Shenzhen Textile (Holdings) Co. Ltd.Financial Statements and Audit Report
For the year ended December 31 2025Shenzhen Textile (Holdings) Co. Ltd.Financial Statements and Audit Report
For the year ended December 31 2025
Content Page
Audit Report 1-4
Consolidated and parent company's balance sheet 5-7
Consolidated and parent company's income statement 8-9
Consolidated and parent company's statement of cash flows 10-11
Consolidated and parent company's statement of changes in shareholders' equity 12-15
Notes to the financial statements 16-108Audit Report
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All shareholders of Shenzhen Textile (Holdings) Co. Ltd.I. Audit opinions
We have audited the financial statements of Shenzhen Textile (Holdings) Co. Ltd. (hereinafter referred to as the
"Shenzhen Textile") 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 and 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
Accounting Standards for Business Enterprises and present fairly the financial position of the Company as at
December 31 2025 and its 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 Standard for Chinese Certified Public Accountants No. 1 - Requirements for Independence in Audit
and Review of Financial Statement and the Code of Ethics for Chinese Certified Public Accountants we are
independent of Shenzhen Textile and have fulfilled other ethical responsibilities. We have complied with the
independence requirements for audits of public interest entities during the audit. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.III. 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 year. 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. We have identified the following matters as key audit matters to be communicated in the audit report.
1. Recognition of revenue from sales of polarizers
As described in the Note (V). 40 to the financial statements in 2025 the operating revenue of Shenzhen Textile as
presented in the consolidated financial statements was RMB 3241380430.62 of which the revenue from sales of
polarizers was RMB 3067530570.03 accounting for 94.64% of the total revenue. The revenue from sales of
polarizers of Shenzhen Textile is recognized when the customer obtains control of the relevant goods. Due to the
importance of revenue from sales of polarizers to the consolidated financial statements as a whole and the fact
that the revenue is one of the key performance indicators of Shenzhen Textile there is an inherent risk that
management may manipulate the revenue recognition in order to achieve specific goals or expectations. Therefore
we have identified the recognition of revenue from sales of polarizers as a key audit matter in the audit of the
consolidated financial statements.- 1 -Audit Report - Continued
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III. Key audit matters - Continued
1. Recognition of revenue from sales of polarizers - Continued
In response to the above key audit matters the audit procedures we performed mainly include:
Test and evaluate the effectiveness of the operation of internal control related to the sales business of
polarizer;
Check the sales contracts signed with major customers identify the terms and conditions of the contracts
related to the transfer of right of control of the goods and evaluate whether the accounting policies for
recognition of revenue from sales of polarizers meet the requirements of the Accounting Standards for
Business Enterprises;
Execute analytical procedures for the revenue from sales of polarizers by production line product type and
customer respectively and analyze the rationality of the change in revenue from sales of polarizers in
combination with market selling price and other factors;
Extract samples to perform detail tests on the revenue from sales of polarizers check the supporting
documents such as invoices delivery orders and receipts related to the recognition of revenue from sales of
polarizers and conduct letter of confirmation on the sales amount of major customers to verify the
authenticity of revenue from sales of polarizers;
Select samples for sales transactions before and after the balance sheet date check supporting documents
such as delivery orders receipts and invoices and evaluate whether the revenue from sales of polarizers is
recorded in the appropriate accounting period.- 2 -Audit Report - Continued
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IV. Other information
The management of Shenzhen Textile is responsible for other information. Other information includes information
covered in the 2025 Annual Report of Shenzhen Textile 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 financial statements our responsibility is to read the other information and in
doing so consider whether the other information is materially inconsistent with 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.IV. Responsibilities of the management and those charged with governance for financial statements
The management of Shenzhen Textile is responsible for preparing the financial statements in accordance with the
requirements of 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 frauds or errors.In preparing the financial statements the management is responsible for assessing the going-concern ability of
Shenzhen Textile disclosing matters related to going concern (if applicable) and applying the going concern basis
unless the management plans to liquidate Shenzhen Textile terminate its operations or has no other realistic
alternative.Those charged with governance are responsible for overseeing the financial reporting process of Shenzhen Textile.VI. 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 they could reasonably be expected to
influence the economic decisions of users taken on the basis of these 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 implement 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.- 3 -Audit Report - Continued
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VI. Responsibilities of certified public accountants for the audit of financial statements - Continued
(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. At the same
time 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 Shenzhen
Textile. If we conclude that a material uncertainty exists we are required to in our audit report draw 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 Shenzhen Textile to cease to continue as a going
concern.
(5) Evaluate the overall presentation (including disclosures) structure and content of the financial statements and
whether the financial statements fairly reflect the relevant transactions and matters.
(6) Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business
activities within Shenzhen Textile to express an opinion on the financial statements. We are responsible for the
direction supervision and performance of the group audit. We remain solely responsible for our audit opinion.We communicate with those charged with governance regarding 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 to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence and the related safeguards (if applicable).From the matters communicated with those charged with governance we have determined which matters are of
most significance to the audit of the financial statements in the current year and thus constitute 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 in the audit report we determine not to do so.Deloitte Touche Tohmatsu Certified Public Accountants LLP Certified Public Accountant of China
(Engagement partner)
Shanghai China
Certified Public Accountant of China
March 26 2026
- 4 -Shenzhen Textile (Holdings) Co. Ltd.Consolidated Balance Sheet
December 31 2025
Consolidated Balance Sheet
RMB
Notes Balance as at the end Balance as at the endof the current year of the previous year
Current assets:
Monetary funds (V). 1 449964450.38 340961443.82
Financial assets held for trading (V). 2 736341286.18 731419904.42
Notes receivable (V). 3 85980246.52 47305221.88
Accounts receivable (V). 4 761807949.52 863731936.89
Receivables financing (V). 5 22584820.72 6804603.68
Advances to suppliers (V). 6 29141210.57 8176724.70
Other receivables (V). 7 4324973.02 3596543.96
Including: interest receivable - -
Dividends receivable - -
Inventories (V). 8 884642355.51 789756700.88
Other current assets (V). 9 85649096.62 21461736.14
Total current assets 3060436389.04 2813214816.37
Non-current assets:
Long-term equity investments (V). 10 107583586.91 114828026.04
Other equity instrument investments (V). 11 159261600.00 165402900.00
Investment properties (V). 12 105730781.63 115993390.19
Fixed assets (V). 13 1657314603.81 1873552843.91
Construction in progress (V). 14 179954389.78 5814012.03
Right-of-use assets (V). 15 16894843.60 15338117.86
Intangible assets (V). 16 31224598.20 35207791.95
Goodwill (V). 17 - -
Long-term deferred expenses (V). 18 7030847.01 6084115.87
Deferred tax assets (V). 19 55777290.89 58920511.20
Other non-current assets (V). 20 37086785.90 27793871.91
Total non-current assets 2357859327.73 2418935580.96
Total assets 5418295716.77 5232150397.33
- 5 -Shenzhen Textile (Holdings) Co. Ltd.Consolidated Balance Sheet - Continued
December 31 2025
Consolidated Balance Sheet - Continued
RMB
Notes Balance as at the end Balance as at the endof the current year of the previous year
Current liabilities:
Derivative financial liabilities (V). 22 4071800.19 1278559.35
Notes payable (V). 23 - 31095540.29
Accounts payable (V). 24 344656835.89 304812580.55
Advances from customers (V). 25 769227.07 1051491.96
Contract liabilities (V). 26 3132419.01 490562.97
Employee compensation payable (V). 27 52647315.74 56685289.92
Taxes payable (V). 28 5806818.55 6853730.84
Other payables (V). 29 159826234.73 160296989.98
Including: interest payable - -
Dividends payable - -
Non-current liabilities maturing within one year (V). 30 65964666.28 63347555.03
Other current liabilities (V). 31 88386795.27 54072022.27
Total current liabilities 725262112.73 679984323.16
Non-current liabilities:
Long-term borrowings (V). 32 261718054.81 162388870.00
Lease liabilities (V). 33 10415997.17 9496564.12
Deferred income (V). 34 83469949.03 96349196.26
Deferred tax liabilities (V). 19 47064430.16 48610809.66
Total non-current liabilities 402668431.17 316845440.04
Total liabilities 1127930543.90 996829763.20
Shareholders' equity:
Equity (V). 35 506521849.00 506521849.00
Capital reserve (V). 36 1961599824.63 1961599824.63
Other comprehensive income (V). 37 102271832.32 106877807.32
Surplus reserves (V). 38 106805904.93 104262315.64
Undistributed profits (V). 39 302520158.30 272608113.66
Total equity attributable to shareholders of the parent
company 2979719569.18 2951869910.25
Minority interests 1310645603.69 1283450723.88
Total shareholders' equity 4290365172.87 4235320634.13
Total liabilities and shareholders' equity 5418295716.77 5232150397.33
The notes are an integral part of the financial statements
_________________________________________________________________
Principal Chief Finance Officer Chief Accountant
- 6 -Shenzhen Textile (Holdings) Co. Ltd.Balance Sheet of the Parent Company
December 31 2025
Balance Sheet of the Parent Company
RMB
Notes Balance as at the end Balance as at the endof the current year of the previous year
Current assets:
Monetary funds 24473234.70 13630974.26
Financial assets held for trading 736341286.18 731419904.42
Accounts receivable (XVI). 1 8714374.34 13028987.63
Advances to suppliers 149618.73 99904.79
Other receivables (XVI). 2 2014545.65 1534395.80
Including: interest receivable - -
Dividends receivable - -
Inventories 46562.05 39835.05
Total current assets 771739621.65 759754001.95
Non-current assets:
Long-term equity investments (XVI). 3 2033445567.58 2040690006.71
Other equity instrument investments 146548800.00 152221200.00
Investment properties 86463450.62 94773462.23
Fixed assets 1910229.22 2099585.67
Right-of-use assets 2498988.67 -
Intangible assets 48270.75 83350.98
Long-term deferred expenses 4756358.34 4448190.05
Other non-current assets 25760086.27 25860862.33
Total non-current assets 2301431751.45 2320176657.97
Total assets 3073171373.10 3079930659.92
Current liabilities:
Accounts payable 194131.97 411743.57
Advances from customers 540673.07 540673.07
Employee compensation payable 19879990.77 17955509.70
Taxes payable 4337326.82 5619509.34
Other payables 93730387.66 87029351.12
Including: interest payable - -
Dividends payable - -
Non-current liabilities maturing within one year 478582.75 -
Total current liabilities 119161093.04 111556786.80
Non-current liabilities:
Lease liabilities 2070057.60 -
Deferred income - 100000.00
Deferred tax liabilities 32534099.01 34086313.51
Total non-current liabilities 34604156.61 34186313.51
Total liabilities 153765249.65 145743100.31
Shareholders' equity:
Equity 506521849.00 506521849.00
Capital reserve 1577392975.96 1577392975.96
Other comprehensive income 93862232.32 98116532.32
Surplus reserves 106805904.93 104262315.64
Undistributed profits 634823161.24 647893886.69
Total shareholders' equity 2919406123.45 2934187559.61
Total liabilities and shareholders' equity 3073171373.10 3079930659.92
The notes are an integral part of the financial statements
- 7 -Shenzhen Textile (Holdings) Co. Ltd.Consolidated Income Statement
For the year ended December 31 2025
Consolidated Income Statement
RMB
Notes Amount for the current Amount for the previousyear year
I. Operating revenue (V). 40 3241380430.62 3335283008.68
Less: operating costs (V). 40 2756367676.81 2795859934.82
Taxes and surcharges (V). 41 11543145.79 10235505.65
Selling and distribution expenses (V). 42 34660033.74 42260603.47
G&A expenses (V). 43 128612089.80 134347821.58
R&D expenses (V). 44 103974839.00 103811822.91
Financial expenses (V). 45 13239709.08 12121156.05
Including: interest expenses 6944766.30 17858022.73
Interest income 4941271.94 7272362.76
Plus: other income (V). 46 40845334.53 41484107.53
Investment income (loss) (V). 47 (1198003.94) (165313.89)
Including: investment income (losses) in associates and joint
ventures (7010989.13) (10701895.08)
Gains from derecognition of financial assets measured
at amortized costs - -
Gains (losses) from changes in fair value (V). 48 (936994.72) 1134503.45
Credit loss gains (V). 49 8447592.80 5100446.66
Asset impairment gains (losses) (V). 50 (138340722.92) (132423108.75)
Gains from disposal of assets 1164099.59 -
II. Operating profit 102964241.74 151776799.20
Plus: non-operating revenue (V). 51 6395734.45 1805086.92
Less: non-operating expenses (V). 52 940862.88 698017.71
III. Total profit 108419113.31 152883868.41
Less: income tax expenses (V). 53 12805570.48 9827102.03
IV. Net profit 95613542.83 143056766.38
(I) Classified by operating sustainability:
1. Net profit from continuing operations 95613542.83 143056766.38
2. Net profit from discontinued operations - -
(II) Classified by ownership:
1. Net profit attributable to shareholders of the parent company 68418663.02 89371134.24
2. Minority interests 27194879.81 53685632.14
V. Net of tax of other comprehensive income (V). 37 (4605975.00) 13270426.51
Net of tax of other comprehensive income attributable to
shareholders of the parent company (4605975.00) 13270426.51
(I) Other comprehensive income that cannot be reclassified into
profit or loss (4605975.00) 14560500.00
1. Changes in re-measurement of defined benefit plans - -
2. Other comprehensive income that cannot be transferred to
profit or loss under the equity method - -
3. Changes in fair value of other equity instrument investments (4605975.00) 14560500.00
4. Changes in fair value of the enterprise's own credit risk - -
(II) Other comprehensive income that will be reclassified into profit
or loss - (1290073.49)
1. Other comprehensive income that can be transferred to profit
or loss under the equity method - -
2. Changes in fair value of other debt investments - -
3. Amount of financial assets reclassified and included in other
comprehensive income - -
4. Provision for credit impairment of other debt investments - -
5. Reserve for cash flows - -
6. Differences arising from translation of foreign-currency
financial statements - (1290073.49)
7. Others - -
Net of tax of other comprehensive income attributable to minority
shareholders - -
VI. Total comprehensive income 91007567.83 156327192.89
Total comprehensive income attributable to shareholders of the
parent company 63812688.02 102641560.75
Total comprehensive income attributable to minority shareholders 27194879.81 53685632.14
VII. Earnings per share
Basic earnings per share (RMB/share) 0.14 0.18
Diluted earnings per share (RMB/share) 0.14 0.18
The notes are an integral part of the financial statements
- 8 -Shenzhen Textile (Holdings) Co. Ltd.Income Statement of the Parent Company
For the year ended December 31 2025
Income Statement of the Parent Company
RMB
Notes Amount for the current Amount for theyear previous year
I. Operating revenue (XVI). 4 77639760.87 77167496.95
Less: operating costs (XVI). 4 11627229.49 10205157.84
Taxes and surcharges 3033498.02 3069369.36
Selling and distribution expenses 85663.09 476938.50
G&A expenses 46236884.06 46124842.97
Financial expenses 161947.16 (1179537.25)
Including: interest expenses 527112.25 422950.59
Interest income 399594.68 1698292.14
Plus: other income 150758.85 164150.75
Investment income (XVI). 5 13965225.54 12077902.81
Including: investment income (losses) in associates and
joint ventures (7010989.13) (10701895.08)
Gains from derecognition of financial assets
measured at amortized costs - -
Gains from changes in fair value 2425205.47 2413062.80
Credit impairment gains (losses) 66651.82 (26291403.84)
Asset impairment gains (losses) (564480.00) (20243658.34)
Gains from disposal of assets - -
II. Operating profit (loss) 32537900.73 (13409220.29)
Plus: non-operating revenue 2089299.55 1124656.60
Less: non-operating expenses 41754.58 93185.54
III. Total profit (loss) 34585445.70 (12377749.23)
Less: income tax expenses 9149552.77 (3885606.10)
IV. Net profit (loss) 25435892.93 (8492143.13)
(I) Net profit (loss) from continuing operations 25435892.93 (8492143.13)
(II) Net profit from discontinued operations - -
V. Net of tax of other comprehensive income (4254300.00) 14486701.51
(I) Other comprehensive income that cannot be reclassified
into profit or loss (4254300.00) 15776775.00
1. Changes in re-measurement of defined benefit plans - -
2. Other comprehensive income that cannot be
transferred to profit or loss under the equity method - -
3. Changes in fair value of other equity instrument
investments (4254300.00) 15776775.00
4. Changes in fair value of the enterprise's own credit
risk - -
5. Others - -
(II) Other comprehensive income that will be reclassified
into profit or loss - (1290073.49)
1. Other comprehensive income that can be transferred
to profit or loss under the equity method - -
2. Changes in fair value of other debt investments - -
3. Amount of financial assets reclassified and included
in other comprehensive income - -
4. Provision for credit impairment of other debt
investments - -
5. Reserve for cash flows - -
6. Differences arising from translation of foreign-
currency financial statements - (1290073.49)
7. Others - -
VI. Total comprehensive income 21181592.93 5994558.38
The notes are an integral part of the financial statements
- 9 -Shenzhen Textile (Holdings) Co. Ltd.Consolidated Statement of Cash Flows
For the year ended December 31 2025
Consolidated Statement of Cash Flows
RMB
Notes Amount for the current Amount for theyear previous year
I. Cash flows from operating activities:
Cash received from sale of goods and rendering of services 3308223415.70 3390788584.83
Refunds of taxes and surcharges received 13163610.09 21049133.80
Other cash received related to operating activities (V). 54(1) 132944006.58 87008969.95
Sub-total of cash inflows from operating activities 3454331032.37 3498846688.58
Cash paid for purchase of goods and receipt of services 2705656832.58 2842864632.73
Cash paid to and on behalf of employees 254545354.48 238890310.33
Cash paid for taxes and surcharges 55145150.97 32071014.09
Other cash paid related to operating activities (V). 54(1) 91190097.08 153756206.34
Sub-total of cash outflows from operating activities 3106537435.11 3267582163.49
Net cash flows from operating activities (V). 55(1) 347793597.26 231264525.09
II. Cash flows from investing activities:
Cash received from recovery of investment - 1349489.37
Cash received from investment income 17323464.63 11747113.36
Net cash received from disposal of fixed assets intangible
assets and other long-term assets
Net cash received from disposal of other long-term 3373824.24 (18.74)
assets
Net cash received from disposal of subsidiaries and other -
business units -
Other cash received related to investing activities (V). 54(2) 1149136738.42 1697000000.00
Sub-total of cash inflows from investing activities 1169834027.29 1710096583.99
Cash paid to acquire and construct fixed assets intangible
assets and other long-term assets 238969979.73 29441167.62
Cash paid for investments - -
Net cash paid to acquire subsidiaries and other business -
units -
Other cash paid related to investing activities (V). 54(2) 1163389759.35 1605454000.00
Sub-total of cash outflows from investing activities 1401639235.53 1634895167.62
Net cash flows from the investing activities (231805208.24) 75201416.37
III. Cash flows from financing activities:
Cash received from absorption of investments - -
Including: cash received by subsidiaries from absorption of -
investments of minority shareholders -
Cash received from acquisition of borrowings 141755054.19 -
Other cash received related to financing activities - -
Sub-total of cash inflows from financing activities 141755054.19 -
Cash paid for debt repayments 41473530.00 406216304.56
Cash paid for distribution of dividends and profits or 42123749.16
payment of interests 50633653.38
Including: dividends and profits paid to minority -
shareholders by subsidiaries -
Other cash paid related to financing activities (V). 54(3) 12484469.33 9508462.57
Sub-total of cash outflows from financing activities 96081748.49 466358420.51
Net cash flows from financing activities 45673305.70 (466358420.51)
IV. Effect of fluctuation in exchange rate on cash and cash (13768475.71)
equivalents 556861.07
V. Net increase (decrease) in cash and cash equivalents (V). 55(1) 147172715.46 (159335617.98)
Plus: balance of cash and cash equivalents at the beginning
of the year (V). 55(2)
302084839.35461420457.33
VI. Balance of cash and cash equivalents at the end of the
year (V). 55(2)
449257554.81302084839.35
The notes are an integral part of the financial statements
- 10 -Shenzhen Textile (Holdings) Co. Ltd.Statement of Cash Flows of the Parent Company
For the year ended December 31 2025
Statement of Cash Flows of the Parent Company
RMB
Notes Amount for the current Amount for theyear previous year
I. Cash flows from operating activities:
Cash received from sale of goods and rendering of services 89344780.98 80553754.68
Refunds of taxes and surcharges received - -
Other cash received related to operating activities 4971695.97 7902075.25
Sub-total of cash inflows from operating activities 94316476.95 88455829.93
Cash paid for purchase of goods and receipt of services 4419294.84 2842492.81
Cash paid to and on behalf of employees 40520746.74 35045305.67
Cash paid for taxes and surcharges 17342747.66 13926380.37
Other cash paid related to operating activities 10077755.49 15727708.36
Sub-total of cash outflows from operating activities 72360544.73 67541887.21
Net cash flows from operating activities 21955932.22 20913942.72
II. Cash flows from investing activities:
Cash received from recovery of investment - 1554056.96
Cash received from investment income 16348614.11 7790814.29
Net cash received from disposal of fixed assets intangible
assets and other long-term assets
Net cash received from disposal of other long-term - -
assets
Net cash received from disposal of subsidiaries and other
business units - -
Other cash received related to investing activities 1160427138.42 1373585151.73
Sub-total of cash inflows from investing activities 1176775752.53 1382930022.98
Acquisition and construction of fixed assets intangible
assets and other long-term assets 1242473.57 2993281.20
Cash paid
Cash paid for investments - -
Net cash paid to acquire subsidiaries and other business
units - -
Other cash paid related to investing activities 1150516500.00 1363000000.00
Sub-total of cash outflows from investing activities 1151758973.57 1365993281.20
Net cash flows from the investing activities 25016778.96 16936741.78
III. Cash flows from financing activities:
Cash received from absorption of investments - -
Cash received from acquisition of borrowings - -
Other cash received related to financing activities - -
Sub-total of cash inflows from financing activities - -
Cash paid for debt repayments - -
Cash paid for distribution of dividends and profits or
payment of interests 35968738.77 33346867.31
Other cash paid related to financing activities 159356.17 -
Sub-total of cash outflows from financing activities 36128094.94 33346867.31
Net cash flows from financing activities (36128094.94) (33346867.31)
IV. Effect of fluctuation in exchange rate on cash and cash
equivalents (2355.80) 1356.80
V. Net increase in cash equivalents 10842260.44 4505173.99
Plus: balance of cash and cash equivalents at the beginning 13630974.26
of the year 9125800.27
VI. Balance of cash and cash equivalents at the end of the 24473234.70
year 13630974.26
The notes are an integral part of the financial statements
- 11 -Shenzhen Textile (Holdings) Co. Ltd.Consolidated Statement of Changes in Shareholders' Equity
For the year ended December 31 2025
Consolidated Statement of Changes in Shareholders' Equity
RMB
Amount for the current year
Item Equity attributable to shareholders of the parent company
Equity Capital reserve Other comprehensiveincome Surplus reserves Undistributed profits
Minority interests Total shareholders' equity
I. Balance as at the end of the previous year 506521849.00 1961599824.63 106877807.32 104262315.64 272608113.66 1283450723.88 4235320634.13
Plus: changes in accounting policies - - - - - - -
Correction of prior period errors - - - - - - -
Others - - - - - - -
II. Balance at the beginning of the current year 506521849.00 1961599824.63 106877807.32 104262315.64 272608113.66 1283450723.88 4235320634.13
III. Increase/decrease in the current year - - (4605975.00) 2543589.29 29912044.64 27194879.81 55044538.74
(I) Total comprehensive income - - (4605975.00) - 68418663.02 27194879.81 91007567.83
(II) Capital contributed or reduced by - - - - - - -
shareholders
1. Ordinary shares invested by shareholders - - - - - - -
2. Amount of share-based payments - - - - - - -
included in shareholders' equity
3. Others - - - - - - -
(III) Profit distribution - - - 2543589.29 (38506618.38) - (35963029.09)
1. Withdrawal of surplus reserves - - - 2543589.29 (2543589.29) - -
2. Profits distributed to shareholders - - - - (35963029.09) - (35963029.09)
3. Others - - - - - - -
(IV) Internal transfer of shareholders' equity - - - - - - -
1. Conversion of capital reserve into share - - - - - - -
capital
2. Conversion of surplus reserve into share - - - - - - -
capital
3. Surplus reserves offsetting losses - - - - - - -
4. Transfer of other comprehensive income - - - - - - -
into retained earnings
5. Others - - - - - - -
(V) Special reserves - - - - - - -
1. Withdrawal in the current year - - - - - - -
2. Use in the current year - - - - - - -
(VI) Others - - - - - - -
IV. Balance as at the end of the current year 506521849.00 1961599824.63 102271832.32 106805904.93 302520158.3 1310645603.69 4290365172.87
- 12 -Shenzhen Textile (Holdings) Co. Ltd.Consolidated Statement of Changes in Shareholders' Equity - Continued
For the year ended December 31 2025
Consolidated Statement of Changes in Shareholders' Equity - Continued
RMB
Amount for the previous year
Item Equity attributable to shareholders of the parent company
Equity Capital reserve Other comprehensiveincome Surplus reserves Undistributed profits
Minority interests Total shareholders' equity
I. Balance as at the end of the previous year 506521849.00 1961599824.63 93607380.81 104262315.64 216160896.14 1229765091.74 4111917357.96
Plus: changes in accounting policies - - - - - - -
Correction of prior period errors - - - - - - -
Others - - - - - - -
II. Balance at the beginning of the current year 506521849.00 1961599824.63 93607380.81 104262315.64 216160896.14 1229765091.74 4111917357.96
III. Increase/decrease in the current year - - 13270426.51 - 56447217.52 53685632.14 123403276.17
(I) Total comprehensive income - - 13270426.51 - 89371134.24 53685632.14 156327192.89
(II) Capital contributed or reduced by
shareholders - - - - - - -
1. Ordinary shares invested by
shareholders - - - - - - -
2. Amount of share-based payments
included in shareholders' equity - - - - - - -
3. Others - - - - - - -
(III) Profit distribution - - - - (32923916.72) - (32923916.72)
1. Withdrawal of surplus reserves - - - - - - -
2. Profits distributed to shareholders - - - - (32923916.72) - (32923916.72)
3. Others - - - - - - -
(IV) Internal transfer of shareholders' equity - - - - - - -
1. Conversion of capital reserve into
share capital - - - - - - -
2. Conversion of surplus reserve into
share capital - - - - - - -
3. Surplus reserves offsetting losses - - - - - - -
4. Transfer of other comprehensive
income into retained earnings - - - - - - -
5. Others - - - - - - -
(V) Special reserves - - - - - - -
1. Withdrawal in the current year - - - - - - -
2. Use in the current year - - - - - - -
(VI) Others - - - - - - -
IV. Balance as at the end of the current year 506521849.00 1961599824.63 106877807.32 104262315.64 272608113.66 1283450723.88 4235320634.13
The notes are an integral part of the financial statements
- 13 -Shenzhen Textile (Holdings) Co. Ltd.Statement of Changes in Shareholders' Equity of the Parent Company
For the year ended December 31 2025
Statement of Changes in Shareholders' Equity of the Parent Company
RMB
Amount for the current year
Item Equity Capital reserve Other comprehensiveincome Surplus reserves Undistributed profits Total shareholders' equity
I. Balance as at the end of the previous year 506521849.00 1577392975.96 98116532.32 104262315.64 647893886.69 2934187559.61
Plus: changes in accounting policies - - - - - -
Correction of prior period errors - - - - - -
Others - - - - - -
II. Balance at the beginning of the current year 506521849.00 1577392975.96 98116532.32 104262315.64 647893886.69 2934187559.61
III. Increase/decrease in the current year - - (4254300.00) 2543589.29 (13070725.45) (14781436.16)
(I) Total comprehensive income - - (4254300.00) - 25435892.93 21181592.93
(II) Capital contributed or reduced by - - - - - -
shareholders
1. Ordinary shares invested by - - - - - -
shareholders
2. Amount of share-based payments - - - - - -
included in shareholders' equity
3. Others - - - - - -
(III) Profit distribution - - - 2543589.29 (38506618.38) (35963029.09)
1. Withdrawal of surplus reserves - - - 2543589.29 (2543589.29) -
2. Profits distributed to shareholders - - - - (35963029.09) (35963029.09)
3. Others - - - - - -
(IV) Internal transfer of shareholders' - - - - - -
equity
1. Conversion of capital reserve into - - - - - -
share capital
2. Conversion of surplus reserve into - - - - - -
share capital
3. Surplus reserves offsetting losses - - - - - -
4. Transfer of other comprehensive - - - - - -
income into retained earnings
5. Others - - - - - -
(V) Special reserves - - - - - -
1. Withdrawal in the current year - - - - - -
2. Use in the current year - - - - - -
(VI) Others - - - - - -
IV. Balance as at the end of the current year 506521849.00 1577392975.96 93862232.32 106805904.93 634823161.24 2919406123.45
Statement of Changes in Shareholders' Equity of the Parent Company - Continued
For the year ended December 31 2025
Statement of Changes in Shareholders' Equity of the Parent Company - Continued
RMB
Item Amount for the previous yearEquity Capital reserve Other comprehensive Surplus reserves Undistributed profits Total shareholders' equity
- 14 -Shenzhen Textile (Holdings) Co. Ltd.income
I. Balance as at the end of the previous year 506521849.00 1577392975.96 83629830.81 104262315.64 689309946.54 2961116917.95
Plus: changes in accounting policies - - - - - -
Correction of prior period errors - - - - - -
Others - - - - - -
II. Balance at the beginning of the current year 506521849.00 1577392975.96 83629830.81 104262315.64 689309946.54 2961116917.95
III. Increase/decrease in the current year - - 14486701.51 - (41416059.85) (26929358.34)
(I) Total comprehensive income - - 14486701.51 - (8492143.13) 5994558.38
(II) Capital contributed or reduced by
shareholders - - - - - -
1. Ordinary shares invested by
shareholders - - - - - -
2. Amount of share-based payments
included in shareholders' equity - - - - - -
3. Others - - - - - -
(III) Profit distribution - - - - (32923916.72) (32923916.72)
1. Withdrawal of surplus reserves - - - - - -
2. Profits distributed to shareholders - - - - (32923916.72) (32923916.72)
3. Others - - - - - -
(IV) Internal transfer of shareholders'
equity - - - - - -
1. Conversion of capital reserve into
share capital - - - - - -
2. Conversion of surplus reserve into
share capital - - - - - -
3. Surplus reserves offsetting losses - - - - - -
4. Transfer of other comprehensive
income into retained earnings - - - - - -
5. Others - - - - - -
(V) Special reserves - - - - - -
1. Withdrawal in the current year - - - - - -
2. Use in the current year - - - - - -
(VI) Others - - - - - -
IV. Balance as at the end of the current year 506521849.00 1577392975.96 98116532.32 104262315.64 647893886.69 2934187559.61
The notes are an integral part of the financial statements
- 15 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(I) Basic information of the Company
1. Company profile
Shenzhen Textile (Holdings) Co. Ltd. (hereinafter referred to as "the Company") is a joint stock limited company
registered in Guangdong Province. The Company was listed on Shenzhen Stock Exchange in August 1994. The
Company has publicly issued RMB ordinary shares (A shares) and domestically listed foreign shares (B shares) to
the domestic and foreign public respectively and listed for trading.Headquartered in Shenzhen Guangdong Province the Company and its subsidiaries (hereinafter referred to as
"the Group") are principally engaged in the research and development production and marketing of polarizers for
liquid crystal displays as well as property management which are mainly located in the prosperous commercial
area of Shenzhen.
