposal of assets
The current year Last year
Item
Amount Amount
Gains on disposal of non-current assets 24500775.05 13572230.63
Including: gains on disposal of non-current assets not classified as
held for sale 24500775.05 13572230.63
Including: gains on disposal of fixed assets 23893960.39 12323105.39
Gains on disposal of intangible assets 660377.36
Gains/losses on disposal of right-of-use assets 606814.66 537251.48
Others 51496.40
Total 24500775.05 13572230.63
61. Non-operating revenue
Amount recorded into
Item Amount incurred in the Amount incurred last the non-recurringcurrent year year gains/losses of the
current year
Income from compensation fines and
liquidated damages 9290317.11 19309630.18 9290317.11
Write-off of current accounts 8682318.14 12321231.59 8682318.14
Non-current assets damage and
retirement gains 271611.84 7381.77 271611.84
Others 4809048.67 4863863.75 4809048.67
Total 23053295.76 36502107.29 23053295.76
156Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
62. Non-operating expenses
Amount recorded into
Item Amount of the current Amount of last year the non-recurringyear gains/losses of the
current year
Estimated guarantee losses 396756575.84 396756575.84
Compensation expenses 11997239.95 5087299.42 11997239.95
Losses on damage and scrapping of
non-current assets 2942707.01 14433649.96 2942707.01
Performance compensation 69755761.30
Others 47816349.69 76298404.02 47816349.69
Total 459512872.49 165575114.70 459512872.49
63. Income tax expense
(1) Income tax expense
Item Amount incurred in thecurrent year Amount incurred last year
Income tax expenses in the current year 26859038.83 86944638.50
Deferred income tax expenses 1266380917.19 -17392309.50
Total 1293239956.02 69552329.00
(2) Adjustment process of accounting profits and income tax expenses
Item Amount incurred in the current year
Total consolidated profit in the current year -10944373563.83
Income tax expenses calculated at legal/applicable tax rate -2736093390.96
Impact of different tax rates applied by subsidiaries 318300135.41
Impact of adjustment of prior period income tax -20610.95
Impact of non-taxable income 9977787.88
Impact of non-deductible costs expenses and losses 4052515.16
Impact of using deductible losses on the deferred tax assets not recognized
previously
Impact of deductible temporary differences or deductible losses of deferred
tax assets not recognized in the current year 3728909448.52
Changes in the opening balance of deferred tax assets/liabilities due to
adjustment of tax rate
Others -31885929.04
Income tax expense 1293239956.02
64. Other comprehensive income
For details please refer to Note VI.45 “Other comprehensive income” of these notes.
65. Items in the cash flow statement
157Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
(1) Cash related to operating activities
1) Cash received from other operating activities
Item Amount incurred in thecurrent year Amount incurred last year
Intercompany payments 104928846.18 99175088.89
Income from government grants 104405766.26 91084949.55
Deposits and security deposits received 87452563.95 123926037.77
Interest income from bank deposits 24204831.04 66117530.26
Compensation and penalty income 7937687.17 20552157.49
Others 46197994.79 63901195.67
Total 375127689.39 464756959.63
2) Cash paid for other operating activities
Item Amount incurred in thecurrent year Amount incurred last year
Cash expenses 473451116.19 803310338.17
Deposit and margin 204978244.69 120837849.81
Bank service charges 2746666.56 4474661.97
Payments made on behalf 28616.88 397101.66
Others 73385553.13 72308452.14
Total 754590197.45 1001328403.75
(2) Cash related to investing activities
1) Cash received from other investing activities
Item Amount incurred in thecurrent year Amount incurred last year
Recovery of interfund lending 6615000.00 10535206.45
Others 31007486.48 176130622.69
Total 37622486.48 186665829.14
2) Cash paid for other investing activities
Item Amount incurred in thecurrent year Amount incurred last year
Payment of interfund lending 100000000.00
Cash paid for disposal of subsidiaries 3969969.81
Others 21481193.45 34327401.00
Total 25451163.26 134327401.00
(3) Cash related to financing activities
1) Cash received from other financing activities
158Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Item Amount incurred in thecurrent year Amount incurred last year
Receipt of interfund lending 3174680000.00
Recovery of pledged margin deposits 2064913851.73 898936642.13
Others 162919.46
Total 5239756771.19 898936642.13
2) Cash paid for other financing activities
Item Amount incurred in thecurrent year Amount incurred last year
Margin deposits for pledge 1934866839.47 1608682236.20
Repayment of interfund lending 1023259856.14 18099962.83
Cash paid for leases 43948994.20 29886200.09
Financing expenses 18890693.71 26001127.56
Others 3423714.89 4300049.48
Total 3024390098.41 1686969576.16
159Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
3) Changes in liabilities arising from financing activities
Increase in the current year Decrease in the current year
Item Beginning balance Ending balance
Cash changes Non-cash changes Cash changes Non-cash changes
Non-current liabilities
maturing within one 6655534395.19 3633511824.98 6613744304.62 24461300.34 3650840615.21
year
Short-term borrowings 5741171468.26 5863443113.20 176137247.72 7204836276.52 4575915552.66
Long-term borrowings 5530649801.93 5416321326.09 295276722.54 3140954568.38 1563366544.64 6537926737.54
Bonds payable 2295193501.05 1196160000.00 163806043.84 61229442.31 1997255226.21 1596674876.37
Lease liabilities 146561588.52 19596281.76 5852280.02 63446621.51 96858968.75
Long-term payables 5504548.24 729327.57 3965960.17 234688.62 2033227.02
Total 20374615303.19 12475924439.29 4289057448.41 17030582832.02 3648764381.32 16460249977.55
160Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
(4) Notes to cash flows expressed in net amount
No cash flows were presented on a net basis in the current year.
(5) Significant activities and financial impacts that do not involve current cash
receipts and payments but affect the financial position of the enterprise or may
affect the cash flows in the future
Item Amount incurred in the current year
Payment for materials made by endorsement of notes
receivable 1556029208.45
Acquisition of long-term assets by endorsement of notes
receivable 84064414.22
Other payments made by endorsement of notes receivable 177588227.57
Total 1817681850.24
66. Supplementary data on the cash flow statement
(1) Supplementary information to the statement of cash flows
Item Amount of the current year Amount of last year
1. Reconciliation of net profit to cash flows from
operating activities: — —
Net Profit -12237613519.85 -4314107326.62
Add: Provision for asset impairment 6176184308.20 999416234.21
Credit impairment loss 1520599233.40 405967710.66
Depreciation of fixed assets depletion of oil and
gas assets depreciation of productive biological 444245049.90 460489835.67
assets
Depreciation of right-of-use assets 51319518.68 55180501.65
Amortization of intangible assets 51918344.43 53255782.40
Amortization of long-term prepaid expenses 175961821.53 140922010.97
Losses on disposal of fixed assets intangible
assets and other long-lived assets ("-" indicates -24500775.05 -13572230.63
income)
Losses on scrap of fixed assets ("-" indicates
income) 2671095.17 14426268.19
Losses on changes in fair value ("-" indicates
income) 460420971.18 363008154.15
Finance costs ("-" indicates income) 806202443.42 884664729.30
Investment loss ("-" indicates income) -277402566.69 40606278.44
Decrease in deferred tax assets ("-" indicates
increase) 1285245746.24 34334680.29
Increase in deferred income tax liabilities ("-"
indicates decrease) -18824120.68 -51726989.79
Decrease in inventories ("-" indicates increase) 289318178.99 -123830950.55
161Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Item Amount of the current year Amount of last year
Decrease in accounts receivable generated from
operating activities ("-" indicates increase) 87769220.84 574731714.03
Increase in accounts payable used in operating
activities ("-" indicates decrease) -367599629.08 692276671.15
Others -36915441.82 -42154230.53
Net cash generated from/used in operating activities -1611000121.19 173888842.99
2. Significant investment and financing
activities not involving cash:
Conversion of liabilities into capital
Convertible corporate bonds due within one year
Fixed assets acquired under finance leases
3. Net changes in cash and cash equivalents:
Balance of cash at the end of the year 5020469510.26 2783177476.45
Less: Beginning balance of cash 2783177476.45 5674784349.55
Add: Ending balance of cash equivalents
Less: Beginning balance of cash equivalents
Net increase in cash and cash equivalents 2237292033.81 -2891606873.10
(2) Supplier financing arrangements
* Terms and conditions of supplier finance arrangements
The Group entered into agreements with banks and financial institutions under which
qualified suppliers approved by the Group can assign their eligible accounts receivable
from the Group to the banks. The Group fulfills its unconditional payment obligation when
the payables become due.* Balance Sheet Presentation Items and Related Information (Unit: RMB 10000)
Line items Ending balance
Accounts payable 75.35
Of which: Amount received by suppliers 75.35
Total 75.35
* Maturity date ranges of payments
Line items Ending
Liabilities under the arrangements 360-365 days after the date of issuance
Comparable accounts payable not under the arrangements -
* Changes in the current period not involving cash receipts and payments
The changes in the Company's aforementioned financial liabilities were not affected by
business combinations or exchange rate fluctuations.
162Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
(3) Net cash paid for the acquisition of subsidiaries in the current year
There was no net cash paid for the acquisition of subsidiaries in the current year.
(4) Net cash received from the disposal of subsidiaries in the current year
There was no net cash received from disposal of subsidiaries in the current year.
(5) Breakdowns of cash and cash equivalents
Item Ending balance Beginning balance
Cash 5020469510.26 2783177476.45
Including: Cash on hand 208.19
Bank deposits available for payment at any time 5015971489.92 2779974224.23
Other monetary funds available for payment at any time 4498020.34 3203044.03
Balance of cash and cash equivalents at the end of the
year 5020469510.26 2783177476.45
(6) Limited use but still presented as cash and cash equivalents
Item Amount of the current
Reasons for classifying the
year Amount of last year funds as cash and cashequivalents
The proceeds can be used at
any time to make payments
Project loan proceeds 19476498.98 38316138.97 and such payments can only be
made for projects
The proceeds can be used at
any time to make payments
Project pre-sale funds 17245802.22 24054347.29 and such payments can only be
made for projects
Total 36722301.20 62370486.26 —
(7) Monetary funds not classified as cash and cash equivalents
Reasons for not
Item Amount of the current year Amount of last year classifying the funds ascash and cash
equivalents
Pledged as collateral for
Time deposits 612670635.63 567478893.23 borrowings
Pledged for borrowings or
Deposit margin 525901180.93 556608881.87 deposit for issuance of
bank acceptance bills
Not readily available for
Frozen funds 154900558.23 208501996.18 payment
Total 1293472374.79 1332589771.28 —
67. Items in the statement of changes in shareholders' equity
No "other" amount in the closing amount of last year was adjusted in the current year.
68. Foreign currency monetary items
(1) Foreign currency monetary items
163Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Item Year-end foreign currency Exchange rate Year-end balancebalance denominated in RMB
Monetary funds — —
Including: USD 27663141.48 7.02880 194438688.83
EUR 1354479.22 8.25498 11181198.87
EGP 7680868.79 0.14729 1131315.16
GBP 1.32 9.46484 12.49
HKD 1983191.10 0.90322 1791257.87
CAD 6.96 5.13345 35.73
PLN 1990983.02 1.95511 3892590.81
Accounts receivable — —
Including: USD 87163632.40 7.02880 612655739.41
EUR 90388.77 8.25498 746157.49
EGP 0.14729
HKD 1077432.71 0.90322 973158.77
AUD 49764.00 4.70569 234173.96
Other receivables — —
Including: USD 110851224.81 7.02880 779151088.94
EGP 108000.00 0.14729 15907.32
HKD 760190.76 0.90322 686619.50
JPY 21400000.00 0.04494 961805.88
Accounts payable — —
Including: USD 5589778.90 7.02880 39289437.93
EUR 42072.24 8.25498 347305.50
EGP 30620358.59 0.14729 4510072.62
HKD 14248.91 0.90322 12869.90
Other payables — —
Including: USD 3108148.44 7.02880 21846553.76
EUR 103562.95 8.25498 854910.08
EGP 498014.80 0.14729 73352.60
HKD 14616606.82 0.90322 13202011.61
(2) Overseas operating entities
The significant overseas entities include Konka Trading Hong Kong Konka Zhongkang
Storage Kangjet Jiali International and Xinying Semiconductor (Hong Kong). The main
164Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
overseas operating place is Hong Kong. The Company's recording currency is HKD since
the main currency in circulation in Hong Kong is HKD.VII. R& D expendit
Item Amount incurred in the currentyear Amount incurred last year
Salary 200826276.67 226287518.69
Depreciation and amortization
expenses 116768922.25 105315963.39
New product trial production expense 2156329.48 20011198.25
Material expense 17187524.66 18169936.41
Patent fee 1599584.39 3046117.93
Testing expense 6034945.14 3315736.07
Others 41532254.37 40259369.60
Total 386105836.96 416405840.34
Including: Expensed R&D expenditure 386105836.96 416405840.34
Capitalized R&D expenditure
VIII. Changes in the scope of consolidation
1. Business combinations not under common control
The Company had no combinations of businesses not under common control in the
current period.
2. Business combinations under common control
The Company had no business combinations under common control in the current period.
165Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
3. Disposal of subsidiaries
(1) Transactions or events resulting in loss of control over subsidiaries during the year
The
difference
between the
disposal Method and
proceeds and main Amount of
the carrying Book value Fair value of assumptions other
amount of of the the for comprehensiveProportion
Disposal Disposal Basis for the share of of remaining remaining
Gain or loss determining income related
Disposal ratio at method Point of determining net assets of remaining equity at the equity at the
arising from the fair value to the original
Subsidiaries consideration at the the remeasuring of the equitythe point loss of the point of equity on consolidated consolidated the remaining investment in
Name at the point of
loss of control of loss of
point of
loss of control loss of
subsidiary the date of financial financial remaining equity at the the subsidiary
control control attributable statement statementcontrol to the loss of level on the level on the equity at fair consolidated transferred to
disposed control date of loss date of loss value financial investment
investment at of control of control statement gains/losses or
the level on the retained
consolidated date of loss earnings
financial of control
statements
level
All rights and
obligations
Kangrong related to the Appraised
4221401.00 41.00 Transfer 2025/5/9Jiayuan target equity 212859.38 10.00 977693.08 1029610.00 51916.92
-
price
have been
transferred
166Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
4. Changes in the scope of consolidation due to other reasons
(1) Subsidiaries established in the current year
No subsidiaries were established in the current year.
(2) Subsidiaries deregistered or reduced in the current year
No subsidiaries were deregistered in the current year.
167Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
IX. Equity in other entities
1. Interest in subsidiary
(1) Compositions of the Group
Shareholding
No. Name of subsidiary Main Place of Place of Percentage (%) AcquisitionBusiness Registration Nature of Business method
Direct Indirect
Guangdong Guangdong Enterprise management consulting incubation Establishment or
1 Konka Venture 51
Shenzhen Shenzhen management housing leasing etc. investment
Establishment or
2 Yantai Konka Yantai Shandong Yantai Shandong Other professional consulting and investigation 51
investment
Establishment or
3 Konka Enterprise Service Guiyang Guizhou Guiyang Guizhou Enterprise management consulting 51
investment
Establishment or
4 Yibin Konka Incubator Sichuan Yibin Sichuan Yibin Commercial services 51
investment
Establishment or
5 Anhui Konka Chuzhou Anhui Chuzhou Anhui Manufacturing 78
investment
Establishment or
6 Kangzhi Trade Chuzhou Anhui Chuzhou Anhui Wholesale 78
investment
Konka Electronic Guangdong Guangdong Establishment or
7 Other science and technology promotion services 100
Material Shenzhen Shenzhen investment
Guangdong Guangdong Establishment or
8 Konka Unifortune Trade and services 51
Shenzhen Shenzhen investment
Establishment or
9 Jiali International Hong Kong China Hong Kong China Trade and services 51
investment
Guangdong Guangdong Establishment or
10 Dongguan Konka Manufacturing 75 25
Dongguan Dongguan investment
Establishment or
11 Suining Konka Intelligent Suining Sichuan Suining Sichuan Wholesale 100
investment
168Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Shareholding
No. Name of subsidiary Main Place of Place of Nature of Business Percentage (%) AcquisitionBusiness Registration method
Direct Indirect
Establishment or
12 Konka Europe Germany Frankfurt Germany Frankfurt International trade 100
investment
Telecommunication Guangdong Guangdong Establishment or
13 Manufacturing 75 25
Technology Shenzhen Shenzhen investment
Hong Kong Konka Establishment or
14 Hong Kong China Hong Kong China Commerce 100
Communications investment
Development of science Guangdong Guangdong Establishment or
15 Commerce 100
and technology industry Shenzhen Shenzhen investment
Establishment or
16 Sichuan Konka Sichuan Yibin Sichuan Yibin Manufacturing 100
investment
Establishment or
17 Yibin Smart Sichuan Yibin Sichuan Yibin Manufacturing 100
investment
Establishment or
18 Anhui Tongchuang Chuzhou Anhui Chuzhou Anhui Manufacturing 100
investment
Anhui Electrical Establishment or
19 Chuzhou Anhui Chuzhou Anhui Manufacturing 51
Appliance investment
Business
Combinations Not
20 Frestec Refrigeration Xinxiang Henan Xinxiang Henan Manufacturing 51
Under Common
Control
Establishment or
21 Frestec Smart Home Xinxiang Henan Xinxiang Henan Manufacturing 51
investment
Business
Frestec Electrical Combinations Not
22 Xinxiang Henan Xinxiang Henan Manufacturing 51
Appliances Under Common
Control
23 Frestec Household Xinxiang Henan Xinxiang Henan Manufacturing 51 Business
169Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Shareholding
No. Name of subsidiary Main Place of Place of Percentage (%) AcquisitionBusiness Registration Nature of Business method
Direct Indirect
Appliances Combinations Not
Under Common
Control
Changzhou Establishment or
24 Jiangsu Konka Smart Changzhou Jiangsu Manufacturing 51
Jiangsu investment
Hebei Establishment or
25 Konka Communication Hebei Shijiazhuang Trade and services 100
Shijiazhuang investment
Guangdong Guangdong Establishment or
26 Pengrun Technology Trade and services 51
Shenzhen Shenzhen investment
Establishment or
27 Jiaxin Technology Hong Kong China Hong Kong China Trade and services 51
investment
Establishment or
28 Beijing Konka Electronics Hebei Langfang Hebei Langfang Home appliance sales 100
investment
Tianjin Pilot Free Tianjin Pilot Free Establishment or
29 Tianjin Konka Service industry 100
Trade Zone Trade Zone investment
Guangdong Guangdong Establishment or
30 Konka Circuit Manufacturing 100
Shenzhen Shenzhen investment
Establishment or
31 Bokang Precision Guangdong Boluo Guangdong Boluo Manufacturing 100
investment
Establishment or
32 Hong Kong Konka Hong Kong China Hong Kong China International trade 100
investment
Establishment or
33 Kangdian Investment Hong Kong China Hong Kong China Investment holding 100
investment
Zhongkang Storage Establishment or
34 Hong Kong China Hong Kong China International trade 51
Technology investment
35 Zhongkang
Establishment or
Shaoxing Zhejiang Shaoxing Zhejiang Trade and services 51
Semiconductor investment
170Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Shareholding
No. Name of subsidiary Main Place of Place ofBusiness Registration Nature of Business
Percentage (%) Acquisition
method
Direct Indirect
(Shaoxing)
Establishment or
36 Kangjet Hong Kong China Hong Kong China Trade and services 51
investment
Establishment or
37 Kangdian Trading Hong Kong China Hong Kong China International trade 100
investment
Establishment or
38 Kanghao Technology Cairo Egypt Cairo Egypt International trade 67
investment
Establishment or
39 Konka North America USA California USA California International trade 100
investment
Guangdong Guangdong Establishment or
40 Konka Investment Capital market services 100
Shenzhen Shenzhen investment
Yibin Konka Industrial Industrial park development construction and Establishment or
41 Sichuan Yibin Sichuan Yibin 100
Park operation management investment
Guangdong Guangdong Establishment or
42 Konka Capital Capital market services 100
Shenzhen Shenzhen investment
Guangdong Guangdong Establishment or
43 Konka Suiyong Commercial services 51
Shenzhen Shenzhen investment
Guangdong Guangdong Establishment or
44 Shengxing Industrial Commercial services 51
Shenzhen Shenzhen investment
Guangdong Guangdong Establishment or
45 Zhitong Technology Software and information technology services 51
Shenzhen Shenzhen investment
Guangdong Guangdong Establishment or
46 Electronics Technology Manufacturing 100
Shenzhen Shenzhen investment
Guangdong Guangdong Establishment or
47 Shenzhen Kangcheng Software and information technology services 100
Shenzhen Shenzhen investment
48 Xiaojia Technology Guangdong Guangdong Retail trade 100 Establishment or
171Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Shareholding
No. Name of subsidiary Main Place of Place of Percentage (%) AcquisitionBusiness Registration Nature of Business method
Direct Indirect
Shenzhen Shenzhen investment
Establishment or
49 Haimen Konka Jiangsu Nantong Jiangsu Nantong Trade and services 100
investment
Chengdu Konka Establishment or
50 Sichuan Chengdu Sichuan Chengdu Manufacturing 100
Electronics investment
Business
Guangdong Guangdong Combinations Not
51 Xingda Hongye Manufacturing 51
Zhongshan Zhongshan Under Common
Control
Liaoyang Kangshun Establishment or
52 Liaoning Liaoyang Liaoning Liaoyang Wholesale 100
Intelligent investment
Liaoyang Kangshun Establishment or
53 Liaoning Liaoyang Liaoning Liaoyang Comprehensive utilization of renewable resources 100
Renewable investment
Establishment or
54 Nanjing Konka Nanjing Jiangsu Nanjing Jiangsu Wholesale 100
investment
Establishment or
55 Shanghai Konka Shanghai Shanghai Real estate industry 100
investment
Establishment or
56 Yantai Kangjin Yantai Shandong Yantai Shandong Real estate industry 62.8
investment
Business
Combinations Not
57 Jiangxi Konka Jiujiang Jiangxi Jiujiang Jiangxi Manufacturing and processing 51
Under Common
Control
Business
Combinations Not
58 Xinfeng Microcrystal Nanchang Jiangxi Nanchang Jiangxi Manufacturing and processing 51
Under Common
Control
172Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Shareholding
No. Name of subsidiary Main Place of Place ofBusiness Registration Nature of Business
Percentage (%) Acquisition
method
Direct Indirect
Guangdong Guangdong Establishment or
59 Shenzhen Nianhua Commercial services 100
Shenzhen Shenzhen investment
Shenzhen Konka Guangdong Guangdong Establishment or
60 Semiconductor 100
Semiconductor Shenzhen Shenzhen investment
Establishment or
61 Chongqing Konka Chongqing Chongqing Software and information technology services 100
investment
Establishment or
62 Ji'an Konka Ji'an Jiangxi Ji'an Jiangxi Commercial services 51
investment
Suining Konka Industrial Industrial park development construction and Establishment or
63 Suining Sichuan Suining Sichuan 100
Park operation management investment
Suining Electronic Establishment or
64 Suining Sichuan Suining Sichuan Commercial services 100
Technology Innovation investment
Shenzhen Chuangzhi Guangdong Guangdong Establishment or
65 Wholesale 100
Electrical Appliances Shenzhen Shenzhen investment
Chongqing
Establishment or
66 Optoelectronic Chongqing Chongqing Research and experimental development 70 5
investment
Technology
Guangdong Guangdong Computer telecommunications and other electronic Establishment or
67 Xinying Semiconductor 100
Shenzhen Shenzhen equipment manufacturing investment
Konka Xinyun Computer telecommunications and other electronic Establishment or
68 Yancheng Jiangsu Yancheng Jiangsu 100
Semiconductor equipment manufacturing investment
Science and technology promotion and application Establishment or
69 Nanjing Konka Smart Nanjing Jiangsu Nanjing Jiangsu 51
services investment
Ningbo Kanghanrui Establishment or
70 Ningbo Zhejiang Ningbo Zhejiang Electrical machinery and equipment manufacturing 60
Electric Appliances investment
Establishment or
71 Suining Jiarun Property Suining Sichuan Suining Sichuan Real estate industry 100
investment
173Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Shareholding
No. Name of subsidiary Main Place of Place of Percentage (%) AcquisitionBusiness Registration Nature of Business method
Direct Indirect
Ecological protection and environmental Establishment or
72 Yibin Kangrun Sichuan Yibin Sichuan Yibin 67
governance services investment
Hainan Konka Establishment or
73 Haikou Hainan Haikou Hainan Commercial services 100
Technology investment
Business
Jiangxi High Transparent Combinations Not
74 Jiujiang Jiangxi Jiujiang Jiangxi Manufacturing and processing 51
Substrate Under Common
Control
Computer telecommunications and other electronic Establishment or
75 Nantong Kangdian Jiangsu Nantong Jiangsu Nantong 100
equipment manufacturing investment
Establishment or
76 Chuzhou Konka Chuzhou Anhui Chuzhou Anhui Manufacturing 94.9
investment
Konka Flexible Establishment or
77 Suining Sichuan Suining Sichuan Manufacturing 97.5
Electronics investment
Kangjia Hongye Establishment or
78 Suining Sichuan Suining Sichuan Manufacturing 95.05
Electronics investment
Xinying Semiconductor Wholesale of computers software and auxiliary Establishment or
79 Hong Kong China Hong Kong China 100
(Hong Kong) equipment investment
Konka Cross-border Establishment or
80 Handan Hebei Handan Hebei Wholesale 100
(Hebei) investment
Establishment or
81 Konka Central China Changsha Hunan Changsha Hunan Commercial services 100
investment
Ecological protection and environmental Establishment or
82 Yibin Kangrun Medical Sichuan Yibin Sichuan Yibin 63.65
governance services investment
Manufacture of household cleaning and sanitary Establishment or
83 Shaanxi Konka Intelligent Xi'an Shaanxi Xi'an Shaanxi 51
electrical appliances investment
174Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Shareholding
No. Name of subsidiary Main Place of Place of Nature of Business Percentage (%) AcquisitionBusiness Registration method
Direct Indirect
Chongqing Xinyuan Science and technology promotion and application Establishment or
84 Chongqing Chongqing 75
Semiconductor services investment
Establishment or
85 Anlu Konka Anlu Hubei Anlu Hubei Software and information technology services 100
investment
Guangdong Guangdong Establishment or
86 Kanghong Dongsheng Commercial services 95.09
Shenzhen Shenzhen investment
Qiannan
Guizhou Konka New Qiannan Prefecture Establishment or
87 Prefecture Manufacturing and processing 51
Material Technology Guizhou investment
Guizhou
Shanxi Smart Home Computer telecommunications and other electronic Establishment or
88 Jincheng Shanxi Jincheng Shanxi 100
Appliance equipment manufacturing investment
Qiannan
Guizhou Kanggui Qiannan Prefecture Establishment or
89 Prefecture Manufacturing and processing 70
Materials Guizhou investment
Guizhou
Establishment or
90 Nantong Kanghai Jiangsu Nantong Jiangsu Nantong Real estate industry 51
investment
Establishment or
91 Chongqing Kangyiyun Chongqing Chongqing Real estate industry 80
investment
Jiangxi Konka Establishment or
92 Shangrao Jiangxi Shangrao Jiangxi Commercial services 100
Technology Park investment
Shangrao Konka
Establishment or
93 Electronic Technology Shangrao Jiangxi Shangrao Jiangxi Research and experimental development 100
investment
Innovation
Zhejiang Konka Establishment or
94 Shaoxing Zhejiang Shaoxing Zhejiang Research and experimental development 100
Electronics investment
Zhejiang Konka Establishment or
95 Shaoxing Zhejiang Shaoxing Zhejiang Commercial services 51 49
Technology Industries investment
175Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Shareholding
No. Name of subsidiary Main Place of Place of Percentage (%) AcquisitionBusiness Registration Nature of Business method
Direct Indirect
Establishment or
96 Xi'an Konka Intelligent Xi'an Shaanxi Xi'an Shaanxi Wholesale 51
investment
Computer telecommunications and other electronic Establishment or
97 Xi'an Konka Network Xi'an Shaanxi Xi'an Shaanxi 100
equipment manufacturing investment
Xi'an Kanghong Establishment or
98 Xi'an Shaanxi Xi'an Shaanxi Commercial services 40 60
Technology Industry investment
Xi'an Konka Intelligent Establishment or
99 Xi'an Shaanxi Xi'an Shaanxi Retail trade 100
Technology investment
Songyang Industry Establishment or
100 Lishui Zhejiang Lishui Zhejiang Software and information technology services 51
Operation investment
Guangdong Guangdong Computer telecommunications and other electronic Establishment or
101 Kangyan Technology 100
Shenzhen Shenzhen equipment manufacturing investment
Songyang Konka Establishment or
102 Lishui Zhejiang Lishui Zhejiang Wholesale 100
Intelligent investment
Establishment or
103 Konka North China Tianjin Tianjin Electrical machinery and equipment manufacturing 100
investment
Guangdong Guangdong Establishment or
104 Digital technology Software and information technology services 100
Shenzhen Shenzhen investment
(2) Significant non-wholly-owned subsidiaries
Shareholding of Gains/losses attributable toName of subsidiary minority shareholders minority shareholders in the
Dividends declared to be distributed to Ending balance of minority
current year minority shareholders in the current year shareholders' equities
Shaanxi Konka Intelligent 49.00% -20016441.66 162406593.64
176Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
(3) Key financial information of significant non-wholly-owned subsidiaries
Ending balance
Name of
subsidiary Current Assets Non-Current Assets Total Assets Current Liabilities Non-CurrentLiabilities Total Liabilities
Shaanxi Konka 726253447.73 547389728.20 1273643175.93 643226943.87 298974204.21 942201148.08
Intelligent
(Continued)
Name of Beginning balance
subsidiary Current Assets Non-Current Assets Total Assets Current Liabilities Non-Current Liabilities Total Liabilities
Shaanxi Konka 523431034.77 560221880.91 1083652915.68 423606123.36 288250518.71 711856642.07
Intelligent
(Continued)
Amount incurred in the current year Amount incurred last year
Name of
subsidiary Operating
Total Cash flows from Total Cash flows
Revenue Net Profit comprehensive operating
Operating
Revenue Net Profit comprehensive from operatingincome activities income activities
Shaanxi Konka -
