2025 Semi-Annual Report of Changchai Company Limited

CHANGCHAI COMPANY LIMITED

2025 Semi-Annual Report

August 2025

12025 Semi-Annual Report of Changchai Company Limited

Part I Important Notes Table of Contents and Definitions

The Board of Directors Supervisory Committee and all directors supervisors and

senior management members of the Company warrant that the content of this semi-annual

report is truthful accurate and complete without any false records misleading statements

or material omissions and shall bear individual and joint legal liabilities accordingly.Mr. Xie Guozhong the legal representative of the Company; Mr. Xie Guozhong the

executive in charge of accounting; and Ms. Jiang He the head of the accounting department

(chief accounting officer) hereby confirm the truthfulness accuracy and completeness of the

financial statements in this semi-annual report.All directors attended the Board meeting convened to review this semi-annual report.This report contains forward-looking statements regarding future plans which do not

constitute substantive commitments to investors. Investors are advised to exercise caution

regarding investment risks.The Company has comprehensively addressed potential risks in “Part III ManagementDiscussion and Analysis” specifically under "X Risks and Countermeasures."

The Company plans neither to distribute cash dividends nor to issue bonus shares nor to

convert capital reserves into share capital.

22025 Semi-Annual Report of Changchai Company Limited

Content

Part I Important Notes Table of Contents and Defin....2

Part II Corporate Information and Key Financial In....6

Part III Management Discussion andAnalysis .......... 9

Part IV Corporate Governance Environment and Socia.. 26

Part V Significant Events ...........................30

Part VI Share Changes and Shareholder Information....35

Part VII Preference Shares ..........................41

Part VIII Financial Statements ......................42

Part IX Other Reported Information .................174

32025 Semi-Annual Report of Changchai Company Limited

Documents Available for Reference

1. Financial statements bearing the signatures and seals of the Company’s legal representative the

executive in charge of accounting and the head of the accounting department (chief accounting

officer).

2. Original copies of all announcements and documents disclosed on the China Securities

Regulatory Commission (CSRC)-designated websites during the reporting period.

3. Semi-annual reports published in other securities markets.

The above reference documents are kept in full at the office of the Company’s Board Secretary.This semi-annual report is prepared in both Chinese and English. In case of any discrepancy in

interpretation the Chinese version shall prevail.

42025 Semi-Annual Report of Changchai Company Limited

Definitions

Term Definition

Changchai Company Limited and its consolidated subsidiaries

“Changchai” the “Company” or “we”

except where the context otherwise requires

Changchai Benniu Changzhou Changchai Benniu Diesel Engine Fittings Co. Ltd.Changchai Wanzhou Changchai Wanzhou Diesel Engine Co. Ltd.Horizon Investment Changzhou Horizon Investment Co. Ltd.Horizon Agricultural Equipment Changzhou Changchai Horizon Agricultural Equipment Co. Ltd.Changchai Robin Changzhou Fuji Changchai Robin Gasoline Engine Co. Ltd.Changchai Machinery Jiangsu Changchai Machinery Co. Ltd.Xingsheng Real Estate Management Changzhou Xingsheng Real Estate Management Co. Ltd.Zhenjiang Siyang Zhenjiang Siyang Diesel Engine Manufacturing Co. Ltd.Changniu Company Changzhou Changniu Machinery Co. Ltd.Expressed in the Chinese currency of Renminbi expressed in tens

RMB RMB’0000

of thousands of Renminbi

The “Reporting Period” or “CurrentThe period from 1 January 2025 to 30 June 2025Period”

52025 Semi-Annual Report of Changchai Company Limited

Part II Corporate Information and Key Financial Information

I Corporate Information

Stock name Changchai Changchai B Stock code 000570、200570

Stock exchange for stock listing Shenzhen Stock Exchange

Company name in Chinese 常柴股份有限公司

Abbr. 苏常柴

Company name in English (if any) CHANGCHAI COMPANYLIMITED

Abbr. (if any) CHANGCHAI CO.LTD.Legal representative Xie Guozhong

II Contact Information

Board Secretary Securities Representative

Name He Jianjiang

123 Huaide Middle Road

Address

Changzhou Jiangsu China

Tel. (86)519-68683155

Fax (86)519-86630954

Email address cchjj@changchai.com

III Other Information

1. Company Contact Information

Whether there were any changes to the company's registered address office address and postal code website or

email during the reporting period

□Applicable √Not Applicable

The company's registered address office address and postal code website and email remained unchanged during

the reporting period. For details please refer to the 2024 Annual Report.

2. Information Disclosure and Storage Location

Whether there were any changes to the information disclosure and storage location during the reporting period

□Applicable √Not Applicable

The stock exchange website and media names/URLs where the company disclosed its semi-annual report as well

as the storage location of the semi-annual report remained unchanged during the reporting period. For details

62025 Semi-Annual Report of Changchai Company Limited

please refer to the 2024 Annual Report.

3. Other relevant materials

Whether there were changes to other relevant materials during the reporting period

□Applicable √Not Applicable

VI Key Financial Information

Whether the Company needs to retrospectively adjust or restate prior-year accounting data

□Yes √No

Current Reporting Same Period of

Period Previous Year YoY Change

Operating revenue (RMB) 1561186625.83 1495909152.63 4.36%

Net profit attributable to the listed

73422814.6950097655.1546.56%

company’s shareholders (RMB)

Net profit attributable to the listed

company’s shareholders before 56297500.59 59846264.97 -5.93%

exceptional gains and losses (RMB)

Net cash generated from/used in

-74306110.63-161814513.00——

operating activities (RMB)

Basic earnings per share (RMB/share) 0.1040 0.0710 46.48%

Diluted earnings per share

0.10400.071046.48%

(RMB/share)

Weighted average return on equity (%) 2.14% 1.47% 0.67%

Change of 30

30 June 2025 31 December 2024 June 2025 over31 December

2024

Total assets (RMB) 5495820689.71 5381900903.82 2.12%

Equity attributable to the listed

3498363449.683362683464.324.03%

company’s shareholders (RMB)

V. Differences in Accounting Data Under Domestic and Foreign Accounting Standards

1. Differences in Net Profit and Net Assets Between Financial Reports Prepared Under International

Accounting Standards and Chinese Accounting Standards

□Applicable √Not Applicable

There were no differences in net profit or net assets between financial reports prepared under International

Accounting Standards and Chinese Accounting Standards during the reporting period.

72025 Semi-Annual Report of Changchai Company Limited

2. Differences in Net Profit and Net Assets Between Financial Reports Prepared Under Foreign Accounting

Standards and Chinese Accounting Standards

□Applicable √Not Applicable

There were no differences in net profit or net assets between financial reports prepared under foreign accounting

standards and Chinese Accounting Standards during the reporting period.VI Exceptional Gains and Losses

√ Applicable □ Not applicable

Unit: RMB

Item Amount Note

Gain or loss on disposal of non-current assets

(inclusive of impairment allowance write-offs) 2797353.31

Government grants recognized in current profit After deducting government grants

or loss (exclusive of those that are closely related to assets transferred from

related to the Company's normal business deferred income totaling RMB

operations and given in accordance with defined 64535.00 1704864.73 individual income tax

criteria and in compliance with government refunds of RMB 53705.85 and job

policies and have a continuing impact on the stabilization subsidies of RMB

Company's profit or loss) 21000.00

This was primarily attributable to

wealth management income generated

Gains or losses from changes in fair value of from the Company's cash management

financial assets and liabilities held by activities during the reporting period

non-financial enterprises as well as gains or as well as an increase in the fair value

losses from disposal of financial assets and 18884092.44 of shares held by wholly-owned

liabilities excluding effective hedging activities subsidiary Horizon Investment in

related to the company's normal business Jiangsu Liance Electromechanical

operations. Technology Co. Ltd. and Kailong

High-Tech Co. Ltd. compared to the

beginning of the period.Other non-operating income and expenses not

listed above. 113416.17

Less: Income tax effects 4733898.62

Non-controlling interests effects (net of

tax) 184.20

Total 17125314.10

Particulars about other items that meet the definition of exceptional gain/loss:

□ Applicable √ Not applicable

No such cases for the Reporting Period.Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item listed in the Explanatory

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

Public—Exceptional Gain/Loss Items:

□ Applicable √ Not applicable

No such cases for the Reporting Period.

82025 Semi-Annual Report of Changchai Company Limited

Part III Management Discussion and Analysis

I Principal Business Activities of the Company During the Reporting Period

1. Industry Development Status

The Company operates in the internal combustion engine and components manufacturing sector within the general

equipment manufacturing industry. Classified by fuel type internal combustion engines are primarily categorized

into diesel engines and gasoline engines. The Company's diesel and gasoline engine products are mainly used in

off-road mobile machinery applications such as harvesters tractors plant protection equipment compact

construction machinery and marine engines.

(1) Industry Overview

Internal combustion engines serve as a critical pillar supporting China's manufacturing security energy security

and national defense security representing a fundamental industry for both national economic development and

defense construction. They are the thermal power devices with the highest power density thermal efficiency and

most extensive application scope.To implement the national development strategies of energy conservation emissions reduction and industrial

transformation/upgrading the internal combustion engine and agricultural machinery industries will strengthen

independent innovation and R&D accelerate the construction of common foundational technology platforms

optimize upstream and downstream industrial chain development implement intelligent manufacturing actively

conduct international exchanges and cooperation and expedite industrial technological upgrading.

(2) Industry Development Landscape and Trends

From the policy perspective energy conservation and emissions reduction have been emphasized as key priorities

with green circular low-carbon environmentally friendly energy-efficient emissions-reducing and reliable

development becoming the main themes guiding internal combustion engine advancement. The industry is

progressively transitioning toward greener and smarter solutions through optimized combustion technologies

emission control systems and intelligent monitoring - thereby reducing environmental impact while enhancing

operational efficiency.In recent years China has introduced a series of policies supporting agricultural machinery market development

including agricultural equipment purchase subsidy programs scrappage renewal subsidy policies and support

measures for agricultural machinery distribution sectors. The 2025 No. 1 Central Policy Document anchored goals

of advancing comprehensive rural revitalization and building an agricultural powerhouse proposing to promote

high-quality development of agricultural machinery equipment accelerate R&D and application of domestically

produced advanced agricultural machinery facilitate retirement and renewal of outdated agricultural equipment

and support smart agriculture development by expanding application scenarios for AI big data and low-altitude

technologies. These initiatives have created new development opportunities for agricultural machinery while

simultaneously imposing higher requirements for technological innovation and industrial upgrading.During the first half of 2025 affected by persistently low grain prices and frequent extreme weather events among

other factors China's agricultural machinery market underperformed expectations overall with sales declining

across most product categories. For specific products tractors as traditional mainstay products showed weak

performance with declining production/sales. In the harvester segment tracked harvesters achieved counter-trend

growth leveraging export advantages while wheeled harvesters saw significant production/sales declines due to

reduced wheat yields. The transplanter market exhibited divergent trends with the sales proportion of walking

92025 Semi-Annual Report of Changchai Company Limited

transplanters surpassing that of high-speed transplanters. Premium agricultural machinery demonstrated strong

resilience - for instance traditional mechanical transmission tractors are being displaced as power-shift models

continue gaining market share.Currently the agricultural machinery market is undergoing structural adjustment. Regarding the competitive

landscape leading firms mastering core technologies are strengthening competitive advantages with increasing

market concentration while midstream/downstream enterprises face greater survival pressures amid accelerated

industry consolidation. From the product structure perspective high-end products have become key growth

focuses with some firms completing strategic transitions toward premium/intelligent solutions. In terms of

development trends technological innovation drives industrial upgrading while policy support expands market

capacity. With rapid advances in AI big data new energy and energy-saving/environmental technologies

agricultural machinery is transitioning from traditional mechanization toward premium intelligent digital and

green development - propelling a new round of structural transformation where enterprises simultaneously enter a

high-quality development phase accelerating advancement and application of advanced technologies/products in

energy conservation smart manufacturing and efficiency improvement. New development opportunities are

emerging within national strategic deployments and accelerated transformation/upgrading processes indicating

vast potential for agricultural machinery market expansion.