2. Approval date of financial statements
The consolidated and parent company's financial statements of the Company were approved by the Board of
Directors on March 26 2026.(II) Basis for the preparation of financial statements
1. Basis for preparation
The Group implements the Accounting Standards for Business Enterprises and related provisions issued by the
Ministry of Finance. In addition the Group also discloses relevant financial information in accordance with the
Rules for the Compilation and Reporting of Information Disclosure by Companies Issuing Securities to the Public
No. 15 - General Provisions on Financial Reports (Revised in 2023).
2. Going concern
The Group has evaluated its going-concern ability for 12 months from December 31 2025 and has not found any
matters or circumstances that cast significant doubt on the going-concern ability. Therefore the financial
statements have been prepared on the going concern basis.
3. Accounting basis and valuation principle
The accounting of the Group is based on the accrual basis. Except for certain financial instruments measured at
fair value the financial statements are measured at historical cost. In the event of any asset impairment a
provision for impairment will be made in accordance with relevant provisions.Under the historical cost measurement assets are measured at the amount of cash or cash equivalents paid or the
fair value of the consideration paid at the time of acquisition. Liabilities are measured at the amount of money or
assets actually received for assuming current obligations or the contract amount of assuming current obligations
or the amount of cash or cash equivalents expected to be paid to repay liabilities in daily activities.Fair value is the price received from the sale of an asset or paid for the transfer of a liability by a market
participant in an orderly transaction occurring on the measurement date. Regardless of whether the fair value is
observable or estimated by using valuation techniques the fair value measured and disclosed in these financial
statements is determined on this basis.- 16 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(II) Basis for the preparation of financial statements - Continued
3. Accounting basis and valuation principle - Continued
For financial assets where the transaction price is taken as the fair value at initial recognition and valuation
techniques involving unobservable input value are used in the subsequent measurement of fair value the valuation
techniques are corrected during the valuation process to make the initial recognition result determined by the
valuation techniques equal to the transaction price.The fair value measurement is divided into three levels based on the observability of the input value of the fair
value and the importance of such input value to the fair value measurement as a whole:
Level 1 input value is the unadjusted quoted price in active markets for identical assets or liabilities that are available
on the measurement date.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.Level 3 input value is the unobservable input value of the relevant assets or liabilities.(III) Important accounting policies and accounting estimates
1. Statement of compliance with the Accounting Standards for Business Enterprises
The financial statements prepared by the Company meet the requirements of the Accounting Standards for
Business Enterprises and truly and completely reflect the Company's consolidated and parent company's financial
position as at December 31 2025 and the consolidated and parent company's operating results changes in
consolidated and parent company's shareholders' equity and consolidated and parent company's cash flows for the
year then ended.
2. Accounting period
The Company adopts the Gregorian calendar year for its accounting year that is from January 1 to December 31
of each year.
3. Operating cycle
Operating cycle refers to the period from the purchase of assets for processing to the realization of cash or cash
equivalents by the enterprise. The operating cycle of the Company is 12 months.
4. Recording currency
RMB is the currency in the main economic environment in which the Company and its domestic subsidiaries
operate. The Company and its domestic subsidiaries adopt RMB as the recording currency. The Company's
overseas subsidiaries determine RMB as their recording currency based on the currency in the main economic
environment in which they operate. The currency used by the Company in preparing these financial statements is
RMB.- 17 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(III) Significant accounting policies and accounting estimates - Continued
5. Importance criteria determination method and selection basis
Item Importance criteria
Significant accounts receivable with the provision for The individual book balance accounts for more than 0.5% of the total
bad debts made on an individual basis assets
The individual recovery or reversal amount accounts for more than 10%
Recovery or reversal amount of provision for bad debts of the total amount of provision for bad debts recovery or reversal of the
of significant accounts receivable corresponding accounts receivable and the amount exceeds RMB 10
million
Advances to suppliers with aging over 1 year and of
significant amount Individual amount accounts for more than 0.5% of total assets
The balance of a single construction in progress accounts for over 10% of
Significant construction in progress project the total balance of construction in progress and the amount is more than
RMB 100000000.00.Important accounts payable advances from
customerscontract liabilities and other payables with Individual amount accounts for more than 0.5% of total assets
aging over 1 year
Other cash received related to significant investing
activities The amount exceeds RMB 50 million
Other cash paid related to significant investing activities The amount exceeds RMB 50 million
The total assets total revenue or total profit of the non-wholly-owned
Major non-wholly-owned subsidiaries subsidiary account for more than 10% of the amount of the corresponding
items in the consolidated financial statements of the Group
The book value of the long-term equity investments of the enterprise at
Significant joint ventures or associates the end of the year accounts for more than 5% of the net assets of the
consolidated financial statements of the Group
6. Accounting treatments for business combinations under common control and those not under common
control
Business combinations are categorized into those under common control and those not under common control.
6.1 Business combinations under common control
If before and after the business combination all parties involved are ultimately controlled by the same party or
the same group of parties and such control is not temporary the combination is considered under common control.The assets and liabilities obtained in the business combination are measured at their book value as recorded in the
consolidated financial statements of the ultimate controller on the combination date. Any difference between the
book value of the net assets acquired by the combining party and the book value of the consideration paid is
adjusted against the share premium in capital reserve. If the equity premium is insufficient the difference is
adjusted against retained earnings.All direct expenses incurred for the purpose of the business combination are recognized in current profit or loss as
they occur.
6.2 Business combinations not under common control and goodwill
When the entities involved in the combination are not under the ultimate control of the same party or the same
group of parties before and after the combination it is considered a business combination not under common
control.The combination cost refers to the fair value of the assets paid the liabilities incurred or assumed and the equity
instruments issued by the acquirer to obtain the right of control of the acquiree. Any intermediary fees for business
combination including but not limited to audit legal and valuation consulting services and other related G&A
expenses incurred by the acquirer are charged to current profit or loss as they arise.Any identifiable assets liabilities and contingent liabilities of the acquiree that meet the recognition criteria and
are obtained by the acquirer in the combination are measured at fair value on the acquisition date.- 18 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(III)Significant accounting policies and accounting estimates - Continued
6. Accounting treatments for business combinations under common control and those not under common
control - Continued
6.2 Business combinations not under common control and goodwill - Continued
If the combination cost exceeds the acquiree's fair value share of net identifiable assets obtained this difference is
recognized as goodwill and initially measured at cost. If the combination cost is less than the acquiree's fair value
share of net identifiable assets obtained the acquirer shall first reassess the fair values of all identifiable assets
liabilities and contingent liabilities of the acquiree as well as the measurement of the combination cost. After
reassessment if the combination cost is still less than acquiree's fair value share of net identifiable assets obtained
the difference is included in current profit or loss.Goodwill arising from a business combination is presented separately in the consolidated financial statements and
is measured at cost less any accumulated provision for impairment.
7. Criteria for determining control and methods for preparing consolidated financial statements
7.1 Criteria for control judgment
Control means that an investor has power over the investee derives variable returns by participating in the
investee's relevant activities and can use that power to affect the amount of returns. Whenever changes in relevant
facts and circumstances alter any element of this definition of control the Group will reassess the situation.
7.2 Methods of preparing consolidated financial statements
The consolidation scope in the consolidated financial statements is determined on the basis of control.A subsidiary is consolidated from the date the Group obtains the right of control over it until the date such right is
lost.For subsidiaries that the Group disposes of operating results and cash flows prior to the disposal date (the date
when the loss of control occurs) are appropriately included in the consolidated income statement and consolidated
cash flow statement.For subsidiaries acquired in a business combination not under common control their operating results and cash
flows from the acquisition date (the date when the right of control is obtained) are appropriately included in the
consolidated income statement and consolidated cash flow statement.For subsidiaries acquired in a business combination under common control regardless of the point in time during
the reporting period at which the combination takes place the subsidiary is deemed to have been under the
Group's consolidation scope from the date it came under the ultimate controller. Its operating results and cash
flows from the earliest beginning date of the reporting period are appropriately included in the consolidated
income statement and consolidated cash flow statement.The primary accounting policies and reporting periods adopted by the subsidiaries are determined in accordance
with the uniform accounting policies and reporting periods set by the Company.- 19 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(III) Significant accounting policies and accounting estimates - Continued
7. Criteria for determining control and methods for preparing consolidated financial statements -
Continued
7.2 Methods for preparing consolidated financial statements - Continued
Any effects on the consolidated financial statements from intercompany transactions between the Company and
its subsidiaries or among the subsidiaries themselves are eliminated upon consolidation.The shares of the subsidiary's ownership interest that are not part of the parent company are shown as minority
interests under the item "minority interests" under the item on shareholders' equity in the consolidated balance
sheet. the share of the subsidiary's net profit or loss attributable to minority interests is presented in the
consolidated income statement under the net profit item as "minority interest income".If the losses borne by minority shareholders exceed the share of owners' equity they hold at the beginning of the
subsidiary's period the excess continues to be deducted from the minority interests.Transactions involving the purchase of a subsidiary's minority interests or the partial disposal of a subsidiary's
equity investments without losing the right of control are accounted for as equity transactions. The book value of
the parent company's owners' equity and the minority interests are adjusted to reflect the changes in their
respective ownership in the subsidiary. Any difference between the adjustment to minority interests and the fair
value of the consideration paid or received is adjusted against the capital reserve. If the capital reserve is
insufficient the difference is adjusted against retained earnings.
8. Joint venture arrangements
Joint venture arrangements are classified as either joint operations or joint ventures based on the rights and
obligations of the parties—determined by factors such as the arrangement's structure legal form and contractual
terms. A joint operation is a joint arrangement in which the parties have rights to the related assets and obligations
for the related liabilities. A joint operation refers to those joint venture arrangements under which the joint venture
is entitled to relevant assets and be responsible for relevant liabilities. A joint venture is a joint venture
arrangement in which the parties are entitled only to the arrangement's net assets.The Group accounts for investments in joint ventures using the equity method. For further details refer to Note
(III) Section 17.3.2 "Long-term equity investments accounted for under the equity method."
9. Criteria for determining cash and cash equivalents
Cash refers to cash on hand and deposits readily available for payment. Cash equivalents refer to short-term
(generally maturing within three months from the purchase date) highly liquid investments held by the Group that
are easily convertible into known amounts of cash and subject to an insignificant risk of value changes.
10. Foreign currency transactions and translation of foreign currency statements
10.1 Foreign currency transactions
Foreign currency transactions are initially recognized at an exchange rate similar to the spot exchange rate on the
date of the transaction and the exchange rate similar to the spot rate on the date of the transaction is determined in
a systematic and reasonable manner.- 20 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(III) Significant accounting policies and accounting estimates - Continued
10. Foreign currency transactions and translation of foreign currency statements - Continued
10.1 Foreign currency transactions - Continued
At each balance sheet date foreign currency monetary items are translated into RMB at the spot rate on that date.Any exchange differences arising from changes in the spot exchange rate (compared to the rate at initial
recognition or the previous balance sheet date) are recognized in current profit or loss except for: (1) exchange
differences on foreign-currency-specific borrowings that qualify for capitalization which are capitalized as part of
the cost of the related asset during the capitalization period; (2) exchange differences on hedging instruments used
to hedge foreign exchange risk which are accounted for under hedge accounting; (3) foreign exchange differences
arising from changes in the book balance of monetary items classified as measured at fair value through other
comprehensive income except for amortized costs are recognized in current profit or loss.When preparing consolidated financial statements involving foreign operations if a foreign currency monetary
item essentially constitutes a net investment in a foreign operation any exchange differences arising from
fluctuation in exchange rate are included under "Exchange differences on translation of foreign currency
statements" in other comprehensive income. Upon disposal of the foreign operation these differences are
recognized in profit or loss for the disposal period.Foreign currency non-monetary items measured at historical cost continue to be measured using the spot exchange
rate in recording currency on the transaction date. For foreign currency non-monetary items measured at fair value
the spot exchange rate on the date the fair value is determined is used for translation. Any difference between the
translated amount in recording currency and the original currency is treated as a fair value change (including
fluctuation in exchange rate) and is recognized in current profit or loss or other comprehensive income as
appropriate.
10.2 Translation of foreign currency financial statements
To prepare consolidated financial statements foreign-currency financial statements of overseas operations are
translated into RMB as follows: all assets and liabilities in the balance sheet are translated at the spot exchange
rate on the balance sheet date; shareholders' equity items are translated at the spot exchange rate on the date of
occurrence; all items in the income statement and items reflecting profit distribution are translated using an
exchange rate approximating the spot exchange rate on the transaction date; any difference between the sum of
translated assets and the sum of translated liabilities plus equity items is recognized as other comprehensive
income and included in shareholders' equity.Foreign currency cash flows and the cash flows of overseas subsidiaries are translated using an exchange rate
approximating the spot exchange rate on the date of the cash flow. The impact of fluctuation in exchange rate on
cash and cash equivalents is presented separately in the statement of cash flows under "Effect of exchange rate
changes on cash and cash equivalents".The figures for the prior year-end and the actual amounts for the previous year are presented according to the
amounts translated in the previous year's financial statements.When the Group disposes of its entire owners' equity in a foreign operation or otherwise loses the right of control
over a foreign operation—whether by partially disposing of equity investments or for any other reason—all
differences on translation of foreign currency statements related to that foreign operation and presented under
shareholders' equity (attributable to the parent company) in the balance sheet are transferred in full to profit or loss
for the disposal period.- 21 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(III) Significant accounting policies and accounting estimates - Continued
10. Foreign currency transactions and translation of foreign currency statements - Continued
10.2 Translation of foreign currency statements - Continued
When disposing of part of an equity investments or in other circumstances that reduce the Group's ownership
interest in an overseas operation without losing the right of control over that operation any differences on
translation of foreign currency statements related to the disposed portion are attributed to minority interests and
are not transferred to profit or loss for the current period. When disposing of a portion of equity in an overseas
operation that is classified as an associate or a joint venture the differences on translation of foreign currency
statements related to that operation are transferred to profit or loss in the disposal period in proportion to the
percentage of equity disposed.
11. Financial instruments
The Group recognizes a financial asset or financial liability when it becomes a party to the contractual provisions
of a financial instrument.For purchases or sales of financial assets in the ordinary course of business the Group recognizes the assets to be
received and the liabilities to be assumed on the trade date or derecognizes the assets sold on the trade date.Financial assets and financial liabilities are measured at fair value upon initial recognition (see Note (II) "Basis of
accounting and valuation principles" for details on determining fair value). For financial assets and liabilities
measured at fair value through profit or loss transaction costs are recognized directly in profit or loss for the
current period; for other categories of financial assets and liabilities the relevant transaction costs are included in
the initial recognition amount. When the Group initially recognizes accounts receivable that do not include a
significant financing component or when the financing component of a contract not exceeding one year is
disregarded under Accounting Standards for Business Enterprises No. 14 - Revenue (hereinafter referred to as
“Revenue Standard”) such receivables are initially measured at the transaction price as defined in the Revenue
Standard.The effective interest method is the method used to calculate the amortized cost of a financial asset or liability and
to allocate the interest income or interest expenses over the relevant accounting periods.The effective interest rate is the rate that discounts the estimated future cash flows over the expected life of a
financial asset or liability to the financial asset's book balance or the financial liability's amortized cost. In
determining the effective interest rate the Group estimates expected cash flows based on all contractual terms of
the financial asset or liability (e.g. early repayment extension call options or other similar options) but does not
factor in expected credit losses.The amortized cost of a financial asset or liability is the initial recognized amount minus any repaid principal plus
or minus the accumulated amortization of the difference between the initial recognized amount and the amount at
maturity using the effective interest method and then minus the accumulated provision for losses (applicable only
to financial assets).- 22 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(III) Significant accounting policies and accounting estimates - Continued
11. Financial instruments - Continued
11.1 Classification recognition and measurement of financial assets
After initial recognition the Group subsequently measures different categories of financial assets at amortized
cost at fair value through other comprehensive income or at fair value through profit or loss.If the contractual terms of a financial asset stipulate that on specified dates cash flows comprise solely payments
of principal and interest on the outstanding principal and the Group's business model for managing this financial
asset is to collect the contractual cash flows the Group classifies this financial asset as measured at amortized cost.Such financial assets mainly include monetary funds notes receivable accounts receivable and other receivables.If the contractual terms of a financial asset stipulate that on specified dates cash flows comprise solely payments
of principal and interest on the outstanding principal and the Group's business model for managing the financial
asset is both to collect contractual cash flows and to sell the financial asset then the Group classifies this asset as
measured at fair value through other comprehensive income. Such financial assets with a maturity of more than
one year from the date of acquisition are presented as "Other debt investments" while those maturing within one
year (inclusive) from the balance sheet date are presented under "Non-current assets due within one year."
Accounts receivable and notes receivable classified upon acquisition as measured at fair value through other
comprehensive income are presented under "Receivables financing" and any other items acquired with a maturity
of one year (inclusive) or less are presented under "Other current assets."
At initial recognition on an individual financial asset basis the Group may irrevocably designate a non-trading
equity instrument investment other than any contingent consideration recognized in a business combination not
under common control as measured at fair value through other comprehensive income. Such financial assets are
presented as "Other equity instrument investments."
If a financial asset meets any of the following conditions it indicates that the Group holds this asset for trading
purposes:
The main purpose of acquiring the financial asset is to sell it in the near term.Upon initial recognition the financial asset is part of an identifiable portfolio of financial instruments that is
collectively managed and there is objective evidence of a recent pattern of short-term profit-taking.The financial asset is a derivative except for derivatives that meet the definition of a financial guarantee
contract or are designated as effective hedging instruments.Financial assets measured at fair value through profit or loss include those classified as such and those designated
as such:
Any financial asset that does not meet the classification criteria for measurement at amortized cost or at fair value
through other comprehensive income is classified as measured at fair value through profit or loss.At initial recognition to eliminate or significantly reduce accounting mismatches the Group may irrevocably
designate a financial asset as measured at fair value through profit or loss.- 23 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(III) Significant accounting policies and accounting estimates - Continued
11. Financial instruments - Continued
11.1 Classification recognition and measurement of financial assets - Continued
Financial assets measured at fair value through profit or loss are presented under "Financial assets held for
trading." Those due in more than one year from the balance sheet date (or with no fixed maturity) and expected to
be held for more than one year are presented under "Other non-current financial assets."
11.1.1 Financial assets measured by amortized cost
Financial assets measured at amortized cost are subsequently measured at amortized cost using the effective
interest method and any gain or loss arising from impairment or derecognition is recognized in profit or loss.The Group recognizes interest income on financial assets measured at amortized cost using the effective interest
method. For purchased or originated financial assets that are already credit-impaired the Group determines
interest income from the date of initial recognition based on the asset's amortized cost and a credit-adjusted
effective interest rate. For all other financial assets the Group calculates interest income by multiplying the book
balance of the asset by the effective interest rate.
11.1.2 Financial assets measured at fair value through other comprehensive income
For a financial asset classified as measured at fair value through other comprehensive income any impairment
loss or gain and interest income calculated using the effective interest method are recognized in profit or loss
while all other fair value changes are recognized in other comprehensive income. The amount recognized in profit
or loss each period is the same as if the asset had been measured at amortized cost throughout its life. When such a
financial asset is derecognized the cumulative gains or losses previously recognized in other comprehensive
income are transferred from other comprehensive income to profit or loss.For a non-trading equity instrument investment designated as measured at fair value through other comprehensive
income fair value changes are recognized in other comprehensive income. When the financial asset is
derecognized the cumulative gains or losses previously recognized in other comprehensive income are transferred
out of other comprehensive income and into retained earnings. During the period the Group holds this non-trading
equity instrument investment if the right to receive dividends is established the related economic benefits are
likely to flow to the Group and the amount of dividends can be measured reliably then the Group recognizes
dividend income in profit or loss.
11.1.3 Financial assets measured at fair value through the current profit or loss
Financial assets measured at fair value through profit or loss are subsequently measured at fair value; gains or
losses arising from fair value changes as well as any dividend and interest income related to these assets are
recognized in profit or loss.- 24 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(III) Significant accounting policies and accounting estimates - Continued
11. Financial instruments - Continued
11.2 Impairment of financial instruments
The Group recognizes impairment allowances and provision for losses based on expected credit losses for
financial assets measured at amortized cost financial assets classified as fair value through other comprehensive
income and lease receivables.For all notes receivable and accounts receivable arising from transactions governed by the Revenue Standard as
well as operating lease receivables arising from transactions governed by Accounting Standards for Business
Enterprises No. 21 - Leases the Group measures the provision for loss at an amount equal to the lifetime expected
credit losses.For other financial instruments except for those purchased or originated with credit loss the Group evaluates
changes in credit risk since initial recognition at each balance sheet date. If the credit risk of such a financial
instrument has significantly increased since initial recognition the Group measures the provision for loss at an
amount equal to the lifetime expected credit losses; if it has not significantly increased the Group measures the
provision for loss at an amount equal to the 12-month expected credit losses. Except for financial assets classified
as fair value through other comprehensive income any increase or reversal of the provision for credit losses is
recognized as an impairment loss or gain in the current period's profit or loss. For financial assets classified as fair
value through other comprehensive income the Group recognizes the provision for credit losses in other
comprehensive income and records the impairment loss or gain in profit or loss without reducing the asset's book
value in the balance sheet.If in a prior period the Group measured the provision for loss at an amount equal to the lifetime expected credit
losses (due to a significant increase in credit risk since initial recognition) but at the current balance sheet date
that significant increase in credit risk no longer applies then the Group measures the provision for loss at an
amount equal to the 12-month expected credit losses. The amount of any resulting reversal is recognized as an
impairment gain in profit or loss.
11.2.1 Significant increase in credit risk
The Group uses reasonable and supportable forward-looking information to compare the risk of default on a
financial instrument at the balance sheet date with the risk of default at initial recognition in order to determine
whether the credit risk has significantly increased since initial recognition.- 25 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(III) Significant accounting policies and accounting estimates - Continued
11. Financial instruments - Continued
11.2 Impairment of financial instruments - Continued
11.2.1 Significant increase in credit risk - Continued
When the Group assesses whether credit risk has increased significantly it considers the following factors:
(1) Whether internal price indicators resulting from changes in credit risk have undergone a significant change.
(2) Whether if an existing financial instrument is effectively originated or issued as a new financial instrument on
the balance sheet date there is a significant change in the interest rate or other terms of that instrument (e.g. more
stringent contractual terms increased collateral or guarantees or a higher yield).
(3) Whether external market indicators of credit risk for the same financial instrument or similar instruments with
the same expected term have changed significantly. Such indicators include credit spreads credit default swap
(CDS) prices for the borrower the length of time and extent to which a financial asset's fair value is below its
amortized cost and other market information related to the borrower (e.g. changes in the prices of the borrower's
debt or equity instruments).