Intelligent 307282044.08 -40849880.93 26721619.02 260200550.68 -24414126.47 -24414126.47 42019883.3840849880.93
2. Equity in joint ventures or associates
(1) Significant joint ventures or associates
Shareholding Percentage (%) Accounting Method for
Name of Joint Ventures or Associates Main Place Place ofof Business Registration Nature of Business Investment in JointDirect Indirect Ventures or Associates
Oriental Jiakang No. 1 (Zhuhai) Private Equity
Zhuhai Zhuhai Investment Management 49.95 Equity Method
Investment Fund (Limited Partnership)
Shenzhen Jielunte Technology Co. Ltd. Shenzhen Shenzhen Professional Equipment 42.79 Equity Method
177Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Main Place Place of Shareholding Percentage (%) Accounting Method forName of Joint Ventures or Associates of Business Registration Nature of Business Investment in JointDirect Indirect Ventures or Associates
Manufacturing
(2) Key financial information of significant associates
Year-End Balance / Amount Incurred in Current Year Beginning-of-Year Balance / Amount Incurred in PreviousYear
Item Oriental Jiakang No. 1 (Zhuhai) Shenzhen Jielunte Oriental Jiakang No. 1 (Zhuhai)Private Equity Investment Fund Private Equity Investment Fund Shenzhen Jielunte
(Limited Partnership) Technology Co. Ltd. (Limited Partnership) Technology Co. Ltd.Current Assets 350138667.41 219896979.76 679918421.73 299214528.27
Including: Cash and Cash Equivalents 18775457.35 16787261.84 9020859.89 16394140.52
Non-Current Assets 381156956.39 385578306.45
Total Assets 350138667.41 601053936.15 679918421.73 684792834.72
Current Liabilities 20026785.45 280946973.50 10026785.45 310050065.52
Non-Current Liabilities 140456865.19 172196132.11
Total Liabilities 20026785.45 421403838.69 10026785.45 482246197.63
Total Net Assets 330111881.96 179650097.46 669891636.28 202546637.09
Including: Minority Interests 4215206.30 6414476.36
Equity Attributable to Shareholders of the
Parent Company 330111881.96 175434891.16 669891636.28 196132160.73
Share of Net Assets Calculated Based on the
Shareholding 164890885.04 75068589.93 334610872.32 83924951.58
Adjustments
-- Goodwill
178Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Year-End Balance / Amount Incurred in Current Year Beginning-of-Year Balance / Amount Incurred in PreviousYear
Item Oriental Jiakang No. 1 (Zhuhai) Oriental Jiakang No. 1 (Zhuhai)
Private Equity Investment Fund Shenzhen Jielunte Private Equity Investment Fund Shenzhen Jielunte
(Limited Partnership) Technology Co. Ltd. (Limited Partnership) Technology Co. Ltd.-- Unrealized Profit on Internal Transactions
-- Others
Book value of equity investments in
associated enterprises 164890885.04 80165191.30 334610872.32 89059544.64
Fair value of equity investments in associates
with publicly quoted prices
Operating Revenue 350072893.86 453598821.35
Finance costs -46291.23 10056355.95 -124906.64 5643459.99
Income tax expense 4961196.48 6482111.17
Net Profit -339771443.55 -22867630.96 3192911.59 -15630059.79
Net profit from discontinued operations
Other comprehensive income
Total comprehensive income -339771443.55 -22867630.96 3192911.59 -15630059.79
Dividend received from associates in the
current year
179Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
(3) Summarized financial insignificant of unimportant joint ventures and
associates
Amount incurred at the end Amount incurred at the
Item of the year/in the current beginning of the year/in last
year year
Associates — —
Total book value of investments 1780982080.65 4304690436.53
The total of following items according to the
shareholding proportions — —
--Net profit -130602308.23 -127981842.74
--Other comprehensive income 1707518.13 -115491.69
--Total comprehensive income -128894790.10 -128097334.43
X. Government grants
1. Liability items involving government grants
Amount
Subsidies recognized as Amount transferred
Account title Beginning balance increased in the non-operating to other income in
current year revenue in the the current year
current year
Deferred income 393437007.37 72028772.87 37201156.10
(Continued)
Account title Other changes in thecurrent year Ending balance Related to assets/income
Deferred income -20088828.63 408175795.51 Related to assets/income
2. Government grants recognized as current gains/losses
Account title Amount incurred in the currentyear Amount incurred last year
Other income -547216758.04 99292763.50
Finance costs 287168.96 10040000.00
Remarks: Konka Hongye Electronics received a loan interest subsidy of RMB
287168.96 in the current year which directly offset the interest expenses in the current
finance costs.XI. Risks related to financial instruments
The Group's main financial instruments include borrowings accounts receivable
accounts payable trading financial assets equity instrument investments etc. Please
refer to Note VI for detailed descriptions of various financial instruments. The risks
related to these financial instruments and the risk management policies adopted by the
Group to mitigate these risks are described below. The management of the Group
180Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
manages and monitors these risk exposures to ensure that these risks are controlled
within a limited scope.
1. Management objectives and policies for various risks
The Group's objective in risk management is to achieve an appropriate balance between
risk and return minimize the negative impact of risk on the Group's operating
performance and maximize the interests of shareholders and other equity investors.Based on the risk management goal the basic strategy of the Group's risk management
is determining and analyzing the various risks faced by the Group setting up the bottom
line of risk and conducting appropriate risk management and timely supervising various
risks in a reliable way and controlling the risk within the range of limit.
(1) Market risk
1) Exchange rate risk
Foreign exchange risk refers to the risks that may lead to losses due to fluctuation in
exchange rate. The foreign exchange risk borne by the Group is related to USD. Except
the procurement and sales in USD of the Company's subsidiaries Hong Kong Konka
Hongdin Trading Chain Kingdom Memory Technologies Hongjet and Benelux
International Limited the Group's other primary business activities are settled in RMB.The currency risk arising from the assets and liabilities of such balance in USD may
affect the Group's operating results. As of December 31 2025 the Group's assets and
liabilities were mainly the balance in RMB except for the assets or liabilities of a balance
in USD as listed below.Item December 31 2025 December 31 2024
Monetary funds 27663141.48 47765558.32
Accounts receivable 87163632.40 86994147.59
Other receivables 110851224.81 108431901.40
Accounts payable 5589778.90 5367446.58
Other payables 3108148.44 3708173.01
The Group pays close attention to the impact of exchange rate changes on the Group's
foreign exchange risk and requires major companies in the Group that purchase and sell
in foreign currency to pay attention to the changes in foreign currency assets and
liabilities manage the Group's foreign currency net asset exposure in a unified way
implement single currency settlement and reduce the scale of foreign currency assets
and liabilities so as to reduce foreign exchange risk exposure.
2) Interest rate risk
The Group bears interest rate risk due to interest rate changes of interest-bearing
181Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
financial assets and liabilities. The Group's interest-bearing financial assets are mainly
bank deposits of which the majority of the variable interest rates are short-term in nature
while the interest-bearing financial liabilities are mainly bank borrowings and corporate
bonds. The Group's long-term bank borrowings and corporate bonds are at fixed interest
rates. The risk of cash flow changes of financial instruments caused by interest rate
changes is mainly related to short-term bank borrowings with floating interest rates. The
Group's policy is to maintain the floating interest rates of such borrowings to eliminate
the fair value risk of interest rate changes. As of December 31 2025 the balance of
such short-term borrowings was RMB 4575915552.66.
(2) Credit risk
As of December 31 2025 the maximum credit risk exposure that may cause financial
losses to the Group mainly came from losses generated from the Group's financial
assets due to failure of the other party to a contract to perform its obligations and the
financial guarantee undertaken by the Group including:
The book amount of the financial assets recognized in the consolidated balance sheet;
for financial instruments measured at fair value the book value reflects its risk exposure
but it is not the maximum risk exposure and its maximum risk exposure will change with
the change of fair value in the future.In order to reduce credit risk the Group has set up a dedicated department to determine
the credit limit conduct credit approval and implement other monitoring procedures to
ensure that necessary measures are taken to recover overdue claims. In addition the
Group reviews the recovery of each single receivable on each balance sheet date to
ensure that sufficient provision for bad debts is made for the unrecoverable amount.Therefore the Group's management believes that the Group's credit risk has been
greatly reduced.The Group's working capital is deposited in banks with a high credit rating so the credit
risk of working capital is low.The Group has adopted necessary policies to ensure that all customers have good credit
records. Except for the top five customers in terms of the amount of accounts receivable
the Group has no other major credit concentration risks. For the financial assets of the
Group that have been individually impaired please refer to 4. Accounts receivable and 7.Other receivables in Note VI.
(3) Liquidity risk
Liquidity risk refers to the risk that the Group is unable to fulfill its financial obligations on
the due date. The Group manages liquidity risk by ensuring that there is sufficient
liquidity to fulfil debt obligations without causing unacceptable loss or damage to the
182Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Group's reputation. In order to mitigate the liquidity risk the Group's management has
carried out a detailed inspection on the liquidity of the Group including the maturity of
accounts payable and other payables bank credit lines and bond financing. The
conclusion is that the Group has sufficient funds to meet the needs of the Group's short-
term debts and capital expenditure.The analysis of the financial assets and financial liabilities held by the Group
based on the maturity period of the undiscounted remaining contractual
obligations is as follows:
183Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Amount as of December 31 2025:
Item Within one year One to two years Two to five years Over five years Total
Financial assets
Monetary funds 6313941885.05 6313941885.05
Trading financial assets 202027000.00 202027000.00
Notes receivable 77316985.56 77316985.56
Accounts receivable 1086929012.15 1086929012.15
Other receivables 942267792.91 942267792.91
Other current assets 235601218.08 235601218.08
Financial liabilities
Short-term borrowings 4575915552.66 4575915552.66
Notes payable 943817767.91 943817767.91
Accounts payable 1977736371.29 1977736371.29
Other payables 6565100788.16 6565100788.16
Employee benefits payable 223175513.10 223175513.10
Non-current liabilities maturing
within one year 3650840615.21 3650840615.21
Long-term borrowings 320500000.19 5565093239.69 652333497.66 6537926737.54
Bonds payable 396674876.37 1200000000.00 1596674876.37
Long-term payables 2033227.02 2033227.02
184Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
2. Sensitivity analysis
The Group adopts sensitivity analysis technology to analyze the possible impact of
reasonable and possible changes of risk variables on current gains/losses or shareholders'
equity. As any risk variable rarely changes in isolation and the correlation between
variables will have a significant effect on the final impact amount of the change of a risk
variable the following content is based on the assumption that the change of each variable
is independent.
(1) Sensitivity analysis of foreign exchange risk
Assumption for the sensitivity of foreign exchange risk: All net investment hedging and
cash flow hedging of overseas operations are highly effective.On the basis of the above assumption under the condition that other variables remain
unchanged the impact of reasonable changes in the exchange rate on current
gains/losses and equity after tax is as follows:
Year 2025 Year 2024
Item Exchange rate Impact on Impact onfluctuations Impact on net
profit shareholders' Impact on net profit shareholders'equity equity
Appreciation of 1%
USD
against RMB 12279535.69 8479654.71 13038269.46 9355341.19
Depreciation of 1% -
USD
against RMB -8479654.71 -13038269.46 -9355341.1912279535.69
(2) Sensitivity analysis of interest rate risk
Sensitivity analysis of interest rate risk is based on the following assumptions:
Changes in market interest rates affect the interest income or expense of financial
instruments with variable interest rates;
For financial instruments with fixed interest rates measured at fair value market interest
rate changes affect only their interest income or expense;
Changes in the fair values of derivative financial instruments and other financial assets
and liabilities are calculated at the market interest rate on the balance sheet date by
discounted cash flow.On the basis of the above assumptions and under the condition that other variables remain
unchanged the impact of reasonable changes in the interest rate on current gains/losses
and equity after tax is as follows:
Year 2025 Year 2024
Interest
Item rate Impact on net Impact on Impact on net Impact on
fluctuations profit shareholders' equity profit shareholders'equity
Borrowings at increase by -17310240.92 -16968636.09 -21670117.43 -21331876.38
185Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Year 2025 Year 2024
Interest
Item rate Impact on net Impact on Impact on net Impact on
fluctuations profit shareholders' equity profit shareholders'equity
floating interest 0.5%
rates
Borrowings at reduce by
floating interest 17310240.92 16968636.09 21670117.43 21331876.38
rates 0.5%
XII. Disclosure of fair value
1. Ending fair value of assets and liabilities measured at fair value
Closing fair value
Item Level-1 fair value Level-2 fair value Level-3 fair value
measurement measurement measurement Total
I. Continuous fair value
measurement — — — —
(I) Trading financial assets 202027000.00 202027000.00
1. Financial assets
measured at fair value 202027000.00 202027000.00
through current profit or loss
(II) Receivables financing 155957556.43 155957556.43
(III) Other debt investments
(IV) Other equity instrument
investments 10213810.20 10213810.20
(V) Investment properties
(VI) Other non-current
financial assets 1161781213.03 1161781213.03
Total assets continuously
measured at fair value 202027000.00 155957556.43 1171995023.23 1529979579.66
Total liabilities
continuously measured at
fair value
II. Non-continuous fair
value measurement — — — —
Total assets not
continuously measured at
fair value
Total liabilities not
continuously measured at
fair value
2. Basis for determining the market price of projects continuously and non-
continuously measured at Level-1 fair value
The Level-1 input is an unadjusted quoted price in an active market for the same assets or
liabilities available on the measurement date.
186Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
3. Qualitative and quantitative data on valuation techniques and important
parameters adopted for projects continuously and non-continuously measured at
Level-2 fair value
Level-2 input value is the directly or indirectly observable input value of the relevant assets
or liabilities except for the Level-1 input value.
4. Qualitative and quantitative data on valuation techniques and important
parameters adopted for projects continuously and non-continuously measured at
Level-3 fair value
The Level-3 inputs are the unobservable inputs of related assets or liabilities.
5. For items continuously measured at fair value if there is a conversion between
levels in the current year the reasons for the conversion and the policy for
determining the conversion time point
For the Group's items continuously measured at fair value there was no conversion
between levels in the current year.
6. Changes in valuation techniques in the current year and reasons for such
changes
For the items measured at fair value of the Group there were no changes in valuation
techniques in the current year.XIII. Related parties and related party transactions
1. Related party relationships
(1) Parent company of the Company
Shareholding Voting right
percentage of percentage ofName of the parent Place of Nature of Registered the parent
company Registration Business capital the parentcompany in the company in
Company (%) the Company(%)
Panshi Runchuang
Consulting
(Shenzhen)
services and
Information Shenzhen RMB 11.71 billion 29.999997 29.999997
enterprise
Management Co.management
Ltd.On April 29 2025 the Company received a notice from its former controlling shareholder
Overseas Chinese Town Group Co. Ltd.: To advance the professional integration among
central state-owned enterprises and optimize resource allocation Overseas Chinese Town
Group and its persons acting in concert (including Shenzhen Overseas Chinese Town
Capital Investment Management Co. Ltd. and Jialong Investment Co. Ltd. wholly-owned
subsidiaries of Overseas Chinese Town Group) respectively signed the Unconditional
187Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Share Transfer Agreement in Respect of Konka Group Co. Ltd. with Panshi Runchuang
and Hemao Co. Ltd. It was planned to gratuitously transfer all shares of the Company
held by Overseas Chinese Town Group and its persons acting in concert to Panshi
Runchuang and Hemao Co. Ltd. wholly-owned subsidiaries under China Resources. As
of July 2025 the gratuitous share transfer has been fully completed. The controlling
shareholder of the Company has been changed to Panshi Runchuang the actual
controller of the Company is China Resources Co. Ltd. and the ultimate actual controller
is the State-owned Assets Supervision and Administration Commission of the State
Council.
(2) Subsidiaries of the Company
Please refer to Note IX.1.(1) Subsidiaries for the information of subsidiaries.
(3) Associates of the Company
For details of the Company's important joint ventures or associates please refer to Note
IX.2.(1) Important joint ventures or associates.Joint ventures and associates involved in the related-party transactions with the Company
in the current year or leading to balance due to the related-party transactions they had
with the Company in previous periods:
Name of associates Relationship with the Company
Kangkong Venture Capital (Shenzhen) Co. Ltd. Associate
Nanjing Zhihuiguang Information Technology Research Institute Co. Associate
Ltd.Feidi Technology (Shenzhen) Co. Ltd. Associate
Foshan Zhujiang Media Creative Park Cultural Development Co. Associate
Ltd.Kangkai Technology Service (Chengdu) Co. Ltd. Associate
Puchuang Jiakang Technology Co. Ltd. Associate
Shenzhen Jielunte Technology Co. Ltd. Associate
Orient Excellent (Zhuhai) Asset Management Co. Ltd. Associate
Tongxiang Wuzhen Kunyu Venture Capital Co. Ltd. Associate
Shenzhen RF-Link Technology Co. Ltd. Associate
Anhui Kaikai Shijie E-commerce Co. Ltd. Associate
Shaanxi Silk Road Yunqi Intelligent Technology Co. Ltd. Associate
Shenzhen Kanghongxing Intelligent Technology Co. Ltd. Associate
Shenzhen Zhongkang Beidou Technology Co. Ltd. Associate
Shenzhen Yaode Technology Co. Ltd. Associate
188Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Name of associates Relationship with the Company
Nantong Konka Technology Industrial Park Operation Management Associate
Co. Ltd.Chuzhou Kangxin Health Industry Development Co. Ltd. Associate
Dongguan Guankang Yuhong Investment Co. Ltd. Associate
Shenzhen Morsemi Semiconductor Technology Co. Ltd. Associate
Yantai Kangyun Industrial Development Co. Ltd. Associate
E3 (Hainan) Technology Co. Ltd. Associate
Shenzhen Konka Jiapin Intelligent Electrical Apparatus Technology Associate
Co. Ltd.Shenzhen Konka E-display Intelligent Technology Co. Ltd. Associate
Chongqing Yuanlv Benpao Real Estate Co. Ltd. Associate
Shenzhen Kangpeng Digital Technology Co. Ltd. Associate
Yantai Kangtang Construction Development Co. Ltd. Associate
Dongguan Kangzhihui Electronics Co. Ltd. Associate
Beijing Kangjia Jingyuan Technology Co. Ltd. Associate
Shenzhen Kangxi Technology Innovation Development Co. Ltd. Associate
Shandong Kangfei Intelligent Electrical Appliances Co. Ltd. Associate
Guangdong Kangyuan Semiconductor Co. Ltd. Associate
Chongqing Kangjian Photoelectric Technology Co. Ltd. Associate
Anhui Kangta Supply Chain Management Co. Ltd. Associate
Wuhan Kangtang Information Technology Co. Ltd. Associate
Sichuan Chengrui Real Estate Co. Ltd. Associate
Hefei Kangxinwei Storage Technology Co. Ltd. Associate
Sichuan Hongxinchen Real Estate Development Co. Ltd. Associate
Chongqing Lanlv Moma Real Estate Development Co. Ltd. Associate
Yantai Kangyue Investment Co. Ltd. Associate
Yikang Technology Co. Ltd. Associate
Dongguan Kangjia New Material Technology Co. Ltd. Associate
Zhejiang Kangying Semiconductor Technology Co. Ltd. Associate
Kangshengjia Smart Energy (Zhejiang) Co. Ltd. Associate
Konka Huanjia Environmental Protection Technology Co. Ltd. Associate
(4) Other related parties
Name of other related parties Relationship with the Company
Chuzhou Hanshang Electric Appliance Co. Ltd. Minority shareholder of subsidiary
189Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Name of other related parties Relationship with the Company
Hande Group Co. Ltd. Minority shareholder of subsidiary
Jiangsu Han Electric Appliance Co. Ltd. Minority shareholder of subsidiary
HOHO ELECTRICAL & FURNITURE CO Minority shareholder of subsidiary
Chongqing Liangshan Industrial Investment Co. Ltd. Minority shareholder of subsidiary
Zhu Xinming Minority shareholder of subsidiary
Hu Zehong Minority shareholder of subsidiary
AUJET INDUSTRY LIMITED Minority shareholder of subsidiary
Guizhou Jiading Mining Management Investment Co. Ltd. Minority shareholder of subsidiary
Beijing Xuri Shengxing Technology Co. Ltd. Minority shareholder of subsidiary
Central SOEs Industrial Investment Fund for Poverty-stricken Area
Minority shareholder of subsidiary
(Jiangxi) Industrial Investment Fund Partnership (L.P.)
Chuzhou State-owned Assets Operation Co. Ltd. Minority shareholder of subsidiary
Wu Guoren Minority shareholder of subsidiary
Xiao Yongsong Minority shareholder of subsidiary
Guizhou Huajinrun Technology Group Co. Ltd. Minority shareholder of subsidiary
Shenzhen Henglongtong Electronics Technology Co. Ltd. Minority shareholder of subsidiary
Liang Ruiling Minority shareholder of subsidiary
Shenzhen Qianhai Datang Technology Co. Ltd. Minority shareholder of subsidiary
Dai Yaojin Minority shareholder of subsidiary
Dai Rongxing Close family member of minority shareholder
Companies controlled by the ultimate controller
Jiangxi Meiji Enterprise Co. Ltd.of minority shareholders of subsidiaries
2. Related party transactions
(1) Related party transactions on purchase and sales of goods rendering and
receipt of services
1) Purchasing goods/receiving services
Related party Content of related- Amount incurred in Amount incurred lastparty transactions the current year year
Chuzhou Hanshang Electric Appliance
Co. Ltd. Purchase of goods 75994082.55 167386472.57
Overseas Chinese Town Holdings
Company and its subsidiaries and Purchase of goods
associates and services
32064372.0178142076.88
Shenzhen Jielunte Technology Co. Ltd.and its subsidiaries and associates Purchase of goods 27838757.55 78398311.31
Korea Electric Group Co. Ltd. and its
subsidiaries Purchase of goods 26040783.50 21852844.87
Shenzhen KONKA E-display Co. Ltd. Purchase of goods
and its subsidiaries and services 12627402.13 10375886.32
Jiangsu Han Electric Appliance Co. Ltd. Purchase of goods 9111898.95 26521440.81
190Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Dongguan Kangjia New Materials
Technology Co. Ltd. Purchase of goods 2505565.46 7136584.98
China Resources (Holdings) Co. Ltd. and Purchase of goods
its subsidiaries and associates and services 1187745.05 -
Shenzhen Konka Jiapin Intelligent
Electrical Apparatus Technology Co. Ltd. Purchase of services 576004.87 4419586.21
Dongguan Kangzhihui Electronics Co.Ltd. Purchase of goods 489548.36 1443620.08
Other related parties Purchase of services 1034604.39 11159587.52
Puchuang Jiakang Technology Co. Ltd. Purchase of goods - 37713014.15
HOHO Electrical & Furniture Co. Purchase of services - 25101.76
Total 189470764.82 444574527.46
2) Sales of goods/provision of labor services
Related party Content of related-party Amount incurred intransactions the current year Amount incurred last year
Sales of goods and
Chuzhou Hanshang Electric
provision of labour
Appliance Co. Ltd. 420399121.77 448249572.71
services
Sales of goods and
Korea Electric Group Co. Ltd.provision of labour
and its subsidiaries 99364894.12 48253101.99
services
Overseas Chinese Town Sales of goods and
Holdings Company and its provision of labour 25706408.18 66416176.82
subsidiaries and associates services
Zhejiang Kangying Sales of goods and
Semiconductor Technology Co. provision of labour 12675393.09 3618418.09
Ltd. and its subsidiaries services
Sales of goods and
Shenzhen KONKA E-display
provision of labour
Co. Ltd. and its subsidiaries 8959810.73 56756074.23
services
Dongguan Kangzhihui
Sales of goods
Electronics Co. Ltd. 1796261.27 5182683.36
Shenzhen Jielunte Technology Sales of goods and
Co. Ltd. and its subsidiaries provision of labour 897808.28 21105047.32
and associates services
Sales of goods and
Subtotal of other related parties provision of labour 8888878.85 15427419.47
services
Total 578688576.29 665008493.99
(2) Related party leases
1) Rental status
Lease income Lease income
Lessee Type of leased assets recognized in the recognized in the
current year previous year
Overseas Chinese Town Holdings
Commercial residences and
Company and its subsidiaries and
office buildings 39311093.50 24830127.03
associates
191Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Lease income Lease income
Lessee Type of leased assets recognized in the recognized in the
current year previous year
China Resources (Holdings) Co.Commercial residences and
Ltd. and its subsidiaries and
office buildings 735420.44
associates
Commercial residences and
Other related parties
office buildings 9012892.25 16830914.58
Total 49059406.19 41661041.61
2) Lease situation
Lease expenses Lease expenses
Name of lessor Type of leased assets recognized in the current recognized in the
year previous year
Overseas Chinese Town Holdings Commercial residences
Company and its subsidiaries and office buildings 31275354.32 34642360.06
Dongguan Guankang Yuhong
Industrial plant
Investment Co. Ltd. 3555102.86 12091006.44
Total 34830457.18 46733366.50
(3) Related party guarantees
1) As the guarantor
Contracted Actual Whether
Name of the guarantee guarantee the
guaranteed party amount amount Currency
Start date of Expiry date of
guarantee guarantee guarantee
(10000 RMB) (10000 RMB) has beenfulfilled
Bokang Precision 1000.00 1000.00 CNY 2025/4/29 2026/4/17 No
Konka Circuit 10000.00 CNY 2023/7/19 2027/1/31 No
Anhui Tongchuang 2000.00 2000.00 CNY 2025/2/25 2026/2/24 No
Anhui Tongchuang 5000.00 CNY 2025/2/24 2026/2/23 No
Anhui Tongchuang 4000.00 1500.00 CNY 2025/4/21 2026/4/21 No
Konka Xinyun
12100.00 8225.35 CNY 2024/11/26 2025/8/1 No
Semiconductor
Konka Xinyun
8277.66 1712.50 CNY 2021/7/12 2022/7/11 No
Semiconductor
Chongqing Konka 38000.00 12042.10 CNY 2022/12/13 2037/12/13 No
Electronics Technology 50000.00 20000.00 CNY 2024/12/3 2025/7/25 No
Dongguan Konka 80000.00 32841.61 CNY 2021/6/23 2031/5/7 No
Sichuan Konka 4000.00 3400.00 CNY 2023/5/23 2026/4/26 No
Yibin Smart 980.00 980.00 CNY 2025/5/19 2028/5/18 No
Xi'an Kanghong
30000.00 4000.00 CNY 2023/5/26 2032/12/31 No
Technology Industry
Kangjia Hongye
19010.00 13845.01 CNY 2024/1/24 2038/11/7 No
Electronics
192Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Contracted Actual Whether
Name of the guarantee guarantee Currency Start date of Expiry date of
the
guaranteed party amount amount guarantee guarantee guarantee
(10000 RMB) (10000 RMB) has beenfulfilled
Ningbo Kanghanrui
6000.00 574.74 CNY 2025/5/9 2026/8/9 No
Electric Appliances
Ningbo Kanghanrui
6000.00 2400.00 CNY 2025/7/13 2026/7/12 No
Electric Appliances
Anhui Konka 10215.95 4751.23 CNY 2021/8/10 2031/7/15 No
Anhui Konka 7000.00 1000.00 CNY 2021/10/29 2026/10/26 No
Anhui Konka 7000.00 1000.00 CNY 2022/10/24 2026/10/26 No
Anhui Konka 5000.00 3860.90 CNY 2023/6/25 2028/6/24 No
Anhui Konka 4000.00 4000.00 CNY 2025/3/6 2026/3/6 No
Econ Technology Co.