2. Principal Operations of the Company

We mainly specialize in the R&D manufacture and sales of diesel engines under the brand "Changchai" and

gasoline engines under the brand "Robin". Our products are mainly used in agricultural machinery small

engineering machinery generator sets and shipborne machinery and other fields closely related to people's

livelihood.In the Reporting Period there were no major changes in the Company's core business and main products.

3. Main Products of the Company

Our main products are divided into two categories: diesel engines and gasoline engines. The details are as follows:

Main

Product Application

produc Graphic display Product description

features fields

ts

Our diesel engine products include

single-cylinder diesel engines and High power low Agricultural

multi-cylinder engines covering oil consumption machinery

power range from 3kW to 129kW low noise construction

Diesel

and cylinder diameters from 65mm compact machinery

engine

to 135mm. Besides sale in domestic structure low generator sets

market our diesel engines are sold emission good shipborne

to Southeast Asia South America reliability machinery

the Middle East and Africa.Our gasoline engines are mainly

general-purpose small gasoline AgriculturalSimple structure

Gasolin engines covering the power range machinerygood reliability

e from 1.5kW to 9.0kW. Besides sale smalleasy

engine in domestic market our gasoline constructionmaintenance

engines are sold to Southeast Asia machinery

the Middle East Europe and

102025 Semi-Annual Report of Changchai Company Limited

America Africa Japan and other

countries and regions.

4. Major Business Models

(1) R&D model

We have established an innovative technology management system for internal combustion engine based on

market demand and forward-looking technologies. Prior to the new products or new technologies development

the marketing department first conducts market assessment and customer research and then initiates a project

according to the forecasted market demand; the technology center conducts development according to the project

materials and collects feedback information from the market and customers in real time during the development

process to ensure technology leadership and product suitability.

(2) Purchasing model

We adopt the "purchase-to-order" purchasing model. The ERP system converts the sales orders the sales plan

developed by the sales department and the production plan drawn up by the production department into the

demand of parts needed and the purchasing department organizes the purchase according to such demand.Meanwhile the purchasing department makes a plan to guide parts procurement according to the sales

department's sales plan and provide it to the supplier and urge the supplier to prepare for the goods.

(3) Production model

We adopt the "make-to-order" production management model. The sales department makes sales plans for

different stages according to the orders in hand sales data in previous years market demand judgment and

feedback of existing customers' purchasing intentions. The Company's production department makes the

production plan according to the sales orders displayed in the ERP system the sales plan made by the sales

department and the reserve inventory demand and organizes the production task in strict accordance with the plan.During the production process the quality assurance department arranges regular inspection to ensure the product

quality.

(4) Sale model

We adopt the sales model of "direct selling + distribution" i.e. the direct selling model for the main engine factory

and the distribution model for the individual circulation market represented by farmers and overseas market.

5. The Company's position in the market

We mainly specialize in the R&D manufacture and sales of diesel engines under the brand "Changchai" and

gasoline engines under the brand "Robin". Up to now we have successfully developed a number of advanced core

technologies with independent intellectual property rights. In terms of diesel engine according to the statistics of

China Internal Combustion Engine Industry Association (CICEIA) as the largest small- and medium-sized

single-cylinder diesel engine manufacturer in the agricultural machinery industry of China we have maintained a

high market share of single-cylinder engines and our market share of single-cylinder diesel engines of some

power ranges has ranked first in China. For many years in the process of achieving steady economic development

of the enterprise we developed in a sound manner and cultivated the "Changchai" brand a famous small diesel

engine brand of China with independent intellectual property rights.

5. Key Performance Drivers

(1) National policy driver

112025 Semi-Annual Report of Changchai Company Limited

In recent years the Chinese government has introduced a series of policies to support the development of the

agricultural machinery market including subsidies for agricultural equipment purchases and replacements as well

as support policies for the agricultural machinery distribution industry. The 2025 No. 1 Central Policy Document

proposed promoting high-quality development of agricultural machinery equipment accelerating the research

development and application of domestically produced advanced agricultural machinery facilitating the

retirement and renewal of outdated agricultural equipment and supporting the development of smart agriculture

by expanding application scenarios for artificial intelligence big data low-altitude technologies and other

innovations. China's agricultural machinery equipment industry layout has always taken innovation as the main

line focusing on core technologies and strengthening innovation capacity building. After the new three-year

agricultural machinery subsidy plan clearly proposed to promote high-quality development of agricultural

machinery equipment relevant supporting policies have been continuously strengthened. The agricultural

machinery subsidy policy favors advanced and applicable models while relevant smart agriculture development

policies have also created a favorable environment for the development of high-end products. The full

implementation of China IV emission standards and the development orientation of high-end and intelligent

agricultural machinery have brought the agricultural machinery industry into a new development stage. The

trade-in action plan has accelerated the replacement process of outdated construction machinery equipment

creating a favorable policy environment for applications in the internal combustion engine field.

(2) Industrial chain synergy empowers sustainable corporate development

The company has built its own casting and machining plants to meet part of the demand for diesel engine

components. Significant synergies have been formed between production and quality aspects and its internal

combustion engine assembly sector. The casting manufacturing sector and internal combustion engine assembly

sector jointly improve to form a mutually reinforcing positive feedback loop thereby helping the company

integrate the internal combustion engine industry chain and build differentiated industry barriers. In terms of

production synergy reducing external procurement is of great significance for reducing process flow lowering

intermediate losses improving production efficiency shortening delivery times and increasing procurement

bargaining power. In terms of quality synergy self-built foundries can enhance the company's quality control of

components thereby improving the yield rate and reliability of internal combustion engine products.

(3) Stable and efficient R&D team

The company has an experienced technical management team and a comprehensive technical support team. Core

technical personnel and R&D management personnel have long been engaged in the research development

design and manufacturing of internal combustion engines possessing profound professional knowledge and rich

practical experience with strong foresight and scientific judgment in market direction and technical route

selection. At the same time the company has established an effective training mechanism to provide strong talent

guarantee for subsequent R&D.

(4) Recognized brand with numerous prestigious clients

The company's predecessor was Changzhou Diesel Engine Factory a century-old national industrial enterprise

and one of China's earliest professional manufacturers of internal combustion engines. The company's diesel and

gasoline engine products as power sources for agricultural machinery and construction machinery have

demonstrated excellent performance in power range reliability specific power noise control and emission

standards and have gained customer recognition. The company has maintained long-term cooperation with its

major customers with cumulative cooperation periods exceeding 15 years. Many of its OEM customers are

well-known enterprises in the agricultural machinery industry with market shares ranking at the forefront in their

respective markets.

6. Business Operations During the Reporting Period

122025 Semi-Annual Report of Changchai Company Limited

In the first half of 2025 against an increasingly complex and severe international environment China's

macroeconomy generally maintained stable growth while facing unresolved structural contradictions between

supply and demand and insufficient consumption. The traditional agricultural machinery industry is currently in a

critical period of adjustment and recovery with slowing growth momentum though emerging market segments

and new application areas continue to show growth potential alongside increasing demand for mid-to-high-end

products. As agricultural modernization advances the agricultural machinery market is entering a new phase of

higher-quality development. The company has united its workforce to uphold the development philosophy of

"seeking progress while maintaining stability through innovation" focusing on annual objectives product and

market development as well as quality and production achieving stable and healthy corporate growth. During the

reporting period the company sold 355100 diesel engines gasoline engines and generator sets generating sales

revenue of 1.561 billion yuan representing a 4.36% year-on-year increase.In product R&D and matching the company promoted the integration of multi-cylinder engine products such as

the 4G36V16A and 4H11V16 with OEM partners for new product applications continuously improving product

compatibility and performance based on market demand and feedback. China IV-compliant single-cylinder diesel

engines have been fully launched into the market and entered serial production with large-horsepower

water-cooled single-cylinder models gaining increasing sales and market recognition both domestically and

internationally. Small-horsepower water-cooled diesel engines have completed verification and entered the market

for tracking feedback. In product development the 4H13 diesel engine adopted a dual-path aftertreatment

development strategy to support various power harvesters while lightweight engine series products and

large-displacement diesel engines progressed steadily according to plan. Additionally the hybrid powertrain

project achieved phased results completing the design of a 120-140 horsepower tractor range-extender hybrid

system configuration and related components laying a solid foundation for subsequent R&D and applications.In sales and services the company strengthened channel management for single-cylinder engines to consolidate

market share in existing industrial clusters enhanced end-market coordination for multi-cylinder engines to

maintain traditional strongholds while expanding into incremental harvester markets and intensified efforts in

non-agricultural sectors with integrated charging stations successfully entering the aerial application market.Export sales achieved significant growth in emerging markets. The company continued optimizing service

resource allocation strengthening service collaboration to complete peak-season support while expanding new

media marketing to enhance outreach and quality.In quality management the company deepened quality engineering through cross-departmental collaboration for

full-chain control implementing strict rapid and precise standards throughout processes while effectively

delivering quality improvements during busy farming seasons. For supply chains the company established an

SQE supplier quality management team to standardize supplier oversight enhance technical exchanges and

introduce new suppliers achieving notable cost reductions. Production systems maintained efficient operations

through process optimization to lower costs and improve labor productivity while leveraging emergency response

teams equipment maintenance specialists and overseas training services. The company also optimized innovation

incentive mechanisms to motivate employees.In internal management the company strengthened subsidiary oversight deepened inter-subsidiary resource

integration and equity structure adjustments emphasized performance evaluation and risk self-inspections to

ensure compliance and improved operational efficiency. Continuous safety risk control and hazard effectively

mitigated various risks promoting stable safety performance. The Party Committee reinforced Party-building

leadership implemented the Central Eight-Point Regulations and advanced integrated learning-inspection-reform

initiatives. For talent development the company intensified cadre training to rejuvenate leadership implemented

industry reform responsibility lists promoted model worker innovation studios and skills competitions and

132025 Semi-Annual Report of Changchai Company Limited

refined incentive mechanisms to motivate staff.During the reporting period the government initiated the expropriation of buildings within the scope of the

company's foundry plant and surrounding area redevelopment project (Phase I) which was approved at the 2025

First Interim Shareholders' Meeting pending final compensation agreement signing. Wholly-owned subsidiary

Changchai Robin completed the absorption of another wholly-owned subsidiary Horizon Agricultural Equipment

assuming all assets liabilities businesses and other rights/obligations with Horizon's legal entity status

deregistered. Another wholly-owned subsidiary Changniu Machinery is absorbing Changben Diesel Engine Parts

inheriting all assets liabilities businesses rights/obligations as well as the original registered capital ownership

structure and governance framework of Changben. As of now creditor notification and announcement procedures

were completed with industrial and commercial registration changes underway.II Core Competitiveness Analysis

1. Brand Advantages

Changchai is a century-old national industrial enterprise and one of China's earliest professional manufacturers of

internal combustion engines. The "Changchai" brand trademark was among the first in China's production

materials sector to be recognized as a China Famous Trademark while Changchai diesel engines are China Brand

Name Products. The company has obtained ISO9001 and IATF16949 quality system certifications ISO14001

environmental management system certification and national export commodity inspection exemption status.Changchai has repeatedly been ranked among China's Top 100 Machinery Enterprises and China Industry Pioneer

Enterprises receiving numerous honors including National Contract-honoring & Creditworthy Enterprise China

Agricultural Machinery Components Leading Enterprise AAA Credit-rated Agricultural Machinery Enterprise

Jiangsu Provincial Quality Management Excellence Award and Changzhou Mayor's Quality Award. For

consecutive years it has been voted among the Top 10 Most Satisfactory After-sales Service Brands in the

"Precision Cultivation Cup" awards. During the reporting period the company was recognized as a National

Product & Service Quality Integrity Commitment Enterprise National Stable & Qualified Quality Inspection

Product and ranked among Jiangsu Province's Top 10 Agricultural Machinery Equipment Manufacturers in 2024.Over decades of stable economic development Changchai has cultivated its proprietary "Changchai" brand - a

renowned Chinese national brand in the small diesel engine sector with global recognition.