(4) Whether the external credit rating of the financial instrument has actually changed or is expected to change
significantly.
(5) Whether there has been a downgrade in the debtor's internal credit rating either actual or anticipated.
(6) Whether there has been an adverse change in the debtor's business financial or economic conditions that is
expected to significantly affect the debtor's ability to meet its debt obligations.
(7) Whether the debtor's operating performance whether actual or expected has changed significantly.
(8) Whether the credit risk of other financial instruments issued by the same debtor has increased significantly.
(9) Whether there has been a significantly adverse change in the regulatory economic or technological
environment in which the debtor operates.
(10) Whether the value of collateral securing the debt or the quality of a third-party guarantee or credit
enhancement has changed significantly. Such changes are expected to reduce the debtor's economic incentive to
repay under the contractual schedule or affect the probability of default.
(11) Whether there has been a significant change in factors that would reduce the borrower's economic incentive
to repay in accordance with the contractual terms.
(12) Whether the loan contract is expected to be modified including the potential release or amendment of
contractual obligations due to anticipated breaches of contract granting interest-free periods raising interest rates
requiring additional collateral or guarantees or otherwise modifying the contractual framework of the financial
instrument.
(13) Whether there is a significant change in the debtor's expected performance or repayment behavior.
(14) Whether the Group's credit management approach for the financial instrument has changed.
Regardless of the outcome of the above assessment if payments under the financial instrument's contract are more
than (or equal to) 30 days past due it indicates that the financial instrument's credit risk has increased significantly.On the balance sheet date if the Group concludes that a financial instrument has only low credit risk it presumes
the credit risk has not increased significantly since initial recognition. A financial instrument is considered to have
low credit risk if its risk of default is low the borrower has a strong capacity to meet its contractual cash flow
obligations in the short term and even over a longer period adverse changes in economic and operating
conditions would not necessarily reduce the borrower's ability to meet those obligations.(III) Significant accounting policies and accounting estimates - Continued
11. Financial instruments - Continued
11.2 Impairment of financial instruments - Continued
11.2.2 Financial assets with credit loss
- 26 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
When one or more events occur that the Group expects to adversely affect the future cash flows of a financial
asset that asset is considered credit-impaired. Evidence for a credit-impaired financial asset includes the
following observable information:
(1) The debtor breaches a contract such as default or delinquency in interest or principal payments.
(2) The debtor breaches the contract such as default or delay in repayment of interest or principal.
(3) The creditor gives the debtor concessions under economic or contractual considerations relating to the debtor's
financial difficulties that would not have been made under any other circumstances;
(4) The debtor is highly likely to go bankrupt or undertake other financial restructuring.
(5) The issuer's or debtor's financial difficulties lead to the disappearance of an active market for the financial
asset.
(6) A financial asset is purchased or originated at a substantial discount reflecting the fact that a credit loss has
occurred.Based on the Group's internal credit risk management if internal recommendations or externally obtained
information indicates that the debtor of a financial instrument cannot fully repay all creditors including the Group
(regardless of any guarantee obtained by the Group) the Group considers this a default event.Regardless of the above assessment if payments under the financial instrument's contract are more than (or equal
to) 90 days past due the Group presumes the instrument is in default.
11.2.3 Determination of expected credit losses
For financial assets and lease receivables the expected credit loss is the present value of the difference between
the contractual cash flows the Group is entitled to receive and the cash flows the Group actually expects to receive.When measuring the expected credit losses on financial instruments the Group's method reflects: an unbiased
probability-weighted average determined by evaluating a range of possible outcomes; the time value of money;
and reasonable and supportable information about past events current conditions and forecasts of future
economic conditions available without undue cost or effort at the balance sheet date.
11.2.4 Write-off of financial assets
If the Group no longer reasonably expects to recover all or part of the contractual cash flows of a financial asset
the Group writes off the book balance of the financial asset directly. This write-off constitutes derecognition of the
relevant financial asset.- 27 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(III) Significant accounting policies and accounting estimates - Continued
11. Financial instruments - Continued
11.3 Transfer of financial assets
A financial asset is derecognized if one of the following conditions is met: (1) the contractual right to receive cash
flows from the financial asset expires; (2) the financial asset has been transferred and substantially all the risks
and rewards of ownership of the asset have been transferred to the transferee; or (3) the financial asset has been
transferred and although the Group has neither transferred nor retained substantially all the risks and rewards of
ownership it has not retained control over the asset.If the Group has neither transferred nor retained substantially all the risks and rewards of ownership of the
financial asset but retains control of it the Group continues to recognize the transferred financial asset to the
extent of its continuing involvement and recognizes a corresponding liability. The Group measures that liability
as follows:
Where the transferred financial asset is measured at amortized cost the book value of the related liability
equals the book value of the asset in which the Group continues to be involved minus the amortized cost of
any rights retained by the Group (if the Group retained such rights due to the transfer) and plus the amortized
cost of any obligations assumed by the Group (if the Group assumed such obligations due to the transfer).Such liabilities are not designated as financial liabilities measured at fair value through profit or loss.Where the transferred financial asset is measured at fair value the book value of the related liability equals
the book value of the asset in which the Group continues to be involved minus the fair value of any rights
retained by the Group (if the Group retained such rights due to the transfer) and plus the fair value of any
obligations assumed by the Group (if the Group assumed such obligations due to the transfer). The fair
values of such rights and obligations are measured on a stand-alone basis.When the full transfer of a financial asset qualifies for derecognition the difference between the book value of the
transferred financial asset on the derecognition date and the sum of the consideration received and the
corresponding portion of the cumulative fair value changes previously recognized in other comprehensive income
is recognized in profit or loss. If the transferred asset by the Group is a non-trading equity instrument investment
designated as measured at fair value through other comprehensive income any cumulative gains or losses
previously recognized in other comprehensive income are transferred out of other comprehensive income and into
retained earnings.When a partial transfer of a financial asset qualifies for derecognition the book value of the original asset before
transfer is allocated between the portion being derecognized and the portion that continues to be recognized based
on the relative fair values of each portion on the transfer date. The difference between (a) the consideration
received for the derecognized portion plus the corresponding portion of the cumulative fair value changes
previously recognized in other comprehensive income and (b) the book value of the derecognized portion on the
derecognition date is recognized in profit or loss. If the transferred asset by the Group is a non-trading equity
instrument investment designated as measured at fair value through other comprehensive income any cumulative
gains or losses previously recognized in other comprehensive income are transferred out of other comprehensive
income and into retained earnings.If a full transfer of a financial asset does not satisfy the derecognition criteria the Group continues to recognize
the entire transferred financial asset and recognizes the consideration received as a liability.- 28 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(III) Significant accounting policies and accounting estimates - Continued
11. Financial instruments - Continued
11.4 Classification of financial liabilities and equity instruments
Based on the contractual terms and the economic substance of the issued financial instrument rather than merely
its legal form and in conjunction with the definitions of financial liabilities and equity instruments the Group
classifies the financial instrument (or its components) as either a financial liability or an equity instrument at
initial recognition.
11.4.1 Classification recognition and measurement of financial liabilities
Upon initial recognition financial liabilities are classified as financial liabilities measured at fair value through
profit or loss or other financial liabilities.
11.4.1.1 Financial liabilities measured at fair value through profit or loss
Financial liabilities measured at fair value through profit or loss include financial liabilities held for trading
(including derivatives classified as financial liabilities) and those designated as measured at fair value through
profit or loss. Except for derivative financial liabilities which are presented separately financial liabilities
measured at fair value through profit or loss are presented as financial liabilities held for trading.If a financial liability meets any of the following conditions it indicates that the Group has assumed this liability
for trading purposes:
The primary purpose of assuming the financial liability is to repurchase it in the near term.Upon initial recognition the financial liability is part of an identifiable portfolio of financial instruments that
is collectively managed and there is objective evidence of a recent pattern of short-term profit-taking.The financial liability is a derivative except for derivatives that meet the definition of a financial guarantee
contract or are designated as effective hedging instruments.At initial recognition if any of the following conditions are met the Group may designate a financial liability as
measured at fair value through profit or loss: (1) the designation can eliminate or significantly reduce accounting
mismatches; (2) under the Group's formally documented risk management or investment strategy portfolios of
financial liabilities or combined portfolios of financial assets and liabilities are managed and evaluated on a fair
value basis and this is reported internally to key officers; or (3) it is part of an eligible hybrid contract containing
an embedded derivative.Financial liabilities held for trading are subsequently measured at fair value with any gains or losses arising from
fair value changes along with dividends or interest expenses related to these liabilities recognized in profit or loss.- 29 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(III) Significant accounting policies and accounting estimates - Continued
11. Financial instruments - Continued
11.4 Classification of financial liabilities and equity instruments - Continued
11.4.1 Classification recognition and measurement of financial liabilities - Continued
11.4.1.1 Financial liabilities measured at fair value through profit or loss - Continued
For a financial liability designated as measured at fair value through profit or loss the portion of the fair value
change attributable to the Group's own credit risk is recognized in other comprehensive income while other
changes in fair value are recognized in profit or loss. When the financial liability is derecognized the accumulated
fair value change attributable to changes in the Group's own credit risk that was previously recorded in other
comprehensive income is transferred to retained earnings. Any dividends or interest expenses related to such
financial liabilities are recognized in profit or loss. If treating the effect of changes in the liability's own credit risk
in this manner creates or enlarges an accounting mismatch in profit or loss the Group recognizes all gains or
losses on the liability (including those related to changes in its own credit risk) in profit or loss.
11.4.1.2 Other financial liabilities
Except for financial liabilities arising from the transfer of financial assets that do not meet derecognition criteria
or where the Group continues to be involved in transferred financial assets other financial liabilities are classified
as financial liabilities measured at amortized cost. They are subsequently measured at amortized cost and any
gains or losses from derecognition or amortization are recognized in profit or loss.If the Group modifies or renegotiates a contract with a counterparty and it does not result in the derecognition of a
financial liability subsequently measured at amortized cost but leads to changes in the contractual cash flows the
Group recalculates the book value of the financial liability and recognizes any related gain or loss in profit or loss.For recalculated book value the Group shall determine it by discounting the renegotiated or modified contractual
cash flows at the original effective interest rate of the financial liability. For any costs or fees incurred as a result
of modifying or renegotiating the contract the Group shall adjust the book value of the modified financial liability
and amortize them over the remaining term thereof.
11.4.2 Derecognition of financial liabilities
If the present obligation of a financial liability is fully or partially discharged the liability (or the discharged
portion) is derecognized. If the Group (as borrower) signs an agreement with a lender to replace the original
financial liability with a new one and the terms of the new liability differ substantially from those of the original
liability the Group derecognizes the original liability and recognizes the new one.When a financial liability is fully or partially derecognized the difference between the book value of the
derecognized portion and the consideration paid (including any non-cash assets transferred or new financial
liabilities assumed) is recognized in profit or loss for the current period.- 30 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(III) Significant accounting policies and accounting estimates - Continued
11. Financial instruments - Continued
11.4 Classification of financial liabilities and equity instruments - Continued
11.4.3 Equity instruments
An equity instrument is a contract that evidences a residual interest in the Group's assets after deducting all
liabilities. The Group treats the issuance (including refinancing) repurchase sale or cancellation of its equity
instruments as changes in equity. The Group does not recognize fair value changes in equity instruments.Transaction costs directly attributable to equity transactions are deducted from equity.The Group's distributions made to holders of equity instruments are treated as profit distribution and any issued
stock dividends do not affect the total shareholders' equity.
11.5 Derivatives
Derivatives including forward foreign exchange contracts are initially measured at fair value on the contract date
and subsequently measured at fair value.
11.6 Offsetting financial assets and financial liabilities
When the Group has a legal right to offset recognized financial assets and liabilities and that right is currently
enforceable and the Group intends to settle on a net basis or to realize the asset and settle the liability
simultaneously the financial assets and liabilities are presented on the balance sheet at the net amount. Otherwise
financial assets and financial liabilities are presented separately in the balance sheet without offset.
12. Notes receivable
12.1 Method for determining expected credit losses on notes receivable and the related accounting treatments
For notes receivable with significantly increased credit risk such as those past due and not accepted or where
there is clear evidence that the acceptor is likely unable to fulfill its acceptance obligation the Group evaluates
credit losses on an individual basis. Other notes receivable are evaluated based on their credit risk characteristics
as a group.Any increase or reversal of the provision for expected credit losses on notes receivable is recognized as a credit
loss or gain in profit or loss.
12.2 Combination categories and basis for determining provision for credit losses according to credit risk
characteristic combination
Apart from those notes receivable whose credit losses are determined on an individual basis the Group classifies
the remaining notes receivable into different groups based on shared credit risk characteristics:
Combination category Determination basis
Combination 1 Bank acceptance bills
Combination 2 Commercial acceptance bills
- 31 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(III) Significant accounting policies and accounting estimates - Continued
13. Accounts receivable
13.1 Method for determining expected credit losses on accounts receivable and the related accounting treatments
The Group uses an impairment matrix at the group level to determine expected credit losses for accounts
receivable. Any increase or reversal of the provision for expected credit losses of accounts receivable is
recognized as a credit loss or gain in profit or loss.
13.2 Combination categories and basis for determining provision for credit losses according to credit risk
characteristic combination.The Group classifies accounts receivable into Combination 1 and Combination 2 based on the credit risk
characteristics of counterparties under different business segments. Combination 1 refers to accounts receivable
arising from the polarizer business revenue where provisions for credit losses are made based on overdue aging
relative to the credit term. Combination 2 refers to accounts receivable arising from property leasing and other
business revenue where provisions for credit losses are made based on natural aging.
13.3 Calculation method of aging for credit risk characteristics portfolio recognized by aging
The Group uses both the natural aging of accounts receivable and the overdue aging relative to the credit term as
credit risk characteristics applying an impairment matrix to determine expected credit losses. Natural aging is
calculated starting from the date of initial recognition of the accounts receivable while overdue aging begins once
the natural aging exceeds the credit term granted to the customer. If the terms and conditions of an accounts
receivable are modified but do not lead to derecognition the aging continues to accumulate.
13.4 Criteria for individual assessment of provision for credit losses
The Group individually determines credit losses for accounts receivable where there is evidence of a significant
increase in credit risk.
14. Receivables financing
14.1 Method for determining expected credit losses on receivables financing and the related accounting treatments
The Group determines credit losses for receivables financing on an individual-asset basis. The Group recognizes
the provision for credit losses for receivables financing in other comprehensive income and records any credit loss
or gain in profit or loss without reducing the book value presented in the balance sheet.
14.2 Criteria for individual assessment of provision for credit losses
Based on the credit status of the accepting bank for bank acceptance bills the Group individually assesses and
determines credit losses for receivables financing.- 32 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(III) Significant accounting policies and accounting estimates - Continued
15. Other receivables
15.1 Method for determining expected credit losses on other receivables and the related accounting treatments
The Group determines credit losses for other receivables on a group basis. Any increase or reversal of the
provision for expected credit losses on other receivables is recognized as a credit loss or gain in profit or loss.
15.2 Combination categories and basis for determining provision for credit losses according to credit risk
characteristic combination
The Group divides other receivables into different combinations based on common credit risk characteristics.Common credit risk characteristics used by the Group include initial recognition date remaining contract term
and length of overdue period.
15.3 Method for calculating aging when determining credit risk characteristic combination
The aging is calculated from the date of initial recognition. If the terms and conditions of other receivables are
modified but do not lead to derecognition the aging continues to accumulate.
16. Inventories
16.1 Types of inventories methods of costing for issuance inventory system and methods for amortizing low-
value consumables and packaging materials
16.1.1 Types of inventories
The Group's inventories mainly include raw materials work in progress finished products and materials
processed on consignment. Inventories are initially measured at cost which includes purchase costs processing
costs and other expenditures incurred to bring the inventories to their current location and condition.
16.1.2 Method of costing for issued inventories
When inventories are issued the actual cost is determined using the weighted average method.
16.1.3 Inventory system
The Group uses a perpetual inventory system.
16.1.4 Amortization methods for low-value consumables and packaging materials
Low-value consumables and packaging materials are amortized using the straight-line method or are written off in
full at once.- 33 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(III) Significant accounting policies and accounting estimates - Continued
16. Inventories - Continued
16.2 Criteria for recognizing and methods for making provision for inventory depreciation
On the balance sheet date inventories are measured at the lower of cost and net realizable value. If net realizable
value is lower than cost a provision for inventory depreciation is made.Net realizable value is the estimated selling price of inventories in the ordinary course of business less the
estimated costs to complete the estimated selling and distribution expenses and related taxes. When determining
the net realizable value of inventories the Group uses conclusive evidence while considering the purpose of
holding the inventories and the impact of events after the balance sheet date.After the provisions for the inventory depreciation are made the factors causing any write-down of inventory
value have disappeared leading to the net realizable values of inventories higher than its book value the amount
of write-down shall be resumed and be reversed from the original provision for inventory devaluation with the
reversal being included in current profit or loss.Generally provisions for inventory depreciation are made on an item-by-item basis.
17. Long-term equity investments
17.1 Criteria for determining common control and significant influence
Control means that an investor has power over the investee derives variable returns by participating in the
investee's relevant activities and can use that power to affect the amount of returns. Common control refers to
shared control over an arrangement under relevant agreements where decisions about the arrangement's relevant
activities require the unanimous consent of the parties sharing the right of control. Significant influence refers to
the power to participate in decisions on an investee's financial and operating policies but not to control or
commonly control the formation of those policies. When determining whether the investor can exercise control or
significant influence over the investee the potential voting rights arising from convertible corporate bonds or
exercisable warrants currently held by the investor or other parties are taken into account.
17.2 Determination of initial investment cost
For a long-term equity investment acquired in a business combination under common control the initial
investment cost is determined on the combination date based on the share of the book value of the acquiree's
owners' equity in the ultimate controller's consolidated financial statements. Any difference between the initial
investment cost of the long-term equity investment and the book value of the cash paid non-cash assets
transferred or liabilities assumed is adjusted against capital reserve. If the capital reserve is insufficient the
difference is adjusted against retained earnings. Where equity securities are issued as consideration for the
combination on the combination date the initial investment cost of the long-term equity investment is determined
based on the share of the book value of the acquiree's owners' equity in the ultimate controller's consolidated
financial statements. The total par value of the issued shares is recognized as share capital and any difference
between the initial investment cost and the total par value of the shares issued is adjusted against capital reserve. If
the capital reserve is insufficient the difference is adjusted against retained earnings.- 34 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(III) Significant accounting policies and accounting estimates - Continued
17. Long-term equity investments - Continued
17.2 Determination of initial investment cost - Continued
For a long-term equity investment acquired in a business combination not under common control on the
acquisition date the initial investment cost is determined based on the combination cost.Audit legal valuation consulting and other related G&A expenses incurred by the acquirer or purchaser for the
business combination are recognized in profit or loss when they occur.Long-term equity investments obtained through methods other than a business combination are initially measured
at cost. Where an investor gains significant influence or common control but not control over an investee through
additional investment the cost of the long-term equity investment is the sum of the fair value of the previously
held equity investment (as determined in accordance with Accounting Standards for Business Enterprises No. 22 -
Recognition and Measurement of Financial Instruments) and the new investment cost.
17.3 Subsequent measurement and recognition method of profit or loss
17.3.1 Long-term equity investments accounted for under the cost method
In the parent company's financial statements long-term equity investments in subsidiaries are measured using the
cost method. A subsidiary is an investee over which the Group can exercise control.Under the cost method long-term equity investments are measured at their initial investment cost. Any additional
investment or capital recovery adjusts the cost of the long-term equity investment. Current investment income is
recognized based on the amount of cash dividends or profits declared and distributed by the investee.
17.3.2 Long-term equity investments measured using the equity method
The Group applies the equity method to its investments in associates and joint ventures. An associate is an
investee over which the Group has significant influence and a joint venture is a joint venture arrangement under
which the Group has rights to the net assets of the arrangement.Under the equity method if the initial investment cost of the long-term equity investment exceeds the share of the
fair value of the investee's identifiable net assets at the time of investment the initial investment cost is not
adjusted. If the initial investment cost is less than the share of the fair value of the investee's identifiable net assets
at the time of investment the difference is recognized in current profit or loss and the cost of the long-term equity
investment is adjusted accordingly.- 35 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(III) Significant accounting policies and accounting estimates - Continued
17. Long-term equity investments - Continued
17.3 Subsequent measurement and recognition method of profit or loss - Continued
17.3.2 Long-term equity investments measured using the equity method - Continued
When the equity method is adopted for accounting the Group based on its attributable share of the net profit or
loss and other comprehensive income realized by the investee respectively recognize the investment income and
other comprehensive income and simultaneously adjust the book value of the long-term equity investment.COOEC shall calculate the shares according to profits or cash dividends declared by the investee and
correspondingly reduce the book value of long-term equity investments; as to any change in owners' equity of the
investee other than net profit or loss other comprehensive income and profit distribution the Group shall adjust
the book value of the long-term equity investment and include such change in capital reserves. When recoginzing
the attributable share of net profit or loss of the investee the Group shall based on the fair value of identifiable
net asset of the investee when it obtains the investmentrecognize the net profits of the investee after adjustment. If
accounting policies and accounting periods adopted by the investee are inconsistent with those of the Company
the financial statements of the investee shall be adjusted according to the accounting policies and accounting
periods of the Company and investment income and other comprehensive income etc. shall be recognized on such
basis. For transactions between the Group and associates and joint ventures if the invested or sold assets do not
constitute business the unrealized profit or loss from internal transactions will be offset at the part attributable to
the Group and the investment profit or loss will be recognized on that basis However the unrealized losses from
internal transactions between the Group and any investee shall not be offset if they belong to the losses from the
impairment of the transferred assets.When recognizing the net losses occurred in the investee that shall be shared the reduction value of book value of
long-term equity investments and other long-term equities that constitute net investments in the investee will be
the limit until it becomes zero. In addition if the Group has the obligation to assume extra-amount losses for the
investee the estimated liabilities are recognized according to the estimated obligations and included in the current
investment losses. Where the investee realizes net profits in the subsequent period the Group shall restore the
income shared after making up for unrecognized losses undertaken by such income.
17.4 Disposal of long-term equity investments
When a long-term equity investment is disposed of the difference between its book value and the actual proceeds
is recognized in current profit or loss. If a long-term equity investment has been accounted for using the equity
method and the remaining equity after disposal is still accounted for using the equity method any other
comprehensive income previously recognized under the equity method is treated on the same basis as if the
investee had directly disposed of the related assets or liabilities and is transferred proportionately. Any other
changes in owners' equity of the investee other than net profit or loss other comprehensive income and profit
distribution which were previously recognized are transferred proportionately to the current profit or loss. If a
long-term equity investment is accounted for using the cost method and the remaining equity after disposal
continues to be accounted for using the cost method any other comprehensive income recognized before the
Group gained control under either the equity method or the accounting standards for recognizing and measuring
financial instruments is treated on the same basis as if the investee had directly disposed of the related assets or
liabilities and is transferred proportionately. Other changes in owners' equity other than net profit or loss other
comprehensive income and profit distribution in net asset of the investee accounted for and recognized by using
the equity method shall be carried forward to the current profit or loss.- 36 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(III) Significant accounting policies and accounting estimates - Continued
17. Long-term equity investments - Continued
17.4 Disposal of long-term equity investments - Continued
Where the Group loses the control over the investee due to the disposal of part of the equity investments when it
prepares separate financial statements the remaining equity after disposal that can commonly control or have
significant influence on the investee will be measured under the equity method and the remaining equity shall be
deemed to have been adjusted under the equity method on acquisition. If the remaining equity after disposal can
not exercise common control or significant influence on the investee such equity will be changed to be accounted
for according to recognition and measurement standards of financial instruments and the difference between fair
value and book value on the date of loss of the control shall be included in the current profit or loss. For other
comprehensive income recognized by using the equity method or financial instruments recognition and
measurement standards before the Group obtains the control over the investee accounting treatment shall be made
on the same basis as that for direct disposal of relevant assets or liabilities by the investee when the Group loses
the control over the investee. Other changes in owners' equity other than net profit or loss other comprehensive
income and profit distribution in net asset of the investee recognized by using the equity methodshall be carried
forward to the current profit or loss when the control over the investee is lost. Where the remaining equities after
disposal are accounted for under the equity method the other comprehensive income and other owners' equity
shall be carried forward in proportion. If the remaining equity after disposal is changed to be accounted for
according to the recognition and measurement standards of the financial instruments the other comprehensive
income and other owner's equity shall be fully carried forward.In case the common control or significant influence over the investee is lost for disposing part of equity
investments the remaining equity will be changed to be accounted for according to the recognition and
measurement principles of financial instruments. The difference between the fair value and the book value on the
date of the loss of common control or significant influence shall be included in the current profit or loss. 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. All other changes in owners' equity recognized due to factors other than net profit
or loss other comprehensive income and profit distribution of the investee are transferred in full to current
investment income when the equity method is no longer applied.Where the Group disposes of equity investments in subsidiaries through multiple transactions and by stages until
loss of control if the above transactions belong to a package of transactions accounting treatment shall be made
on the transactions as a transaction to dispose equity investments of subsidiaries and lose the control. The
difference between each disposal cost and the book value of long-term equity investments corresponding to
disposed equities before the loss of control shall be firstly recognized as other comprehensive income and then
transferred into the current profit or loss at the loss of control.
18. Investment properties
Investment property refers to property held to earn rentals or for capital appreciation or both and includes leased
land use rights and leased buildings.Investment property is initially measured at cost. 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 shall be included
in the cost of the investment property. Other subsequent expenses shall be included in the current profit or loss
when incurred.- 37 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(III) Significant accounting policies and accounting estimates - Continued
18. Investment properties - Continued
The Group uses the cost model for subsequent measurement of investment property and provides for depreciation
on a straight-line basis over its service life. The depreciation method useful life estimated residual value and
annual depreciation rates for each category of investment property are as follows:
Type Depreciation method Depreciation life Residual value rate (%) Annual depreciation(years) rate (%)
Houses and buildings Straight-line method 10-40 0.00-4.00 2.40-10.00
When an investment property is being disposed of or permanently withdraws from use without any economic
benefits expected from the disposal the investment property shall be derecognized.The difference between the disposal proceeds of an investment property (through sale transfer retirement or
damage) and its book value net of related taxes and fees is recognized in current profit or loss.
19. Fixed assets
19.1 Recognition conditions
Fixed assets refer to tangible assets held for the purpose of producing goods providing services renting or
operating management with a service life exceeding one fiscal year. Fixed assets will only be recognized when
the economic benefits associated with such assets are likely to flow into the Group and the cost can be measured
reliably. A fixed asset is initially measured at cost.For the subsequent expenses related to the fixed assets if the economic benefits related to the fixed assets are
likely to flow in and the cost can be measured reliably they shall be included in the cost of the fixed assets and
the book value of the replaced part shall be derecognized Other subsequent expenses shall be included into the
current profit or loss when incurred.