1498.97 1167.95 CNY 2023/5/22 2024/5/21 No
Ltd.Econ Technology Co.
4388.00 3021.76 CNY 2024/10/24 2025/8/6 No
Ltd.Econ Technology Co.
2248.46 576.87 CNY 2024/9/24 2025/9/23 No
Ltd.Econ Technology Co.
1498.97 1406.54 CNY 2025/1/14 2026/1/13 No
Ltd.Econ Technology Co.
749.49 749.49 CNY 2025/1/17 2026/1/17 No
Ltd.
2) As the secured party
Guarantee Whether
Name of guarantor amount Currency Start date of Expiry date
the
(10000 guarantee of guarantee guarantee
yuan) has beenfulfilled
Jiangxi Konka 13431.31 CNY 2023/6/15 2027/3/8 No
Jiangxi Konka 56.53 CNY 2024/3/7 2027/3/6 No
Jiangxi High Transparent Substrate 38045.57 CNY 2023/6/15 2027/3/19 No
Jiangxi High Transparent Substrate 258.80 CNY 2024/4/28 2030/3/6 No
Jiangxi High Transparent Substrate 234.44 CNY 2024/3/7 2027/3/6 No
Xinfeng Microcrystal 34475.18 CNY 2023/6/15 2025/12/31 No
Xinfeng Microcrystal 1379.77 CNY 2024/3/4 2027/3/3 No
Xingda Hongye 20949.46 CNY 2025/6/19 2029/6/18 No
Konka Venture 1322.54 CNY 2021/12/15 2022/11/5 No
Zhejiang Kangying Semiconductor
25000.00 CNY 2024/12/3 2025/7/25 No
Technology Co. Ltd.China Resources Co. Ltd. 150000.00 CNY 2025/12/9 2027/1/29 No
193Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Guarantee Whether
Name of guarantor amount Start date of Expiry date
the
(10000 Currency guarantee of guarantee guarantee
yuan) has beenfulfilled
China Resources Co. Ltd. 40000.00 CNY 2025/12/9 2027/3/18 No
China Resources Co. Ltd. 40000.00 CNY 2025/12/9 2027/3/18 No
China Resources Co. Ltd. 41000.00 CNY 2025/12/9 2028/6/23 No
China Resources Co. Ltd. 79000.00 CNY 2025/12/9 2028/7/4 No
Chuzhou State-owned Assets Operation
1045.27 CNY 2021/8/10 2031/7/15 No
Co. Ltd.Chuzhou State-owned Assets Operation
220.00 CNY 2021/10/29 2026/10/26 No
Co. Ltd.Chuzhou State-owned Assets Operation
220.00 CNY 2022/10/24 2026/10/26 No
Co. Ltd.Chuzhou State-owned Assets Operation
849.40 CNY 2023/6/25 2028/6/24 No
Co. Ltd.Chuzhou State-owned Assets Operation
880.00 CNY 2025/3/6 2026/3/6 No
Co. Ltd.Wu Guoren 875.00 USD 2019/12/31 2024/12/31 No
Wu Guoren 2022.50 USD 2019/12/31 2024/12/31 No
Xiao Yongsong 840.00 USD 2019/12/31 2024/12/31 No
Xiao Yongsong 1941.60 USD 2019/12/31 2024/12/31 No
United Fortune Supply Chain Co. Ltd. 1269.10 USD 2021/6/21 2022/12/31 No
United Fortune Supply Chain Co. Ltd. 650.49 USD 2021/6/21 2022/12/31 No
Guizhou Huajinrun Technology Group
381.15 USD 2022/1/1 2025/12/31 No
Co. Ltd.Guizhou Huajinrun Technology Group
157.50 USD 2022/1/1 2025/12/31 No
Co. Ltd.Shenzhen Henglongtong Electronics
241.40 USD 2022/1/1 2025/12/31 No
Technology Co. Ltd.Shenzhen Henglongtong Electronics
99.75 USD 2022/1/1 2025/12/31 No
Technology Co. Ltd.AUJET INDUSTRY LIMITED 3227.63 USD 2021/11/10 2025/12/31 No
AUJET INDUSTRY LIMITED 40.18 USD 2021/11/10 2025/12/31 No
AUJET INDUSTRY LIMITED 1029.00 USD 2020/7/20 2025/12/31 No
Zhu Xinming 12446.00 CNY 2022/10/15 2023/10/14 No
Zhu Xinming 3399.49 CNY 2023/1/1 2023/12/31 No
Zhu Xinming 13249.19 CNY 2023/2/19 2024/2/18 No
Zhu Xinming 6860.00 CNY 2023/3/1 2024/2/28 No
194Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Guarantee Whether
Name of guarantor amount Currency Start date of Expiry date
the
(10000 guarantee of guarantee guarantee
yuan) has beenfulfilled
Zhu Xinming 2330.54 CNY 2023/3/9 2024/3/8 No
Zhu Xinming 2156.00 CNY 2023/4/1 2023/9/30 No
Zhu Xinming 443.45 CNY 2023/1/13 2023/12/31 No
Zhu Xinming 44.05 CNY 2023/3/30 2023/12/31 No
Zhu Xinming 443.45 CNY 2023/4/14 2023/12/31 No
Zhu Xinming 44.05 CNY 2023/6/30 2023/12/31 No
Zhu Xinming 443.45 CNY 2023/7/14 2023/12/31 No
Zhu Xinming 44.05 CNY 2023/10/11 2023/12/31 No
Zhu Xinming 149.45 CNY 2023/10/13 2023/12/31 No
Zhu Xinming 44.05 CNY 2023/12/29 2023/12/31 No
Zhu Xinming 490.00 CNY 2023/2/28 2024/2/27 No
Zhu Xinming 5109.05 CNY 2023/1/1 2023/12/31 No
Zhu Xinming 252.63 CNY 2023/1/13 2023/12/31 No
Zhu Xinming 101.77 CNY 2023/1/13 2023/12/31 No
Zhu Xinming 203.63 CNY 2023/4/14 2023/12/31 No
Zhu Xinming 1862.90 CNY 2023/1/1 2023/12/31 No
Zhu Xinming 223.85 CNY 2023/2/17 2023/12/31 No
Zhu Xinming 93.12 CNY 2023/3/8 2023/12/31 No
Zhu Xinming 101.35 CNY 2023/5/19 2023/12/31 No
Zhu Xinming 93.12 CNY 2023/6/8 2023/12/31 No
Zhu Xinming 93.12 CNY 2023/9/8 2023/12/31 No
Zhu Xinming 62.25 CNY 2023/12/7 2023/12/31 No
Zhu Xinming 137.20 CNY 2024/11/1 2026/10/30 No
Hu Zehong 2025/6/19 2029/6/18 No
6467.02 CNY
Liang Ruiling Dai Yaojin 2025/6/19 2026/12/31 No
Sui Yong Rongxin Asset Management
2450.00 CNY 2018/1/1 2025/6/30 No
Co. Ltd.Sui Yong Rongxin Asset Management
2842.00 CNY 2018/1/1 2025/12/31 No
Co. Ltd.Shenzhen Henglongtong Electronic
Technology Co. Ltd. Guizhou Huajinrun 735.00 CNY 2022/1/1 2025/12/31 No
Technology Group Co. Ltd. Huaying
195Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Guarantee Whether
Name of guarantor amount Start date of Expiry date
the
(10000 Currency guarantee of guarantee guarantee
yuan) has beenfulfilled
Gaokede Electronic Technology Co.Ltd. and Huaying Gaokelong Electronic
Technology Co. Ltd.Shenzhen Baili Yongxing Technology
2018/1/1 2023/12/31 No
Co. Ltd.Shenzhen Henglongtong Electronic
Technology Co. Ltd. Guizhou Huajinrun
Technology Group Co. Ltd. Huaying
2022/1/1 2025/12/31 No
Gaokede Electronic Technology Co.Ltd. and Huaying Gaokelong Electronic 488.37 CNY
Technology Co. Ltd.Shenzhen Baili Yongxing Technology
2018/1/1 2023/12/31 No
Co. Ltd.Shenzhen Henglongtong Electronic
Technology Co. Ltd. Guizhou Huajinrun
Technology Group Co. Ltd. Huaying
2022/1/1 2025/12/31 No
Gaokede Electronic Technology Co.Ltd. and Huaying Gaokelong Electronic 552.72 CNY
Technology Co. Ltd.Shenzhen Baili Yongxing Technology
2018/1/1 2023/12/31 No
Co. Ltd.Chuzhou Hanshang Electric Appliance
3798.96 CNY 2021/5/20 2024/5/19 No
Co. Ltd.Shenzhen Qianhai Datang Technology
441.00 CNY 2024/11/17 2025/11/16 No
Co. Ltd.
(4) Loans from/to related parties
Related party name Amount (10000RMB) Currency Start date Due date
Borrowing
Panshi Runchuang (Shenzhen) Information
217000.00 CNY 2025/8/28 2026/8/28
Management Co. Ltd.Chuzhou Hanshang Electric Appliance Co. Ltd. 12862.50 CNY 2025/1/1 2025/12/31
Chuzhou Hanshang Electric Appliance Co. Ltd. 2450.00 CNY 2024/8/3 2025/12/31
Chuzhou Hanshang Electric Appliance Co. Ltd. 980.00 CNY 2025/2/14 2026/2/13
Kangkong Venture Capital (Shenzhen) Co. Ltd. 245.00 CNY 2022/7/21 2026/7/18
Beijing Xuri Shengxing Technology Co. Ltd. 228.67 CNY 2024/12/1 2025/11/30
Total 233766.17
Lending
Dongguan Guankang Yuhong Investment Co.
2223.19 CNY 2022/8/6 2025/9/25
Ltd.
196Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Related party name Amount (10000RMB) Currency Start date Due date
Dongguan Guankang Yuhong Investment Co.
17376.81 CNY 2022/8/6 2025/9/25
Ltd.Chuzhou Kangxin Health Industry Development
13288.00 CNY 2022/12/18 2025/12/21
Co. Ltd.Chuzhou Kangxin Health Industry Development
2000.00 CNY 2022/12/18 2025/12/21
Co. Ltd.Chuzhou Kangxin Health Industry Development
735.00 CNY 2023/1/5 2025/12/21
Co. Ltd.Chuzhou Kangxin Health Industry Development
59.45 CNY 2023/1/5 2025/12/21
Co. Ltd.Chuzhou Kangxin Health Industry Development
1240.03 CNY 2022/12/18 2025/12/21
Co. Ltd.Chuzhou Kangxin Health Industry Development
16758.00 CNY 2023/3/22 2025/12/21
Co. Ltd.Chuzhou Kangxin Health Industry Development
1359.26 CNY 2023/3/21 2025/12/21
Co. Ltd.Chuzhou Kangxin Health Industry Development
109.95 CNY 2023/3/21 2025/12/21
Co. Ltd.Chuzhou Kangxin Health Industry Development
1344.36 CNY 2023/3/22 2025/12/21
Co. Ltd.Chuzhou Kangxin Health Industry Development
2080.72 CNY 2023/10/18 2025/12/21
Co. Ltd.Chuzhou Kangxin Health Industry Development
562.97 CNY 2023/12/22 2025/12/21
Co. Ltd.Sichuan Chengrui Real Estate Co. Ltd. 14724.50 CNY 2022/1/21 2026/4/15
Yantai Kangyue Investment Co. Ltd. 12852.70 CNY 2020/12/16 2022/11/5
Yantai Kangyun Industrial Development Co. Ltd. 10020.00 CNY 2021/11/23 2026/3/31
Yantai Kangyun Industrial Development Co. Ltd. 949.00 CNY 2022/8/25 2026/3/31
Yantai Kangyun Industrial Development Co. Ltd. 1394.00 CNY 2022/8/25 2026/3/31
Yantai Kangyun Industrial Development Co. Ltd. 323.00 CNY 2022/8/25 2026/3/31
Yantai Kangyun Industrial Development Co. Ltd. 564.00 CNY 2022/8/25 2026/3/31
Yantai Kangyun Industrial Development Co. Ltd. 1020.00 CNY 2022/3/17 2026/3/31
Yantai Kangyun Industrial Development Co. Ltd. 3400.00 CNY 2022/5/23 2026/3/31
Yantai Kangyun Industrial Development Co. Ltd. 2500.00 CNY 2022/6/1 2026/3/31
Yantai Kangyun Industrial Development Co. Ltd. 2430.00 CNY 2022/11/15 2026/3/31
Chongqing Lanlv Moma Real Estate Development
18843.00 CNY 2020/11/25 2023/11/24
Co. Ltd.Sichuan Hongxinchen Real Estate Development
19879.55 CNY 2022/9/15 2026/2/27
Co. Ltd.Econ Technology Co. Ltd. 18315.11 CNY 2023/12/20 2026/12/20
Econ Technology Co. Ltd. 4996.58 CNY 2023/12/21 2026/12/20
197Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Related party name Amount (10000RMB) Currency Start date Due date
Chongqing Liangshan Industrial Investment Co.
5000.00 CNY 2024/9/29 2026/9/27
Ltd.Chongqing Liangshan Industrial Investment Co.
5000.00 CNY 2024/9/30 2026/9/27
Ltd.Total 181349.18
198Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
(5) Other related party transactions
1) Transfer of trading financial assets
Related party Content of related-
Transaction
party transactions Quantity (shares) Unit price (RMB) price (RMB10000)
China Resources Asset Transfer of shares held
Management (Shenzhen) in Wuhan Tianyuan 66283973.00 13.80 91471.88
Co. Ltd. Group Co. Ltd.
2) Perpetual bond financing
Content of
Related party related-party Amount
transactions (RMB 10000)
Term
The term is 3+3*N years (where N = 1 2 3... and N
is the number of extensions) meaning the initial
duration is 3 years. Each 3-year period constitutes a
duration cycle. Upon the expiration of the initial
duration it can be extended for another duration
Panshi Runchuang
Perpetual bond cycle with no limit on the number of extensions.(Shenzhen) Information 500000.00
financing Within 20 working days before the expiration of any
Management Co. Ltd.duration cycle the Company has the right to choose
to extend for another duration cycle; or choose to
repay the entire principal all accrued but unpaid
interest (including deferred interest) accretions and
other payables (if any).