2. Technological Advantages

Changchai operates a National-level Technology Center Postdoctoral Research Station and Jiangsu Provincial

Small & Medium Power Engine Engineering Research Center. As a leading producer of small-to-medium power

single-cylinder and multi-cylinder diesel engines Changchai maintains the industry's most comprehensive product

portfolio with the broadest power coverage in China's small diesel sector where all core products feature

proprietary intellectual property. During the reporting period the company secured authorization for 8 utility

model patents. As of June 30 2025 Changchai held 159 valid patents globally including 18 domestic invention

patents and 3 international invention patents.

3. Marketing Advantages

Changchai adheres to market-centric principles continuously innovating marketing strategies to adapt to market

evolution. The company implements an integrated "Five-in-One" management system encompassing complete

machine sales spare parts supply warranty services payment collection and information feedback. Its nationwide

sales and service network comprises 24 sales service centers and 742 authorized service stations covering urban

and rural markets - the most extensive service coverage in China's small-to-medium power diesel engine industry.Under the unified coordination of Changchai's Customer Call Center at headquarters all service outlets commit to

142025 Semi-Annual Report of Changchai Company Limited

"proactive rapid convenient and accurate" service principles to deliver premium pre-sales in-sales and

after-sales support. To meet China Non-Road Stage IV emission standards and provide precise aftermarket

services the company has developed a proprietary service monitoring platform with distinctive Changchai

features.III Core Business Analysis

Overview

Please refer to the relevant content under "I. Principal Business Activities of the Company During the Reporting

Period."

Year-over-year changes in key financial data:

Unit: RMB

Current Reporting Same Period of YoY

Period Previous Year Change Reasons for Fluctuations

Operating revenue 1561186625.83 1495909152.63 4.36%

Cost of sales 1361474105.33 1284673407.54 5.98%

Selling expense 29894284.08 25133785.12 18.94%

Administrative

expense 50718409.56 53480629.46 -5.16%

The main reason was the

year-on-year decrease in foreign

Finance costs -5618946.80 -8614351.66 —— exchange gains and interest

income during the reporting

period.The primary factor was the

increase in fair value of trading

Income tax financial assets held by

expense 13529676.07 4314671.32 213.57% wholly-owned subsidiaryHorizon Investment resulting in

a corresponding increase in

deferred tax liabilities.R&D expense 38891905.33 38765247.04 0.33%

This was mainly due to the

Net cash company's reduction in

generated inventory carried over from the

from/used in -74306110.63 -161814513.00 —— previous year decreased cash

operating payments to suppliers for

activities purchases and increased exporttax rebates received during the

reporting period.Net cash

generated

from/used in -97167644.92 -132707275.04 ——

investing activities

Net cash

generated The principal cause was the

from/used in -7056925.07 -33167547.83 —— reduction in cash dividend

financing payments made by the company

activities during the reporting period.

152025 Semi-Annual Report of Changchai Company Limited

This was primarily attributable

to the company's inventory

Net increase in reduction from the previous

cash and cash -178530680.62 -327689335.87 —— year decreased cash payments to

equivalents suppliers for procurement andthe year-on-year reduction in

cash dividend distributions

during the reporting period.Significant Changes in Profit Composition or Profit Sources During the Reporting Period

□Applicable √Not Applicable

There were no significant changes in the Company's profit composition or profit sources during the reporting

period.Composition of Operating Revenue

Unit: RMB

Current Reporting Period Same Period of Previous Year

As % of total As % of total

Operating YoY Change

operating Operating revenue operating

revenue

revenue (%) revenue (%)

Total 1561186625.83 100% 1495909152.63 100% 4.36%

By operating division

Internal

combustion 1537977952.94 98.51% 1477768073.74 98.79% 4.07%

engines

Other 23208672.89 1.49% 18141078.89 1.21% 27.93%

By product category

Diesel engines 1464198188.86 93.79% 1397237787.65 93.40% 4.79%

Gasoline

engines 71014743.76 4.55% 62093594.55 4.15% 14.37%

Other 25973693.21 1.66% 36577770.43 2.45% -28.99%

By operating segment

Domestic 1327242298.54 85.01% 1339807981.05 89.56% -0.94%

Overseas 233944327.29 14.99% 156101171.58 10.44% 49.87%

Operating Division Product Category Operating Segment or Marketing Model Contributing over 10% of

Operating Revenue or Operating Profit

√Applicable □Not applicable

Unit: RMB

YoY YoY

Gross change in YoY change change in

Operating revenue Cost of sales profit operating in cost of gross

margin revenue sales (%) profit

(%) margin(%)

By operating division

162025 Semi-Annual Report of Changchai Company Limited

Internal

combustion 1537977952.94 1342621700.34 12.70% 4.07% 8.89% -3.87%

engines

By product category

Diesel engines 1464198188.86 1279759010.01 12.60% 4.79% 10.02% -4.15%

Gasoline

engines 71014743.76 60161457.71 15.28% 14.37% 14.72% -0.26%

By operating segment

Domestic 1327242298.54 1134828841.05 14.50% -0.94% 3.34% -3.54%

Overseas 233944327.29 226645264.28 3.12% 49.87% 52.13% -1.44%

Core business data of the prior year restated according to the changed statistical caliber for the Reporting Period:

□ Applicable √ Not applicable

IV Analysis of Non-Core Business Operations

√Applicable □Not applicable

Unit: RMB

Amount As % of grossprofit Source

Recurrent

or not

The primary reason was dividend

Return on income from stocks and wealth

investment 7570956.48 8.36% management gains generated Yesthrough cash management

activities.During the reporting period this

was mainly attributable to the

increase in fair value of shares

Gains/losses on held by the Company's

changes in fair 15685633.55 17.33% wholly-owned subsidiary

value Horizon Investment in Jiangsu

No

Liance Electromechanical

Technology Co. Ltd. and Kailong

High-Tech Co. Ltd. compared to

the beginning of the period.This was principally due to

Asset impairment

loss -1007978.87 -1.11%

impairment provisions made for

inventory during the current No

period.Non-operating The main factor was the receipt of

income 142118.30 0.16% compensation for trademark Noinfringement.Non-operating This was primarily caused by

expense 28702.13 0.03% losses from the scrapping and Nowrite-off of non-current assets.V Analysis of Assets and Liabilities

1. Significant Changes in Asset Composition

Unit: RMB

172025 Semi-Annual Report of Changchai Company Limited

30 June 2025 31 December 2024 Change

As % of in Reason for any significant

As % of

Amount Amount total percenta change

total assets

assets ge (%)

Cash and Cash 858358

461.4215.62%

1063700

Equivalents 492.59

19.76%-4.14%

The main reason was that

most of the Company's

multi-cylinder engine

customers are OEM suppliers

with relatively longer

payment cycles. Concurrently

Accounts 125245 22.79% 44425427584.20 40.02 8.25% 14.54% due to product emissionreceivable

upgrades the Company

increased market development

efforts and moderately

extended credit leading to a

significant increase in

accounts receivable.This was mainly attributable

to increased product sales

during the reporting period

Inventories 563967833.16 10.26%

8192019

98.42 15.22% -4.96% which consumed the diesel

engine inventory reserves

from the beginning of the

period.Investment 366924 0.67% 3774084 0.70% -0.03%

property 87.77 4.55

Fixed assets 578958440.32 10.53%

6154145

05.4011.43%-0.90%

The primary cause was the

Company's investment in

Construction 533299

4.970.10%

3376866.

69 0.06% 0.04% technological transformationin progress

projects during the reporting

period.This was principally because

the Company discounted bank

Short-term

0.000.00%9447178

acceptance bills with lower

7.41 1.76% -1.76%borrowings credit ratings in the previous

year while no such activities

occurred in the current period.

234693

Contract 40.44 0.43%

3164087

9.590.59%-0.16%

182025 Semi-Annual Report of Changchai Company Limited

liabilities

2. Indicate whether overseas assets take up a high percentage in total assets

□ Applicable √ Not applicable

3. Assets and Liabilities at Fair Value

√Applicable □Not applicable

Unit: RMB

Gain/loss

on Cumulati Impairme

Beginni fair-value ve nt Purchase Sold in

Item ng changes fair-value allowance d in the the Other Ending

amount in the changes for the Reporting Reporting change amount

Reporting charged Reporting Period Period

Period to equity Period

Financial

assets

Held-for-t

rading

financial

assets

(derivativ 303667 3067860 6992535 6133650 42023456

e 459.65 9.65

0.000.0000.0000.000.009.30

financial

assets

exclusive)

Investme

nt in other

equity 941120 7850800 8350580 10196280

instrumen 058.72 0.00 58.72

0.000.000.000.0058.72

ts

Subtotal

of 12447 1237563 8350580 6992535 6133650 14398626

financial 87518. 0.00 0.0037 48.65 58.72 00.00 00.00 28.02assets

Other 377869217.49 0.00 0.00 0.00 0.00 0.00 0.00

37786921

7.49

Total of 16226 1237563 8350580 6992535 6133650 18177318

above 56735. 0.00 0.0086 48.65 58.72 00.00 00.00 45.51

Financial

liabilities 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Contents of other change: N/A

Significant changes to the measurement attributes of the major assets in the Reporting Period:

□ Yes √ No

192025 Semi-Annual Report of Changchai Company Limited

4. Restricted Asset Rights as at the Period-End

Unit: RMB

Item At the period-end Reason for restriction

Bank acceptance bill guarantee deposits Letter of guarantee

Monetary assets 144207257.20 deposits、Performance bond deposits、Term deposits and ac

crued interest

Notes receivable 85332514.94 Payment obligations for undiscounted but discounted bills

VI Investment Status Analysis

1.Overview

□ Applicable √ Not applicable

2. Major Equity Investments Made in the Reporting Period

□ Applicable √ Not applicable

3. Major Non-Equity Investments Ongoing in the Reporting Period

□ Applicable √ Not applicable

4. Financial Investments

(1) Securities Investments

√ Applicable □ Not applicable

Unit: RMB

Gain/ Accu

loss mula

Acco Begi on ted Purc

Initia untin nnin fair fair hase Sold

Gain/

loss EndiVarie Code Nam l g g value value d in in thety of of e of meas chan chan the Repo in the

ng Acco Fund

carry untin ing

secur secur secur inves urem carrytmen ing ges ges Repo rting

Repo

ity ity ity ent in the recor rting Perio rting

ing g sourc

t cost amou Perio amou title emeth nt Repo ded Perio d ntod rting in d d

Perio equit

d y

Inves

Dom tmen

estic/ Foto 4178 Fair 3626 3498 3915 t in Self-

forei 6001 n66 Moto 4000

value

meth 9500 0.00 1100 0.00 0.00 0.00 9500

other

gn .00 0.00 0.00 0.00 equit

fund

stock r od y

ed

instr

umen

202025 Semi-Annual Report of Changchai Company Limited

ts

Inves

tmen

Dom Bank Fair t inestic/ 6009 of 4278 value 2297 2366 5016 2793 other Self-forei 19 Jiang 6000 meth 8800 0.00 1000 0.00 0.00 960. 9600 equit fundgn

stock su.00 od 0.00 0.00 00 0.00 y edinstr

umen

ts

Held

Dom Kailo -for-t

estic/ ng Fair3009 High 2000 value 1157 3209 3209 1477

radin

forei 1268 0150 459. 0.00 0.00 0.00 459. 9609 g

Self-

12 Tech meth finan fundgn .00 .00 00 00 .00 ed

stock nolo od cialgy asset

s

Held

Dom Lian -for-t

estic/ 6881 ce 7200

Fair

value 4070 1140 1166 5211

radin Self-

forei 13 Tech 000. meth 8800 4800 0.00 0.00 0.00 5440 3600

g fund

gn nolo 00 od .00 .00 .00 .00

finan ed

stock gy cialasset

s

Held

Dom -for-t

estic/ Fair radin

forei 6053

Lanti

an 1607 value 3200 -445 0.00 0.00 0.00 -319 2755 g

Self-

gn 68 Gas 44.76 meth 40.00 20.00 20.00 20.00 finan

fund

ed

stock od cialasset

s

111964501456586419857381

Total 3201 -- 8199 9739 2100 0.00 0.00 9939 5972 -- --

2.760.00.000.00.009.00

(2) Investments in Derivative Financial Instruments

□ Applicable √ Not applicable

No such cases in the Reporting Period.