19.2 Depreciation method
From the month following the date a fixed asset is in working condition for intended use the Group depreciates
the asset on a straight-line basis over its service life. The depreciation method service year estimated residual
value and annual depreciation rates for each category of fixed assets are as follows:
Type Depreciation method Depreciation life Residual value rate (%) Annual depreciation(years) rate (%)
Buildings and constructions Straight-line method 10-40 0.00-4.00 2.40-10.00
Machinery equipment Straight-line method 10-14 4.00 6.86-9.60
Transportation equipment Straight-line method 8 4.00 12.00
Electronic equipment and others Straight-line method 5 4.00 19.20
Estimated net residual value refers to the amount obtained by the Group from the disposal of the fixed assets at
present after deducting the estimated disposal expenses assuming that the estimated service life of the fixed asset
has expired and the fixed asset is in the expected state at the end of its service life.- 38 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(III) Significant accounting policies and accounting estimates - Continued
19. Fixed assets - Continued
19.3 Other explanations
When the fixed assets are disposed of or it is expected that no economic benefits can be generated through use or
disposal the fixed assets shall be derecognized. The difference of the revenue from disposal of fixed assets such
as sales transfer retirement or damage deducting their book value and related taxes shall be included into the
current profit or loss.The Group will review service life estimated net residual value and depreciation methods of the fixed assets at the
end of each year. Changes if any shall be handled as changes in accounting estimates.
20. Construction in progress
The construction in progress is measured at actual cost which includes various project expenditures incurred
during the construction period capitalized borrowing costs before the project reaches working condition for
intended use and other related costs. No depreciation is made for construction in progress.The construction in progress shall be carried forward to the fixed assets after it reaches the working condition for
intended use. The criteria and timing for the conversion of various types of construction in progress into fixed
assets are as follows:
Type Criteria for conversion to fixed assets Time point of conversion intofixed assets
The machinery equipment shall be carried forward to the fixed assets when
it has been accepted and the following conditions are met:
Installation of (1) The machinery equipment and its supporting facilities have been Reach working condition for
machinery equipment installed; intended use
(2) After commissioning the machinery equipment can maintain normal and
stable operation or produce qualified products for a period of time.
21. Borrowing costs
The capitalization of the borrowing costs that can be directly attributable to the acquisition construction or
production of assets that meet the capitalization conditions will start when the asset expenditure has incurred the
borrowing costs have incurred and the acquisition construction or production activities necessary for the asset to
reach the intended usable or salable state have begun; the capitalization shall be ceased when the acquired and
constructed or produced assets eligible for capitalization have reached their working condition for intended use or
sales condition. The remaining borrowing costs are recognized as expenses on occurrence.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; general borrowings shall be determined by multiplying
the weighted average of asset disbursements of the part of accumulated asset disbursements exceeding special
borrowings by the capitalization rate of used general borrowings and on this basis the capitalization amount is
determined. The capitalization rate is calculated and recognized as per the weighted average interest rate of
general borrowing.- 39 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(III) Significant accounting policies and accounting estimates - Continued
22. Intangible assets
22.1 Service life and its basis for determination estimate amortization method or review procedure
Intangible assets include land use right software and patent rights etc.The intangible assets shall be initially measured at the costs. For intangible assets with limited service life the
original value shall be evenly amortized by straight-line method within the expected service life from the time
when they are available for use. The intangible assets with uncertain service life shall not be amortized. The
amortization method service life and residual value rate of various intangible assets are as follows:
Type Amortizationmethod Service life (year) and basis of determination
Residual value rate
(%)
Land use rights Straight-linemethod 50 (Determine the service life based on the statutory service life) -
Software Straight-line 5 (Determine the service life based on the period expected to bringmethod economic benefits) -
Patent right Straight-line 15 (Determine the service life based on the period expected to bringmethod economic benefits) -
At the end of the period the service life and amortization method of intangible assets with limited service life
shall be reviewed and adjusted if necessary.
22.2 The collection scope and related accounting treatments for research expenditures
The expenditures in research phase will be included in current profit or loss on occurrence.Expenditures in the development stage will be recognized as intangible assets only when the following conditions
are simultaneously satisfied and included in current profit or loss if the following conditions are not satisfied:
(1) It is technically feasible to complete the intangible assets so that it can be used or sold;
(2) It has the intention to complete the intangible assets and use or sell them;
(3) The manner in which an intangible asset generates economic benefits includes the ability to prove that there is
a market for the products produced through the use of this intangible asset or a market for the intangible asset
itself. In the case that the intangible asset will be used internally its usefulness shall be proven.
(4) With the support of sufficient technology financial resources and other resources it is able to complete the
development of the intangible assets and it is able to use or sell the intangible assets;
(5) The expenditures attributable to the intangible assets in the development stage can be measured reliably.
Where the research expenditures and the development expenditures are indistinguishable the COOEC shall
include research expenditures and development expenditures incurred in current profit or loss. The cost of the
intangible assets formed by internal development activities only includes the total expenditure incurred from the
time when the capitalization conditions are met to the time when the intangible assets reach the intended use. The
expenses recognized in profit or loss before meeting the capitalization conditions during the development for the
same intangible asset will not be adjusted.The scope of R&D expenditure includes wages salaries and welfare expenses of personnel directly engaged in
R&D activities materials fuel and power costs directly consumed in R&D activities and depreciation expenses
of instruments and equipment for R&D activities etc.- 40 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(III) Significant accounting policies and accounting estimates - Continued
23. Impairment of long-term assets
On each balance sheet date the Group checks whether there is any indication that long-term equity investments
investment properties measured by the cost model fixed assets construction in progress right-of-use assets and
intangible assets with a definite service life may have impairment. If there are indications of impairment of such
assets the recoverable amount shall be estimated. Intangible assets with indefinite service life and intangible
assets that have not yet reached a usable state are subject to impairment testing every year regardless of whether
there are indications of impairment.The recoverable amount of the estimated asset is based on a single asset. If it is difficult to estimate the
recoverable amount of a single asset the recoverable amount of the asset group shall be determined on the basis of
the asset group to which the asset belongs. The recoverable amount is the higher of the net amount obtained by
deducting the disposal expenses from the fair value of an asset or an asset group and the present value of its
expected future cash flows.If the recoverable amount of the asset is lower than its book value the provision for asset impairment shall be
made at the difference and included in the current profit or loss.The goodwill shall be tested for impairment at least at the end of each year. The impairment test of goodwill shall
be carried out in combination with the asset group or combination of asset groups related to it. That is from the
acquisition date the book value of goodwill shall be allocated using a reasonable method to the asset group or
portfolio of asset groups that benefit from the synergies of the business combination. If the recoverable amount of
the asset group or group of asset groups including the allocated goodwill is lower than its book value the
corresponding impairment losses shall be recognized. Amount of impairment losses shall be firstly used to deduct
the book value of goodwill allocated to the asset group or portfolio of asset groups and then deduct book value of
other assets according to the proportion of the book values of other assets (except for goodwill) in the asset group
or portfolio of asset groups.The above losses from assets impairment will not be reversed in subsequent accounting periods once recognized.
24. Long-term deferred expenses
Long-term deferred expenses refer to the expenses which have been already incurred but will be borne in the
current period and in the future with an amortization period of over 1 year. Long-term deferred expenses are
amortized evenly over the expected benefit period.
25. Contract liabilities
Contract liabilities refer to the obligation of the Group to transfer goods or services to customers for consideration
received or receivable from customers. Contract assets and contract liabilities under the same contract are
presented by their net amounts.
26. Employee remuneration
26.1 Accounting treatments for short-term compensation
During the accounting period when employees provide services for the Group the Group recognizes the short-
term compensation actually incurred as liabilities and includes it in the current profit or loss or related asset costs.The employee welfare expenses incurred by the Group shall be included in the current profit or loss or related
asset costs according to the actual amount incurred. If the employee benefits are non-monetary benefits they shall
be measured at fair value.- 41 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(III) Significant accounting policies and accounting estimates - Continued
26. Employee employee compensation - Continued
26.1 Accounting treatments for short-term compensation - Continued
For the medical insurance premiums work-related injury insurance premiums maternity insurance premiums and
other social insurance premiums and housing provident funds paid by the Group for employees as well as the
labor union funds and employee education expenses withdrawn by the Group in accordance with the provisions
the corresponding employee compensation amount shall be calculated and determined according to the prescribed
accrual basis and accrual ratio during the accounting period when employees provide services for the Group and
the corresponding liabilities shall be recognized and included in the current profit or loss or related asset costs.
26.2 Accounting treatments for post-employment benefits
Post-employment benefits are all defined contribution plans.During the accounting period when employees provide services for the Group the Group recognizes the amount
payable calculated according to the defined contribution plans as a liability and includes it in the current profit or
loss or related asset costs.
26.3 Accounting treatments for dismissal benefits
When the Group provides dismissal benefits to employees the employee compensation liability arising from the
dismissal benefits shall be recognized at the earlier of the following dates and included in the current profit or loss:
when the Group cannot unilaterally withdraw the dismissal benefits provided due to the termination of labor
relationship plan or the layoff proposal; when the Group recognizes the costs or expenses related to the
restructuring involving the payment of dismissal benefits.
27. Estimated liabilities
When the obligation related to the contingency such as product quality guarantee is a current obligation of the
Group and the performance of such obligation is likely to result in the outflow of economic benefits and the
amount of such obligation can be measured reliably it is recognized as estimated liabilities.On the balance sheet date by considering the risks uncertainty and time value of money and other factors related
to contingency the estimated liabilities will be measured according to the best estimate of the required
expenditures for performace of relevant present obligation. If the time value of money is significant the best
estimate shall be determined by the amount discounted by the estimated future cash flows.
28. Revenue
28.1 Accounting policies adopted for revenue recognition and measurement disclosed by business type
When the Group has fulfilled its performance obligations under the contract that is when the customer obtains
right of control of the relevant goods or services the revenue is recognized based on the transaction prices
allocated to the specific performance obligation. Performance obligations refer to the contractual commitments in
which the Group transfers clearly distinguishable goods or services to the customers.- 42 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(III) Significant accounting policies and accounting estimates - Continued
28. Revenue - Continued
28.1 Accounting policies adopted for revenue recognition and measurement disclosed by business type -
Continued
The Group evaluates the contract on the contract commencement date identifies each individual performance
obligation contained in the contract and determines whether each individual performance obligation is performed
within a certain period of time or at a certain point in time. If one of the following conditions is met it is a
performance obligation performed within a certain period of time and the Group recognizes revenue within a
certain period of time according to the performance progress: (1) the customer obtains and consumes the
economic benefits brought by the Group at the same time as the Group performs the contract; (2) The customer is
able to control the goods under construction in the course of the Group's performance; (3) 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. Otherwise the Group recognizes the revenue
at the point when the customer obtains the right of control of the relevant goods or services.For goods sold to customers the Group recognizes revenue when the right of control of the goods is transferred
that is when the goods are delivered to the designated place of the other party and signed by the other party. For
property service the Group recognizes revenue in the course of providing property service.Transaction prices refer to the amount of consideration that the Group is expected to be entitled to receive as a
result of the transfer of goods or services to customers but does not include the amount received on behalf of third
parties and the amount expected to be returned to customers by the Group. When determining the transaction
prices the Group considers the impact of variable consideration significant financing components in the contract
non-cash consideration consideration payable to customers and other factors.If the contract contains two or more performance obligations the Group shall on the commencement date of the
contract allocate the transaction prices to each individual performance obligation according to the relative ratio of
the individual selling price of the goods or services promised by each individual performance obligation. However
if there is conclusive evidence that the contractual discount or variable consideration is only related to one or more
(but not all) performance obligations in the contract the Group shall allocate the contractual discount or variable
consideration to the relevant one or more performance obligations. Individual selling price refers to the price at
which the Group sells goods or services to customers separately. If the individual selling price cannot be directly
observed the Group will comprehensively consider all the information that can be reasonably obtained and
estimate the individual selling price by maximizing the use of observable input value.For sales with sales return clauses the Group recognizes revenue at the amount of consideration expected to be
entitled to receive due to the transfer of goods to the customer (i.e. excluding the amount expected to be returned
due to sales return) when the customer obtains the relevant control over goods and recognizes liabilities at the
amount expected to be returned due to sales return; at the same time the balance of the book value of the expected
goods to be returned at the time of transfer after deducting the expected cost of recovering the goods (including
the impairment of the value of the returned goods) is recognized as an asset. The net amount after deducting the
cost of the above asset will be transferred as cost based on the book value of the transferred goods.For sales with quality assurance clauses if the quality assurance provides a separate service in addition to assuring
the customer that the goods or services sold meet the established standards the quality assurance constitutes a
single performance obligation. Otherwise the Group shall conduct accounting treatment for the quality assurance
liability in accordance with the Accounting Standards for Business Enterprises No. 13 - Contingencies.The Group determines whether it is the principal or the agent when engaging in transactions based on whether it
has the right of control over the goods or services before transferring them to the customer. If the Group can
control the goods or services before transferring them to the customer the Group is the main responsible person
and recognizes the revenue according to the total consideration received or receivable; otherwise the Group is an
agent and recognizes revenue based on the expected commissions or service fee it is entitled to receive. This
amount is determined by subtracting the price payable to other related parties from the total consideration received
or receivable.- 43 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(III) Significant accounting policies and accounting estimates - Continued
28. Revenue - Continued
28.1 Accounting policies adopted for revenue recognition and measurement disclosed by business type -
Continued
If the Group receives payment in advance from customers for sales of goods or services the payment is first
recognized as a liability and then transferred to revenue when the relevant performance obligations are fulfilled.When the Group's advances from customers do not need to be returned and the customer may waive all or part of
its contractual rights the Group expects to be entitled to the amount related to the contractual rights waived by the
customer and recognizes the above amount as revenue in ratio according to the mode of the customer's exercise
of contractual rights; otherwise the Group will only transfer the relevant balance of the above-mentioned
liabilities to revenue when it is highly unlikely that the customer will request the fulfillment of the remaining
performance obligations.
29. Government subsidies
Government subsidies refer to the monetary assets and non-monetary assets obtained by the Group from the
government for free. Government subsidies are recognized when they can meet the conditions attached to
government subsidies and can be received.The government subsidies considered as monetary assets are measured at the amount received or receivable.
29.1 Judgment basis and accounting treatments for government subsidies related to assets
The subsidies fro production line and equipment in the Group's government subsidies can form long-term assets
so such government subsidies are asset-related government subsidies.Government subsidies related to assets are recognized as deferred income and included in the current profit or loss
by stages according to the straight-line method within the service life of the relevant assets.
29.2 Judgment basis and accounting treatments for government subsidies related to income
The industry development support funds and enterprise development support funds in the Group's government
subsidies cannot form long-term assets so such government subsidies are income-related government subsidies.Income-related government subsidies used to compensate for relevant costs and losses in subsequent periods are
recognized as deferred income and included in the current profit or loss in the period when the relevant costs or
expenses are recognized; if it is used to compensate the relevant costs and losses incurred it shall be directly
included in the current profit or loss.Government subsidies related to the daily activities of the Group are included in other income according to the
essence of economic business. Government subsidies unrelated to the daily activities of the Group are included in
the non-operating revenue.When the recognized government subsidies need to be returned if there is relevant deferred income balance the
book balance of relevant deferred income shall be offset and the excess shall be included in the current profit or
loss; if there is no relevant deferred income it shall be directly included in the current profit or loss.- 44 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(III) Significant accounting policies and accounting estimates - Continued
30. Leases
Leases refers to a contract in which the lessor transfers the right of use of the asset to the lessee for consideration
within a certain period of time.At the commencement date of the contract the Group assesses whether the contract is a lease contract or contains
a lease. Unless the terms and conditions of the contract change the Group does not reassess whether the contract
is a lease contract or contains a lease.
30.1 The Group as a lessee
30.1.1 Spin-off of the lease
When a contract contains one or more lease and non-lease parts the Group will split the individual lease and non-
lease parts and allocate the contract consideration according to the relative ratio of the sum of the individual price
of each lease part and the individual price of the non-lease part.
30.1.2 Right-of-use assets
Except for short-term leases the Group recognizes the right-of-use assets of the lease on the lease commencement
date. The lease commencement date refers to the starting date when the lessor provides the leased assets for use by
the Group. Right-of-use assets are initially measured at cost. The cost includes:
The initial measurement amount of the lease liabilities;
the lease payments made on or before the lease commencement date or the relevant amount after deducting
the lease incentive already enjoyed if any;
Initial direct expenses incurred by the Group;
The estimated costs incurred by the Group for dismantling and removing the leased assets restoring the
premises where the leased assets are located or restoring the leased assets to the state agreed in the lease
clauses.The Group depreciates right right-of-use assets with reference to the depreciation provisions of Accounting
Standards for Business Enterprises No. 4 — Fixed Assets. If the Group can reasonably determine that the
ownership of leased assets will be obtained at the expiration of the lease term the right-of-use assets shall be
depreciated within the remaining service life of the leased assets. If it is not reasonably certain that ownership of
leased assets will be obtained at the expiration of the lease term the depreciation shall be accrued during the
shorter of the lease term and remaining service life leased assets.The Group determines whether the right-of-use assets are impairment in accordance with the Accounting
Standards for Business Enterprises No. 8 - Asset Impairment and performs accounting treatment on the identified
impairment losses.
30.1.3 Lease liabilities
Except for short-term leases the Group makes initial measurement of the lease liabilities on the lease
commencement date according to the present value of the lease payments that have not been paid on that date.When calculating the present value of lease payments the Group uses the interest rate implicit in lease as the
discount rate and if the interest rate implicit in lease cannot be determined the incremental borrowing rate is used
as the discount rate.- 45 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(III) Significant accounting policies and accounting estimates - Continued
30. Leases - continued
30.1 The Group as a lessee - Continued
30.1.3 Lease liabilities - Continued
Lease payments refer to the payments made by the Group to the lessor in connection with the right to use the
leased assets during the lease term including:
Fixed payment amount and substantial fixed payment amount. If there is lease incentive the relevant amount
of lease incentive shall be deducted;
Variable lease payment amount depending on index or ratio;
The exercise price of the option reasonably determined by the Group to be exercised;
The amount to be paid to terminate the lease when the lease term reflects that the Group will exercise the
option;
The amount expected to be paid according to the residual value of the guarantee provided by the Group.After the lease commencement date the Group calculates the interest expenses of the lease liabilities for each
period of the lease term at a fixed cyclical interest rate and includes it in the current profit or loss or related asset
costs.After the lease commencement date if any of the following circumstances occurs the Group shall remeasure the
lease liabilities and adjust the corresponding right-of-use assets. If the book value of the right-of-use assets has
been reduced to zero but the lease liabilities still needs to be further reduced the Group shall include the
difference in the current profit or loss:
If the lease term changes or the evaluation result of the purchase option changes the Group will re-measure
the lease liabilities according to the present value calculated by the changed lease payment amount and the revised
discount rate;
If the estimated payable amount according to the guarantee residual value or the index or proportion used to
determine the lease payment changes the Group will re-measure the lease liabilities according to the present value
calculated by the changed lease payment amount and the original discount rate.
30.1.4 As the basis for judgment and accounting treatments for the simplified treatment of short-term leases by
the lessee
The Group chooses not to recognize right-of-use assets and lease liabilities for short-term leases of some plants
and some leased warehouses. Short-term lease refers to a lease that lasts for no more than 12 months and includes
no purchase options at the lease commencement date. The Group includes the lease payments of short-term leases
in the current profit or loss or related asset costs according to the straight-line method in each period of the lease
term.
30.1.5 Lease modification
If the lease is modified and the following conditions are met at the same time the Group will account for the lease
modification as a separate lease:
The lease modification expands the scope of the lease by adding one or more right of use of the leased assets;
The increased consideration is equivalent to the individual price of the expanded part adjusted according to
the contract.- 46 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(III) Significant accounting policies and accounting estimates - Continued
30. Leases - continued
30.1 The Group as a lessee - Continued
30.1.5 Lease modifications - Continued
If the lease modification is not accounted for as a separate lease on the effective date of the lease modification
the Group re-apportions the consideration of the modified contract re-determines the lease term and re-measures
the lease liabilities at the present value calculated according to the modified lease payments and the revised
discount rate.If the lease modification results in a reduction in the scope of the lease or the lease term the Group shall reduce
the book value of the right-of-use assets accordingly and include the relevant gains or losses of partial or
complete termination of leases into the current profit or loss. If the lease liabilities are remeasured due to other
lease modification the Group shall adjust the book value of the right-of-use assets accordingly.
30.2 The Group as a lessor
30.2.1 Spin-off of the lease
If the contract contains both the lease and non-lease parts the Group shall allocate the contract consideration
according to the provisions of the revenue standards on the allocation of transaction prices and the basis of
allocation shall be the separate price of the lease part and the non-lease part.
30.2.2 Classification criteria and accounting treatments as a lessor
Leases that substantially transfer substantially all of the risks and rewards associated with the ownership of leased
assets are financing leases Leases other than financing lease are operating leases.
30.2.2.1 The Group records operating leases as a lessor
During each period of the lease term the Group recognizes the lease receipts of operating leases as rental income
by using the straight-line method. The initial direct costs incurred by the Group in connection with operating
leases are capitalized when incurred amortized on the same basis as rental income recognition during the lease
term and included in the current profit or loss in installments.The variable lease receipts related to operating leases acquired by the Group and not included in the lease receipts
are included in the current profit or loss when actually incurred.
30.2.3 Lease modification
If the operating lease is changed the Group will account for it as a new lease from the effective date of the change
and the advance or receivable lease receipts related to the lease before the change will be regarded as the receipt
amount of the new lease.- 47 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(III) Significant accounting policies and accounting estimates - Continued
31. Deferred tax assets and deferred tax liabilities
Income tax expenses include current income tax and deferred income tax.
31.1 Current income tax
On the balance sheet date the current income tax liabilities (or assets) formed in the current and prior periods are
measured at the expected income tax payable (or refundable) calculated in accordance with the tax law.
31.2 Deferred tax assets and deferred tax liabilities
For the difference between the book value of certain assets and liabilities and their tax bases and the temporary
differences arising from the difference between the book value and tax base of items that are not recognized as
assets and liabilities but whose tax bases can be determined in accordance with the tax law the balance sheet
liability method is adopted to recognize deferred tax assets and deferred tax liabilities.In general the relevant deferred income taxes are recognized for all temporary differences. However for
deductible temporary differences the Group recognizes the relevant deferred tax assets to the extent of the taxable
income that is likely to be obtained to offset the deductible temporary differences. In addition deferred tax assets
or liabilities are not recognized for temporary differences associated with the initial recognition of goodwill and
with the initial recognition of assets or liabilities arising from transactions that are neither business combinations
nor affect accounting profit or taxable income (or deductible losses) and do not result in equal taxable temporary
differences and deductible temporary differences.For deductible loss and tax credits that can be carried forward to subsequent years the corresponding deferred tax
assets arising therefrom are recognized to the extent that future taxable income will be probable to be available
against deductible losses and tax credits.The Group recognizes deferred tax liabilities arising from taxable temporary differences associated with
subsidiaries associates and investments in joint ventures unless the Group is able to control the timing of the
reversal of the temporary differences and it is probable that the temporary differences will not be reversed in the
foreseeable future. For deductible temporary differences related to subsidiaries associates and investments in joint
ventures the Group recognizes deferred tax assets only if it is probable that the temporary differences will reverse
in the foreseeable future and it is probable that taxable income will be available to offset the deductible temporary
differences in the future.On the balance sheet date deferred tax assets and deferred tax liabilities should be measured at the applicable tax
rate during the period of expected recovery of the relevant assets or liquidation of the relevant assets according to
the provisions of tax laws.Except for the current income tax and deferred income taxes related to transactions and events directly included in
other comprehensive income or shareholders' equity which are included in other comprehensive income or
shareholders' equity and the book value of deferred income taxes arising from business combination to adjust
goodwill the remaining current income tax and deferred income tax expenses or income are included in the
current profit or loss.On the balance sheet date the book value of the deferred tax assets shall be reviewed. If it is likely that sufficient
taxable income will not be available in the future to offset the benefits of the deferred tax assets the book value of
the deferred tax assets shall be written down. When it is likely to earn sufficient taxable income the written down
amount is reversed.- 48 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(III) Significant accounting policies and accounting estimates - Continued
31. Deferred tax assets and deferred tax liabilities - Continued
31.3 Offset of income tax
When the Group has a legal right to settle on a net basis and intends to settle with net amount or acquire assets and
pay off liabilities simultaneously the Group reports the net amount of current income tax assets and current tax
liabilities after offsetting.When the Group has the legal right to settle current income tax assets and current income tax liabilities on a net
basis and the deferred tax assets and deferred tax liabilities are related to the income tax levied by the same tax
collection authority on the same taxpayer or on different taxpayers but in each important future period of reversal
of deferred tax assets and liabilities the involved taxpayer intends to settle current income tax assets and liabilities
on a net basis or to obtain assets and settle liabilities at the same time the deferred tax assets and deferred tax
liabilities of the Group are presented at the net amount after offset.
32. Changes in significant accounting policies and accounting estimates
32.1 Adjustments for changes in significant accounting policies
32.1.1 The Interpretation No. 19 of the Accounting Standards for Business Enterprises
On December 5 2025 the Ministry of Finance issued the Interpretation No. 19 of the Accounting Standards for
Business Enterprises hereinafter referred to as the "Interpretation No.19"). Interpretation No. 19 specifies the
assessment of the cash flow characteristics of financial asset contracts and related disclosures as well as the
disclosures for equity instruments designated to be measured at fair value with changes recorded in other
comprehensive income and it will come into effect on January 1 2026.Assessment of the contractual cash flow characteristics of financial assets and related disclosure
To assesses whether the contractual cash flows of a financial asset are consistent with a basic lending arrangement
the entity may need to consider the different components of interest. The assessment of interest should focus on
what the entity is being compensated for rather than the amount of compensation although the latter may indicate
that the entity is being compensated for factors other than the basic lending risks and costs. If the contractual cash
flows are linked to variables other than the basic lending risks or costs (such as the value of an equity instrument
or the price of a commodity) or if the contractual cash flows represent a portion of the debtor's revenue or profit
then the contractual cash flows are inconsistent with the basic lending arrangement. The Group will implement
this provision as of January 1 2026 and believes that the adoption of the above provisions has no material impact
on the Group's financial statements.Disclosure of designated equity instruments measured at fair value with changes recognized in other
comprehensive income
Interpretation No. 19 stipulates that an entity shall at a minimum disclose by category the fair value of designated
investment in equity instruments measured at fair value through other comprehensive income at the end of the
reporting period and the changes in their fair value during the reporting period and may make further disclosure
by item based on the principle of materiality and in conjunction with the entity's actual situation. Among these the
amount of change related to investments derecognized during the reporting period and the amount of change
related to investments held at the end of the reporting period shall be disclosed separately. The entity shall also
disclose the transfer of cumulative gains or losses included in equity related to investments derecognized during
the reporting period. The Group will implement this provision as of January 1 2026 and believes that the
adoption of the above provisions has no material impact on the Group's financial statements.- 49 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(III) Significant accounting policies and accounting estimates - Continued
32. Changes in significant accounting policies and accounting estimates - Continued
32.2 Changes in accounting estimates
The Group has no significant changes in accounting estimates during the year.(IV) Taxes
1.Main tax types and tax rates
Tax type Tax basis Tax rate
Balance of output tax minus deductible input tax; tax The output tax for domestic sales is calculated at
Value-added tax exemption offset and refund measures are applicable to 13% 9% 6% and 5% of the sales amount
the sales of export products according to relevant tax regulations and theexport product tax rebate rate is 13%
Urban maintenance and
construction tax Turnover tax payable 7%
Education surcharge Turnover tax payable 3%
Local education surtax Turnover tax payable 2%
Corporate income tax Taxable income 25%、20%、15%、8.25%
THE RESIDUAL VALUE AFTER DEDUCTING 30%
Property taxes FROM THE ORIGINAL VALUE OF THE PROPERTY 1.2%
AT ONCE
Notes to the taxpayers with different corporate income tax rates:
Name of taxpayer Income tax rate
The Company 25%
Shenzhen Shenfang Property Management Co. Ltd. 20% (Note 1)
Shenzhen Meibainian Garment Co. Ltd. 20% (Note 1)
Shenzhen Lisi Industrial Development Co. Ltd. 20% (Note 1)
Shenzhen Shenfang Sungang Property Management Co. Ltd. 20% (Note 1)
SATO (Hong Kong) Limited 8.25% (Note 2)
Shenzhen SAPO Photoelectric Co. Ltd. (hereinafter referred to as "SAPO
Photoelectric") 15% (Note 3)
Note 1: See Note (IV) and 2(2) for details.Note 2: according to the Inland Revenue Ordinance of Hong Kong SATO (Hong Kong) Limited is subject to a
two-tier profits tax system. The first HKD 2 million of taxable profits shall taxed at a rate of 8.25% and the
profits generated thereafter shall be taxed at a rate of 16.5%.Note 3: See Note (IV) and 2(1) for details.