(Continued)
Interest rate Interest payment date and interestdeferral option Order of repayment
Interest is payable annually. The Company
shall have the right to defer interest The payment order of the
The annualized interest rate is the one-year
payments and may at its discretion defer principal interest and
Loan Prime Rate (LPR) a floating rate.payment of the interest payable for the accretions (if any) of the
Each 12-month period is a floating cycle
current period together with all previously perpetual bond held by
with repricing occurring once per floating
deferred interest and accrued interest Panshi Runchuang is
cycle. No interest rate jump-up clause is
thereon to the next interest payment date subordinated to the
stipulated.with no limit on the number of such interest Company's general debts.deferrals.
(6) Remuneration for key management personnel
Project The current year (RMB 10000) Last year (RMB 10000)
Total remuneration 587.40 805.91
199Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
3. Balance of amounts receivable and payable by related parties
(1) Receivables
Ending balance Beginning balance
Related party
Balance Provision for Provision for badbad debts Balance debts
Accounts receivable:
Shenzhen Yaode Technology Co. Ltd. and its 144454581. 144454581. 1477346
subsidiaries 31 31 52.41 147734652.41
HOHO ELECTRICAL & FURNITURE CO. LIMITED 116261899. 109061518. 124609492 07 04.13 93990064.79
Chuzhou Hanshang Electric Appliance Co. Ltd. 98177722.38 2002825.54
4771792
8.47973445.73
Overseas Chinese Town Holdings Company and its 65818264.0 46400209.9 7227697
subsidiaries and associates 4 7 9.60 31123407.93
Shenzhen Kanghongxing Intelligent Technology Co. 38319878.7 38319878.7 3834411
Ltd. 7 7 5.39 38344115.39
Handian Group Co. Ltd. and its subsidiaries and 27943560.3 570048.63 852837.0associates 9 8 17397.88
Anhui Kaikai Shijie E-commerce Co. Ltd. and its 26436604.9
subsidiaries 2 6116465.89
2667741
7.752692954.15
Shandong Kangfei Intelligent Electrical Appliances 4466641.58 4130097.83 4466641.Co. Ltd. 58 4074943.14
Shenzhen KONKA E-display Co. Ltd. and its
subsidiaries 875788.71 388276.97
1367734.
51143334.28
Shenzhen Jielunte Technology Co. Ltd. and its 1321004
subsidiaries and associates 269304.95 5493.82 6.28 269484.95
Subtotal of other related parties 9361800.98 617441.63 9167397.63 674330.10
Total 532386047. 352066838. 486425195 43 54.83 320038130.75
Financing accounts receivable/Notes receivable:
Korea Electric Group Co. Ltd. and its subsidiaries 3209127.25
Chuzhou Hanshang Electric Appliance Co. Ltd. 320000.00
Total 3209127.25 320000.00
Other receivables:
Konka Huanjia Environmental Protection 174473643 174473643 1744736
Technology Co. Ltd. 4.49 4.49 434.49 1744736434.49
Chuzhou Kangxin Health Industry Development Co. 460482883. 341564138. 4284133
Ltd. 84 02 83.27
Yantai Kangyun Industry Development Co. Ltd. and 293164911. 200813312. 2748338
its subsidiaries 17 70 00.04
Sichuan Hongxinchen Real Estate Development 260445465. 260445465. 2443209
Co. Ltd. 59 59 45.73
Dongguan Guankang Yuhong Investment Co. Ltd. 254964600. 33890711.7 251643432 9 89.20 2200000.00
Chongqing Lanlv Moma Real Estate Development 236698102. 236698102. 2366981
Co. Ltd. 31 31 02.31 17677972.27
Sichuan Chengrui Real Estate Co. Ltd. 189205812. 189205812. 180452969 69 15.47
Yantai Kangyue Investment Co. Ltd. 171069706. 127404906. 171069745 45 06.45 73609697.70
Chongqing Liangshan Industrial Investment Co. Ltd. 102616027. 3026160.28 100858138 50.67 1008581.51
200Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Ending balance Beginning balance
Related party
Balance Provision for Balance Provision for badbad debts debts
Dai Rongxing 89251531.4 89251531.4 89251531 1 1.41 89251531.41
Jiangxi Meiji Enterprise Co. Ltd. 84462640.3 84462640.3 93512641 1 0.31 93512640.31
Shenzhen Kanghongxing Intelligent Technology Co. 39130497.1 39130497.1 3913049
Ltd. 7 7 7.17 39044321.62
Overseas Chinese Town Holdings Company and its 28342867.9 22862402.5 3131955
subsidiaries and associates 6 9 0.72 21246621.58
HOHO ELECTRICAL & FURNITURE CO. LIMITED 2466257.96 2466257.96 2522359.24 2522359.24
Zhu Xinming 1844316.15 418475.33 1844316.15 184800.48
Hu Zehong 333084.83 165196.50 816533.42 171132.24
Subtotal of other related parties 4761997.11 184522.25 3840950.86 71393.70
Total 396397713 337672656 38952657.14 7.84 306.91 2085237486.55
Prepayments:
Kangshengjia Smart Energy (Zhejiang) Co. Ltd. 67139571.6 48239428 6.19 67139571.68
Puchuang Jiakang Technology Co. Ltd. 377322.00 377322.00 377322.00
Overseas Chinese Town Holdings Company and its 21424.49 113278.6subsidiaries and associates 0 21424.49
Subtotal of other related parties 491110.16 52339.79 491110.16
Total 68029428.3 48782363 6.58 68029428.33
Other current assets:
Yikang Technology Co. Ltd. and its subsidiaries 235601218. 233116908 49.03 235601218.08
Total 235601218. 233116908 49.03 235601218.08
Contract assets:
Overseas Chinese Town Holdings Company and its 401807.8
subsidiaries and associates 963764.77 51725.07 4 8196.88
Total 963764.77 51725.07 401807.84 8196.88
(2) Payables
Related party Ending book Beginning bookbalance balance
Accounts payable:
Overseas Chinese Town Holdings Company and its subsidiaries and associates 43601700.08 42040127.95
Shenzhen Jielunte Technology Co. Ltd. and its subsidiaries and associates 13297141.47 65368676.00
HOHO ELECTRICAL & FURNITURE CO. LIMITED 4510072.62 5036570.10
Anhui Kaikai Shijie E-commerce Co. Ltd. and its subsidiaries 4326148.17 4326148.17
Handian Group Co. Ltd. and its subsidiaries and associates 4309351.22 4189576.68
201Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Related party Ending book Beginning bookbalance balance
Chuzhou Hanshang Electric Appliance Co. Ltd. 4253835.32 8399596.80
Dongguan Guankang Yuhong Investment Co. Ltd. 2783842.00 7783842.00
Shenzhen KONKA E-display Co. Ltd. and its subsidiaries 1245087.25 11078987.35
Subtotal of other related parties 1984392.70 22555598.64
Total 80311570.83 170779123.69
Notes payable:
Shenzhen Jielunte Technology Co. Ltd. and its subsidiaries and associates 13596541.72 10327556.31
Handian Group Co. Ltd. and its subsidiaries and associates 4689383.18 1565908.77
Dongguan Kangjia New Materials Technology Co. Ltd. 918483.35 1991363.46
Shenzhen Konka Jiapin Intelligent Electrical Apparatus Technology Co. Ltd. 807859.00
Total 20012267.25 13884828.54
Contract liabilities/other current liabilities/other non-current liabilities:
Overseas Chinese Town Holdings Company and its subsidiaries and associates 53849339.85 65821382.94
Shenzhen Konka Jiapin Intelligent Electrical Apparatus Technology Co. Ltd. 8417949.44 4449842.05
AUJET INDUSTRY LIMITED 3983759.72 3851376.79
Zhejiang Kangying Semiconductor Technology Co. Ltd. and its subsidiaries 1604546.07 22446.94
Chongqing Kangyiqing Technology Co. Ltd. 206882.30 146882.30
Shenzhen KONKA E-display Co. Ltd. and its subsidiaries 153017.09 915488.73
Subtotal of other related parties 135288.55 332100.74
Total 68350783.02 75539520.49
Other payables:
China Resources Company Limited and its subsidiaries and associates 2193246343.33
Chuzhou Hanshang Electric Appliance Co. Ltd. 208390348.31 207983241.15
Overseas Chinese Town Holdings Company and its subsidiaries and associates 28045215.53 22391131.89
Guizhou Jiading Mining Management Investment Co. Ltd. 18000000.00 18000000.00
Dongguan Guankang Yuhong Investment Co. Ltd. 15655996.80 12100893.94
Shenzhen KONKA E-display Co. Ltd. and its subsidiaries 5147213.00 1000000.00
Konka Huanjia Environmental Protection Technology Co. Ltd. 4353280.41 5104349.30
Yantai Kangtang Construction Development Co. Ltd. 3000000.00
Beijing Xuri Shengxing Technology Co. Ltd. 2814638.40 2675533.68
Kangkong Venture Capital (Shenzhen) Co. Ltd. 2523500.00 2523701.42
202Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Related party Ending book Beginning bookbalance balance
Yikang Technology Co. Ltd. and its subsidiaries 355586.25 21696728.31
Central SOEs Industrial Investment Fund for Poverty-stricken Area (Jiangxi)
Industrial Investment Fund Partnership (L.P.) 14400000.00
Subtotal of other related parties 9065998.82 10446793.62
Total 2490598120.85 318322373.31
Advances from customers:
China Resources Company Limited and its subsidiaries and associates 61285.03 61285.03
Total 61285.03 61285.03
XIV. Commitments and contingencies
1. Important commitments
(1) Capital commitments
Item Ending balance Beginning balance
Contract signed but hasn't been recognized in financial
statements
Commitment to purchase and construct long-term assets 137000000.00
Large-scale outsourcing contract 85942612.22 173593973.84
Foreign investment commitments
Total 222942612.22 173593973.84
(2) Other commitments
As of December 31 2025 there were no other significant commitments for the Group to
disclose.
2. Contingencies
The Group's material contingencies requiring disclosure are set out below:
(1) A dispute over an international contract for the sale of goods between Micro Crystal
Transfer Group Ltd. (plaintiff) and Chongqing Optoelectronic Technology Co. Ltd. a
subsidiary of the Company (defendant) involving a disputed amount of RMB36396700.As of the date of issuance of this report the case was under trial.
(2) A dispute over a construction contract between Shenzhen Sansen Decoration Group
Co. Ltd. (plaintiff) and Shenzhen Konka Semiconductor a subsidiary of the Company
(defendant) and Chongqing Konka a subsidiary of the Company (defendant) involving a
subject matter amount of RMB 25607300. As of the date of issuance of this report the
case was under trial.
(3) A dispute over a sales and purchase contract between Jiujiang Baoyong Gas Co. Ltd.
(plaintiff) and Jiangxi High-transparency Substrate a subsidiary of the Company
203Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
(defendant) involving a subject matter amount of RMB 91227800. As of the date of
issuance of this report the case was in execution.
(4) A dispute over a construction project contract between Nantong Construction Group
Co. Ltd. (Plaintiff) and Haimen Ronghui Real Estate Co. Ltd. (Defendant) Shanghai
Rongzhen Enterprise Management Co. Ltd. (Defendant) the Company (Defendant) and
Nantong Konka Technology Industrial Park Operation Management Co. Ltd. (Defendant)
an associated entity of the Company involving a disputed amount of RMB 99000000. As
of the date of issuance of this report the case was under trial.
(5) A dispute over a construction contract between Sichuan Yisheng Construction Group
Co. Ltd. (plaintiff) and Yibin Konka Industrial Park a subsidiary of the Company
(defendant) involving a subject matter amount of RMB 28061000. As of the date of
issuance of this report the case was under trial.
(6) A dispute over a contract between Shenzhen Oriental Venture Capital Co. Ltd.
(plaintiff) and the Company (defendant) involving a subject matter amount of RMB
752147500. The Company won both the first-instance and second-instance trials. The
plaintiff has filed an application for retrial. As of the date hereof the case is under retrial
review.
(7) In 2018 to support the financing of Donggang Kangrun Environmental Treatment Co.
Ltd. (hereinafter referred to as “Donggang Kangrun”) a subsidiary controlled by Yikang
Konka issued a support letter to China Construction Bank Corporation Donggang Sub-
branch (hereinafter referred to as “CCB Donggang Sub-branch”). The main contents areas follows: “Donggang Kangrun is a subsidiary of our company and the project company ofthe Donggang Urban Inland River Comprehensive Treatment PPP Project (hereinafter
referred to as the ‘Project’). Our company attaches great importance to the Project.Therefore Donggang Kangrun intends to apply to your bank for a project loan of RMB 975
million to support the fund operation of the Project. In addition to the applied loan our
company will use self-raised funds and other financing channels to support the Project to
ensure its smooth progress and guarantee that Donggang Kangrun will repay the loanfrom your bank in full when due”. As of December 31 2026 the outstanding principal
balance of loans borrowed by Donggang Kangrun from CCB Donggang Sub-branch
amounted to RMB 852000000.
(8) In 2019 to support the financing of Weifang Sihai Kangrun Investment and Operation
Co. Ltd. (hereinafter referred to as "Weifang Kangrun") a controlling subsidiary of Econ
Konka issued two letters of support to the Weifang Branch of Industrial Bank Co. Ltd.(hereinafter referred to as "CIB Weifang Branch"). The main contents were respectively:
"Our company will use self-raised funds and other financing channels to support the
204Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Weifang Binhai Economic Development Zone Central Urban Area Comprehensive
Improvement Project to ensure the smooth progress of the project and at the same time
ensure that Weifang Kangrun can repay your bank's loan in full on the due date" and "Our
company will use self-raised funds to support the Weifang Binhai Economic and
Technological Development Zone Central Urban Area Comprehensive Improvement
Project and ensure that the project capital of Weifang Kangrun is in place on time and in
full". As of December 31 2025 the outstanding loan balance (principal) of Weifang
Kangrun to CIB Weifang Branch was RMB 595114700.XV. Subsequent events after the balance sheet date
1. Important non-adjusting matters
As of the date of issuance of this financial report the significant non-adjusting events that
the Group needs to disclose are as follows:
A case concerning a dispute over a construction contract between Longxin Construction
Group Co. Ltd. (plaintiff) and Nantong Kanghai (defendant) involving a subject matter
amount of RMB 80000000.00. As of the date of issuance of this report the case was
under trial.
2. Sales return
As of the date of this financial report the Group had no material sales returns.