5. Use of Raised Funds

□ Applicable √ Not applicable

During the reporting period the Company did not have any utilization of raised capital.

212025 Semi-Annual Report of Changchai Company Limited

VII Sale of Major Assets and Equity Interests

1. Sale of Major Assets

□ Applicable √ Not applicable

No such cases in the Reporting Period.

2. Sale of Major Equity Interests

□ Applicable √ Not applicable

VIII Major Subsidiaries

√ Applicable □ Not applicable

Major fully/majority-owned subsidiaries and those minority-owned subsidiaries with an over 10% effect on the

Company’s net profit:

Unit: RMB

Relatio

nship

with Principal Registere Total Net Operatin Operating Net

Name

the activity d capital assets assets g revenue profit profit

Compa

ny

Production

Changchai Subsidi of diesel 550630 129631 667139 104382 -100186 -991941.Benniu ary engine 00.00 344.99 31.05 303.05 7.46 62

accessories

Diesel

Changchai Subsidi 850000 670871 525273 250048 1107929 112645

engine

Wanzhou ary 00.00 00.13 77.48 58.48 .14 1.83

assembly

External

Horizon Subsidi investment 400000 911092 805706 1493644 112706

0.00

Investment ary and 00.00 82.58 05.85 7.95 79.92

consulting

Gasoline

Changchai Subsidi 372500 106256 947179 710147 4688259 408804

engines

Robin ary 00.00 422.03 24.27 43.76 .86 1.44

assembly

Internal

combustion

Changchai Subsidi 300000 732554 519718 499681 8624737 863146

engine and

Machinery ary 000.00 094.53 630.41 127.23 .07 2.73

related

accessories

222025 Semi-Annual Report of Changchai Company Limited

Xingsheng

Real estate

Real Estate Subsidi 100000 363915 258965 187266 654369.3 621650.manageme

Manageme ary 0.00 4.67 0.18 7.07 5 88

nt service

nt

Manufactur

ing and

Zhenjiang Subsidi marketing 200000 126946 117557 420663 7294159 619918

Siyang ary of diesel 0.00 483.43 097.68 51.38 .02 5.17

engines for

ships

Subsidiaries obtained or disposed of in the Reporting Period:

□ Applicable √ Not applicable

Other information about principal subsidiaries and joint stock companies:

1. Equity Ownership and Control of Zhenjiang Siyang

As of the end of the reporting period the Company holds a 49% equity interest in Zhenjiang Siyang making it the

largest shareholder. Given that other shareholders are highly dispersed and considering that 4 out of 7 board seats

(including the Chairman) are appointed by the Company the Company exercises actual control over Zhenjiang

Siyang. Accordingly Zhenjiang Siyang meets the criteria for consolidation under applicable accounting standards.

2. Wholly-owned subsidiary Changchai Robin completed the statutory merger through comprehensive absorption

of another wholly-owned subsidiary Horizon Agricultural Equipment assuming all assets liabilities business

operations and other rights/obligations. As of February 2025 Horizon Agricultural Equipment's independent legal

entity status has been deregistered marking the full completion of the merger between these two wholly-owned

subsidiaries.IX Structured Bodies Controlled by the Company

□ Applicable √ Not applicable

X Risks and Countermeasures

(1) Market Risks

The agricultural machinery industry has entered a period of adjustment and recovery. Influenced by national

equipment purchase subsidy policies industrial development policies and environmental regulations traditional

product markets are declining while emerging segments and new application areas maintain growth momentum

with increasing demand for mid-to-high-end products. As agricultural modernization advances the sector is

transitioning toward higher-quality development. Most enterprises are intensifying product R&D and market

expansion efforts amid escalating competition.Countermeasures include: accelerating product upgrades to enhance technological capabilities; proactively

adapting to domestic and international market changes to improve profitability; focusing on quality enhancement

232025 Semi-Annual Report of Changchai Company Limited

for comprehensive quality management improvements; implementing refined management to strengthen full

product lifecycle cost control; aligning with high-quality development needs through strategic talent acquisition;

and strengthening Party leadership through strict governance implementation.

(2) Industrial Risks

The advancement of new energy technologies and related policies has prompted enterprises to accelerate R&D

and market deployment of alternative power solutions partially impacting diesel engine market share. While new

energy applications in agricultural machinery still face challenges like high costs and complex operating

environments technological breakthroughs may gradually replace diesel engines in certain non-road applications.Countermeasures include: developing products compliant with national energy conservation policies while

optimizing product lines through smart technologies and new materials to enhance value and competitiveness;

accelerating new energy powertrain R&D including hybrid solutions for sustainable development; and

coordinating product operations with capital management to facilitate expansion into emerging industries.

(3) Foreign Trade Risks

The increasingly complex international environment marked by geopolitical conflicts and trade disputes has

negatively impacted global economic recovery food/energy security and ecological stability causing fluctuating

trade policies and exchange rate volatility. Significant changes in political stability or trade policies could

substantially affect export sales.Countermeasures include: enhancing collaborative capabilities through resource sharing to improve trade

efficiency; adapting products for overseas markets with high-performance solutions; developing key markets

leveraging OEM partners' global channels with improved service training and overseas support networks;

mitigating currency risks through optimal pricing/ settlement methods and export credit insurance; and adjusting

product pricing/payment terms in response to material cost fluctuations.

(4) Raw Material Price Volatility Risks

Prices of key materials like steel and pig iron fluctuate due to macroeconomic conditions production capacity and

demand changes creating manufacturing cost pressures that may affect profitability.Countermeasures include: strengthening internal management through technical improvements and cost

optimization; building stable and efficient supply chains; and closely monitoring market trends with proactive

inventory management to mitigate price volatility impacts.

(5) Talent Risks

As talent is crucial for sustainable development inadequate compensation or incentive policies may lead to

shortages in leadership technical expertise and succession pipelines undermining innovation and

competitiveness.Countermeasures include: refining talent recruitment and training systems to optimize workforce structure;

enhancing professional capabilities through systematic training; improving incentive mechanisms and

performance evaluation to rejuvenate leadership teams; and fostering employee engagement through democratic

management and union services.XI Implementation of Market Value Management System and Valuation Enhancement Plan

Indicate whether the Company has disclosed the Market Value Management System

□ Yes √ No

Indicate whether the Company has disclosed the Valuation Enhancement Plan

□ Yes √ No

242025 Semi-Annual Report of Changchai Company Limited

XII Implementation Status of the "Dual Enhancement of Quality and Returns" Initiative

Indicate whether the Company has disclosed the “Quality and Earnings Dual Improvement” Action Plan.□ Yes √ No

252025 Semi-Annual Report of Changchai Company Limited

Part IV Corporate Governance Environment and Social

Responsibility

I Changes in Company Directors Supervisors and Senior Management

□ Applicable √ Not applicable

There were no changes to the Company's directors supervisors or senior management during the reporting period.For details please refer to the 2024 Annual Report.II Profit Distribution and Capital Reserve Conversion During the Reporting Period

□ Applicable √ Not applicable

The Company plans to distribute no cash dividends issue no bonus shares and convert no capital reserves into

share capital for the interim period.III Implementation of Equity Incentive Plans Employee Stock Ownership Plans or Other

Employee Incentive Measures

□ Applicable √ Not applicable

The Company had no equity incentive plans employee stock ownership plans or other employee incentive

measures implemented during the reporting period.IV Environmental Information Disclosure

Whether the listed company and its major subsidiaries are included in the list of enterprises required to disclose

environmental information in accordance with the law:

√Yes □No

Number of Enterprises Included in the List of Enterprises

Required to Disclose Environmental Information in 4

Accordance with the Law (Unit: Companies)

No. Name of company Access Index for Environmental InformationDisclosure Reports

1 Changchai Company Limited Official query portal: Jiangsu Provincial

Department of Ecology and Environment -

2 Changchai Company Limited Changjiang Enterprise Environmental Information Disclosurebranch System (Jiangsu)

3 Jiangsu Changchai Machinery Co. Ltd. http://ywxt.sthjt.jiangsu.gov.cn:18181/spsarchive-w

ebapp/web/viewRunner.htmlviewId=http://ywxt.st

4 Changzhou Changniu Machinery Co. Ltd. hjt.jiangsu.gov.cn:18181/spsarchive-webapp/web/s

ps/views/yfpl/views/yfplHomeNew/index.js

262025 Semi-Annual Report of Changchai Company Limited

V Social Responsibility

During the reporting period the Company attached great importance to and actively fulfilled its social

responsibilities. Upholding the core values of "customer first employee-oriented shareholder returns and social

benefit" with the mission of "providing green power for a better life" the Company adhered to ethical operations

tax compliance and continuously enhanced its self-development capabilities to achieve sustainable growth. It

diligently safeguarded the legitimate rights and interests of shareholders employees customers suppliers and

consumers actively implemented measures to reduce energy consumption and pollution emissions preserved a

healthy living environment pursued harmonious development between the Company and society and actively

contributed to societal well-being.The Company's Party Committee advanced the integration of Party leadership into corporate governance

implemented the "three major and one large" decision-making system and the Party Committee's "pre-review

procedures" and strictly adhered to decision-making and deliberation protocols. During the reporting period the

Committee conducted pre-review studies on 26 major operational matters promptly addressing key challenges in

production and operations thereby providing strong support for the effective execution of critical projects and

fully leveraging the Party Committee's role in guiding direction managing and ensuring implementation.In compliance with the Company Law of the People's Republic of China the Securities Law of the People's

Republic of China the Corporate Governance Guidelines for Listed Companies the Shenzhen Stock Exchange

Listing Rules and other relevant laws and regulations as well as the Company's Articles of Association the

Company continuously improved its corporate governance structure established robust internal management and

control systems and further elevated its governance standards. The Company has built a governance framework

centered on the Shareholders' Meeting Board of Directors and Supervisory Board forming a modern corporate

governance system with clear responsibilities division of roles and coordinated operations among all entities and

management. On this foundation the Company strictly adhered to internal control requirements further clarified

the boundaries and authority of all levels and departments and continuously enhanced institutionalized and

refined operations through optimized management processes and strengthened policy enforcement.