2.Tax incentives
(1) In 2025 SAPO Photoelectric a subsidiary of the Company was jointly recognized as Industry and
Information Technology Bureau of Shenzhen Municipality Shenzhen Finance Bureau and Shenzhen Tax Service
State Taxation Administration respectively with a certification period of 3 years and the certificate numbers of
GR202544204289 respectively. Since SAPO Photoelectric was recognized as a high-tech enterprise it is eligible
for the tax incentives for high-tech enterprises for three years. After filing with the competent tax bureau SAPO
Photoelectric has paid corporate income tax at a tax rate of 15%.- 50 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(IV) Taxes - continued
2. Tax incentives - continued
(2) The Company's subsidiaries Shenzhen Meibainian Garment Co. Ltd. Shenzhen Lisi Industrial Development
Co. Ltd. Shenzhen Shenfang Sungang Property Management Co. Ltd. and Shenzhen Shenfang Property
Management Co. Ltd. are qualified small low-profit enterprises. According to the Announcement of the Ministry
of Finance and the State Taxation Administration of Taxation on Further Implementing Preferential Policies for
Corporate Income Tax of Small and Micro Enterprises (No. 13 2022) and the Announcement of the Ministry of
Finance and the State Taxation Administration on Preferential Policies for Corporate Income Tax of Small and
Micro Enterprises and Individual Industrial and Commercial Households (No. 6 2023) the part of the annual
taxable income not exceeding RMB 3 million will be included in the taxable income after deducting 25% and
corporate income tax will be paid at a tax rate of 20%.
(3) In accordance with the relevant provisions of the Notice of the State Administration of Taxation of the General
Administration of Customs of Ministry of Finance on Import Tax Policies for Supporting the Development of the
New Display Device Industry (No. 19[2021]Cai Guan Shui) SAPO Photoelectric a subsidiary of the Company
meets the relevant conditions and enjoys the policy of exemption from import duties for related products from
January 1 2021 to December 31 2030.
(4) According to the Announcement on the Policy of Additional Value-Added Tax Deduction for Advanced
Manufacturing Enterprises (CZBSWZJGG [2023] No.43) issued by the Ministry of Finance and the State
Taxation Administration in September 2023 from January 1 2023 to December 31 2027 advanced
manufacturing enterprises are allowed to deduct the value-added tax payable by 5% of the deductible input tax for
the current period. SAPO Photoelectric a subsidiary of the Company meets the relevant conditions and enjoyed
the policy of additional deduction of value-added tax (VAT) in 2025.(V) Notes to financial statements items
1. Monetary funds
RMB
Item Balance as at the end of the Balance as at the end of thecurrent year previous year
Cash on hand: 15510.21 4751.69
RMB 15451.50 4691.50
HKD 58.71 60.19
Bank deposits (Note 1): 449263543.52 302111853.17
RMB 291041371.64 245621517.80
USD 93081165.25 40462152.89
JPY 64400647.02 15265963.38
HKD 740359.61 762219.10
Other monetary funds (Note 2): 685396.65 38844838.96
RMB 685394.45 10920461.06
JPY 2.20 27924377.90
Total 449964450.38 340961443.82
Including: total amount deposited abroad - -
- 51 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(V) Notes to financial statements - continued
1. Monetary funds - continued
Note 1: On December 31 2025 the bank deposits include interest income from current deposits agreement
deposit and 7-day notice deposits amounting to RMB 21498.92 (on December 31 2024: RMB 31765.51).Note 2: On December 31 2025 the Group's other monetary funds included RMB 684860.26 (December 31 2024:
RMB 3401500.00) restricted in use due to account freezing and RMB536.39 (December 31 2024: RMB
35443338.96) deposits for bills and letters of credit.
2. Financial assets held for trading
RMB
Item Balance as at the end of the Balance as at the end of thecurrent year previous year
Financial assets measured at fair value through current profit or
loss 736341286.18 731419904.42
Including: money funds structured deposits and wealth
management products 736341286.18 731419904.42
3. Notes receivable
(1) Classification of notes receivable
RMB
Category Balance as at the end of the Balance as at the end of thecurrent year previous year
Bank acceptance bills 85980246.52 47305221.88
(2) As at December 31 2025 the Group has no pledged notes receivable.
(3) As of December 31 2025 notes receivable endorsed or discounted by the Group and not yet due on the balance
sheet date at the end of the period.RMB
Item Amount derecognized at the Amount not derecognized at theend of the period end of the period
Bank acceptance bills - 53001736.07
(4) Disclosure by provision method for bad debts
RMB
Balance as at the end of the current year Balance as at the end of the previous year
Category Book balance Provision for bad debts Book balance Provision for bad debts
Amount Ratio Provision
Book value Provision Book value
(%) Amount ratio (%) Amount Ratio (%) Amount ratio (%)
Provision for bad debts
accrued on an individual - - - - - - - - - -
basis
Provision for bad debts
made by portfolio 85980246.52 100.00 - - 85980246.52 47305221.88 100.00 - - 47305221.88
Including: bank
acceptance bills 85980246.52 100.00 - - 85980246.52 47305221.88 100.00 - - 47305221.88
Total 85980246.52 100.00 - 85980246.52 47305221.88 100.00 - 47305221.88
(5) In 2025 the Group has no actual write-off of notes receivable.
- 52 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(V) Notes to financial statements - continued
4. Accounts receivable
(1) Disclosure by aging
RMB
Aging Book balance at the end of the Book balance at the end of theyear previous year
Within 1 year 777768360.91 888265598.53
1-2 years 362522.04 368365.12
2 to 3 years 126149.29 -
Over 3 years 13513950.97 13565696.79
Total 791770983.21 902199660.44
(2) Disclosure by provision method for bad debts
RMB
Balance as at the end of the current year
Category Book balance Provision for bad debts
Amount Ratio (%) Amount Provision ratio Book value(%)
Provision for bad debts accrued 38464614.51 4.86 18450283.68 47.97 20014330.83
on an individual basis
Provision for bad debts made 753306368.70 95.14 11512750.01 741793618.69
by portfolio
Including: portfolio 1 743510570.70 93.90 11247868.50 1.51 732262702.20
Combination 2 9795798.00 1.24 264881.51 2.70 9530916.49
Total 791770983.21 100.00 29963033.69 761807949.52
RMB
Balance as at the end of the previous year
Category Book balance Provision for bad debts
Amount Ratio (%) Amount Provision ratio Book value(%)
Provision for bad debts accrued
on an individual basis 35622829.91 3.95 17870018.37 50.16 17752811.54
Provision for bad debts made
by portfolio 866576830.53 96.05 20597705.18 845979125.35
Including: portfolio 1 854782067.66 94.74 20338340.21 2.38 834443727.45
Combination 2 11794762.87 1.31 259364.97 2.20 11535397.90
Total 902199660.44 100.00 38467723.55 863731936.89
As of December 31 2025 the Company has no significant accounts receivable with individual provision for bad
debts.As of December 31 2025 the credit risk and provision for bad debts of accounts receivable of Portfolio 1 are as
follows:
RMB
Balance as at the end of the current year
Type Expected average loss
rate (%) Book balance Provision for bad debts Book value
Within the credit period 1.28 711685368.76 9123382.28 702561986.48
1-30 days overdue 1.63 29661939.99 484532.27 29177407.72
31-60 days overdue 13.98 220361.71 30804.63 189557.08
61-90 days overdue 82.54 1911084.01 1577333.09 333750.92
More than 90 days overdue 100.00 31816.23 31816.23 -
(with impairment)
Total 743510570.70 11247868.50 732262702.20
- 53 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(V) Notes to financial statements - continued
4. Accounts receivable - continued
(2) Disclosure by provision method for bad debts - Continued
As of December 31 2025 the credit risk and provision for bad debts of accounts receivable of Portfolio 2 are as
follows:
RMB
Balance as at the end of the current year
Aging Expected average loss
rate (%) Book balance Provision for bad debts Book value
Within 1 year 1.55 9271692.90 143294.18 9128398.72
1-2 years 6.90 358039.00 24692.50 333346.50
2 to 3 years 30.00 98816.10 29644.83 69171.27
Over 3 years 100.00 67250.00 67250.00 -
Total 9795798.00 264881.51 9530916.49
As of December 31 2025 provision for bad debts is made based on the simplified expected credit losses model
RMB
Whole duration Whole duration
Provision for bad debts Expected credit losses Expected credit losses Total
(No credit loss) (With credit loss)
Balance at the beginning of the
year 24828685.54 13639038.01 38467723.55
Balance at the beginning of the - - -
year
- Transfer to credit loss incurred - - -
- Reversal of credit loss not - - -
incurred
Withdrawal in the current year 5012530.89 - 5012530.89
Reversal in the current year (13392133.71) (125087.04) (13517220.75)
Charge-off in the current year - - -
Write-off in the current year - - -
Other changes - - -
Balance as at the end of the 16449082.72 13513950.97 29963033.69
current year
(3) Provision for bad debts
RMB
Balance at the Changes in the current year Balance as at the
Type beginning of the Recovery or Resale or write- end of the current
year Provision reversal off Other changes year
Provision for
bad debts 38467723.55 5012530.89 (13517220.75) - - 29963033.69
There was no significant amount of provision for bad debts recovered or reversed this year.
(4) There are no accounts receivable actually written off this year.
- 54 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(V) Notes to financial statements - continued
4. Accounts receivable - continued
(5) Top 5 accounts receivable in terms of the ending balances by debtors
RMB
Proportion in accounts
receivable Provision for bad debts
Entity name Book balance at the end of theyear Ratio of balance at the end of Balance as at the end of the
the year (%) current year
Customer 1 128443330.43 16.22 1653660.98
Customer 2 100119032.87 12.64 1287356.61
Customer 3 90314120.50 11.41 1170120.08
Customer 4 84819285.15 10.71 1127277.20
Customer 5 73851813.87 9.33 949605.87
Total 477547582.82 60.31 6188020.74
5. Receivables financing
(1) Presentation of receivables financing by category
RMB
Item Balance as at the end of the Balance as at the end of thecurrent year previous year
Bank acceptance bills 22584820.72 6804603.68
The Group believes that the bank acceptance bills it holds are issued by banks with high credit ratings and carry
no significant credit risk; therefore no provision for bad debts has been made.As at December 31 2025 the Group has no pledged receivables financing.
(3) As of December 31 2025 receivables financing endorsed or discounted by the Group and not yet due on the
balance sheet date at the end of the period
RMB
Item Amount derecognized at the end Amount not derecognized at theof the period end of the period
Bank acceptance bills 76263471.66 -
(4) In 2025 the Group has no receivables financing with actual write-off.
- 55 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(V) Notes to financial statements - continued
6. Advances to suppliers
(1) Disclosure of advances to suppliers by aging
RMB
Balance as at the end of the current year Balance as at the end of the previous year
Aging
Amount Ratio (%) Amount Ratio (%)
Within 1 year 28531062.77 97.91 7233035.70 88.46
1-2 years 440626.72 1.51 873375.47 10.68
2 to 3 years 99375.47 0.34 8227.73 0.10
Over 3 years 70145.61 0.24 62085.80 0.76
Total 29141210.57 100.00 8176724.70 100.00
As of December 31 2025 the Group has no advances to suppliers with an aging of more than 1 year and an
important amount.
(2) Top 5 advances to suppliers in terms of the ending balances by prepayment objects
The total amount of the top five prepayments categorized by prepayment objects as of the end of the year was
RMB 24076887.09 accounting for 77.27% of the ending balance of advances to suppliers.
7. Other receivables
(1) Disclosure by aging
RMB
Aging Balance as at the end of Balance as at the end ofthe current year the previous year
Within 1 year 3292434.09 2878553.22
1-2 years 439728.28 227729.90
2 to 3 years 179540.31 37922.15
Over 3 years 18454569.46 18436540.75
Total 22366272.14 21580746.02
Less: provision for bad debts 18041299.12 17984202.06
Book value 4324973.02 3596543.96
(2) Disclosure by nature of payment
RMB
Nature of payment Book balance at the end of Book balance at the end ofthe year the previous year
Current accounts 15455577.41 15422685.97
Guarantee and deposits 2373756.82 2523551.88
Export tax rebate 709028.48 709028.48
Petty cash and employee borrowings 293128.97 296058.95
Others 3534780.46 2629420.74
Total 22366272.14 21580746.02
- 56 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(V) Notes to financial statements - continued
7. Other receivables - continued
(3) Provision for bad debts
As of December 31 2025 provision for bad debts is made based on general model of expected credit losses
RMB
Phase I Phase II Phase III
Expected credit losses The entire expected The entire expectedProvision for bad debts
over the next 12 credit loss over the credit loss over the
Total
months life of the instruments life of the instruments(No credit loss) (With credit loss)
Balance at the beginning of the year 146991.50 39206.78 17798003.78 17984202.06
Balance at the beginning of the year
-Transfer to phase II (23085.73) 23085.73 - -
-Transfer to phase III - (7445.09) 7445.09 -
-Reversal to phase II - - - -
-Reversal to phase I - - - -
Withdrawal in the current year 22343.56 36164.89 2425.00 60933.45
Reversal in the current year - (3836.39) (3836.39)
Charge-off in the current year - - - -
Write-off in the current year - -
Other changes - - -
Balance as at the end of the current 146249.33 87175.92 17807873.87 18041299.12
year
As of December 31 2025 provision for bad debts shall be made according to the credit risk characteristic
combination
RMB
Balance as at the end of the current year
Item Expected average Book balance Provision for badloss rate (%) debts Book value
Provision for bad debts based on credit risk
characteristic combination 80.66 22366272.14 18041299.12 4324973.02
Provision for other receivables
As of December 31 2025 the credit risk and provision for bad debts of other receivables are as follows:
RMB
Balance as at the end of the current year
Aging Expected average Provision for bad
loss rate (%) Book balance debts Book value
Within 1 year 4.44 3292434.09 146249.33 3146184.76
1-2 years 10.70 439728.28 47050.92 392677.36
2 to 3 years 22.35 179540.31 40125.00 139415.31
Over 3 years 96.50 18454569.46 17807873.87 646695.59
Total 22366272.14 18041299.12 4324973.02
- 57 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(V) Notes to financial statements - continued
7. Other receivables - continued
(4) Provision for bad debts
RMB
Balance at the Changes in the current year Balance as at
Type beginning of the Provision Recovery or Resale or write-year reversal off Other changes
the end of the
current year
Provision for bad debts 17984202.06 60933.45 (3836.39) - - 18041299.12
There is no provision for bad debts recovery or reversal of significant amount in the current year.
(5) There are no other receivables actually written off this year.
(6) Top five entities in terms of ending balance of other receivables by debtors
RMB
Proportion of
other receivables Provision for bad
Balance as at the (%) debts
name end of the current Balance as at the Nature of amount Aging Balance as at the
year end of the current end of the current
year year
Customer 1 11389044.60 50.92 Intercoursepayment Over 3 years 11389044.60
Customer 2 1800000.00 8.05 Intercourse Over 3 yearspayment 1800000.00
Customer 3 1100000.00 4.92 Intercourse Within 1 yearpayment 55000.00
Customer 4 1018295.37 4.55 Intercourse Over 3 yearspayment 1018295.37
Customer 5 980461.06 4.38 Others Over 3 years 980461.06
Total 16287801.03 72.82 15242801.03
8. Inventories
(1) Classification of inventories
RMB
Balance as at the end of the current year Balance as at the end of the previous year
Item Provision for Provision forBook balance inventory Book value Book balance inventory Book value
depreciation depreciation
Raw materials 507546211.97 36085589.06 471460622.91 453134126.81 14875137.34 438258989.47
Products in
progress 356737261.98 58000907.47 298736354.51 335115507.53 66220022.55 268895484.98
Finished
products 140769463.04 32736881.09 108032581.95 121746047.85 40357658.59 81388389.26
Entrusted
processing 6920970.30 508174.16 6412796.14 1710557.68 496720.51 1213837.17
materials
Total 1011973907.29 127331551.78 884642355.51 911706239.87 121949538.99 789756700.88
Note: as of December 31 2025 the book balance of the polarizer inventories was RMB 1006015410.72
(December 31 2024: RMB 905482857.11) with a corresponding provision for inventory depreciation of RMB
121613439.13 (December 31 2024: RMB 115967084.94).
(2) Provision for inventory depreciation
RMB
Balance at the Increase in the current year Decrease in the current year Balance as at the
Item beginning of the Reversal or end of the current
year Provision Others write-off Others year
- 58 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
Raw materials 14875137.34 21310338.94 - 99887.22 - 36085589.06
Products in 66220022.55 35879526.66 - 44098641.74 - 58000907.47progress
Finished 40357658.59 81139403.67 - 88760181.17 - 32736881.09products
Entrusted 11453.65 - - - 508174.16
processing 496720.51
materials
Total 121949538.99 138340722.92 - 132958710.13 - 127331551.78
- 59 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(V) Notes to financial statements - continued
8. Inventories - continued
(2) Provision for inventory depreciation - Continued
Specific basis for determining the net realizable value of inventories and the reasons for reversal or write-off of
the provision for inventory depreciation during the current year:
Reasons for reversing or
Item Specific basis for determining net realizable value writing off provision forinventory depreciation this
year
The net realizable value is determined by the estimated
Raw materials goods in process and selling price of the relevant finished products minus the Received or sold in the
consigned processing materials estimated cost to be incurred until completion estimated current year
selling and distribution expenses and relevant taxes.The net realizable value is determined by the estimated
Finished products selling price of the inventories minus the estimated It is sold or market value is
selling and distribution expenses and related taxes. recovered in the current year
(3) As of December 31 2025 there is no amount in the balance of inventories used for guarantee and no amount
of capitalization of borrowing costs.
9. Other current assets
RMB
Item Balance as at the end of the Balance as at the end of thecurrent year previous year
Value-added tax to be deducted and input tax to be certified 56593276.80 2100314.86
Cost of return receivable 29008785.23 19314386.69
Prepaid income tax 47034.59 47034.59
Total 85649096.62 21461736.14
10. Long-term equity investments
RMB
Changes in the current year
Other Provision
for
Balance at the Additi Investment profit
compr
ehensi Chang Cash dividends Balance as at the impairment
Investees beginning of the onal or loss recognized es inReduced Provisio end of the current
year under the equity
ve other or profits Balance as
invest investment incom declared to be n for
Others year
method equity at the end
ment e paid impairm of the
adjust ent current year
ment
I. Joint ventures
Shenzhen Guanhua Printing
and Dyeing Co. Ltd. 111555887.28
--(7280934.44)-----104274952.84-
Sub-total 111555887.28 - - (7280934.44) - - - - - 104274952.84 -
II. Associates
Shenzhen Changlianfa Printing 3272138.76 - - 269945.31 - - (233450.00) - - 3308634.07and Dyeing Co. Ltd. -
Sub-total 3272138.76 - - 269945.31 - - (233450.00) - - 3308634.07 -
Total 114828026.04 - - (7010989.13) - - (233450.00) - - 107583586.91 -
- 60 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(V) Notes to financial statements - continued
11. Other equity instrument investments
(1) Details of other equity instrument investments
RMB
Changes in the current year
Dividend Accumulative
Gains accrued Loss accrued to income Accumulative gains
Balance at the to other other Balance as at the recognized in accrued to other
losses accrued Reasons designated as
comprehensive to otherItem beginning of end of the current being measured at fairAdditional Reduced comprehensive comprehensive Others the current comprehensive
the year value through otherinvestment investment income in the income in the year period income income comprehensive income
current year current year
Hualian Development Group Co. Ltd. 129884000.00 - - - (6680600.00) - 123203400.00 - 120603400.00 - The Group plans tohold it for a long time
Shenzhen Dailisi Underwear Co. Ltd. 19642900.00 - - 1278300.00 - - 20921200.00 1037735.85 18361343.74 - The Group plans tohold it for a long time
Shenzhen Nanfang Textile Co.Ltd. 13181700.00 - - - (468900.00) - 12712800.00 869411.17 11212800.00 - The Group plans tohold it for a long time
Shenzhen Xinfang Knitting Factory 2694300.00 - - - (270100.00) - 2424200.00 198000.00 1900200.00 - The Group plans toCo. Ltd. hold it for a long time
Jintian Industry (Group) Co. Ltd. - - - - - - - - - (14831681.50) The Group plans tohold it for a long time
Total 165402900.00 - - 1278300.00 (7419600.00) - 159261600.00 2105147.02 152077743.74 (14831681.50)
(2) Description of derecognition in the current year
There is no derecognition of other equity instrument investments this year.- 61 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(V) Notes to financial statements - continued
12. Investment properties
(1) Investment properties measured at the cost mode
RMB
Item Houses and buildings
I. Total original book value
1. Balance at the beginning of the year 350367442.40
2. Increase in the current year -
(1) Outsourcing -
(2) Transfer of fixed assets -
3. Decrease in the current year 903094.00
(1) Disposal 903094.00
(2) Other transfer-out -
4. Balance at the end of the year 349464348.40
II. Accumulated depreciation and accumulated amortization
1. Balance at the beginning of the year 234374052.21
2. Increase in the current year 9578063.55
(1) Provision or amortization 9578063.55
(2) Transfer of fixed assets -
3. Decrease in the current year 218548.99
(1) Disposal 218548.99
(2) Other transfer-out -
4. Balance at the end of the year 243733566.77
III. Provision for impairment
1. Balance at the beginning of the year -
2. Increase in the current year -
(1) Provision -
3. Decrease in the current year -
(1) Disposal -
4. Balance at the end of the year -
IV. Book value
1. Book value at the end of the year 105730781.63
2. Book value at the beginning of the year 115993390.19
(2) Investment properties without certificate of title
RMB
Item Book value Reasons for failure to obtainthe certificate of title
Houses and buildings 10174628.79 Warrants not obtained forhistorical reasons
- 62 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(V) Notes to financial statements - continued
13. Fixed assets
(1) Fixed assets
RMB
Item Buildings and Machinery Transportation
Electronic equipment
constructions equipment equipment and TotalOthers
I. Total original book value
1. Balance at the beginning of
the year 737314323.44 2742755668.60 17296480.97 44961075.88 3542327548.89
2. Increase in the current year - 10670402.98 1769234.30 1920350.26 14359987.54
(1) Purchase - 5699245.91 1462223.02 1920350.26 9081819.19
(2) Transfer from - 4971157.07 307011.28 - 5278168.35
construction in progress
(3) Other changes - - - - -
3. Decrease in the current year 1200082.66 50002603.71 899097.77 1561435.59 53663219.73
(1) Disposal or scrapping 1200082.66 50002603.71 899097.77 1561435.59 53663219.73
(2) Other changes - - - - -
4. Balance at the end of the 736114240.78 2703423467.87 18166617.50 45319990.55 3503024316.70
year
II. Accumulated depreciation
1. Balance at the beginning of
the year 212518046.33 1378019063.83 9666345.31 36492325.52 1636695780.99
2. Increase in the current year 23096381.84 199623463.69 2160850.05 3486951.33 228367646.91
(1) Provision 23096381.84 199623463.69 2160850.05 3486951.33 228367646.91
(2) Other changes - - - - -
3. Decrease in the current year 402358.83 45088586.69 753558.59 1310319.85 47554823.96
(1) Disposal or scrapping 402358.83 45088586.69 753558.59 1310319.85 47554823.96
(2) Other changes - - - - -
4. Balance at the end of the 235212069.34 1532553940.83 11073636.77 38668957.00 1817508603.94
year
III. Provision for impairment
1. Balance at the beginning of
the year 9919769.42 21721908.03 7228.57 430017.97 32078923.99
2. Increase in the current year - - - - -
(1) Provision - - - - -
3. Decrease in the current year 99508.16 3643617.60 1102.16 133587.12 3877815.04
(1) Disposal or scrapping 99508.16 3643617.60 1102.16 133587.12 3877815.04
4. Balance at the end of the 9820261.26 18078290.43 6126.41 296430.85 28201108.95
year
IV. Book value
1. Book value at the end of the 491081910.18 1152791236.61 7086854.32 6354602.70 1657314603.81
year
2. Book value at the beginning
of the year 514876507.69 1343014696.74 7622907.09 8038732.39 1873552843.91
(2) Fixed assets without certificate of title
RMB
Item Book value Reasons for failure to obtain thecertificate of title
Houses and buildings 10438495.07 Warrants not handled for historicalreasons
(3) Fixed assets of mortgage and guarantee
As at December 31 2025 the Group's fixed assets mortgaged for bank borrowings are detailed in Note (V) 21
"Assets with Restricted Ownership or Right of Use".- 63 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(V) Notes to financial statements - continued
14. Construction in progress
14.1 Summary of construction in progress
RMB
Item Balance as at the end of Balance as at the end ofthe current year the previous year
Construction in progress 179954389.78 5814012.03
14.2 Construction in progress
(1) Status of construction in progress
RMB
Balance as at the end of the current year Balance as at the end of the previous year
Item
Book balance Provision forimpairment Net book value Book balance
Provision for
impairment Net book value
Installation of
machinery 179954389.78 - 179954389.78 5814012.03 - 5814012.03
equipment
- 64 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(V) Notes to financial statements - continued
14.2 Status of construction in progress - continued
(2) Changes in major projects under construction in the current year
RMB
Including: the
Amount Other Proportion of the Accumulated amount of the
Capitalization
Beginning Increase in the transferred decreases in project Progress of capitalization capitalized
rate of
Project Budget to fixed current year Ending balance accumulative interests in the interest in thisbalance current year construction (%) amount of Source of fundsassets in the input in budget interest current year
year (%)
current year (%)
1.49m-wide polarizer Self-owned
production line project 1333600000.00 - 179954389.78 - - 179954389.78 13.49 13.49 176406.29 176406.29 2.24 funds and
(Line 8) borrowings
- 65 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(V) Notes to financial statements - continued
15. Right-of-use assets
RMB
Item Buildings and Machinery equipment Totalconstructions
I. Total original book value:
1. Balance at the beginning of the year 36483426.47 1799631.64 38283058.11
2. Increase in the current year 9977227.43 1438279.28 11415506.71
(1) Addition 9977227.43 1438279.28 11415506.71
3. Decrease in the current year 1520405.16 1249146.48 2769551.64
(1) Termination of leases 1520405.16 1249146.48 2769551.64
4. Balance at the end of the year 44940248.74 1988764.44 46929013.18
II. Accumulated depreciation
1. Balance at the beginning of the year 21398599.29 1546340.96 22944940.25
2. Increase in the current year 9120156.88 738624.09 9858780.97
(1) Provision 9120156.88 738624.09 9858780.97
3. Decrease in the current year 1520405.16 1249146.48 2769551.64
(1) Termination of leases 1520405.16 1249146.48 2769551.64
4. Balance at the end of the year 28998351.01 1035818.57 30034169.58
III. Provision for impairment
1. Balance at the beginning of the year - - -
2. Increase in the current year - - -
(1) Provision - - -
3. Decrease in the current year - - -
4. Balance at the end of the year - - -
IV. Book value
1. Book value at the end of the year 15941897.73 952945.87 16894843.60
2. Book value at the beginning of the year 15084827.18 253290.68 15338117.86
- 66 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(V) Notes to financial statements - continued
16. Intangible assets
(1) Details of intangible assets
RMB
Item Land use rights Software Patent right Total
I. Total original book value
1. Balance at the beginning of the year 48258239.00 22819127.70 11825200.00 82902566.70
2. Increase in the current year - 471775.41 - 471775.41
(1) Purchase - 471775.41 - 471775.41
3. Decrease in the current year - - - -
4. Balance at the end of the year 48258239.00 23290903.11 11825200.00 83374342.11
II. Accumulated accumulation
1. Balance at the beginning of the year 17057278.99 18812295.76 11825200.00 47694774.75
2. Increase in the current year 891565.32 3563403.84 - 4454969.16
(1) Provision 891565.32 3563403.84 - 4454969.16
3. Decrease in the current year - - - -
4. Balance at the end of the year 17948844.31 22375699.60 11825200.00 52149743.91
III. Provision for impairment
1. Balance at the beginning of the year - - - -
2. Increase in the current year - - - -
3. Decrease in the current year - - - -
4. Balance at the end of the year - - - -
IV. Book value
1. Book value at the end of the year 30309394.69 915203.51 - 31224598.20
2. Book value at the beginning of the
year 31200960.01 4006831.94 - 35207791.95
As at December 31 2025 for the intangible assets pledged by the Group due to bank borrowings please refer to
Note (V) 21 "Assets with restricted ownership or right of use" for details.