3. Notes to other subsequent events after the balance sheet date
As of the date of issuance of this financial report the Group has no other events after the
balance sheet date.XVI. Other key matters
1. Correction of previous errors and impact
(1) Retrospective restatement method
1) Reasons for correction of accounting errors
After self-inspection for the failure to consider the agreed matters of some equity transfer
projects and the underprovision of patent royalties and bad debt provisions for accounts
receivable of specific customers in previous years the Group corrected the related errors
as detailed below:
* In the process of auditing and preparing the 2025 annual report after careful verification
when introducing strategic investors for Ypfun in 2021 the Group signed supplementary
agreements with 11 investors promising that if Ypfun failed to complete its IPO before the
agreed time the Group would be obliged to repurchase their transferred equity at the
original transfer price and pay interest. The above-mentioned agreed matters did not go
through the approval procedures of the Company's Board of Directors and the General
205Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Meeting and were not subjected to appropriate accounting treatment and information
disclosure. Based on this contractual obligation and the facts currently known the
Company's management recognized this obligation as a financial liability and corrected
previous accounting errors.* When our company transferred the equity of Anhui Kaikai Vision E-commerce Co. Ltd.(hereinafter referred to as "Kaikai Vision") in previous years it signed a shareholder
agreement with Alibaba (China) Technology Co. Ltd. (hereinafter referred to as "Alibaba").Under the agreement the company undertook the obligation to repurchase the equity and
pay interest if the IPO of Kaikai Vision was not completed within the agreed time limit.Ultimately Kaikai Vision failed to complete its IPO and listing as scheduled. The aforesaid
shareholder agreement was not reviewed and approved by the company's General
Manager's Office Meeting and Party Committee Office Meeting nor was appropriate
accounting treatment and information disclosure conducted. Based on the contractual
obligations and currently available facts the company's management recognized such
payment obligations as financial liabilities and carried out prior period error corrections.The company has fulfilled the equity repurchase obligation and paid the relevant interest in
November 2025.* The color TV products operated and sold by the Group adopt essential patents
complying with industry standards. Through self-inspection the Company has confirmed
discrepancies in the previously paid data. The Group shall accrue the relevant patent
royalties retroactively for prior years and make corrections to prior period errors.* Accounts receivable of specific customers of the Group were overdue and uncollected.After careful verification the overdue and uncollected accounts receivable of such
customers were caused by the inability of related underlying customers to repay. Individual
bad debt provision should be made in the year when the related underlying customers lose
their repayment ability and previous accounting errors should be corrected.
2) Processing procedure
On April 27 2026 the Group held the 11th Meeting of the 11th Board of Directors to
review and approve the Proposal on Correction of Previous Accounting Errors and
Retrospective Adjustments specifying that the Company should correct the previous
accounting errors in accordance with the Accounting Standard for Business Enterprises
No. 28 - Changes in Accounting Policies and Accounting Estimates and Correction of
Errors and the Rules for the Compilation of Information Disclosure by Companies Offering
Securities to the Public No. 19 - Correction of Financial Information and Related
Disclosures.
3) Impact of correction of previous accounting errors on financial statements
206Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Names of statement items affected in comparative periods Cumulative impact
Accounts receivable -143700409.78
Long-term equity investments 1193140574.00
Other payables 1826641494.04
Undistributed profits -777201329.82
Cost of sales 235788807.29
Finance costs 324752686.75
Credit impairment loss -143700409.78
Asset impairment loss -72959426.00
XVII. Notes to the main items of the financial statements of the parent company
1. Accounts receivable
(1) Accounts receivable aged analysis
Aging Ending book balance Beginning book balance
Within 1 year (including 1 year) 2518870996.93 2478867657.14
1-2 years 936172219.27 269445994.78
2-3 years 71304189.74 25878752.19
3-4 years 25395465.05 42081276.61
4-5 years 42024672.61 10744497.16
Over 5 years 857898045.25 848569108.69
Total 4451665588.85 3675587286.57
(2) Accounts receivable classified and listed by provision methods for bad debts
Ending balance
Balance Provision for bad debts
Category
Percentage Provision Book valueAmount (%) Amount percentage(%)
Provision for bad debts
by single item 750993030.62 16.87 750932742.61 99.99 60288.01
Provision for bad debts
by portfolio
Of which: Aging
portfolio 243003431.27 5.46 154701363.19 63.66 88302068.08
Related party portfolio 3457669126.96 77.67 3457669126.96
Subtotal of portfolio 3700672558.23 83.13 154701363.19 4.18 3545971195.04
Total 4451665588.85 100.00 905634105.80 20.34 3546031483.05
(Continued)
207Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Beginning balance
Balance Provision for bad debts
Category
Percentage Provision Book valueAmount (%) Amount percentage(%)
Provision for bad debts
by single item 751101547.52 20.43 751041259.51 99.99 60288.01
Provision for bad debts
by portfolio
Of which: Aging
portfolio 262862169.32 7.15 141146416.75 53.70 121715752.57
Related party portfolio 2661623569.73 72.41 2661623569.73
Subtotal of portfolio 2924485739.05 79.57 141146416.75 4.83 2783339322.30
Total 3675587286.57 100.00 892187676.26 24.27 2783399610.31
1) Provision for bad debts of accounts receivable made by individual item
Beginning balance Ending balance
Name Provision for Provision for ProvisionBalance Reasons for thebad debts Balance bad debts percentage(%) provision
CEFC Shanghai 2982805 298280558. Not expected to
International 298855950.30 298855950.30 100.00 be recoverable
Group Limited 58.37 37
Hongtu
Sanpower 2000000 200000000. Not expected to
Technology Co. 200000000.00 200000000.00 100.0000.00 00 be recoverable
Ltd.Zhongfu
Tiangong 7128909 71289096.6 Not expected to
Construction 71289096.65 71289096.65 100.006.65 5 be recoverable
Group Co. Ltd.CCCC First
Harbor 5543810 55438105.0 Not expected to
Engineering 55438105.00 55438105.00 100.005.00 0 be recoverable
Company Ltd.China Energy
(Shanghai) 4999356 49993564.1 Not expected to
Industrial Co. 49993564.16 49993564.16 100.004.16 6 be recoverable
Ltd.Shenzhen
Kanghongxing 3621105 36211057.5 Not expected to
Intelligent 36211057.55 36211057.55 100.00
7.55 5 be recoverableTechnology Co.
Ltd.
3978064 39720360.8 Expected to be
Others 39313773.86 39253485.85 99.85
8.89 8 difficult to recover
7509930750932742.
Total 751101547.52 751041259.51 99.99 —
30.6261
208Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
2) Provision for bad debts for accounts receivable made as per portfolio
* In the portfolio accounts receivable of provision for expected credit loss made by aging
Ending balance
Aging
Balance Provision for bad debts Provision percentage(%)
Within 1 year 87122029.63 1777289.39 2.04
1-2 years 3182303.05 318866.77 10.02
2-3 years 50794.29 11525.22 22.69
3-4 years 155531.00 100908.51 64.88
4-5 years 41109210.00 41109210.00 100.00
Over 5 years 111383563.30 111383563.30 100.00
Total 243003431.27 154701363.19 63.66
* In the portfolio accounts receivable of provision for expected credit loss made by other
methods
Ending balance
Aging
Balance Provision for bad Provision percentagedebts (%)
Related party portfolio 3457669126.96
Total 3457669126.96
(3) Provision for bad debts of accounts receivable set aside recovered or reversed
in the current year
Change in the current year
Category Beginning balance
Provision Recovered orreversed
Provision for bad debts of
accounts receivable 892187676.26 15735211.50 2288781.96
Total 892187676.26 15735211.50 2288781.96
(Continued)
Change in the current year
Category Ending balance
Written-off Others
Provision for bad debts of
accounts receivable 905634105.80
Total 905634105.80
(4) Accounts receivable actually written off in the current year
There are no accounts receivable actually written off in the current year.
(5) Top five accounts receivable and contract assets in the ending balance
209Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
categorized by debtors
The total amount of the top five accounts receivable in the year-end balance categorized
by debtor in the current year was RMB 3309486768.65 accounting for 74.34% of the
total year-end balance of accounts receivable. The corresponding total year-end balance
of provision for bad debts was RMB 298280558.37.
2. Other receivables
Item Ending balance Beginning balance
Interest receivable
Dividends receivable 394828312.64 397729468.60
Other receivables 6169721184.70 7812366963.81
Total 6564549497.34 8210096432.41
2.1 Dividends receivable
Investee Ending balance Beginning balance
Hong Kong Konka Co. Ltd. 114828312.64 117729468.60
Suining Konka Industrial Park Development
Co. Ltd. 280000000.00 280000000.00
Total 394828312.64 397729468.60
2.2 Other receivables
(1) Classified by account nature
Nature of funds Ending book balance Beginning book balance
Receivables from subsidiaries 7338448596.60 7470528350.51
Energy-saving subsidies receivable 141549150.00 141549150.00
Receivables from other related parties 3643705051.48 2217059558.78
Deposits guarantees and down payments 11316782.23 11203961.90
Others 54245272.51 51145919.15
Total 11189264852.82 9891486940.34
(2) Other receivables listed by aging
Aging Ending book balance Beginning book balance
Within 1 year (including 1 year) 2468208504.58 2833825882.55
1-2 years 1821365482.14 2791206932.00
2-3 years 2712875647.73 2093828942.23
3-4 years 2087164066.22 198020662.24
4-5 years 193527410.48 438628738.59
Over 5 years 1906123741.67 1535975782.73
210Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Aging Ending book balance Beginning book balance
Total 11189264852.82 9891486940.34
(3) Classified presentation of other receivables by provisioning methods of bad
debts
Ending balance
Balance Provision for bad debts
Category
Amount Percentage
Provision Book value
(%) Amount percentage(%)
Provision for bad debts
by single item 5578850648.69 49.86 4974026480.15 89.16 604824168.54
Provision for bad debts
by portfolio
Of which: Aging portfolio 39006591.44 0.35 36740977.75 94.19 2265613.69
Low-risk portfolio 14968292.40 0.13 8776210.22 58.63 6192082.18
Related party portfolio 5556439320.29 49.66 5556439320.29
Subtotal of portfolio 5610414204.13 50.14 45517187.97 0.81 5564897016.16
Total 11189264852.82 100.00 5019543668.12 44.86 6169721184.70
(Continued)
Beginning balance
Balance Provision for bad debts
Category
Amount Percentage
Provision Book value
(%) Amount percentage(%)
Provision for bad debts by
single item 2346639698.77 23.72 2030143279.98 86.51 316496418.79
Provision for bad debts by
portfolio
Of which: Aging portfolio 59556884.46 0.60 41789999.23 70.17 17766885.23
Low-risk portfolio 14762006.60 0.15 7186697.32 48.68 7575309.28
Related party portfolio 7470528350.51 75.52 7470528350.51
Subtotal of portfolio 7544847241.57 76.28 48976696.55 0.65 7495870545.02
Total 9891486940.34 100.00 2079119976.53 21.02 7812366963.81
1) Provision set aside for bad debts of other receivables by portfolio
Ending balance
Aging
Balance Provision for bad Provision percentagedebts (%)
Within 1 year 945505547.22 39758.91
211Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Ending balance
Aging
Balance Provision for bad Provision percentagedebts (%)
1-2 years 1393107700.92 73168.69 0.01
2-3 years 1186533466.90 79012.10 0.01
3-4 years 1982809787.75 1503498.90 0.08
4-5 years 18730683.89 1629384.54 8.70
Over 5 years 83727017.45 42192364.83 50.39
Total 5610414204.13 45517187.97 0.81
212Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
2) Provision set aside for bad debts of other receivables by the general expected
credit loss model
Phase I Phase II Phase III
Provision for bad Expected credit Expected credit Expected credit loss
debts loss for the next loss throughout the throughout the
Total
12 months duration (without duration (with creditcredit loss) impairment)
Balance as of
January 1 2025 97657.39 48879039.16 2030143279.98 2079119976.53
Balance as of
January 1 2025 in
the current year
-- Transfer to Stage II -14896.62 14896.62
-- Transfer to Stage
III -13938000.00 13938000.00
-- Reversal to Stage
II
-- Reversal to Stage I
Provision in the
current year 39758.91 14353567.19 2929945200.17 2944338526.27
Reversal in the
current year 82760.77 3832082.99 3914843.76
Charge-off in the
current year
Write-off in the
current year
Other changes 9.08 9.08
Balance as of
December 31 2025 39758.91 45477429.06 4974026480.15 5019543668.12
Remarks: The first stage is that credit risk has not increased significantly since initial
recognition. For other receivables with an aging portfolio and a low-risk portfolio within one
year the loss provision is measured according to the expected credit losses in the next 12
months.The second stage is that credit risk has increased significantly since initial recognition but
credit impairment has not yet occurred. For other receivables with an aging portfolio and a
low-risk portfolio that exceed one year the loss provision is measured based on the
expected credit losses for the entire duration.The third stage is credit impairment after initial recognition. For other receivables with
credit impairment that have occurred the loss provision is measured according to the
credit losses that have occurred throughout the duration.
(4) Provision for bad debts of other receivables set aside recovered or reversed in
213Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
the current year
Change in the current year
Category Beginning balance
Provision Recovered orreversed
Provision for bad debts of
other receivables 2079119976.53 2944338526.27 3914843.76
Total 2079119976.53 2944338526.27 3914843.76
(Continued)
Change in the current year
Category Ending balance
Written-off Others
Provision for bad debts of other
receivables 9.08 5019543668.12
Total 9.08 5019543668.12
(5) Other receivables actually written off in the current year
No other receivables were actually written off in the current year.
(6) Other receivables with top five year-end balances categorized by debtors
The total amount of the top five other receivables in the year-end balance categorized by
debtors in the current year was RMB 6877609289.97 accounting for 61.47% of the total
year-end balance of other receivables. The corresponding total year-end balance of
provisions for bad debts was RMB 2874590635.73.
214Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
3. Long-term equity investments
Ending balance Beginning balance
Item
Balance Provision forimpairment Book value Balance Provision for impairment Book value
Investment in
subsidiaries 7825224811.83 715180000.00 7110044811.83 7825394811.83 689680000.00 7135714811.83
Investments in
associates and joint 3101020668.93 2264032106.38 836988562.55 3522936610.99 663595371.27 2859341239.72
ventures
Total 10926245480.76 2979212106.38 7947033374.38 11348331422.82 1353275371.27 9995056051.55
(1) Investment in subsidiaries
Provision for Changes in the current year
Investee Beginning balance impairment Ending balance Provision for
Unit (Book value) Beginning Increase in Decrease in Provision for
impairment
(Book value)
balance investment investment impairment
Others Ending balance
Konka Venture 2550000.00 2550000.00
Anhui Konka 122780937.98 122780937.98
Konka Electronic
Material 300000000.00 300000000.00
Konka Unifortune 15300000.00 15300000.00
Dongguan Konka 274783988.91 274783988.91
Konka Europe 3637470.00 3637470.00
Telecommunication
Technology 360000000.00 360000000.00
Development of
science and 100000000.00 100000000.00
technology industry
215Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Provision for Changes in the current year
Investee Beginning balance impairment Ending balance Provision for
Increase in Decrease in Provision for impairmentUnit (Book value) Beginning (Book value)
balance investment investment impairment
Others Ending balance
Anhui Tongchuang 779702612.22 779702612.22
Konka
Communication 30749800.00 30749800.00
Pengrun Technology 25500000.00 25500000.00 25500000.00
Beijing Konka
Electronics 200000000.00 200000000.00
Konka Circuit 740752721.18 4930000.00 745682721.18
Hong Kong Konka 781828.61 781828.61
Konka Investment 500000000.00 500000000.00
Electronics
Technology 1000000000.00 1000000000.00
Shanghai Konka 40000000.00 40000000.00
Jiangxi Konka 689680000.00 689680000.00
Shenzhen Nianhua 30000000.00 30000000.00
Shenzhen Konka
Semiconductor 100000000.00 100000000.00
Ji'an Konka 50000.00 50000.00
Suining Konka
Industrial Park 200000000.00 200000000.00
Kangrong Jiayuan 5100000.00 5100000.00
Suining Electronic
Technology 200000000.00 200000000.00
Innovation
216Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Provision for Changes in the current year
Investee Beginning balance impairment Ending balance Provision for
Increase in Decrease in Provision for impairmentUnit (Book value) Beginning (Book value)
balance investment investment impairment
Others Ending balance
Shenzhen Chuangzhi
Electrical Appliances 10000000.00 10000000.00
Chongqing
Optoelectronic 1400000000.00 1400000000.00
Technology
Xinying
Semiconductor 192520000.00 192520000.00
Ningbo Kanghanrui
Electric Appliances 90000000.00 90000000.00
Suining Jiarun
Property 10000000.00 10000000.00
Yibin Kangrun 67000000.00 67000000.00
Hainan Konka
Technology 9205452.93 9205452.93
Konka Cross-border
(Hebei) 50000000.00 50000000.00
Konka Central China 30000000.00 30000000.00
Guizhou Kanggui
Materials 28000000.00 28000000.00
Nantong Kanghai 15300000.00 15300000.00
Jiangxi Konka
Technology Park 50000000.00 50000000.00
Shangrao Konka
Electronic
Technology 30000000.00 30000000.00
Innovation
217Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Provision for Changes in the current year
Investee Beginning balance impairment Ending balance Provision forimpairment
Unit (Book value) Beginning Increase in Decrease in Provision for (Book value)
balance investment investment impairment
Others Ending balance
Xi'an Kanghong
Technology Industry 12000000.00 12000000.00
Xi'an Konka
Intelligent 50000000.00 50000000.00
Technology
Songyang Konka
Intelligent 30000000.00 30000000.00
Konka North China 30000000.00 30000000.00
Total 7135714811.83 689680000.00 4930000.00 5100000.00 25500000.00 7110044811.83 715180000.00
(2) Investment in associates
Changes in the current year
Provision for
Beginning balance impairment Gains/losses on Adjustments to
Investee
(Book value) Beginning Increase in Decrease investment other
balance investment Investment recognized under comprehensive
the equity method income
Anhui Kaikai Shijie E-commerce Co. Ltd. 39191473.50 49583326.00 -2938902.56 57037.58
Kunshan Kangsheng Investment
Development Co. Ltd. 40891367.28 -5388016.54
Shaanxi Silk Road Yunqi Intelligent
Technology Co. Ltd. 3467934.60 -3315263.80
Shenzhen Kanghongxing Intelligent
Technology Co. Ltd. 5158909.06
Shenzhen Zhongkang Beidou Technology
Co. Ltd.Shenzhen Yaode Technology Co. Ltd. 214559469.35
218Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Changes in the current year
Provision for
Beginning balance impairment Gains/losses on Adjustments to
Investee
(Book value) Beginning Increase in Decrease investment other
balance investment Investment recognized under comprehensive
the equity method income
Wuhan Tianyuan Group Co. Ltd. 545842155.57 239447355.00
Chuzhou Konka Technology Industry
Development Co. Ltd.Chuzhou Kangjin Health Industry
Development Co. Ltd. 92285525.83 -32283182.56
Nantong Konka Technology Industrial Park
Operation Management Co. Ltd. 5002208.91 -5002208.91
Chuzhou Kangxin Health Industry
Development Co. Ltd. 6203105.97 -1841318.73
Dongguan Guankang Yuhong Investment
Co. Ltd.Econ Technology Co. Ltd. 714353682.97 278887555.25 -5557305.38
Dongguan Kangjia New Materials Technology
Co. Ltd. 3231195.79 -1323182.99
Chongqing Ypfun Technology Co. Ltd. 1354769939.92 23376100.00 200000000.00
Yantai Kangyun Industrial Development Co.Ltd.E3 (Hainan) Technology Co. Ltd. 4574609.73 8000000.00
Shenzhen Konka Jiapin Intelligent Electrical
Apparatus Technology Co. Ltd. 5896518.07 -3447912.19
Shenzhen Konka E-display Intelligent
Technology Co. Ltd. 24007406.43 3564368.70 -136519.75
Chongqing Yuanlv Benpao Real Estate Co.Ltd.
219Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Changes in the current year
Provision for
Beginning balance impairment Gains/losses on Adjustments to
Investee
(Book value) Beginning Increase in Decrease investment other
balance investment Investment recognized under comprehensive
the equity method income
Shenzhen Kangpeng Digital Technology Co.Ltd. 1310766.92 -330466.61
Wuhan Kangtang Information Technology
Co. Ltd. 15853661.78 -14876432.16
Sichuan Chengrui Real Estate Co. Ltd.Sichuan Hongxinchen Real Estate
Development Co. Ltd. 2459686.45
Shenzhen Kangyue Industrial Co. Ltd. 230011.61
Konka Huanjia Environmental Protection
Technology Co. Ltd. 91800000.00
Kangrong Jiayuan Technology (Zhejiang) Co.Ltd. 1000000.00 2643.86
Total 2859341239.72 663595371.27 201000000.00 247，447355.00 -72737179.87 -79482.17
(Continued)
Changes in the current year
Cash dividends Ending balance Provision for
Investee Changes in or profits Provision for impairment(Book value)
other equity declared to be impairment Others Ending balance
distributed
Anhui Kaikai Shijie E-commerce Co. Ltd. 36309608.52 85892934.52
Kunshan Kangsheng Investment
Development Co. Ltd. 35503350.74
Shaanxi Silk Road Yunqi Intelligent 152670.80
220Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Changes in the current year
Cash dividends Ending balance Provision for
Investee Changes in or profits Provision for impairment(Book value)
other equity declared to be impairment Others Ending balance
distributed
Technology Co. Ltd.Shenzhen Kanghongxing Intelligent
Technology Co. Ltd. 5158909.06
Shenzhen Zhongkang Beidou Technology
Co. Ltd.Shenzhen Yaode Technology Co. Ltd. 214559469.35
Wuhan Tianyuan Group Co. Ltd. 8618395.70 -297776404.87
Chuzhou Konka Technology Industry
Development Co. Ltd.Chuzhou Kangjin Health Industry
Development Co. Ltd. 60002343.27
Nantong Konka Technology Industrial Park
Operation Management Co. Ltd.Chuzhou Kangxin Health Industry
Development Co. Ltd. 4361787.24 4361787.24
Dongguan Guankang Yuhong Investment
Co. Ltd.Econ Technology Co. Ltd. 326506.69 708469870.90 279214061.94
Dongguan Kangjia New Materials Technology
Co. Ltd. 1908012.80 1908012.80
Chongqing Ypfun Technology Co. Ltd. 301193.49 1555071133.41 1578447233.41
Yantai Kangyun Industrial Development Co.Ltd.
221Notes to Financial Statements of Konka Group Co. Ltd.
From January 1 2025 to December 31 2025
(Amounts are expressed in RMB unless otherwise stated)
Changes in the current year
Cash dividends Ending balance Provision for
Investee Changes in or profits Provision for impairment(Book value)
other equity declared to be impairment Others Ending balance
distributed
E3 (Hainan) Technology Co. Ltd. 3425390.27
Shenzhen Konka Jiapin Intelligent Electrical
Apparatus Technology Co. Ltd. 2448605.88
Shenzhen Konka E-display Intelligent
Technology Co. Ltd. 27435255.38
Chongqing Yuanlv Benpao Real Estate Co.Ltd.Shenzhen Kangpeng Digital Technology Co.Ltd. 980300.31
Wuhan Kangtang Information Technology
Co. Ltd. 977229.62
Sichuan Chengrui Real Estate Co. Ltd.Sichuan Hongxinchen Real Estate
Development Co. Ltd. 2459686.45 2459686.45
Shenzhen Kangyue Industrial Co. Ltd. 230011.61
Konka Huanjia Environmental Protection
Technology Co. Ltd. 91800000.00
Kangrong Jiayuan Technology (Zhejiang) Co.Ltd. 16291.79 1018935.65
Total 301193.49 8618395.70 1600436735.11 294334722.81 836988562.55 2264032106.38
2224. Operating revenue and cost of sales
(1) Operating revenue and cost of sales
Amount incurred in the current year Amount incurred last year
Item
Income Cost Income Cost
Principal
activity 1354862479.09 1382585906.19 1773409740.83 1908349581.90
Other 132961429.47 63913533.56 134714183.27 66145019.39
Total 1487823908.56 1446499439.75 1908123924.10 1974494601.29
(2) Information in relation to the transaction price apportioned to the residual
contract performance obligation
At the end of the current year the amount of revenue corresponding to the performance
obligations for which contracts have been signed but have not yet been performed or
have not yet been fully performed is RMB 25285546.17 which is expected to be
recognized as revenue in 2026.
5. Investment income
Item Amount incurred in the Amount incurred lastcurrent year year
Long-term equity investment income calculated by the cost
method
Returns on long-term equity investments calculated by the
equity method -72737179.87 -29330307.37
Return on investment arising from the disposal of long-term
equity investments 7970560.10 78445940.06
Investment income from financial assets held for trading
during the holding period 420553.86 4240444.62
Investment income from disposal of financial assets held for
trading -1807577.63 -26511417.25
Gains from remeasurement of residual equity at fair value
after losing control
Interest income from debt investments during the holding
period 5360451.37 5688905.13
Income from the derecognition of financial assets at amortized
cost -226103.98 -1332512.07
Conversion of long-term equity investments accounted for by
the equity method to financial assets 655666680.89
Others
Total 594647384.74 31201053.12
223Supplementary Materials to the Financial Statements
1. Items and amounts of non-recurring gains/losses in the current year
Item Amount of the currentyear Description
Gains/losses on disposal of non-current assets (including the portion
offset for provisions for asset impairment) 21769444.15
Government grants included in current gains/losses (except for
government subsidies that are closely related to the Company's normal
business operation comply with national policies and are enjoyed in -560729053.82
accordance with defined criteria and have a continuing impact on the
Company's gains/losses)
Gains/losses on fair value changes in financial assets and liabilities held
by a non-financial enterprise as well as on disposal of financial assets
and liabilities (exclusive of the effective portion of hedges that arise in the -455947543.58
Company’s ordinary course of business)
Funds occupation fee charged to non-financial enterprises included in
current gains/losses
Gains/losses on entrusting others with investments or asset
management
Gains/losses on loan entrustment 86761707.56
Losses on assets resulted from force majeure factors such as natural
disasters
Reversed portions of impairment allowances for receivables which are
tested individually for impairment 13649084.68
Gains arising from business combination when the investment cost is
less than the recognized fair value of net assets of the investee
Current net gains/losses of subsidiaries acquired in business
combination under the same control from period-beginning to
combination date
Gains/losses on non-monetary asset swap
Gains/losses on debt restructuring
Non-recurring expenses incurred by the enterprise as a result of the
discontinuation of a related operating activity such as expenses for
relocating employees
One-time impact on current gains/losses due to adjustments in tax
accounting and other laws and regulations
One-time recognition of share-based payment expense due to
cancellation and modification of equity incentive plans
Cash-settled share-based payments gains/losses arising from changes
in the fair value of employee compensation payable after the date of
exercisability
Gains/losses on change in fair value of investment property subject to
follow-up measurement at fair value method
Gains from transactions at significantly unfair prices
Gains/losses arising from contingencies unrelated to the normal
operation of the Company's business
Custodian fees earned from entrusted operation
224Item Amount of the currentyear Description
Non-operating revenue and expense other than the above -433788481.56
Other gains/losses that meet the definition of non-recurring gains/losses -1069326647.31
Subtotal -2397611489.88
Less: Income tax effects 1029921.23
Minority equity effects (after tax) -197080357.87
Total -2201561053.24 —
（1）Specific Information of Other Profit and Loss Items Complying with the Definition of
Non-recurring Profit and Loss项目金额原因
During the reporting period the Company changed the
accounting treatment method for its equity interest in
Wuhan Tianyuan Group Co. Ltd. 655666680.89 Wuhan Tianyuan Group Co. Ltd. from long-term equityinvestments (equity method) to trading financial assets
resulting in the recognition of non-recurring gains and
losses
During the reporting period the loss arising from the
claims due from loss-making subsidiaries in excess of
Excess losses of subsidiaries -1560621492.59 their net assets recognized by the Company wasincluded in the "net profit attributable to owners of the
parent company" thereby generating non-recurring
gains and losses
Interest on equity repurchase -164371835.61 During the reporting period the Company accrued
payments interest on equity repurchase payments（ 2 ） The items that are not listed in the Explanatory Announcement No. 1 on
Information Disclosure by Companies Offering Securities to the Public - Non-recurring
gains/losses (Revised in 2023) but recognized by the Company as non-recurring
gains/losses items and involving significant amounts and listed non-recurring
gains/losses items recognized as recurring gains/losses items
Item Amount Reason
Government grants closely related to
the normal operation of the Company's
Tax rebates on software and VAT business which comply with national
16548508.82
additional deduction policies and are received continuously
based on a certain standard quota or
quantitative amount
2. Return on net assets and earnings per share
EPS (RMB/share)
Weighted average
Profit for the Reporting Period
Return on net assets (%) Basic earnings per Diluted earnings
share per share
Net profit attributable to ordinary
shareholders of the parent Not applicable -5.2254 -5.2254
company
225EPS (RMB/share)
Weighted average
Profit for the Reporting Period
Return on net assets (%) Basic earnings per Diluted earnings
share per share
Net profit attributable to ordinary
shareholders of the parent
Not applicable
company before non-recurring -4.3111 -4.3111
gains/losses
226
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