(1) Protection of Shareholder Rights

The Company strictly followed the Rules for Shareholders' Meetings of Listed Companies its Articles of

Association and the Rules of Procedure for Shareholders' Meetings to standardize the convening conduct and

decision-making processes of shareholders' meetings. In the first half of 2025 the Company held two

shareholders' meetings ensuring shareholders' rights to information and participation through standardized

procedures and safeguarding their legitimate interests.For information disclosure the Company strictly complied with legal requirements to ensure the authenticity

accuracy completeness and timeliness of disclosed information. Disclosures included periodic reports such as the

2024 Annual Report the Board of Directors' Work Report the Supervisory Board's Work Report and interim

announcements on significant matters enabling investors to stay informed about the Company's operations

promptly and accurately.In investor communications the Company established multiple channels including online earnings briefings

investor hotlines email and interactive platforms adhering to principles of openness fairness and impartiality to

actively engage with investors. During the reporting period the Company conducted an online earnings briefing

for the 2024 Annual Report diligently managed investor relations maintained effective communication with

shareholders protected their right to information enhanced operational transparency and safeguarded the interests

of shareholders especially minority shareholders.

272025 Semi-Annual Report of Changchai Company Limited

Additionally the Company successfully completed the 2024 annual dividend distribution totaling RMB 7.0569

million. Over the past three years the cumulative cash dividend payout ratio reached 69.64% of the average

annual net profit exceeding dividend commitments and rewarding shareholders with tangible actions.Furthermore the Company prioritized insider information management mitigating risks of insider trading through

robust internal controls. No insider trading occurred during the reporting period nor were there any instances of

harm to shareholder interests.

(2) Protection of Customer and Consumer Rights

The Company established a nationwide sales and service network with 24 sales service centers and 742 authorized

service stations. To meet China Non-Road Stage IV emission standards and provide precise after-sales support the

Company developed a proprietary service monitoring platform. It fostered long-term partnerships with customers

delivering high-quality efficient and timely services earning recognition as a preferred supplier for multiple

OEMs. In recent years the Company has been repeatedly honored as a "National Exemplary Enterprise for

Product and Service Quality Integrity" and recognized as a top supplier by leading manufacturers with its

products and services widely acclaimed by customers and consumers.

(3) Protection of Supplier Rights

The Company strengthened supplier management based on the Parts Supply and Procurement Contracts and

Supplier Quality Agreements optimized production capacity allocation improved inventory and planning

management and ensured timely payments to safeguard suppliers' legitimate interests. To enhance supply chain

quality control the Company refined systems and mechanisms formed a Supplier Quality Engineer (SQE) team

and provided quality guidance through audits and collaborative problem-solving. Leveraging digital tools it

centralized and visualized supply chain data to prevent excess inventory and reduce supplier costs. A dynamic

supplier evaluation system was implemented to continuously optimize the supply chain structure support

suppliers' technical growth and foster mutually beneficial relationships.

(4) Protection of Employee Rights

The Company upheld a people-oriented philosophy focusing on employees' comprehensive development through

theoretical and practical training. It established HR departments and trade unions at all levels alongside a legally

compliant employee representative assembly system to safeguard workers' rights. Labor policies were strictly

followed to ensure equitable treatment and standardized employment practices.The Company fostered a fair inclusive and harmonious workplace continuously improving compensation and

benefits. During the reporting period it conducted over 700 employee visits organized health initiatives such as

medical check-ups and cancer screenings for female staff and provided welfare support through union services.Cultural and sports activities innovation campaigns and safety programs enriched employees' lives while

enhancing engagement and awareness. Occupational health lectures and volunteer initiatives further improved

working conditions and well-being.The Company optimized its workforce structure offering robust platforms for growth accelerated leadership

rejuvenation and implemented 38 training programs covering 210+ participants to upskill employees.Performance-based incentives were refined to motivate staff aligning personal growth with corporate

development.

(5) Workplace Safety

The Company enforced security fire safety and emergency response protocols. During the reporting period 401

employees received fire safety training and four drills were conducted to enhance emergency preparedness.Regular safety education improved employees' ability to handle emergencies involving operations equipment and

occupational health.

282025 Semi-Annual Report of Changchai Company Limited

(6) Environmental Protection and Sustainable Development

The Company embraced green development principles prioritizing efficiency energy conservation and emission

reduction to minimize environmental impact. Its operations product design and services adhered to the PDCA

(Plan-Do-Check-Act) cycle maintaining ISO 14001 certification.Aligned with its business strategy the Company advanced R&D of eco-friendly products to support agricultural

modernization improve energy efficiency and protect the environment. It conscientiously fulfilled its social

responsibilities to promote balanced economic social and environmental sustainability.

292025 Semi-Annual Report of Changchai Company Limited

Part V Significant Events

I Fulfilled and Overdue Commitments by the Company's Actual Controller Shareholders

Related Parties Acquirers and Other Commitment-Related Parties During the Reporting

Period

□ Applicable √ Not applicable

During the reporting period there were no fulfilled or overdue commitments by the Company's actual controller

shareholders related parties acquirers or other commitment-related parties.II Non-Operational Fund Occupancy by Controlling Shareholders and Other Related Parties

□ Applicable √ Not applicable

The Company did not experience any non-operational fund occupancy by controlling shareholders or their related

parties during the reporting period.III Irregular External Guarantees

□Applicable √Not applicable

No irregular external guarantees occurred during the reporting period.IV Appointment/Dismissal of Accounting Firms

Whether the interim financial report has been audited:

□Yes √No

The Company's interim report was unaudited.V Board and Supervisory Board Explanations Regarding "Non-Standard Audit Reports" for

the Current Reporting Period

□Applicable √Not applicable

VI Board's Explanations Regarding Prior Year's "Non-Standard Audit Report"

□Applicable √Not applicable

VII Bankruptcy Reorganization Matters

□Applicable √Not applicable

No bankruptcy reorganization events occurred during the reporting period.

302025 Semi-Annual Report of Changchai Company Limited

VIII Litigation Matters

Major Litigation and Arbitration Matters

□Applicable √Not applicable

The Company had no significant litigation or arbitration matters during the reporting period.Other Litigation Matters

□Applicable √Not applicable

IX Penalties and Rectifications

□Applicable √Not applicable

The Company incurred no penalties or rectification requirements during the reporting period.X Integrity Status of the Company and Its Controlling Shareholders/Actual Controllers

√Applicable □Not applicable

The Company's actual controller is the State-owned Assets Supervision and Administration Commission of

Changzhou Municipal People's Government and its controlling shareholder is Changzhou Investment Group Co.Ltd. The controlling shareholder has no outstanding court judgments or significant debts that have become due but

remain unpaid.XI Material Related-Party Transactions

1. Related-party transactions related to daily operations

□Applicable √Not applicable

No related-party transactions related to daily operations occurred during the reporting period.

2. Related-party transactions involving asset or equity acquisitions/disposals

□Applicable √Not applicable

No related-party transactions involving asset or equity acquisitions/disposals occurred during the reporting period.

3. Related-party transactions involving joint external investments

□Applicable √Not applicable

No related-party transactions involving joint external investments occurred during the reporting period.

4. Related-party creditor/debtor relationships

□Applicable √Not applicable

No related-party creditor/debtor relationships existed during the reporting period.

312025 Semi-Annual Report of Changchai Company Limited

5. Transactions with related financial companies

□Applicable √Not applicable

The Company had no deposits loans credit extensions or other financial transactions with related financial

companies and related parties.

6. Transactions between the Company's controlled financial companies and related parties

□Applicable √Not applicable

The Company's controlled financial companies had no deposits loans credit extensions or other financial

transactions with related parties.

7. Other material related-party transactions

□Applicable √Not applicable

No other material related-party transactions occurred during the reporting period.XII. Material Contracts and Their Performance

1. Trusteeship contracting and leasing matters

(1) Trusteeship

□Applicable √Not applicable

No trusteeship arrangements existed during the reporting period.

(2) Contracting

□Applicable √Not applicable

No contracting arrangements existed during the reporting period.

(3) Leasing

□Applicable √Not applicable

No leasing arrangements existed during the reporting period.

2. Material guarantees

□Applicable √Not applicable

No material guarantee arrangements existed during the reporting period.

3. Entrusted wealth management

√Applicable □Not applicable

322025 Semi-Annual Report of Changchai Company Limited

Unit: RMB 0000

Unrecovered

Specific type Capital Amount Undue balance Unrecovered overdue amountresources incurred overdue amount with provision

for impairment

Bank financial

products Self-funded 2118.00 2118.00 0.00 0.00

Broker financial

products Self-funded 38075.00 33070.00 0.00 0.00

Total 40193.00 35188.00 0.00 0.00

High-risk wealth management transactions with a significant single amount or with low security low liquidity:

□Applicable √Not applicable

Where entrusted wealth management arrangements exhibit circumstances indicating potential recoverability of

principal or other impairment triggers

□Applicable √Not applicable

4. Other Major Contracts

□Applicable √Not applicable

No such cases in the Reporting Period.XIII Other Significant Events

√ Applicable □ Not applicable

1. Expropriation and Compensation for the Company's Foundry Plant

On March 6 2025 the Company received the Expropriation Decision for State-Owned Land and Buildings

(Chang Xin Zheng [2025] No. 1) issued by the People's Government of Xinbei District Changzhou. Due to public

interest requirements for urban redevelopment the Xinbei District Government decided to expropriate buildings

within the scope of the Sanjing Subdistrict Foundry Plant and surrounding area urban renewal project (Phase I).On May 8 2025 the Company convened the Second Interim Board Meeting and Second Interim Supervisory

Committee Meeting of 2025 approving the Proposal on Signing the Expropriation Compensation Agreement for

Non-Residential Buildings in Xinbei District Changzhou. The matter was further approved at the First Interim

Shareholders' Meeting of 2025 on May 26 2025 authorizing the Company to sign a compensation agreement

with the Xinbei District Housing and Urban-Rural Development Bureau and Sanjing Subdistrict with a total

compensation amount of RMB 346.8569 million. The final signing of the expropriation agreement is pending

completion of approval procedures by the Xinbei District Housing and Urban-Rural Development Bureau and the

Sanjing Subdistrict Expropriation and Compensation Service Center.

2. Expropriation and Compensation for Part of the Company Headquarters (Street-Facing Shops)

On February 26 2025 the Company received the Announcement on the Expropriation Compensation Plan for the

West Hengjie Station Project of Changzhou Metro Line 5 issued by the People's Government of Zhonglou District

Changzhou. Due to public interest needs the Zhonglou District Government proposed to expropriate part of the

buildings at No. 123 Huaide Middle Road (i.e. the Company's street-facing shops at its headquarters).On July 21 2025 the Company convened the Fourth Interim Board Meeting and Third Interim Supervisory

Committee Meeting of 2025 approving the Proposal on Signing the Expropriation Compensation Agreement for

State-Owned Land and Buildings for the Headquarters' Street-Facing Shops. The matter was further approved at

332025 Semi-Annual Report of Changchai Company Limited

the Second Interim Shareholders' Meeting of 2025 on August 6 2025 authorizing the Company to sign a

compensation agreement with the Zhonglou District Housing and Urban-Rural Development Bureau with a total

compensation amount of RMB 48.7877 million.XIV Major Matters Concerning the Company's Subsidiaries

√Applicable □Not applicable

1. Merger of Changchai Robin with Horizon Agricultural Equipment

On November 22 2024 the Company convened the Fifth Interim Board Meeting of 2024 and approved the

Proposal on the Merger of Changzhou Changchai Horizon Agricultural Equipment Co. Ltd. and Changzhou Fuji

Changchai Robin Gasoline Engine Co. Ltd. The Board agreed that wholly-owned subsidiary Changzhou Fuji

Changchai Robin Gasoline Engine Co. Ltd. ("Changchai Robin") would absorb and succeed all assets liabilities

business operations and other rights and obligations of wholly-owned subsidiary Changzhou Changchai Horizon

Agricultural Equipment Co. Ltd. ("Horizon Agricultural Equipment") through statutory merger. Post-merger

Changchai Robin continues normal operations while Horizon Agricultural Equipment's independent legal entity

status was deregistered. In February 2025 the Company received the Registration Notice (No. Deng Zi [2025]

02270081) issued by the Administrative Service Office of Changzhou High-Tech Industrial Development Zone

(Xinbei District) confirming the deregistration of Horizon Agricultural Equipment and completion of the merger.