17. Goodwill
(1) Original book value of goodwill
RMB
Name of the investees Balance at the Increase in current Decrease in current Balance as at the end
or matters forming goodwill beginning of the year year year of the current year
SAPO Photoelectric 9614758.55 - - 9614758.55
Shenzhen Meibainian Garment Co. Ltd. 2167341.21 - - 2167341.21
Total 11782099.76 - - 11782099.76
- 67 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(V) Notes to financial statements - continued
17. Goodwill - continued
(2) Provision for impairment of goodwill
RMB
Name of the investees Balance at the Balance as at the
beginning of the Increase in current Decrease in current
or matters forming goodwill year year year
end of the current
year
SAPO Photoelectric 9614758.55 - - 9614758.55
Shenzhen Meibainian Garment Co. Ltd. 2167341.21 - - 2167341.21
Total 11782099.76 - - 11782099.76
18. Long-term deferred expenses
RMB
Balance at the
Item beginning of the Increase in the
Amortization Balance as at the
current year amount for the Other decreases end of the currentyear current year year
Decoration and facility
renovation costs 6084115.87
2653265.771706534.63-7030847.01
19. Deferred tax assets and deferred tax liabilities
(1) Deferred tax assets without offset
RMB
Balance as at the end of the current year Balance as at the end of the previous year
Item Deductible Deferred tax Deductible Deferred tax
temporary temporary
differences Assets differences Assets
Provision for credit losses 47068758.51 8605770.45 55500808.39 9874641.13
Provision for asset impairment 151835215.23 22775282.28 146194722.68 21929208.40
Unrealized profits of internal transactions 1967734.40 295160.16 2056848.93 308527.34
Employee compensation payable 4469827.00 1117456.75 4173800.00 1043450.00
Deferred income 83392067.07 12508810.06 95821558.58 14373233.79
Deductible losses 84464489.24 12669673.38 96771113.52 14515667.03
Fair value changes of investments in other 14831681.50 3707920.38
equity instruments 14831681.50 3707920.38
Lease liabilities 17683257.08 2907352.60 16381050.71 2457157.61
Changes in fair value of derivative 3362200.19 504330.03
financial liabilities 1278559.35 191783.90
Provision 14370007.84 2155501.18 9451090.40 1417663.56
Total 423445238.06 67247257.27 442461234.06 69819253.14
Based on the Group's profit forecast for the future periods the Group believes that it is highly probable to obtain
sufficient taxable income to utilize the above-mentioned deductible temporary differences and deductible losses in
the future periods so the relevant deferred tax assets are recognized.- 68 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(V) Notes to financial statements - continued
19. Deferred tax assets and deferred tax liabilities - continued
(2) Deferred tax liabilities without offset
RMB
Balance as at the end of the current year Balance as at the end of the previous year
Item Taxable temporary Deferred tax Taxable temporary Deferred tax
differences Liabilities differences Liabilities
Difference between initial recognition
cost and tax base of long-term equity
investments 62083693.36 15520923.34 62083693.36 15520923.34
Fair value changes of investments in other 152077743.74 38019435.94
equity instruments 158219043.74 39554760.94
Rent receivable 6414441.92 1603610.48 8532598.56 2133149.64
Right-of-use assets 16894843.60 2784125.41 15338117.86 2300717.68
Changes in fair value of financial assets 2425205.47 606301.37
held for trading - -
Total 239895928.09 58534396.54 244173453.52 59509551.60
(3) Deferred tax assets or liabilities listed net amount after write-offs
RMB
Deduction amount Ending balance of Deduction amount of Balance of deferred
of deferred tax deferred tax assets or
Item assets and liabilities liabilities after write-
deferred tax assets tax assets or
off of the current and liabilities at the liabilities afterat the end of the end of the previous offset at the end of
current year year year the previous year
Deferred tax assets (11469966.38) 55777290.89 (10898741.94) 58920511.20
Deferred tax liabilities (11469966.38) 47064430.16 (10898741.94) 48610809.66
(4) Unrecognized deferred tax assets
RMB
Item Balance as at the end of the Balance as at the end of thecurrent year previous year
Deductible temporary differences 9402132.77 15750990.01
Deductible losses 325441799.20 365594502.67
Total 334843931.97 381345492.68
(5) Deductible losses from unrecognized deferred tax assets will be expired in the following years
RMB
Item Balance as at the end of the Balance as at the end of thecurrent year previous year
2025--
2026126219867.4683168900.37
202710067397.5010067397.50
202813479346.6613479346.66
202985276427.23132565644.36
203014316545.7075352814.24
2031 years - -
2032--
203350960399.5450960399.54
2034--
2035 years 25121815.11 -
Total 325441799.20 365594502.67
- 69 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(V) Notes to financial statements - continued
20. Other non-current assets
RMB
Balance as at the end of the current year Balance as at the end of the previous year
Item
Book balance Provision forimpairment Book value Book balance
Provision for
impairment Book value
Advances for projects and
equipment 11326699.63 - 11326699.63 2033785.64 - 2033785.64
Investment funds to be
liquidated 25760086.27 - 25760086.27 25760086.27 - 25760086.27
Total 37086785.90 - 37086785.90 27793871.91 - 27793871.91
- 70 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(V) Notes to financial statements - continued
21.Assets with restrictions on the ownership or use right
At the end of current year At the end of the previous year
Item
Book balance Book value Restricted type Restricted condition Book balance Book value Restricted type Restricted condition
Monetary funds 685396.65 685396.65 Restricted right Account freezing andof use guarantee 38844838.96 38844838.96
Restricted right Account freezing and
of use guarantee
Notes receivable 53001736.07 53001736.07 Restricted right Bill endorsement hasof use not been derecognized 30291952.76 30291952.76
Restricted right Bill endorsement has not
of use been derecognized
Fixed assets 581895750.64 432224852.53 Restricted right Mortgageof use 581895750.64 448156480.33
Restricted right
of use Mortgage
Intangible assets 44770083.00 30309394.69 Restricted right Mortgage Restricted rightof use 44770083.00 31200960.01 of use Mortgage
Total 680352966.36 516221379.94 695802625.36 548494232.06
- 71 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(V) Notes to financial statements - continued
22.Derivative financial liabilities
RMB
Item Balance as at the end of the Balance as at the end of thecurrent year previous year
Forward foreign exchange contracts 4071800.19 1278559.35
23. Notes payable
RMB
Bill type Balance as at the end of the Balance as at the end of thecurrent year previous year
Bank acceptance bills - 31095540.29
The Group had no notes payable due but unpaid at the end of the year.
24. Accounts payable
RMB
Item Balance as at the end of the Balance as at the end of thecurrent year previous year
Payment for goods 315492749.54 282510771.35
Service fee 17809719.59 15645017.04
Payment for outsourcing processing 8954077.38 3489364.64
Royalties 1949556.00 2006578.00
Others 450733.38 1160849.52
Total 344656835.89 304812580.55
As at December 31 2025 the Group had no significant accounts payable with aging of over 1 year or overdue.
25. Advances from customers
RMB
Item Balance as at the end of the Balance as at the end of thecurrent year previous year
Rent and others 769227.07 1051491.96
As at December 31 2025 the Group had no significant advances from customers with aging of over 1 year.
26. Contract liabilities
RMB
Item Balance as at the end of the Balance as at the end of thecurrent year previous year
Payment for goods 3132419.01 490562.97
As at December 31 2025 the Group had no significant contract liabilities with aging of more than 1 year.- 72 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(V) Notes to financial statements - continued
27. Employee compensation payable
(1) Presentation of employee compensation payable
RMB
Item Balance at the Increase in current Decrease in current Balance as at the endbeginning of the year year year of the current year
Short-term compensation 53625879.32 227614006.70 230183092.64 51056793.38
Post-employment benefits - defined 22812522.26 23512522.26 -
contribution plans 700000.00
Dismissal welfare 2359410.60 - 768888.24 1590522.36
Total 56685289.92 250426528.96 254464503.14 52647315.74
(2) Presentation of short-term compensation
RMB
Balance at the
Item beginning of the Increase in current Decrease in current
Balance as at the
year year end of the currentyear year
Salaries bonuses allowances and subsidies 51400482.93 199876062.05 202797724.38 48478820.60
Employee welfare expenses - 7519689.14 7490204.64 29484.50
Social insurance premiums - 5173319.35 5173319.35 -
Including: medical insurance - 3818635.71 3818635.71 -premiums
Maternity insurance premiums - 640272.20 640272.20 -
Work-related injury insurance - 714411.44 714411.44 -premiums
Housing provident fund - 10180132.09 10180132.09 -
Union funds and employee education 4864804.07 4541712.18 2548488.28
funds 2225396.39
Total 53625879.32 227614006.70 230183092.64 51056793.38
(3) Presentation of defined contribution plans
RMB
Balance at the Balance as at the
Item beginning of the Increase in current Decrease in currentyear year end of the currentyear year
Basic endowment insurance premiums 700000.00 19234522.69 19934522.69 -
Supplementary endowment insurance - 2800406.18 2800406.18 -premiums
Unemployment insurance premium - 777593.39 777593.39 -
Total 700000.00 22812522.26 23512522.26 -
The Group participates in the endowment insurance and unemployment insurance plans established by
government agencies in accordance with the regulations. According to the plans the Group makes contributions to
such plans in accordance with the prescribed standards. Except for the above monthly contributions the Group
has no further payment obligations. The corresponding expenses are included in the current profit or loss or the
cost of related assets when incurred.The Group shall pay RMB 19234522.69 and RMB 777593.39 to the endowment insurance and unemployment
insurance plans respectively for the current year (2024: RMB 15756686.06 and RMB 691145.34). As of
December 31 2025 the Group has fully paid the amount of pension insurance and unemployment insurance plans
payable during the reporting period.- 73 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(V) Notes to financial statements - continued
28. Taxes payable
RMB
Taxation Balance as at the end of the Balance as at the end of thecurrent year previous year
Corporate income tax 3763975.34 4720967.29
Individual income tax 670592.00 751443.34
Value-added tax 251065.10 592143.28
Other taxes 1121186.11 789176.93
Total 5806818.55 6853730.84
29. Other payables
(1) Other payables by nature of payment
RMB
Item Balance as at the end of the Balance as at the end of thecurrent year previous year
Engineering equipment payment 43922031.06 56213373.95
Current accounts 46981495.00 53333604.97
Guarantee and deposits 57213864.04 37775687.75
Others 11708844.63 12974323.31
Total 159826234.73 160296989.98
(2) As at December 31 2025 the Group had no significant other payables with aging of more than 1 year or
overdue.
30. Non-current liabilities maturing within one year
RMB
Item Balance as at the end of the Balance as at the end of thecurrent year previous year
Long-term borrowings maturing within one year (Note (V) 32) 48033108.58 47011978.04
Lease liabilities maturing within one year (Note (V) 33) 7267259.91 6884486.59
Estimated liabilities due within one year 10664297.79 9451090.40
Total 65964666.28 63347555.03
31. Other current liabilities
RMB
Item Balance as at the end of the Balance as at the end of thecurrent year previous year
Endorsed but undue acceptance bills 53001736.07 30291952.76
Payables for returned goods 31679349.15 23747757.33
Product quality assurance 3705710.05 -
Output tax to be carried forward in the value-added tax - 32312.18
Total 88386795.27 54072022.27
- 74 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(V) Notes to financial statements - continued
32. Long-term borrowings
RMB
Item Balance as at the end of the Balance as at the end of thecurrent year previous year Interest rate range
Guaranteed borrowings (Note) 167899085.74 209400848.04 3.26%-3.31%
Credit borrowings 141852077.65 - 2.24%
Total 309751163.39 209400848.04
Less: long-term borrowings maturing
within one year 48033108.58 47011978.04
Long-term borrowings due after one year 261718054.81 162388870.00
Note: SAPO Photoelectric a subsidiary of the Company obtained the loan by mortgaging the real estate such as
the plant it held and the Company and Hengmei Optoelectronics Co. Ltd. provided 60% and 40% joint and
several liability guarantee for the loan respectively.
33. Lease liabilities
RMB
Item Balance as at the end of the Balance as at the end of thecurrent year previous year
Lease liabilities 17683257.08 16381050.71
Total 17683257.08 16381050.71
Less: Lease liability maturing within one year 7267259.91 6884486.59
Lease liabilities due after one year 10415997.17 9496564.12
The Group's lease liabilities are presented as follows according to the maturity of undiscounted remaining
contractual obligations:
RMB
Within 1 month 1- 3 months 3 - 12 months 1 - 5 years Over 5 years Total
Balance as at the
end of the current 1049935.94 2078351.34 4688581.14 9705967.44 1937423.13 19460258.99
year
Balance as at the
end of the 1105714.51 2425877.50 3879671.64 7808943.06 3098158.97 18318365.68
previous year
34. Deferred income
RMB
Item Balance at the Increase in current Decrease in current Balance as at the endbeginning of the year year year of the current year Formation causes
Government 96349196.26 3940329.84 16819577.07 83469949.03 Governmentsubsidies subsidies received
35. Share capital
RMB
Changes in the current year
Balance at the Balance as at the
Item beginning of the New shares Conversion of end of the current
year issued Bonus issue provident fund Others Sub-total yearinto shares
Total shares 506521849.00 - - - - - 506521849.00
- 75 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(V) Notes to financial statements - continued
36. Capital reserve
RMB
Item Balance at the Increase in current year Decrease in current Balance as at the end ofbeginning of the year year the current year
Equity premium 1826482608.54 - - 1826482608.54
Other capital reserves 135117216.09 - - 135117216.09
Total 1961599824.63 - - 1961599824.63
37. Other comprehensive income
RMB
Amount for the current year
Less: the Less:
amount retained
included in incomeincluded in
Balance at the Amount before other Attributabl
Item beginning of the income tax this comprehensiv
other Balance as at the
e income in comprehensi Less: income tax
Attributable to e to end of the current
year year prior period ve income in expenses
parent company minority
prior periods after tax shareholder
year
and and s after taxtransferred to
current profit transferred
or loss to currentprofit or loss
I. Other comprehensive income that 106877807.32 (6141300.00) - - (1535325.00) (4605975.00) - 102271832.32cannot be reclassified into profit or loss
1. Changes in fair value of other equity 106877807.32 (6141300.00) - - (1535325.00) (4605975.00) - 102271832.32instrument investments
II. Other comprehensive income to be - - - - - - -
reclassified into profit or loss later -
Total of other comprehensive income 106877807.32 (6141300.00) - - (1535325.00) (4605975.00) - 102271832.32
38. Surplus reserves
RMB
Item Balance at the Increase in current year Decrease in current Balance as at the end ofbeginning of the year year the current year
Statutory surplus reserve 104262315.64 2543589.29 - 106805904.93
39. Undistributed profits
RMB
Item Amount for the current year Amount for the previous year
Undistributed profits at the beginning of the year before
adjustment 272608113.66 216160896.14
Total adjusted undistributed profits at the beginning of
the year - -
Adjusted undistributed profit at the beginning of the 272608113.66
year 216160896.14
Plus: net profit attributable to shareholders of the parent
company in the current year 68418663.02 89371134.24
Less: Withdrawal of statutory surplus reserves 2543589.29 -
Distribution of dividends of ordinary shares (Note) 35963029.09 32923916.72
Undistributed profits at the end of the year 302520158.30 272608113.66
Note: According to the resolution of the General Meeting of Shareholders on May 19 2025 the Company
distributed a cash dividend of RMB 0.71 (including tax) for every 10 shares totally RMB 35963029.09
(including tax) based on the share capital of 506521849 shares as of December 31 2024.- 76 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(V) Notes to financial statements - continued
40. Operating revenue and operating costs
(1) Operating revenue and operating costs
RMB
Amount for the current year Amount for the previous year
Item
Revenue Cost Revenue Cost
Primary business 3177244941.55 2708436607.17 3275150434.05 2748312498.75
Other business 64135489.07 47931069.64 60132574.63 47547436.07
Total 3241380430.62 2756367676.81 3335283008.68 2795859934.82
(2) Primary business by product
RMB
Amount for the current year Amount for the previous year
Product type Income from primary
business Cost of primary business
Income from primary
business Cost of primary business
Polarizer sales business 3067530570.03 2682406961.72 3161332478.08 2720719735.99
Property leasing and 109714371.52 26029645.45
others 113817955.97 27592762.76
Total 3177244941.55 2708436607.17 3275150434.05 2748312498.75
(3) Primary business by region
RMB
Amount for the current year Amount for the previous year
Main business area Income from primary
business Cost of primary business
Income from primary
business Cost of primary business
Domestic 2807874318.29 2418697219.08 3113083695.45 2621542725.57
Overseas 369370623.26 289739388.09 162066738.60 126769773.18
Total 3177244941.55 2708436607.17 3275150434.05 2748312498.75
(4) Description of performance obligations
The Group's businesses are mainly the production and sales of polarizers. For goods sold to customers the Group
recognizes revenue when the right of control of the goods is transferred that is when the goods are delivered to
the designated place of the other party and signed by the other party. The Group recognizes a receivable when the
goods are delivered to the customer because the delivery of the goods to the customer represents an unconditional
right to receive the contractual consideration and the maturity of the payment depends only on the passage of time.When the customer makes a prepayment for goods the Group recognizes the transaction amount received as a
contract liability and recognizes the revenue when the goods are delivered to the customer.The Group provides property services to customers and such services represent performance obligations
performed over a period of time. For property service the Group recognizes revenue in the course of providing
property service.
(5) Description of allocation to remaining performance obligations
As of December 31 2025 the amount of contract liabilities corresponding to the performance obligations that the
Group has already signed contracts for but has not yet fulfilled or has not fully fulfilled is RMB 3132419.01
which will be recognized as revenue when the customer obtains the control over goods.- 77 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(V) Notes to financial statements - continued
41. Taxes and surcharges
RMB
Item Amount for the current Amount for the previousyear year
Property taxes 8545385.60 7240576.84
Urban maintenance and construction tax 375243.29 397643.06
Education surcharge 267606.86 287055.45
Other taxes 2354910.04 2310230.30
Total 11543145.79 10235505.65
42. Selling expenses
RMB
Item Amount for the current Amount for the previousyear year
Employee compensation 13859259.00 15245568.88
Sales service fee 14066794.72 19491891.54
Business entertainment expenses 1130045.94 1117751.47
Others 5603934.08 6405391.58
Total 34660033.74 42260603.47
43. G&A expenses
RMB
Item Amount for the current Amount for the previousyear year
Employee compensation 91924691.04 90301081.26
Depreciation cost 11209271.67 10962929.91
Professional service fees 5540619.77 10520874.85
Amortization of intangible assets 4454969.16 4575688.69
Property leasing and utilities 2751267.57 2441383.42
Business entertainment expenses 649200.79 1193877.91
Others 12082069.80 14351985.54
Total 128612089.80 134347821.58
44. R&D expenses
RMB
Item Amount for the current Amount for the previousyear year
Employee compensation 17031748.89 15844594.49
Material consumption 81524391.18 83483679.76
Depreciation cost 2056127.28 3275385.23
Others 3362571.65 1208163.43
Total 103974839.00 103811822.91
The Group has no development expenses of R&D projects that meet the capitalization requirements.- 78 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(V) Notes to financial statements - continued
45. Financial expenses
RMB
Item Amount for the current year Amount for the previous year
Interest expenses (Note) 7121172.59 17858022.73
Less: capitalized interest 176406.29 -
Interest income 4941271.94 7272362.76
Exchange differences 9266532.25 (3772940.12)
Service fee and others 1969682.47 5308436.20
Total 13239709.08 12121156.05
Note: The interest expenses of the lease liabilities in 2025 is RMB 715255.07.
46. Other income
RMB
Classification by nature Amount for the current year Amount for the previous year
Transfer-in of deferred income 16497827.07 16401790.63
Support funds for industry development (Note 1) 5200000.00 7988744.44
Support funds for enterprise development (Note 2) 124784.96 989098.49
Tax incentives 18484146.10 16014588.22
Others 538576.40 89885.75
Total 40845334.53 41484107.53
Note 1: The support funds of industry development mainly include the subsidy for the green manufacturing pilot
demonstration project of the Industry and Information Technology Bureau of Shenzhen Municipality and the
subsidy for the atmospheric environment quality improvement of the Ecology and Environment Bureau of
Shenzhen Municipality.Note 2: The support funds of enterprise development mainly include the social security and post subsidies for
employing people lifted out of poverty and the one-time employment expansion subsidy for 2025 from the Human
Resources Bureau of Pingshan District Shenzhen Municipality.
47. Investment income (loss)
RMB
Item Amount for the current year Amount for the previous year
Losses on long-term equity investments accounted for under equity
method (7010989.13) (10701895.08)
Investment income from disposal of long-term equity investments - 833613.28
Investment income obtained during holding the financial assets held
for trading 14540478.82 13846181.90
Investment loss from derecognition of derivative financial liabilities (10832640.65) (6454000.00)
Dividend income from investments in other equity instrument during
the holding period 2105147.02 2310786.01
Total (1198003.94) (165313.89)
- 79 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(V) Notes to financial statements - continued
48. Gains (losses) from changes in fair value
RMB
Sources of gains from changes in fair value Amount for the current Amount for the previousyear year
Financial assets held for trading 2425205.47 2413062.80
Derivative financial liabilities (3362200.19) (1278559.35)
Total (936994.72) 1134503.45
49. Credit impairment gains
RMB
Item Amount for the current Amount for the previousyear year
Gains on impairment of accounts receivable (Note (V) 4 (2)) 8504689.86 5093840.35
Gains on impairment of other receivables (Note (V) 7 (3)) (57097.06) 6606.31
Total 8447592.80 5100446.66
50. Asset impairment gains (losses)
RMB
Item Amount for the current Amount for the previousyear year
Inventory depreciation loss (138340722.92) (123538967.06)
Fixed asset impairment loss - (6863474.54)
Other asset impairment loss - (2020667.15)
Total (138340722.92) (132423108.75)
51. Non-operating revenue
RMB
Amount included in the
Item Amount for the current Amount for the previous current non-recurringyear year
profit or loss
Gains from unclaimed payables 5108649.83 1439654.31 5108649.83
Liquidated damages 1121434.64 275672.99 1121434.64
Insurance compensation 20692.22 24911.31 20692.22
Gains from the damage and scrapping of non-
current assets 13057.39 341.42 13057.39
Others 131900.37 64506.89 131900.37
Total 6395734.45 1805086.92 6395734.45
- 80 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(V) Notes to financial statements - continued
52. Non-operating expenses
RMB
Amount included in the
Item Amount for the current Amount for the previous current non-recurringyear year
profit or loss
Losses on scrapping of non-current assets 39914.17 51361.87 39914.17
Amercement outlay 3390.66 44000.00 3390.66
Compensation expenses 842646.03 468146.00 842646.03
Other losses 54912.02 134509.84 54912.02
Total 940862.88 698017.71 940862.88
53. Income tax expenses
(1) List of income tax expenses
RMB
Item Amount for the current Amount for the previousyear year
Income tax expenses for the current period 9673404.67 8562225.60
Deferred tax expenses 3132165.81 1264876.43
Total 12805570.48 9827102.03
(2) Adjustment process of accounting profits and income tax expenses
RMB
Item Amount for the current Amount for the previousyear year
Total profits 108419113.31 152883868.41
Income tax expenses calculated at statutory tax rate 27104778.33 38220967.10
Influence of different tax rates applicable to subsidiaries (8786686.81) (15431945.83)
Influence of adjustments to the income tax for the prior years 954565.40 (27243.77)
Influence of non-taxable income (1122137.29) (3079800.79)
Influence of nondeductible costs expenses and losses 1777866.90 5591965.60
Utilization of unrecognized deductible losses and deductible temporary
differences from prior periods and their tax effects (1383582.51) (7061678.51)
Tax effects of unrecognized deductible losses and deductible temporary
differences 6890154.91 4078341.28
Additional deduction for R&D expenses (12633463.47) (12458381.02)
Others 4075.02 (5122.03)
Income tax expenses 12805570.48 9827102.03
- 81 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(V) Notes to financial statements - continued
54. Notes to items in statement of cash flows
(1) Cash related to operating activities
Other cash received related to operating activities
RMB
Item Amount for the current Amount for the previousyear year
Guarantee and deposit 95357705.42 30652489.87
Interest income 4972503.26 9057486.70
Government subsidies 9265114.80 24242842.93
Current accounts and others 23348683.10 23056150.45
Total 132944006.58 87008969.95
Other cash paid related to operating activities
RMB
Item Amount for the current Amount for the previousyear year
Guarantee and deposit 39437305.24 57908823.39
Out-of-pocket expenses 49378916.99 68667614.18
Current accounts and others 2373874.85 27179768.77
Total 91190097.08 153756206.34
(2) Cash related to investing activities
Other cash received related to significant investing activities
RMB
Item Amount for the current Amount for the previousyear year
Structured deposits and wealth management products 1000000000.00 950000000.00
Monetary fund 148427138.42 747000000.00
Certificates of deposit and others 709600.00 -
Total 1149136738.42 1697000000.00
Other cash paid related to significant investing activities
RMB
Item Amount for the current Amount for the previousyear year
Structured deposits and wealth management products 1150000000.00 950000000.00
Monetary fund - 649000000.00
Forward foreign exchange contracts 13389759.35 6454000.00
Total 1163389759.35 1605454000.00
- 82 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(V) Notes to financial statements - continued
55. Notes to items in statement of cash flows - continued
(2) Cash related to investing activities - continued
Other cash received related to investing activities
RMB
Item Amount for the current Amount for the previousyear year
Wealth management investment structured deposits and others 1149136738.42 1697000000.00
Other cash paid related to investing activities
RMB
Item Amount for the current Amount for the previousyear year
Structured deposits and wealth management products 1150000000.00 950000000.00
Monetary fund - 649000000.00
Forward foreign exchange contracts 13389759.35 6454000.00
Total 1163389759.35 1605454000.00
(3) Cash related to financing activities
Other cash paid related to financing activities
RMB
Item Amount for the current Amount for the previousyear year
Lease payments 12484469.33 9508462.57
Changes in various liabilities arising from financing activities
RMB
Balance at the Increase in current year Decrease in current year Balance as at the
Item beginning of the end of the
year Cash changes
Non-cash Non-cash
changes Cash changes changes current year
Long-term 209400848.04 141755054.19 6373365.34 47778104.18 - 309751163.39borrowings (Note)
Lease liabilities 16381050.71 - 12130761.78 10828555.41 - 17683257.08(Note)
Total 225781898.75 141755054.19 18504127.12 58606659.59 - 327434420.47
Note: long-term borrowings and lease liabilities include those maturing within one year.
(4) The Group does not present cash flows on a net basis.
(5) The Group has no significant activities that do not involve current cash receipts and payments but affect the
financial position of the enterprise or may affect the cash flows of the enterprise in the future.- 83 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(V) Notes to financial statements - continued
55. Supplementary information to statement of cash flows
(1) Supplementary information to the statement of cash flows
RMB
Supplementary information Amount for the current Amount for the previousyear year
1. Adjustment of net profit to cash flows from operating activities:
Net profit 95613542.83 143056766.38
Plus: provision for assets impairment 138340722.92 132423108.75
Provision for credit losses (8447592.80) (5100446.66)
Depreciation of fixed assets and investment properties 237945710.46 237717328.95
Depreciation of right-of-use assets 9858780.97 9651343.75
Amortization of intangible assets 4454969.16 4575688.69
Amortization of long-term deferred expenses 1706534.63 2934915.74
Losses (gains) from disposal of fixed assets intangible assets and other long-
term assets (1164099.59) -
Losses (gains) on retirement of non-current assets 26856.78 51020.45
Losses from changes in fair value (income) 936994.72 (1134503.45)
Financial expenses (income) 20713242.01 17301161.66
Investment loss (income) 1198003.94 165313.89
Decrease (increase) in deferred tax assets 3143220.31 1684854.22
Increase (decrease) in deferred tax liabilities (11054.50) (419977.79)
Decrease (increase) in inventories (233226377.55) (176903495.67)
Decrease (increase) in operating receivables (34639831.51) 29434877.96
Increase (decrease) in operating payables 111343974.48 (164173431.78)
Net cash flows from operating activities 347793597.26 231264525.09
2. Net changes in cash and cash equivalents:
Ending balance of cash and cash equivalents 449257554.81 302084839.35
Less: beginning balance of cash and cash equivalents 302084839.35 461420457.33
Net increase (decrease) in cash and cash equivalents 147172715.46 (159335617.98)
(2) Composition of cash and cash equivalents
RMB
Item Balance as at the end of Balance as at the end ofthe current year the previous year
I. Cash 449257554.81 302084839.35
Including: cash on hand 15510.21 4751.69
Unrestricted bank deposits 449242044.60 302080087.66
Other unrestricted monetary funds - -
II. Cash equivalents - -
III. Balance of cash and cash equivalents at the end of the year 449257554.81 302084839.35
(3) As of the end of the year the Group had no cash and cash equivalents with restricted use that were still
presented as such.- 84 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(V) Notes to financial statements - continued
55. Supplementary information to the statement of cash flows - continued
(4) Monetary funds other than cash and cash equivalents
RMB
Item Balance as at the end Balance as at the end of theof the current year previous year Reason
Bill and L/C guarantee 536.39 35443338.96 Not available for paymentat any time
Interest on demand and agreement deposits and 21498.92 31765.51 Not available for payment7-day notice deposits at any time
Others 684860.26 3401500.00 Account freezing
Total 706895.57 38876604.47
56. Foreign currency monetary items
(1) Foreign currency monetary items
RMB
Foreign currency balance Conversion at the end of
Item at the end of the current Exchange rate of the current year
year conversion RMB balance
Monetary funds 158222232.79
Including: USD 13242824.56 7.0288 93081165.25
JPY 1437610760.10 0.0448 64400649.22
HKD 819754.12 0.9032 740418.32
Accounts receivable 77112536.74
Including: USD 10935180.15 7.0288 76861194.24
HKD 278280.00 0.9032 251342.50
Other receivables 495717.51
Including: USD 70526.62 7.0288 495717.51
Accounts payable 178353317.24
Including: USD 242062.43 7.0288 1701408.41
JPY 3943122965.00 0.0448 176651908.83
Other payables 6125444.55
Including: USD 867786.00 7.0288 6099494.24
JPY 15131.00 0.0448 677.87
HKD 27981.00 0.9032 25272.44
57. Leases
(1)As a lessee
The Group leases a number of assets including houses and buildings for lease terms of 1 to 10 years. The above
right-of-use assets cannot be used for purposes such as borrowing mortgages guarantees etc.The Group had no variable lease payments that were not included in the measurement of lease liabilities.- 85 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(V) Notes to financial statements - continued
57. Leases - continued
(1) As a lessee - continued
The short-term lease expenses subject to simplified accounting treatment and recognized in the current profit or
loss in this year amounted to RMB 1218112.00 (previous year: RMB 950508.89).The total cash outflows related to leases in the current year amounted to RMB 13702581.33 (previous year:
RMB 10458971.46).
(2) As a lessor
Operating lease as lessor
RMB
Including: revenue related to
Item Lease income variable lease payments not
included in lease receipts
Buildings and constructions 96149109.79 -
The operating leases of the Group as the lessor are related to houses and buildings with lease terms ranging from
1 to 15 years.
The revenue related to operating leases in the current year amounted to RMB 96149109.79 (previous year: RMB
96066371.44) of which the revenue related to variable lease payments not included in the lease receipts
amounted to RMB 0 (previous year: RMB 0).RMB
Undiscounted lease receipts
Item Amount at the end of current Amount at the end of the
year previous year
The first year after the balance sheet date 62836298.43 66825466.35
The second year after the balance sheet date 42497987.11 49946457.62
The third year after the balance sheet date 31889090.71 31103495.38
The fourth year after the balance sheet date 9303836.50 8785825.58
The fifth year after the balance sheet date 5911687.52 6625510.75
Subsequent years 4518270.00 5106929.55
Total undiscounted lease receipts 156957170.27 168393685.23
- 86 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025（VI）R&D expenditures
(1) Presented by nature of expenses
RMB
Item Amount for the current year Amount for the previous year
Employee compensation 17031748.89 15844594.49
Material consumption 81524391.18 83483679.76
Depreciation cost 2056127.28 3275385.23
Others 3362571.65 1208163.43
Total 103974839.00 103811822.91
Including: expensed R&D expenditures 103974839.00 103811822.91
Capitalized R&D expenditures - -
(2) The Group has no development expenses of R&D projects that meet the capitalization requirements.
(3) The Group has no significant outsourced projects under research.
(VII) Changes in the scope of consolidation
The Company's subsidiary Shenzhen Huaqiang Hotel Co. Ltd completed its liquidation and distribution in 2024
and is no longer included in the scope of consolidation this year.(VIII) Interests in other entities
1. Interest in subsidiary
(1) Structure of the enterprise group
Shareholding ratio Method
Registered capital of the Company
Name of subsidiaries Main Registration ofpremise Business nature(RMB) place (%) acquisiti
Direct Indirect on
Shenzhen Lisi Industrial
Development Co. Ltd. Shenzhen RMB 2360000.00 Shenzhen Property leasing 100.00 -
Establish
ment
Shenzhen Shenfang
Property Management Shenzhen RMB 1600400.00 Shenzhen Property management 100.00 - Establish
Co. Ltd. ment
Shenzhen Meibainian
Garment Co. Ltd. Shenzhen RMB 13000000.00 Shenzhen
Production and sales
of textiles 100.00 -
Establish
ment
Shenzhen Shenfang
Sungang Property Shenzhen RMB 1000000.00 Shenzhen Property management 100.00 - Establishment
Management Co. Ltd.Shenzhen SAPO Shenzhen RMB 583333333.00 Shenzhen Production and sales AcquisitiPhotoelectric Co. Ltd. of polarizers 60.00 - on
SATO (Hong Kong)
Limited Hong Kong HKD 10000.00 Hong Kong Polarizer sales - 100.00
Establish
ment
- 87 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(VIII) Interests in other entities - continued
1. Interests in subsidiaries - continued
(2) Significant non-wholly-owned subsidiaries
RMB
Dividends declared to be
Name of subsidiaries Shareholding ratio by
Profit or loss attributable distributed to minority Balance of minority
minority shareholders to minority shareholders shareholders in the interests at the end of thein the current year current year current year
Shenzhen SAPO
Photoelectric Co. 40.00% 27194879.81 - 1310645603.69
Ltd.
(3) Key financial information of significant non-wholly-owned subsidiaries
RMB
SAPO Photoelectric
Balance as at the end of Balance as at the end of
Item the current year/ the previous year/
Amount for the current Amount for the previous
year year
Current assets 2277246004.30 2039673042.84
Non-current assets 1960766749.97 1998903130.31
Total assets 4238012754.27 4038576173.15
Current liabilities 613303419.14 567603106.30
Non-current liabilities 353456061.45 267706992.70
Total liabilities 966759480.59 835310099.00
Operating revenue 3137568960.10 3230006072.51
Net profit 67987199.53 134214080.34
Total comprehensive income 67987199.53 134214080.34
Cash flows from operating activities 322248751.41 205666636.23
(VIII) Interests in other entities - continued
2. Equity in joint ventures or associates
Summarized financial information of insignificant joint ventures and associates
RMB
Balance as at the end of Balance as at the end of
Item the current year/ the previous year/Amount for the current Amount for the previous
year year
Joint ventures:
Total of investment book value 104274952.84 111555887.28
Total amounts of the following items calculated at shareholding ratio
- Net profit (loss) (7280934.44) (10814606.80)
-Other comprehensive income - -
-Total comprehensive income (7280934.44) (10814606.80)
Associates:
Total of investment book value 3308634.07 3272138.76
Total amounts of the following items calculated at shareholding ratio
-Net profit 36495.31 112711.72
-Other comprehensive income - -
-Total comprehensive income 36495.31 112711.72
- 88 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(IX) Government grants
(1) As of December 31 2025 the Group had no government subsidies recognized at the amount receivable.
(2) Liability items involving government subsidies
RMB
Subsidies Amount
Amount at the Amount Other
Related to
increased in the included in included in changes in Amount at the end assets/Liabilities beginning of current year non-operating
the year revenue in the other income the current of current year Related to
current year in the current year income
year
Deferred
income 96349196.26 3940329.84 -
16497827.0
7(321750.00)83469949.03
Related to
assets
(3) Government subsidies included in the current profit or loss
RMB
Grants Amount for the current year Amount for the previousyear
Other income 21822612.03 25379633.56
(X) Risks associated with financial instruments
THE GROUP'S MAIN FINANCIAL INSTRUMENTS INCLUDE MONETARY FUNDS FINANCIAL
ASSETS HELD FOR TRADING NOTES RECEIVABLE ACCOUNTS RECEIVABLE RECEIVABLES
FINANCING OTHER RECEIVABLES OTHER EQUITY INSTRUMENT INVESTMENTS SHORT-TERM
BORROWINGS DERIVATIVE FINANCIAL LIABILITIES NOTES PAYABLE ACCOUNTS PAYABLE
OTHER PAYABLES OTHER CURRENT LIABILITIES AND LONG-TERM BORROWINGS ETC. AT THE
END OF THE YEAR THE FINANCIAL INSTRUMENTS HELD BY THE GROUP ARE AS FOLLOWS AND
THE DETAILS ARE DESCRIBED IN NOTE (V). RISKS ASSOCIATED WITH THESE FINANCIAL
INSTRUMENTS AND THE RISK MANAGEMENT POLICIES ADOPTED BY THE GROUP TO MITIGATE
THESE RISKS ARE DESCRIBED BELOW. THE GROUP'S MANAGEMENT MANAGES AND MONITORS
THESE EXPOSURES TO ENSURE THAT THE RISKS ARE CONTROLLED WITHIN CERTAIN LIMITS.- 89 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(X) Risks associated with financial instruments - continued
RMB
Item Amount at the end of current Amount at the end of theyear previous year
Financial assets
Measured at fair value through current profit or loss
Financial assets held for trading 736341286.18 731419904.42
Measured at fair value through other comprehensive income
Receivables financing 22584820.72 6804603.68
Other equity instrument investments 159261600.00 165402900.00
Measured at amortized costs
Monetary funds 449964450.38 340961443.82
Notes receivable 85980246.52 47305221.88
Accounts receivable 761807949.52 863731936.89
Other receivables 4324973.02 3596543.96
Financial liabilities
Measured at fair value through current profit or loss
Derivative financial liabilities 4071800.19 1278559.35
Measured at amortized costs
Notes payable - 31095540.29
Accounts payable 344656835.89 304812580.55
Other payables 159826234.73 160296989.98
Other current liabilities 53001736.07 30291952.76
Long-term borrowings 309751163.39 209400848.04
THE GROUP USES SENSITIVITY ANALYSIS TECHNIQUES TO ANALYZE THE POSSIBLE IMPACT OF
REASONABLE AND POSSIBLE CHANGES IN RISK VARIABLES ON THE CURRENT PROFIT OR LOSS
AND SHAREHOLDERS' EQUITY. AS ANY RISK VARIABLE SELDOM CHANGES IN ISOLATION AND
THE CORRELATION BETWEEN THE VARIABLES WILL HAVE A SIGNIFICANT EFFECT ON THE
FINAL AFFECTED AMOUNT OF THE CHANGE OF A RISK VARIABLE THE FOLLOWING CONTENTS
ARE CARRIED OUT UNDER THE ASSUMPTION THAT THE CHANGE OF EACH VARIABLE IS
INDEPENDENTLY:
1. Risk management objectives policies and procedures and changes in the current year
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 THIS RISK MANAGEMENT OBJECTIVE THE BASIC STRATEGY OF
THE GROUP'S RISK MANAGEMENT IS TO IDENTIFY AND ANALYZE VARIOUS RISKS FACED BY
THE GROUP ESTABLISH AN APPROPRIATE RISK TOLERANCE BOTTOM LINE AND CONDUCT RISK
MANAGEMENT AND TIMELY AND RELIABLY SUPERVISE VARIOUS RISKS TO CONTROL RISKS
WITHIN A LIMITED SCOPE.- 90 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(X) Risks associated with financial instruments - continued
1. RISK MANAGEMENT OBJECTIVES POLICIES AND PROCEDURES AND CHANGES IN THE
CURRENT YEAR - CONTINUED
1.1 MARKET RISK
1.1.1FOREIGN EXCHANGE RISK
Foreign exchange risk refers to the risk of losses arising from the exchange rate fluctuation. The Group's exposure
to foreign exchange risk is mainly related to the USD the JPY and the HKD. Except for some of the Group's
import purchases and export sales in Chinese mainland which were mainly settled in USD JPY and HKD the
Group's other major business activities were settled in RMB.As of December 31 2025 except for the foreign currency monetary items in Note (V) 56 the assets and
liabilities of the Group were all in RMB. The foreign currency balances of assets and liabilities (converted into
RMB) listed in the table below may expose the Group to foreign exchange risks that could impact its operating
performance.RMB
Balance as at the end of the current year
Item
Assets Liabilities
USD 170438077.00 7800902.65
JPY 64400649.22 176652586.70
HKD 991760.82 25272.44
The Group closely monitors the impact of exchange rate changes on the Group's foreign exchange risk and will
take measures to avoid foreign exchange risk according to the actual situation.Sensitivity analysis of foreign exchange risk
With other variables unchanged the pre-tax impact of reasonable changes in exchange rates on the current profit
or loss and shareholders' equity is as follows:
RMB
CURRENT YEAR PREVIOUS YEAR
IMPACT ON IMPACT ON
ITEM FLUCTUATION INEXCHANGE RATE IMPACT ON SHAREHOLDERS' IMPACT ON SHAREHOLDERS'
PROFIT EQUITY PROFIT EQUITY
ALL
FOREIGN REVALUATION
CURRENCI AGAINST RMB BY 2567586.26 2567586.26 (2401052.54) (2401052.54)
ES 5%
ALL
FOREIGN DEPRECIATION
CURRENCI AGAINST RMB BY (2567586.26) (2567586.26) 2401052.54 2401052.54
ES 5%
1.1.2. Interest rate risk - risk of changes in cash flows
The Group's risk of changes in cash flows of financial instruments due to changes in interest rates is mainly
related to bank borrowings with floating rates. The Group continues to closely monitor the impact of interest rate
changes on the Group's interest rate risk. The Group's policy is to maintain the floating rate of these borrowings
and there are currently no interest rate swap arrangements.- 91 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(X) Risks associated with financial instruments - continued
1. RISK MANAGEMENT OBJECTIVES POLICIES AND PROCEDURES AND CHANGES IN THE
CURRENT YEAR - CONTINUED
1.1 MARKET RISK - CONTINUED
1.1.2. Interest rate risk - risk of changes in cash flow - continued
SENSITIVITY ANALYSIS OF INTEREST RATE RISK:
WITH OTHER VARIABLES UNCHANGED THE PRE-TAX IMPACT OF REASONABLE CHANGES IN
INTEREST RATES ON THE CURRENT PROFIT OR LOSS AND SHAREHOLDERS' EQUITY IS AS
FOLLOWS:
RMB
CURRENT YEAR PREVIOUS YEAR
FLUCTUATION IMPACT ON IMPACT ON
ITEM IN EXCHANGE IMPACT ON SHAREHOLDERS' IMPACT ON SHAREHOLDERS'
RATE PROFIT EQUITY PROFIT EQUITY
IMPACT IMPACT
FLOATING RATE UP 1% (3094866.74) (3094866.74)BORROWINGS (2092051.50) (2092051.50)
FLOATING RATE 3094866.74 3094866.74
BORROWINGS DOWN 1% 2092051.50 2092051.50
1.2. Credit risk
As of December 31 2025 the maximum credit risk exposure that may cause financial losses to the Group mainly
comes from the losses of the Group's financial assets due to the failure of the other party to the contract to perform
its obligations including: monetary funds financial assets held for trading notes receivable accounts receivable
receivables financing and other receivables. On the balance sheet date the book value of the Group's financial
assets represents its maximum credit risk exposure.In order to reduce the credit risk the Group arranges special personnel to determine the credit line conduct credit
approval and implement other monitoring procedures to ensure that necessary measures are taken to recover
overdue debts. In addition the Group reviews the recovery of financial assets on each balance sheet date to ensure
that adequate provision for credit losses has been made for the relevant financial assets. Therefore the
management of the Group believes that the credit risk assumed by the Group has been greatly reduced.The Group's monetary funds are deposited in banks with high credit ratings so the monetary funds only have low
credit risk.As of December 31 2025 the balance of accounts receivable from the top five customers of the Group was RMB
477547582.82 accounting for 60.31% of the balance of accounts receivable of the Group. In addition the Group
has no other significant credit risk exposure concentrated in a single financial asset or a portfolio of financial
assets with similar characteristics.
1.3. Liquidity risk
When managing liquidity risk the Group maintains cash and cash equivalents that the management believes are
sufficient and monitors them to meet the Group's operational needs and reduce the impact of fluctuations in cash
flows. The Group's management monitors the use of bank borrowings and ensures compliance with loan
agreements.- 92 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(X) Risks associated with financial instruments - continued
1. RISK MANAGEMENT OBJECTIVES POLICIES AND PROCEDURES AND CHANGES IN THE
CURRENT YEAR - CONTINUED
1.3. Liquidity risk - continued
AS OF DECEMBER 31 2025 THE UNUSED COMPREHENSIVE BANK CREDIT LINE OF THE GROUP
WAS RMB 113649.52.THE GROUP'S FINANCIAL LIABILITIES HELD ARE PRESENTED AS FOLLOWS BASED ON THE
MATURITY OF UNDISCOUNTED REMAINING CONTRACTUAL OBLIGATIONS:
RMB
Item Within 1 year 1 - 5 years Over 5 years Total
Accounts payable 344656835.89 - - 344656835.89
Other payables 159826234.73 - - 159826234.73
Other current liabilities 53001736.07 - - 53001736.07
Long-term borrowings 55787469.56 269158669.95 - 324946139.51
Lease liabilities 7816868.42 9705967.44 1937423.13 19460258.99
Derivative financial liabilities 4071800.19 - - 4071800.19
2. Transfer of financial assets
2.1 Classification of transfer methods
RMB
Transfer Nature of transferred Amount of
method financial assets Derecognition Judgment basis for derecognitiontransferred financial
assets
The credit risk level of the acceptance bank of
Outstanding bank the bank acceptance bill transferred byTransfer by acceptance bills classified 76263471.66 Derecognized endorsement is relatively high and almost allendorsement as receivables financing the risks and rewards of the ownership of thecorresponding receivables financing have been
transferred
The credit risk level of the acceptance bank of
Transfer by Outstanding bank the bank acceptance bill transferred by
endorsement acceptance bills classified 53001736.07 Not derecognized endorsement is not high and almost all theas notes receivable risks and rewards of the ownership of the
relevant notes receivable are retained
Total 129265207.73
2.2 Financial assets derecognized due to transfer
RMB
Item Transfer method of
Amount of
financial assets derecognized financial
Gains or losses related
assets to derecognition
Receivables financing Transfer by 76263471.66endorsement -
- 93 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(X) Risks associated with financial instruments - continued
2. Transfer of financial assets - continued
2.3 Transfer of financial assets with continued involvement
RMB
Item Asset transfer
Amount of assets arising Amount of liabilities
method from continued arising from continuedinvolvement involvement
Notes receivable Transfer by 53001736.07 53001736.07endorsement
(XI)Disclosure of fair value
1. Fair value of assets and liabilities measured at fair value at the end of the year
RMB
Fair value at the end of current year
Item Measured at the fair Measured at the fair Measured at the fair
value of the 1st level value of the 2nd value of the 3rd Totallevel level
Continuous fair value measurement
(I) Financial assets held for trading - 736341286.18 - 736341286.18
(II) Receivables financing - - 22584820.72 22584820.72
(III) Other equity instrument investments - - 159261600.00 159261600.00
Total assets constantly measured at fair - 736341286.18 181846420.72 918187706.90value
(IV) Derivative financial liabilities - 4071800.19 - 4071800.19
Total liabilities constantly measured at - 4071800.19 - 4071800.19fair value
2. Qualitative and quantitative valuation techniques and important parameters of sustainable and non-
sustainable items measured on the basis of fair value of level 2
RMB
Fair value at the end of
Item current year Valuation techniques Input value
Financial assets held for trading 736341286.18 Discounted cash flowmethod Expected rate of return
The contracted delivery
exchange rate under forward
Derivative financial liabilities 4071800.19 Discounted cash flowmethod foreign exchange contracts andthe market forward exchange
rate as of the balance sheet date
3. Qualitative and quantitative valuation techniques and important parameters of sustainable and non-
sustainable items measured on the basis of fair value of level 3
RMB
Fair value at the end of
Item current year Valuation techniques Input value
Receivables financing 22584820.72 Discounted cash flowmethod Discount rate
Comparable Public P/B ratio of similar listed
Company Method companies
Other equity instrument investments 159261600.00 Comparable earningsmethod Market price
Statement adjustment
method Book value
- 94 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(XI) Disclosure of fair value - continued
4. Condition of fair value of financial assets and financial liabilities not measured at fair value
Financial assets and liabilities not measured at fair value mainly include: monetary funds notes receivable
accounts receivable other receivables notes payable accounts payable other payables other current liabilities
and long-term borrowings etc.The Group's management believes that the book value of financial assets and financial liabilities measured at
amortized costs in the financial statements is close to the fair value of such assets and liabilities.(XII) Related parties and related party transactions
1. Parent company
Registered Proportion of
Name Registration place Business nature capital Parent company's
(RMB 10000) shareholding ratio
voting rights of the
in the Company (%) parent company inthe Company (%)
Equity
Floor 18 Investment investments
Shenzhen Investment Holdings Building Shennan
Co. Ltd. Road Futian real estate 3358600.00 46.21 46.21
District Shenzhen development
etc.Parent company of the Company: the parent company of the Company is a wholly state-owned company approved
and authorized by the Shenzhen Municipal Government which exercises the functions of the investor in
accordance with the law for the state-owned enterprises within the authorized scope.During the reporting period the registered capital of the parent company changed as follows:
RMB 10000
Balance at the beginning of the Increase in current year Decrease in current year Balance as at the end of theyear current year
3318600.0040000.00-3358600.00
2. Subsidiaries
See Note (VIII) 1 for details of the subsidiary.