2. Merger of Changniu Company with Changchai Benniu

On June 9 2025 the Company convened the Third Interim Board Meeting of 2025 and approved the Proposal on

the Merger of Changzhou Changchai Benniu Diesel Engine Parts Co. Ltd. and Changzhou Changniu Machinery

Co. Ltd. The Board agreed that Changzhou Changniu Machinery Co. Ltd. ("Changniu Company") would absorb

all assets liabilities business operations and other rights and obligations of Changzhou Changchai Benniu Diesel

Engine Parts Co. Ltd. ("Changchai Benniu") while inheriting Changchai Benniu's registered capital ownership

structure and governance framework. Post-merger Changniu Company continues normal operations and

Changchai Benniu's independent legal entity status will be deregistered.

342025 Semi-Annual Report of Changchai Company Limited

Part VI Share Changes and Shareholder Information

I Share Changes

1. Share Changes

Unit: share

Before Increase/decrease in the Reporting Period (+/-) After

Shares as Shares as

dividend dividend O

Number Percenta New converte converted th Subto Number Percentage (%) issues d from from capital er tal ge (%)

profit reserves

1. Restricted

shares 0 0.00% 0 0 0 0 0 0 0.00%

1.1 Shares

held by 0 0.00% 0 0 0 0 0 0 0.00%

government

1.2 Shares

held by

state-owned 0 0.00% 0 0 0 0 0 0 0.00%

legal persons

1.3 Shares

held by other

domestic 0 0.00% 0 0 0 0 0 0 0.00%

investors

Among

which:

Shares held 0 0.00% 0 0 0 0 0 0 0.00%

by domestic

legal persons

Shares

held by

domestic 0 0.00% 0 0 0 0 0 0 0.00%

natural

persons

1.4 Shares

held by

foreign 0 0.00% 0 0 0 0 0 0 0.00%

investors

Among

which:

Shares held 0 0.00% 0 0 0 0 0 0 0.00%

by foreign

legal persons

Shares

held by 0 0.00% 0 0 0 0 0 0 0.00%

foreign

natural

352025 Semi-Annual Report of Changchai Company Limited

persons

2.

Unrestricted 705692507 100.00% 0 0 0 0 0

705692

507 100.00%shares

2.1

RMB-denomi

nated 555692507 78.74% 0 0 0 0 0

555692

ordinary 507

78.74%

shares

2.2

Domestically 1500000

listed foreign 00 21.26% 0 0 0 0 0

150000

00021.26%

shares

2.3

Oversea

listed foreign 0 0.00% 0 0 0 0 0 0 0.00%

shares

2.4 Other 0 0.00% 0 0 0 0 0 0 0.00%

3. Total 7056925

shares 07 100.00% 0 0 0 0 0

705692

507100.00%

Reasons for Share Capital Changes

□Applicable √Not applicable

Approval Status of Share Capital Changes

□Applicable √Not applicable

Transfer Procedures for Share Capital Changes

□Applicable √Not applicable

Implementation Progress of Share Repurchase

□Applicable √Not applicable

Implementation Progress of Repurchased Share Reduction Through Centralized Bidding

□Applicable √Not applicable

Impact of Share Capital Changes on Key Financial Indicators

□Applicable √Not applicable

Other Disclosures Deemed Necessary by the Company or Required by Securities Regulators

□Applicable √Not applicable

2. Changes in Restricted Shares

□Applicable √Not applicable

II Issuance and Listing of Securities

□Applicable √Not applicable

III Number of Shareholders and Shareholding Structure

Unit: share

362025 Semi-Annual Report of Changchai Company Limited

Total Number of Preferred Shareholders

Total Number of Common

with Restored Voting Rights as of the

Shareholders as of the End of 49433 0

End of the Reporting Period (if

the Reporting Period

applicable)

Shareholding Status of Major Common Shareholders (Holding >5% Shares) or Top 10 Common Shareholders

(Excluding Shares Lent Through Securities Lending)

Shares in

Sharehol Increase/d

Name of Nature of ding Total shares ecrease in Restricte

pledge or

Unrestricted frozen

shareholder shareholder percentag held at the the d shares

e period-end Reporting held

shares held

Statu Sha

Period s res

Changzhou

Investment State-owne

Group Co. d legal 32.26% 227663417 0 0 227663417

Ltd person

Domestic

Chen Jian natural 0.71% 4995800 1368000 0 4995800

person

Domestic

Dai Xuerong natural 0.56% 3918000 3918000 0 3918000

person

KGI ASIA Foreign

LIMITED legal 0.44% 3100195 0 0 3100195person

Bank of

China

Limited -

Huashang

Selective

Return Others 0.42% 2954200 2954200 0 2954200

Mixed

Securities Not

Investment appli 0

Fund cable

BARCLAYS Foreign

BANK PLC legal 0.41% 2883501 2285101 0 2883501person

Domestic

Cao Yifan natural 0.32% 2249100 2249100 0 2249100

person

China

Minsheng

Banking

Corp. Ltd. -

Jinyuan

Shun'an

Yuanqi Others 0.28% 1950000 750000 0 1950000

Flexible

Allocation

Mixed

Securities

Investment

Fund

Wang Defu Domestic 0.23% 1638800 751400 0 1638800

372025 Semi-Annual Report of Changchai Company Limited

natural

person

Domestic

Li Suinan natural 0.23% 1602000 1700 0 1602000

person

Strategic Investors or

Institutional Shareholders

Becoming Top 10

Shareholders Through New Not applicable

Share Placements (if

applicable)

Explanations on Connected The Company is unaware of whether any connected relationships exist among its

Relationships or Concerted top 10 tradable shareholders or top 10 unrestricted tradable shareholders or

Actions Among the

Above-mentioned whether they constitute acting-in-concert parties as defined in the Shareholding

Shareholders Change Information Management Measures.Disclosure of Voting

Rights Entrustment/Waiver

Arrangements Involving Not applicable

the Above-mentioned

Shareholders

Special Notes Regarding

Share Repurchase

Accounts Among Top 10 Not applicable

Shareholders (if

applicable)

Shareholding Status of Top 10 Unrestricted Common Shareholders

(Excluding shares lent through securities lending and executive lock-up shares)

Number of Unrestricted Shares Held at Share Types

Name of shareholder

the End of the Reporting Period Share Types Number

Changzhou Investment

Group Co. Ltd 227663417

RMB-denominated

Ordinary Shares 227663417

Chen Jian 4995800 RMB-denominatedOrdinary Shares 4995800

Dai Xuerong 3918000 RMB-denominatedOrdinary Shares 3918000

Domestic Listed

KGI ASIA LIMITED 3100195 Foreign-Investment 3100195

Shares

Bank of China Limited -

Huashang Selective Return 2954200 RMB-denominatedMixed Securities Ordinary Shares 2954200

Investment Fund

BARCLAYS BANK PLC 2883501 RMB-denominatedOrdinary Shares 2883501

Domestic Listed

Cao Yifan 2249100 Foreign-Investment 2249100

Shares

China Minsheng Banking

Corp. Ltd. - Jinyuan

Shun'an Yuanqi Flexible 1950000 RMB-denominatedOrdinary Shares 1950000Allocation Mixed

Securities Investment Fund

382025 Semi-Annual Report of Changchai Company Limited

Wang Defu 1638800 RMB-denominatedOrdinary Shares 1638800

Domestic Listed

Li Suinan 1602000 Foreign-Investment 1602000

Shares

Explanations on Connected

Relationships or Concerted

Actions Among the Top 10 The Company is unaware of whether any connected relationships exist among its

Unrestricted Tradable top 10 tradable shareholders or top 10 unrestricted tradable shareholders or

Shareholders and Between whether they constitute acting-in-concert parties as defined in the Shareholding

the Top 10 Unrestricted Change Information Management Measures.Tradable Shareholders and

the Top 10 Shareholders

Disclosure on Margin

Trading Activities of the Shareholders Chen Jian and Wang Defu held 4995800 shares and 1638800

Top 10 Common shares respectively through margin trading accounts.Shareholders

Shareholders Holding >5% Shares Top 10 Shareholders and Top 10 Unrestricted Tradable Shareholders'

Participation in Securities Lending Business

□Applicable √Not applicable

Changes in Top 10 Shareholders and Top 10 Unrestricted Tradable Shareholders Due to Securities Lending

(Borrowing/Returning Shares) Compared to the Previous Period

□Applicable √Not applicable

Whether the Top 10 Common Shareholders and Top 10 Unrestricted Common Shareholders Conducted Agreed

Repurchase Transactions During the Reporting Period

□Yes √No

he Top 10 common shareholders and Top 10 unrestricted common shareholders did not conduct any agreed

repurchase transactions during the reporting period.IV Changes in Shareholdings of Directors Supervisors and Senior Management

□Applicable √Not applicable

There were no changes in the shareholdings of the Company's directors supervisors or senior management during

the reporting period. For details please refer to the 2024 Annual Report.V Changes in Controlling Shareholder orActual Controller

Change in controlling shareholder during the reporting period

□Applicable √Not applicable

The Company's controlling shareholder remained unchanged during the reporting period.Change in actual controller during the reporting period:

□Applicable √Not applicable

The Company's actual controller remained unchanged during the reporting period.

392025 Semi-Annual Report of Changchai Company Limited

VI. Preferred Shares Related Matters

□Applicable √Not applicable

The Company had no preferred shares outstanding during the reporting period.

402025 Semi-Annual Report of Changchai Company Limited

Part VII Preference Shares

□Applicable √Not applicable

412025 Semi-Annual Report of Changchai Company Limited

Part VIII Financial Statements

I Auditor’s Report

Whether the Semi-Annual Report is Audited

□Yes √No

The Company's semi-annual financial statements are unaudited.II Financial Statements

Currency unit for the financial statements and the notes thereto: RMB

1. Consolidated Balance Sheet

Prepared by Changchai Company Limited

30 June 2025

Unit: RMB

Item Closing balance Opening balance

Current assets:

Monetary assets 858358461.42 1063700492.59

Settlement reserve

Interbank loans granted

Held-for-trading financial assets 420234569.30 303667459.65

Derivative financial assets

Notes receivable 144816296.81 318814017.13

Accounts receivable 1252457584.20 444254240.02

Accounts receivable financing 39513968.25 223261002.76

Prepayments 13744199.73 12725958.70

Premiums receivable

Reinsurance receivables

Receivable reinsurance contract

reserve

Other receivables 9180838.09 9847441.82

Including: Interest receivable

Dividends receivable 5016960.00 7165080.00

Financial assets purchased under

resale agreements

Inventories 563967833.16 819201998.42

Including: Data resources

Contract assets

Assets held for sale

422025 Semi-Annual Report of Changchai Company Limited

Current portion of non-current

assets

Other current assets 19676778.70 54605021.67

Total current assets 3321950529.66 3250077632.76

Non-current assets:

Loans and advances to

customers

Investments in debt obligations

Investments in other debt

obligations

Long-term receivables

Long-term equity investments

Investments in other equity

instruments 1019628058.72 941120058.72

Other non-current financial

assets 377869217.49 377869217.49

Investment property 36692487.77 37740844.55

Fixed assets 578958440.32 615414505.40

Construction in progress 5332994.97 3376866.69

Productive living assets

Oil and gas assets

Right-of-use assets

Intangible assets 139702226.26 142805785.86

Including: Data resources

Development costs

Including: Data resources

Goodwill

Long-term prepaid expense 2661330.28 2664557.06

Deferred income tax assets 8929666.59 6458337.99

Other non-current assets 4095737.65 4373097.30

Total non-current assets 2173870160.05 2131823271.06

Total assets 5495820689.71 5381900903.82

Current liabilities:

Short-term borrowings 94471787.41

Borrowings from the central

bank

Interbank loans obtained

Held-for-trading financial

liabilities

Derivative financial liabilities

Notes payable 631444212.92 491643629.88

Accounts payable 716427585.20 690733575.75

Advances from customers 30222448.06 30183376.84

Contract liabilities 23469340.44 31640879.59

432025 Semi-Annual Report of Changchai Company Limited

Financial assets sold under

repurchase agreements

Customer deposits and interbank

deposits

Payables for acting trading of

securities

Payables for underwriting of

securities

Employee benefits payable 11878823.63 48792254.98

Taxes payable 4176010.33 4214324.70

Other payables 130131731.84 117736961.52

Including: Interest payable

Dividends payable 3891433.83 3891433.83

Handling charges and

commissions payable

Reinsurance payables

Liabilities directly associated

with assets held for sale

Current portion of non-current

liabilities

Other current liabilities 98247746.66 175064677.93

Total current liabilities 1645997899.08 1684481468.60

Non-current liabilities:

Insurance contract reserve

Long-term borrowings

Bonds payable

Including: Preferred shares

Perpetual bonds

Lease liabilities

Long-term payables

Long-term employee benefits

payable

Provisions 72125778.35 73002860.52

Deferred income 27681302.29 29386167.02

Deferred income tax liabilities 169850274.38 154449852.33

Other non-current liabilities

Total non-current liabilities 269657355.02 256838879.87

Total liabilities 1915655254.10 1941320348.47

Shareholders’ equity:

Share capital 705692507.00 705692507.00

Other equity instruments

Including: Preferred shares

Perpetual bonds

Capital reserves 640509675.84 640509675.84

442025 Semi-Annual Report of Changchai Company Limited

Less: Treasury stock

Other comprehensive income 709799349.91 643067549.91

Specific reserve 24541362.09 21959066.35

Surplus reserves 367826665.27 367826665.27

General reserve

Retained earnings 1049993889.57 983627999.95

Total equity attributable to

Shareholders of the Company as 3498363449.68 3362683464.32

the parent

Non-controlling interests 81801985.93 77897091.03

Total shareholders’ equity 3580165435.61 3440580555.35

Total liabilities and shareholders’

equity 5495820689.71 5381900903.82

Legal representative: Xie Guozhong General Manager: Xie Guozhong

Head of the accounting department: Jiang He

452025 Semi-Annual Report of Changchai Company Limited

2. Balance Sheet of the Company as the Parent

Unit: RMB

Item Closing balance Opening balance

Current assets:

Monetary assets 732999515.55 932456827.90

Held-for-trading financial assets 301143750.00 200209027.78

Derivative financial assets

Notes receivable 134353496.75 291060042.38

Accounts receivable 1216497263.15 424946666.41

Accounts receivable financing 39513968.25 215854639.00

Prepayments 11373339.38 8720127.77

Other receivables 23253949.64 24288767.65

Including: Interest receivable

Dividends receivable 5016960.00 7165080.00

Inventories 331218921.07 551350588.20

Including: Data resources

Contract assets

Assets held for sale

Current portion of non-current

assets

Other current assets 888623.39 31935179.39

Total current assets 2791242827.18 2680821866.48

Non-current assets:

Investments in debt obligations

Investments in other debt

obligations

Long-term receivables

Long-term equity investments 868279449.94 868279449.94

Investments in other equity

instruments 1019628058.72 941120058.72

Other non-current financial

assets 377869217.49 377869217.49

Investment property 36692487.77 37740844.55

Fixed assets 170537891.18 188539011.23

Construction in progress 5016737.44 3132433.82

Productive living assets

Oil and gas assets

Right-of-use assets

Intangible assets 54450735.24 56046446.22

Including: Data resources

Development costs

Including: Data resources

462025 Semi-Annual Report of Changchai Company Limited

Goodwill

Long-term prepaid expense

Deferred income tax assets 8285605.02 5814276.42

Other non-current assets 3758279.00 3755279.00

Total non-current assets 2544518461.80 2482297017.39

Total assets 5335761288.98 5163118883.87

Current liabilities:

Short-term borrowings 49843838.91

Held-for-trading financial

liabilities

Derivative financial liabilities

Notes payable 645030519.41 652752618.33

Accounts payable 643108648.44 572396386.79

Advances from customers 30152248.06 30183376.84

Contract liabilities 20963758.88 23493204.39

Employee benefits payable 4801445.59 39221119.16

Taxes payable 1454153.78 2116355.96

Other payables 117888204.64 111060096.07

Including: Interest payable

Dividends payable 3243179.97 3243179.97

Liabilities directly associated

with assets held for sale

Current portion of non-current

liabilities

Other current liabilities 97402299.32 39139067.15

Total current liabilities 1560801278.12 1520206063.60

Non-current liabilities:

Long-term borrowings

Bonds payable

Including: Preferred shares

Perpetual bonds

Lease liabilities

Long-term payables

Long-term employee benefits

payable

Provisions 69144414.39 70293055.65

Deferred income 27681302.29 29386167.02

Deferred income tax liabilities 159282945.60 147506745.60

Other non-current liabilities

Total non-current liabilities 256108662.28 247185968.27

Total liabilities 1816909940.40 1767392031.87

Shareholders’ equity:

Share capital 705692507.00 705692507.00

472025 Semi-Annual Report of Changchai Company Limited

Other equity instruments

Including: Preferred shares

Perpetual bonds

Capital reserves 659418700.67 659418700.67

Less: Treasury stock

Other comprehensive income 709799349.91 643067549.91

Specific reserve 19232805.37 19117263.36

Surplus reserves 367826665.27 367826665.27

Retained earnings 1056881320.36 1000604165.79

Total shareholders’ equity 3518851348.58 3395726852.00

Total liabilities and shareholders’

equity 5335761288.98 5163118883.87

Legal representative: Xie Guozhong General Manager: Xie Guozhong

Head of the accounting department: Jiang He

482025 Semi-Annual Report of Changchai Company Limited

3. Consolidated Income Statement

Unit: RMB

Item 2025 Semi-Annual 2024 Semi-Annual

1. Revenue 1561186625.83 1495909152.63

Including: Operating revenue 1561186625.83 1495909152.63

Interest income

Insurance premium income

Handling charge and commission income

2. Costs and expenses 1485288910.96 1402397808.63

Including: Cost of sales 1361474105.33 1284673407.54

Interest expense

Handling charge and commission expense

Surrenders

Net insurance claims paid

Net amount provided as insurance contract

reserve

Expenditure on policy dividends

Reinsurance premium expense

Taxes and surcharges 9929153.46 8959091.13

Selling expense 29894284.08 25133785.12

Administrative expense 50718409.56 53480629.46

R&D expense 38891905.33 38765247.04

Finance costs -5618946.80 -8614351.66

Including: Interest expense 704087.32 1546928.49

Interest income 7108599.23 7969452.65

Add: Other income 6527952.88 1953702.37

Return on investment (“-” for loss) 7570956.48 14299040.62

Including: Share of profit or loss of joint

ventures and associates

Income from the derecognition of

financial assets at amortized cost (“-” for loss)

Exchange gain (“-” for loss)

Net gain on exposure hedges (“-” for loss)

Gain on changes in fair value (“-” for loss) 15685633.55 -34487453.74

Credit impairment loss (“-” for loss) -17051155.31 -17838282.66

Asset impairment loss (“-” for loss) -1007978.87 -359995.80

Asset disposal income (“-” for loss) 2797353.31 408245.54

3. Operating profit (“-” for loss) 90420476.91 57486600.33

Add: Non-operating income 142118.30 1070935.19

Less: Non-operating expense 28702.13 267734.59

4. Profit before tax (“-” for loss) 90533893.08 58289800.93

492025 Semi-Annual Report of Changchai Company Limited

Less: Income tax expense 13529676.07 4314671.32

5. Net profit (“-” for net loss) 77004217.01 53975129.61

5.1 By operating continuity

5.1.1 Net profit from continuing operations (“-”

77004217.0153975129.61

for net loss)

5.1.2 Net profit from discontinued operations (“-”

for net loss)

5.2 By shareholders’ equity

5.2.1 Net profit attributable to shareholders of the

73422814.6950097655.15

Company as the parent

5.2.1 Net profit attributable to non-controlling interests 3581402.32 3877474.46

6. Other comprehensive income net of tax 66731800.00 -44237400.00

Attributable to shareholders of the Company as the

66731800.00-44237400.00

parent

6.1 Items that will not be reclassified to profit or loss 66731800.00 -44237400.00

6.1.1 Changes caused by remeasurements on

defined benefit schemes

6.1.2 Other comprehensive income that will not be

reclassified to profit or loss under the equity method

6.1.3 Changes in the fair value of investments in

66731800.00-44237400.00

other equity instruments

6.1.4 Changes in the fair value arising from changes

in own credit risk

6.1.5 Other

6.2 Items that will be reclassified to profit or loss

6.2.1 Other comprehensive income that will be

reclassified to profit or loss under the equity method

6.2.2 Changes in the fair value of investments in

other debt obligations

6.2.3 Other comprehensive income arising from the

reclassification of financial assets

6.2.4 Credit impairment allowance for investments

in other debt obligations

6.2.5 Reserve for cash flow hedges

6.2.6 Differences arising from the translation of

foreign currency-denominated financial statements

6.2.7 Other

Attributable to non-controlling interests

7. Total comprehensive income 143736017.01 9737729.61

Attributable to shareholders of the Company as the

140154614.695860255.15

parent

Attributable to non-controlling interests 3581402.32 3877474.46

8. Earnings per share

502025 Semi-Annual Report of Changchai Company Limited

8.1 Basic earnings per share 0.1040 0.0710

8.2 Diluted earnings per share 0.1040 0.0710

Legal representative: Xie Guozhong General Manager: Xie Guozhong

Head of the accounting department: Jiang He

512025 Semi-Annual Report of Changchai Company Limited

4. Income Statement of the Company as the Parent

Unit: RMB

Item 2025 Semi-Annual 2024 Semi-Annual

1. Operating revenue 1451712384.50 1420095519.32

Less: Cost of sales 1302126081.67 1248849498.10

Taxes and surcharges 6144680.41 5596041.85

Selling expense 22573818.66 21137008.43

Administrative expense 37086364.52 38925179.53

R&D expense 35215371.58 34813766.30

Finance costs -5781927.35 -12954483.76

Including: Interest expense 491473.80 1415480.19

Interest income 7720759.20 11403739.83

Add: Other income 6508819.29 1756921.35

Return on investment (“-” for loss) 6826069.66 13453121.53

Including: Share of profit or loss of joint

ventures and associates

Income from the derecognition of

financial assets at amortized cost (“-” for loss)

Net gain on exposure hedges (“-” for loss)

Gain on changes in fair value (“-” for loss) 1143750.00

Credit impairment loss (“-” for loss) 268082.12 -18792776.77

Asset impairment loss (“-” for loss) -477875.67 -349743.48

Asset disposal income (“-” for loss) 2793207.25 421678.54

2. Operating profit (“-” for loss) 71410047.66 80217710.04

Add: Non-operating income 6.36 567599.20

Less: Non-operating expense 3720.00 3720.00

3. Profit before tax (“-” for loss) 71406334.02 80781589.24

Less: Income tax expense 8072254.38 11155612.41

4. Net profit (“-” for net loss) 63334079.64 69625976.83

4.1 Net profit from continuing operations (“-” for

net loss) 63334079.64 69625976.83

4.2 Net profit from discontinued operations (“-”

for net loss)