3. Joint ventures and associates of the Company
See Note (V) 10 for details of the Company's joint ventures and associates.- 95 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(XII)Related parties and related-party transactions - continued
4. Other related parties of the Company
Name of related party Relationship with the Company
Shenzhen Shentou Property Development Co. Subsidiary of the parent company of the Company Shenzhen Investment
Ltd. Holdings Co. Ltd.Shenzhen Seg Longyan Energy Technology Co. Subsidiary of the parent company of the Company Shenzhen Investment
Ltd. Holdings Co. Ltd.Guoren P&C Insurance Co. Ltd. Shenzhen Subsidiary of the parent company of the Company Shenzhen Investment
Branch Holdings Co. Ltd.Shenzhen Talent Service Center (Shenzhen Talent Subsidiary of the parent company of the Company Shenzhen Investment
Market) Holdings Co. Ltd.Shenzhen Property Management Co. Ltd. Subsidiary of the parent company of the Company Shenzhen InvestmentHoldings Co. Ltd.Shenzhen Cultural Enterprise Development Co. Subsidiary of the parent company of the Company Shenzhen Investment
Ltd. Holdings Co. Ltd.Shenzhen Investment Holdings Development Co. Subsidiary of the parent company of the Company Shenzhen Investment
Ltd. Holdings Co. Ltd.Shenzhen Investment Holdings Digital Subsidiary of the parent company of the Company Shenzhen Investment
Technology Co. Ltd. Holdings Co. Ltd.Shenzhen Leaguer Education Co. Ltd. Subsidiary of the parent company of the Company Shenzhen InvestmentHoldings Co. Ltd.Shenzhen Legal Training Center Co. Ltd. Subsidiary of the parent company of the Company Shenzhen Investment
Holdings Co. Ltd.Shenzhen Investment Holdings Sports Event Subsidiary of the parent company of the Company Shenzhen Investment
Development Co. Ltd. Holdings Co. Ltd.Shenzhen Silver Lake Convention Center (Hotel) Subsidiary of the parent company of the Company Shenzhen Investment
Co. Ltd. Holdings Co. Ltd.Wuzhou Guest House Operation Branch of Subsidiary of the parent company of the Company Shenzhen Investment
Shenzhen Wuzhou International Hotel Holdings Co. Ltd.Management Group Co. Ltd.Jiazhihua Center Cinema of Shenzhen Cultural Subsidiary of the parent company of the Company Shenzhen Investment
Enterprise Development Co. Ltd. Holdings Co. Ltd.Shenzhen Penglao Human Resources Subsidiary of the parent company of the Company Shenzhen Investment
Management Co. Ltd. Holdings Co. Ltd.Shenzhen Talent Recruitment International Subsidiary of the parent company of the Company Shenzhen Investment
(Group) Co. Ltd. (formerly known as Shenzhen Holdings Co. Ltd.Talent Recruitment International Co. Ltd.)
Shenzhen Guohui Hotel Co. Ltd. Subsidiary of the parent company of the Company Shenzhen InvestmentHoldings Co. Ltd.Xinmei Fontana Holding (Hong Kong) Limited One of the directors of the Company is a director of SAPO Photoelectric
Kunshan Xinmei Optical Technology Co. Ltd. One of the directors of the Company is a director of SAPO Photoelectric
Hengmei Optoelectronics Co. Ltd. Minority shareholder of the Company's subsidiary SAPO Photoelectric; one ofthe directors of the Company is a director of SAPO Photoelectric
Fuzhou Hengmei Optoelectronics Co. Ltd. A subsidiary of a minority shareholder of SAPO Photoelectric a subsidiary of theCompany
Haosheng Hengxin (Wuxi) Materials Co. Ltd. A subsidiary of a minority shareholder of SAPO Photoelectric a subsidiary of theCompany
Hoardsun Advanced Materials Korea LLC A subsidiary of a minority shareholder of SAPO Photoelectric a subsidiary of the
Company
Shenzhen Xinfang Knitting Factory Co. Ltd. The Company's participated company
Shenzhen Dailisi Underwear Co. Ltd. The Company's participated company
- 96 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(XII)Related parties and related-party transactions - continued
5. Related party transactions
(1) Procurement of goods/receipt of labor services
RMB
Related party Content of related party Amount for the current Amount for thetransactions year previous year
Equipment costs optical
Hengmei Optoelectronics Co. Ltd. film materials and 179843047.65 2874.60
processing
Xinmei Fontana Holding (Hong Kong) Limited Raw materials 177573836.05 -
Kunshan Xinmei Optical Technology Co. Ltd. Raw materials 18328566.87 -
Hoardsun Advanced Materials Korea LLC Raw materials 5388320.92 -
Fuzhou Hengmei Optoelectronics Co. Ltd. Optical film materials 1370344.95 -
Shenzhen Seg Longyan Energy Technology Co. Ltd. Purchase of electricity 1061155.37 1146803.41
Shenzhen Investment Holdings Development Co. Ltd. Rental and propertymanagement fees 618425.18 65786.40
Guoren P&C Insurance Co. Ltd. Shenzhen Branch Insurance premiums 431262.04 285104.25
Shenzhen Talent Service Center (Shenzhen Talent Outsourcing service fee
Market) 128290.23 125596.14
Shenzhen Investment Holdings Digital Technology Information construction
Co. Ltd. 102031.36 78655.84
Shenzhen Penglao Human Resources Management Labor dispatch fees
Co. Ltd. 148088.54 -
Shenzhen Legal Training Center Co. Ltd. Training expenses 61136.99 34597.00
Shenzhen Leaguer Education Co. Ltd. Training expenses 27944.70 20449.02
Shenzhen Property Management Co. Ltd. Property management fee 25899.76 47258.75
Shenzhen Cultural Enterprise Development Co. Ltd. Equipment costsexhibition fees 23416.00 136298.00
Shenzhen Talent Recruitment International (Group) Campus recruitment fees
Co. Ltd. (formerly known as Shenzhen Talent 14342.15 7000.00
Recruitment International Co. Ltd.)
Shenzhen Silver Lake Convention Center (Hotel) Co. Service fee
Ltd. 10904.00 -
Wuzhou Guest House Operation Branch of Shenzhen Service fee
Wuzhou International Hotel Management Group Co. 8352.00 -
Ltd.Shenzhen Guanhua Printing and Dyeing Co. Ltd. Interest expenses 3316.31 9025.99
Jiazhihua Center Cinema of Shenzhen Cultural Service fee
Enterprise Development Co. Ltd. 3040.00 -
Shenzhen Guohui Hotel Co. Ltd. Service fee 1200.00 -
Shenzhen Investment Holdings Sports Event Marketing expenses
Development Co. Ltd. - 80000.00
Shenzhen Property Management Co. Ltd. Property management fee - 47258.75
Total 385172921.07 2039449.40
- 97 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(XII) Related parties and related-party transactions - continued
5. Related party transactions - continued
(2) Sales of goods/ rendering of services
RMB
Related party Content of related party Amount for the current Amount for thetransactions year previous year
Haosheng Hengxin (Wuxi) Materials Co. Ltd. Processing fees 7267737.20 -
Fuzhou Hengmei Optoelectronics Co. Ltd. Processing fees 910142.37 -
Hengmei Optoelectronics Co. Ltd. Processing fees 577658.64 -
Shenzhen Xinfang Knitting Factory Co. Ltd. Lease 11428.57 -
Shenzhen Changlianfa Printing and Dyeing Co. Ltd. Lease 11428.57 -
Total 8778395.35 -
(3) Related party leases
The Group as lessor
RMB
Lease income Lease income
Lessee Type of leased asset recognized in this recognized in previous
period period
Shenzhen Xinfang Knitting Factory Co. Ltd. Houses and buildings 11428.57 -
Shenzhen Changlianfa Printing and Dyeing Co. Ltd. Houses and buildings 11428.57 -
Total 22857.14 -
The Group as lessee
RMB
Amount in the current period
Rental costs for
short-term leases Variable lease Interest
Lessor Type of and low-value
payments not expense on Increase in
leased asset asset leases for included in themeasurement of Paid rents lease right-of-usesimplified liabilities assets
processing (if lease liabilities (if assumed
applicable) applicable)
Shenzhen Investment
Holdings Development Houses and
-
buildings 389545.30 440134.57 7295.94 2541344.41Co. Ltd.RMB
Amount in the current period
Rental costs for
short-term leases Variable lease
Type of and low-value payments not
Interest
Lessor leased asset asset leases for included in the
expense on Increase in
simplified measurement of
Paid rents lease right-of-use
processing (if lease liabilities (if
liabilities assets
assumed
applicable) applicable)
Shenzhen Investment
Holdings Development Houses and
Co. Ltd. buildings
65786.40-65786.40--
(4) Loans from and to related parties
RMB
Related party Amount borrowed Start date Maturity date Notes
Borrowed from
Shenzhen Guanhua Printing and Annual interest rate
Dyeing Co. Ltd. 3806454.17 July 30 2019 July 31 2025 0.15%
- 98 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(XII) Related parties and related-party transactions - continued
5. Related party transactions - continued
(5) Remuneration of key management personnel
RMB
Item Amount for the current year Amount for the previous year
Remuneration of key officers 6322000.00 6932991.00
6. Accounts receivable accounts payable to related parties and other unsettled items
(1) Receivables
RMB
Balance as at the end of the Balance as at the end of the
Project Related party current year previous year
Book balance Provision for bad Book balance Provision for baddebts debts
Haosheng Hengxin (Wuxi) Materials
Co. Ltd. 3255772.72 41863.57 - -
Fuzhou Hengmei Optoelectronics
Accounts Co. Ltd. 1028460.87 848850.89 - -
receivable Hengmei Optoelectronics Co. Ltd. 652754.27 538757.54 - -
Shenzhen Shentou Property
Development Co. Ltd. 6027.00 1808.10 6027.00 602.70
Total 4943014.86 1431280.10 6027.00 602.70
Kunshan Xinmei Optical Technology
Co. Ltd. 4745325.94 - - -
Advances to Shenzhen Investment Holdings DigitalTechnology Co. Ltd. 96500.00 - - -suppliers Shenzhen Investment Holdings
Development Co. Ltd. 53118.73 - - -
Total 4894944.67 - - -
Shenzhen Dailisi Underwear Co. Ltd. 1100000.00 55000.00 1100000.00 55000.00
Other receivables Shenzhen Investment HoldingsDevelopment Co. Ltd. 106237.44 568.37 73096.00 3910.64
Total 1206237.44 55568.37 1173096.00 58910.64
(2) Payables
RMB
Project Related party Balance as at the end of the Balance as at the end of thecurrent year previous year
Xinmei Fontana Holding (Hong Kong) Limited 14853562.10 -
Accounts payable Fuzhou Hengmei Optoelectronics Co. Ltd. 1370344.95 -Hengmei Optoelectronics Co. Ltd. 633118.20 -
Total 16857025.25 -
Shenzhen Guanhua Printing and Dyeing Co. Ltd. 3806454.17 3816981.88
Shenzhen Changlianfa Printing and Dyeing Co.Ltd. 2281299.95 2281299.95
Shenzhen Xinfang Knitting Factory Co. Ltd. 244789.85 244789.85
Shenzhen Investment Holdings Digital
Technology Co. Ltd. 51840.00 37735.84
Other payables Shenzhen Investment Holdings DevelopmentCo. Ltd. 18417.00 29238.40
Shenzhen Cultural Enterprise Development Co.Ltd. 6536.00 -
Shenzhen Investment Holdings Sports Event
Development Co. Ltd. - 80000.00
Shenzhen Property Management Co. Ltd. - 7934.52
Total 6409336.97 6497980.44
- 99 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(XIII) Commitments and contingencies
1. Important commitments
(1) Capital commitments
RMB
Item Amount at the end of current Amount at the end of previousyear year
Contracted but not recognized in the financial statements
Commitment on construction and purchase of long-lived assets 7977917.50 53374.76
2. Contingencies
As of December 31 2025 the Group had no contingencies such as pending litigations and external guarantees to
be discolsed.(XIV) Events after the balance sheet date
1. Profit distribution after the balance sheet date
On March 26 2026 the profit distribution proposal for the year 2025 was approved by the Board of the Company.It is proposed that the Company distribute cash dividends of RMB 0.48 per ten shares (tax inclusive) to all
shareholders based on the total share capital of 506521849 shares as of December 31 2025 resulting in total
cash dividends of RMB 24313048.75 (tax inclusive). The profit distribution plan is subject to the consideration
and approval of the Company's General Meeting.RMB
Item Amount
Profit or dividend to be distributed 24313048.75
Profit or dividend declared to be granted upon deliberation and approval -
- 100 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(XV) Other significant matters
1. Segment information
(1) Determination basis and accounting policies for reporting segments
According to the internal organizational structure management requirements and internal reporting system of the
Group the Group's operating business is divided into two operating segments. The management of the Group
regularly evaluates the operating results of these segments to decide on the allocation of resources to them and
evaluate their performance. On the basis of operating segments the Group has identified the following two
reporting segments polarizer business property leasing business and other business.Information on segment reporting is disclosed according to the accounting policies and measurement standards
adopted by each segment when reporting to the management and these measurement bases are consistent with the
accounting and measurement bases when preparing the financial statements.
(2) Financial information of reporting segments
RMB
Current year or end of Polarizer Property leasing andcurrent year others Offset Total
Operating revenue:
Revenue from
external transactions 3128737095.55 112643335.07 - 3241380430.62
Revenue from
transactions between - 3578055.92 (3578055.92) -
segments
Total operating
revenue of segments 3128737095.55 116221390.99 (3578055.92) 3241380430.62
Operating expenses
(Note) 2964660493.76 86976269.15 (3239268.69) 3048397494.22
Operating profit 67696577.60 40317571.37 (5049907.23) 102964241.74
Net profit 67893144.85 32905892.39 (5185494.41) 95613542.83
Total assets of
segments 4231298575.88 3142462542.68 (1955465401.79) 5418295716.77
Total liabilities of
segments 966686977.47 196395831.31 (35152264.88) 1127930543.90
Previous year or the
beginning of current Polarizer Property leasing and
year others
Offset Total
Operating revenue:
Revenue from
external transactions 3219211416.65 116071592.03 - 3335283008.68
Revenue from
transactions between - 4239345.09 (4239345.09) -
segments
Total operating
revenue of segments 3219211416.65 120310937.12 (4239345.09) 3335283008.68
Operating expenses
(Note) 3007500292.36 95037109.98 (3900557.86) 3098636844.48
Operating profit 136015568.69 (20628307.04) 36389537.55 151776799.20
Net profit 134120025.66 (15831104.78) 24767845.50 143056766.38
Total assets of
segments 4031861994.76 3149618569.49 (1949330166.92) 5232150397.33
- 101 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
Total liabilities of
segments 835237595.88 191159171.74 (29567004.42) 996829763.20
Note: this item includes operating costs taxes and surcharges G&A expenses R&D expenses selling and
distribution expenses and financial expenses.- 102 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(XV) Other important matters - Continued
2. Other significant events affecting the decision-making of investors
Based on the current operating status of Shenzhen Xieli Automobile Enterprise Co. Ltd. (hereinafter referred to as
"Shenzhen Xieli") the Company applied to the People's Court of Luohu District Shenzhen (hereinafter referred to
as the "Court") for compulsory liquidation of Shenzhen Xieli on January 7 2026. The Court accepted the case on
January 22 2026 and the case is currently under compulsory liquidation proceedings.(XVI) Notes to the main items of the parent company's financial statements
1. Accounts receivable
(1) Disclosure by aging
RMB
Aging Book balance at the end of the Book balance at the beginningyear of the year
Within 1 year 8710793.24 10649986.34
1-2 years - -
2 to 3 years - -
3 - 4 years - 2485076.00
4 to 5 years 118603.99 -
Total 8829397.23 13135062.34
(2) Disclosure by provision method for bad debts
RMB
Balance as at the end of the current year
Category Book balance Provision for bad debts
Book value
Amount Ratio (%) Amount Provision ratio(%)
Provision for bad debts - - -
accrued on an individual - -
basis
Provision for bad debts
made by portfolio 8829397.23 100.00 115022.89 1.30 8714374.34
Total 8829397.23 100.00 115022.89 8714374.34
- 103 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(XVI) Notes to the main items of the parent company's financial statements - Continued
1. Accounts receivable - Continued
(2) Disclosure by provision method for bad debts - Continued
RMB
Balance as at the end of the previous year
Category Book balance Provision for bad debts
Amount Ratio (%) Amount Provision ratio Book value(%)
Provision for bad debts - - -
accrued on an individual - -
basis
Provision for bad debts
made by portfolio 13135062.34 100.00 106074.71 0.81 13028987.63
Total 13135062.34 100.00 106074.71 13028987.63
As of December 31 2025 accounts receivable with provision for bad debts accrued on a portfolio basis:
RMB
Balance as at the end of the current year
Aging Expected average loss
rate (%) Book balance
Provision for bad
debts Book value
Within 1 year 1.32 8710793.24 115022.89 8595770.35
4 to 5 years - 118603.99 - 118603.99
Total 8829397.23 115022.89 8714374.34
As of December 31 2025 provision for bad debts is made based on the simplified expected credit losses model
RMB
Whole duration Whole duration
Provision for bad debts Expected credit losses Expected credit losses Total
(No credit loss) (With credit loss)
Balance at the beginning of the year 106074.71 - 106074.71
Balance at the beginning of the year - - -
- Transfer to credit loss incurred - - -
- Reversal of credit loss not incurred - - -
Withdrawal in the current year 8948.18 - 8948.18
Reversal in the current year - - -
Charge-off in the current year - - -
Write-off in the current year - - -
Other changes - - -
Balance as at the end of the current
year 115022.89 - 115022.89
(3) Provision for bad debts
RMB
Balance at the Changes in the current year Balance as at the
Type beginning of the Provision Recovery or Resale or write- Other changes end of the currentyear reversal off year
Provision for bad
debts 106074.71 8948.18 - - - 115022.89
There was no significant amount of provision for bad debts recovered or reversed this year.- 104 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(XVI) Notes to the main items of the parent company's financial statements - Continued
1. Accounts receivable - Continued
(4) There are no accounts receivable actually written off this year.
(5) Top five entities in terms of the ending balance of accounts receivable by debtor
RMB
Balance of provision
Entity name Book balance at the
Ratio in total
accounts receivable for bad debts as at theend of the year (%) end of the currentyear
Customer A 6980341.04 79.06 93757.57
Customer B 1227979.88 13.91 -
Customer C 118603.99 1.34 -
Customer D 117394.64 1.33 5869.73
Customer E 81272.44 0.92 -
Total 8525591.99 96.56 99627.30
2. Other receivables
(1) Disclosure by aging
RMB
Aging Balance as at the end of Balance as at the end ofthe current year the previous year
Within 1 year 1973476.50 15129726.66
1-2 years 13636400.01 273000.00
2 to 3 years 273000.00 2204641.09
Over 3 years 27509236.20 25380195.11
Total 43392112.71 42987562.86
Less: provision for bad debts 41377567.06 41453167.06
Book value 2014545.65 1534395.80
(2) Disclosure by nature of payment
RMB
Nature of payment Book balance at the end of Book balance at the end ofthe year the previous year
Transactions with related parties within the consolidation scope 26114041.10 26189641.10
Transactions with external units 15455577.41 15422435.97
Guarantee and deposits 10000.00 10000.00
Others 1812494.20 1365485.79
Total 43392112.71 42987562.86
(3) Provision for bad debts
As of December 31 2025 provision for bad debts was made in accordance with the general model of expected
credit loss.RMB
Stage 1 Stage 2 Stage 3
Provision for bad debts Expected credit loss Lifetime expected Lifetime expectedfor the next 12 credit loss (without credit loss (credit- Total
months credit impairment) impaired)
Balance at the beginning of the
year 13711066.34 2477641.09 25264459.63 41453167.06
Balance at the beginning of the
current year
-- Transferred to Stage 2 (13636400.01) 13636400.01 - -
-- Transferred to Stage 3 - (2204641.09) 2204641.09 -
-- Reclassified to Stage 2 - - - -
-- Reclassified to Stage 1 - - - -
Provision for the year - - - -
- 105 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
Reversed during the year - - (75600.00) (75600.00)
Written off during the year - - - -
Written off during the year - - - -
Other changes - - - -
Balance at the end of the year 74666.33 13909400.01 27393500.72 41377567.06
As of December 31 2025 provision for bad debts shall be made according to the credit risk characteristic
combination
RMB
Balance as at the end of the current year
Phase Expected average loss Book balance Provision for badrate (%) debts Book value
Provision for bad debts based on
credit risk characteristic combination 95.36 43392112.71 41377567.06 2014545.65
Provision for other receivables
- 106 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(XVI) Notes to the main items of the parent company's financial statements - Continued
2. Other receivables - continued
(3) Provision for bad debts - continued
As of December 31 2025 the credit risk and provision for bad debts of other receivables are as follows:
RMB
Balance as at the end of the current year
Aging Expected average loss
rate (%) Book balance Provision for bad debts Book value
Within 1 year 3.78 1973476.50 74666.33 1898810.17
1-2 years 100.00 13636400.01 13636400.01 -
2 to 3 years 100.00 273000.00 273000.00 -
Over 3 years 99.58 27509236.20 27393500.72 115735.48
Total 43392112.71 41377567.06 2014545.65
(4) Changes in provision for bad debts
RMB
Balance at the Changes in the current year Balance as at the
Type beginning of the Provision Recovery or Resale or Other changes end of theyear reversal write-off current year
Provision for bad debts 41453167.06 - (75600.00) - - 41377567.06
(5) There were no other receivables actually written off this year.
(6) Top five entities in terms of ending balance of other receivables by debtors
RMB
Proportion of
other Provision for
Balance as at receivables bad debts
Entity name the end of the Balance as at Nature of amount Aging Balance as at
current year the end of the the end of the
current year current year
ratio (%)
Customer A 26114041.10 60.18 Intercourse payment Over1- 3 years 26114041.10
Customer B 11389044.60 26.25 Intercourse payment Over 3 years 11389044.60
Customer C 1800000.00 4.15 Intercourse payment Over 3 years 1800000.00
Customer D 1100000.00 2.54 Intercourse payment Within 1 year 55000.00
Customer E 1018295.37 2.35 Intercourse payment Over 3 years 1018295.37
Total 41421381.07 95.47 40376381.07
3. Long-term equity investments
RMB
Balance as at the end of the current year Balance as at the end of the previous year
Item Book balance Provision for Provision forimpairment Book value Book balance impairment Book value
Investment in
subsidiaries 1963252748.31 37390767.64 1925861980.67 1962688268.31 36826287.64 1925861980.67
Investments in
joint ventures 104274952.84 - 104274952.84 111555887.28 - 111555887.28
Investments in
associates 3308634.07 - 3308634.07 3272138.76 - 3272138.76
Total 2070836335.22 37390767.64 2033445567.58 2077516294.35 36826287.64 2040690006.71
- 107 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(XVI) Notes to the main items of the parent company's financial statements - Continued
3. Long-term equity investments - Continued
(1) Investment in subsidiaries
RMB
Provision for Provision for
Investees Balance at thebeginning of the year Increase in current year Decrease in current year impairment in the
Balance as at the end of impairment
current year the current year Balance as at the end ofthe current year
SAPO Photoelectric 1910247781.94 - - - 1910247781.94 14415288.09
Shenzhen Lisi Industrial Development Co.Ltd. 8073388.25
---8073388.25-
Shenzhen Meibainian Garment Co. Ltd. - 564480.00 - 564480.00 - 22975479.55
Shenzhen Shenfang Property Management - - - 1713186.55 -
Co. Ltd. 1713186.55
Shenzhen Shenfang Sungang Property
Management Co. Ltd. 5827623.93
---5827623.93-
Total 1925861980.67 564480.00 - 564480.00 1925861980.67 37390767.64
(2) Investment in associates and joint ventures
RMB
Changes in the current year
Balance at the Investment profit Other Cash dividends
Balance of
Investees beginning of the Additional Reduced or loss recognized comprehensi or profits
Balance as at the provision for
year investment investment under the equity ve income Change in declared to be Provision for Others
end of the current impairment
method adjustment other equity paid impairment
year as at the end
of the current
year
Joint ventures
Shenzhen Guanhua Printing 111555887.28 - - (7280934.44) - - - - - 104274952.84 -and Dyeing Co. Ltd.Sub-total 111555887.28 - - (7280934.44) - - - - - 104274952.84 -
Associates
Shenzhen Changlianfa 3272138.76 - - 269945.31 - - (233450.00) - - 3308634.07 -Printing and Dyeing Co. Ltd.Sub-total 3272138.76 - - 269945.31 - - (233450.00) - - 3308634.07 -
Total 114828026.04 - - (7010989.13) - - (233450.00) - - 107583586.91 -
- 108 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
(XVI) Notes to the main items of the parent company's financial statements - Continued
4. Operating revenue and operating costs
(1) Operating revenue and operating costs
RMB
Amount for the current year Amount for the previous year
Item
Revenue Cost Revenue Cost
Primary business 76736666.87 10942684.48 77167496.95 10205157.84
Other business 903094.00 684545.01 - -
Total 77639760.87 11627229.49 77167496.95 10205157.84
(2) Primary business by product
RMB
Amount for the current year Amount for the previous year
Products Income from primary
business Cost of primary business
Income from primary
business Cost of primary business
Property leasing 76736666.87 10942684.48 77167496.95 10205157.84
(3) Primary business by region
RMB
Amount for the current year Amount for the previous year
Region Income from primary
business Cost of primary business
Income from primary
business Cost of primary business
Domestic 76736666.87 10942684.48 77167496.95 10205157.84
5. Investment income
RMB
Item Amount for the current Amount for the previousyear year
Long-term equity investment income calculated under the equity method (7010989.13) (10701895.08)
Income from long-term equity investments under cost method 5200000.00 4700000.00
Investment income from the recovery of long-term equity investments - 5838587.94
Investment income obtained during holding the financial assets held for trading 14540478.82 10795474.10
Dividend income from investments in other equity instrument during the 1235735.85
holding period 1445735.85
Total 13965225.54 12077902.81
- 109 -Shenzhen Textile (Holdings) Co. Ltd.Notes to the financial statements
For the year ended December 31 2025
1. Breakdown of current non-recurring profit or loss
According to the Interpretive Announcement No. 1 on Information Disclosure of Companies Issuing Securities to
the Public - Non-recurring Profit or Loss (Revision 2024) (hereinafter referred to as "Interpretive Announcement
No. 1") issued by the China Securities Regulatory Commission the Group's non-recurring profit or loss for 2025
are as follows:
RMB
Item Amount for the currentyear
Profit or loss from disposal of non-current assets including the writing-off part for which the asset
impairment provision is made 1137242.81
Government subsidies included in the current profit or loss (except for those that are closely related to the
Company's normal business operations comply with national policies and regulations are enjoyed
according to determined standards and have a sustained impact on the Company's profit or loss) 6426316.96
Profit or loss from changes in fair value of financial assets and liabilities held by non-financial enterprises
and profit or loss from the disposal of financial assets and financial liabilities except for effective hedging
operations related to the Company's normal business operations (11769635.37)
Reversal of provision for impairment of accounts receivable subject to separate impairment test 4371571.58
Non-operating revenue and expenses other than the above-mentioned items 5481728.35
Total non-recurring profit or loss 5647224.33
Less: income tax effect of non-recurring profit or loss 906584.80
Net amount of non-recurring profit or loss 4740639.53
Less: net effect of non-recurring profit or loss attributable to minority shareholders (after tax) (243998.88)
Non-recurring profit or loss attributable to the Company's ordinary shareholders 4984638.41
2. Return on net assets and earnings per share
This return on net assets and earnings per share table is prepared by Shenzhen Textile (Holdings) Co. Ltd. in
accordance with the Rules for the Compilation and Reporting of Information Disclosure by Companies Issuing
Securities in Public (No. 9) - Calculation and Disclosure of Return on Net Assets and Earnings per Share
(Revision 2010) issued by the China Securities Regulatory Commission.RMB
Weighted average rate of Earnings per share
Profit in the reporting period return on net assets %
Basic earnings per share Diluted earnings pershare
Net profit attributable to ordinary shareholders of
the COOEC 2.31 0.14 0.14
Net profit attributable to ordinary shareholders of
the Company after deducting non-recurring profit or
loss 2.14 0.13 0.13
110
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