5. Other comprehensive income net of tax 66731800.00 -44237400.00

5.1 Items that will not be reclassified to profit or

loss 66731800.00 -44237400.00

5.1.1 Changes caused by remeasurements on

defined benefit schemes

5.1.2 Other comprehensive income that will not

be reclassified to profit or loss under the equity method

5.1.3 Changes in the fair value of investments

in other equity instruments 66731800.00 -44237400.00

5.1.4 Changes in the fair value arising from

changes in own credit risk

522025 Semi-Annual Report of Changchai Company Limited

5.1.5 Other

5.2 Items that will be reclassified to profit or loss

5.2.1 Other comprehensive income that will be

reclassified to profit or loss under the equity method

5.2.2 Changes in the fair value of investments

in other debt obligations

5.2.3 Other comprehensive income arising from

the reclassification of financial assets

5.2.4 Credit impairment allowance for

investments in other debt obligations

5.2.5 Reserve for cash flow hedges

5.2.6 Differences arising from the translation of

foreign currency-denominated financial statements

5.2.7 Other

6. Total comprehensive income 130065879.64 25388576.83

7. Earnings per share

7.1 Basic earnings per share

7.2 Diluted earnings per share

Legal representative: Xie Guozhong General Manager: Xie Guozhong

Head of the accounting department: Jiang He

532025 Semi-Annual Report of Changchai Company Limited

5. Consolidated Cash Flow Statement

Unit: RMB

Item 2025 Semi-Annual 2024 Semi-Annual

1. Cash flows from operating activities:

Proceeds from sale of commodities and rendering of services 882699452.94 881118416.96

Net increase in customer deposits and interbank deposits

Net increase in borrowings from the central bank

Net increase in loans from other financial institutions

Premiums received on original insurance contracts

Net proceeds from reinsurance

Net increase in deposits and investments of policy holders

Interest handling charges and commissions received

Net increase in interbank loans obtained

Net increase in proceeds from repurchase transactions

Net proceeds from acting trading of securities

Tax rebates 38633075.84 10606127.65

Cash generated from other operating activities 14290624.34 12788451.27

Subtotal of cash generated from operating activities 935623153.12 904512995.88

Payments for commodities and services 683791472.53 748951967.58

Net increase in loans and advances to customers

Net increase in deposits in the central bank and in interbank

loans granted

Payments for claims on original insurance contracts

Net increase in interbank loans granted

Interest handling charges and commissions paid

Policy dividends paid

Cash paid to and for employees 171760589.81 183166748.96

Taxes paid 44828633.07 38069979.90

Cash used in other operating activities 109548568.34 96138812.44

Subtotal of cash used in operating activities 1009929263.75 1066327508.88

Net cash generated from/used in operating activities -74306110.63 -161814513.00

2. Cash flows from investing activities:

Proceeds from disinvestment 643428229.00 385750000.00

Return on investment 3992501.83 14299040.62

Net proceeds from the disposal of fixed assets intangible

assets and other long-lived assets 3530738.93 76305099.30

Net proceeds from the disposal of subsidiaries and other

business units

Cash generated from other investing activities 12600.00

Subtotal of cash generated from investing activities 650964069.76 476354139.92

542025 Semi-Annual Report of Changchai Company Limited

Payments for the acquisition of fixed assets intangible assets

and other long-lived assets 3578214.68 11017090.96

Payments for investments 744553500.00 598044324.00

Net increase in pledged loans granted

Net payments for the acquisition of subsidiaries and other

business units

Cash used in other investing activities

Subtotal of cash used in investing activities 748131714.68 609061414.96

Net cash generated from/used in investing activities -97167644.92 -132707275.04

3. Cash flows from financing activities:

Capital contributions received

Including: Capital contributions by non-controlling interests to

subsidiaries

Borrowings raised

Cash generated from other financing activities

Subtotal of cash generated from financing activities

Repayment of borrowings

Interest and dividends paid 7056925.07 33167547.83

Including: Dividends paid by subsidiaries to non-controlling

interests

Cash used in other financing activities

Subtotal of cash used in financing activities 7056925.07 33167547.83

Net cash generated from/used in financing activities -7056925.07 -33167547.83

4. Effect of foreign exchange rates changes on cash and cash

equivalents

5. Net increase in cash and cash equivalents -178530680.62 -327689335.87

Add: Cash and cash equivalents beginning of the period 892681884.84 971629523.46

6. Cash and cash equivalents end of the period 714151204.22 643940187.59

Legal representative: Xie Guozhong General Manager: Xie Guozhong

Head of the accounting department: Jiang He

552025 Semi-Annual Report of Changchai Company Limited

6. Cash Flow Statement of the Company as the Parent

Unit: RMB

Item 2025 Semi-Annual 2024 Semi-Annual

1. Cash flows from operating activities:

Proceeds from sale of commodities and rendering of

services 784383704.35 792554114.17

Tax rebates 34098461.67 5571468.42

Cash generated from other operating activities 9834418.79 10526359.52

Subtotal of cash generated from operating activities 828316584.81 808651942.11

Payments for commodities and services 658698461.72 723988549.96

Cash paid to and for employees 136568203.72 153563701.50

Taxes paid 34259403.60 28596026.83

Cash used in other operating activities 72493533.98 77233383.77

Subtotal of cash used in operating activities 902019603.02 983381662.06

Net cash generated from/used in operating activities -73703018.21 -174729719.95

2. Cash flows from investing activities:

Proceeds from disinvestment 550000000.00 370000000.00

Return on investment 3198458.89 13453121.53

Net proceeds from the disposal of fixed assets intangible

assets and other long-lived assets 3138377.83 76421678.54

Net proceeds from the disposal of subsidiaries and other

business units

Cash generated from other investing activities 612159.97

Subtotal of cash generated from investing activities 556948996.69 459874800.07

Payments for the acquisition of fixed assets intangible

assets and other long-lived assets 1795759.49 2211874.73

Payments for investments 650000000.00 572000000.00

Net payments for the acquisition of subsidiaries and other

business units

Cash used in other investing activities

Subtotal of cash used in investing activities 651795759.49 574211874.73

Net cash generated from/used in investing activities -94846762.80 -114337074.66

3. Cash flows from financing activities:

Capital contributions received

Borrowings raised

Cash generated from other financing activities

Subtotal of cash generated from financing activities

Repayment of borrowings

Interest and dividends paid 7056925.07 33167547.83

Cash used in other financing activities

Subtotal of cash used in financing activities 7056925.07 33167547.83

562025 Semi-Annual Report of Changchai Company Limited

Net cash generated from/used in financing activities -7056925.07 -33167547.83

4. Effect of foreign exchange rates changes on cash and cash

equivalents

5. Net increase in cash and cash equivalents -175606706.08 -322234342.44

Add: Cash and cash equivalents beginning of the period 805614858.63 899689740.60

6. Cash and cash equivalents end of the period 630008152.55 577455398.16

Legal representative: Xie Guozhong General Manager: Xie Guozhong

Head of the accounting department: Jiang He

572025 Semi-Annual Report of Changchai Company Limited

7. Consolidated Statements of Changes in Shareholders’ Equity

Current Period

Unit: RMB

2025 Semi-Annual

Equity attributable to shareholders of the Company as the parent

Other equity Total

Item Non-continstruments Other Surplu RetainCapital Less: Genera sharehold

Share compreh Specific s ed Ot rolling

capital Preferr Perpet

reserve Treasury l Subtotal ers’

Oth ensive reserve reserv earnin her interests

ed ual s stock reserve equity

er income es gs

shares bonds

1. Balance as

7056925 64050 643067 219590 3678 98362at the end of 9675.8 2666 7999. 336268 7789709 344058007.00 549.91 66.35 3464.32 1.03 555.35

the prior year 4 5.27 95

Add:

Adjustment for

change in

accounting

policy

Adjustment for

correction of

previous error

Other

adjustments

582025 Semi-Annual Report of Changchai Company Limited

2. Balance as

at the 7056925 640509675.8 643067 219590

36789836233626877897093440580

beginning of 07.00 4 549.91 66.35

26667999.

5.27953464.321.03555.35

the period

3. Increase/

decrease in the 66365

0.0066731825822913567939048941395848

period (“-” for 00.00 5.74

889.6

2985.36.9080.26

decrease)

3.1 Total

comprehensive 667318

73422

00.00814.6

14015435814021437360

9 614.69 .32 17.01income

3.2 Capital

increased and

reduced by

shareholders

3.2.1 Ordinary

shares

increased by

shareholders

3.2.2 Capital

increased by

holders of

other equity

instruments

592025 Semi-Annual Report of Changchai Company Limited

3.2.3

Share-based

payments

included in

shareholders’

equity

3.2.4 Other

3.3 Profit -7056 -70569 -705692

distribution 925.07 25.07 5.07

3.3.1

Appropriation

to surplus

reserves

3.3.2

Appropriation

to general

reserve

3.3.3

Appropriation -7056 -70569 -705692925.07 25.07 5.07

to shareholders

3.3.4 Other

3.4 Transfers

within

shareholders’

equity

602025 Semi-Annual Report of Changchai Company Limited

3.4.1 Increase

in capital (or

share capital)

from capital

reserves

3.4.2 Increase

in capital (or

share capital)

from surplus

reserves

3.4.3 Loss

offset by

surplus

reserves

3.4.4 Changes

in defined

benefit

schemes

transferred to

retained

earnings

3.4.5 Other

comprehensive

income

transferred to

retained

earnings

612025 Semi-Annual Report of Changchai Company Limited

3.4.6 Other

3.5 Specific 258229 258229 323492.5 2905788

reserve 5.74 5.74 8 .32

3.5.1 Increase 600503 600503 373360.1 6378392

in the period 1.87 1.87 7 .04

3.5.2 Used in 342273 342273 3472603

the period 6.13 6.13

49867.59.72

3.6 Other

4. Balance as 64050 3678 1049

at the end of 7056925 9675.8 709799 245413 349836 8180198 358016507.00 4 349.91 62.09

2666993883449.685.93435.61

the period 5.27 9.57

Prior Period

Unit: RMB

2024 Semi-Annual

Equity attributable to shareholders of the Company as the parent

Other equity instruments Total

Item Less: Other Gen Retain Non-conPerpe Capital shareholdShare Treasu compreh Specific Surplus eral ed Subtot trolling

capital Preferre tual

reserve Other ers’

Other ry ensive reserve reserves reser earnin al interests

d shares bond s equitystock income ve gs

s

1. Balance as 64050 1002 33989

at the end of 7056925 9675.8 667180 194320 363695 711212 347006807.00 4 321.82 89.52 592.34

4367246911.

the prior year 4.71 23

08.35119.58

622025 Semi-Annual Report of Changchai Company Limited

Add:

Adjustment for

change in

accounting

policy

Adjustment for

correction of

previous error

Other

adjustments

2. Balance as

at the 7056925 64050 667180 194320 363695 1002 339899675.8 43672 46911. 711212 3470068

beginning of 07.00 4 321.82 89.52 592.34 4.71 23 08.35 119.58

the period

3. Increase/

decrease in the -44237 650615. 16930 -2665

period (“-” for 400.00 85 107.3 6676.8

387747-227792

2 3 4.46 02.37decrease)

3.1 Total

-44237 50097comprehensive 400.00 655.1

586023877479737729

5 55.15 4.46 .61income

3.2 Capital

increased and

reduced by

shareholders

632025 Semi-Annual Report of Changchai Company Limited

3.2.1 Ordinary

shares

increased by

shareholders

3.2.2 Capital

increased by

holders of

other equity

instruments

3.2.3

Share-based

payments

included in

shareholders’

equity

3.2.4 Other

3.3 Profit -3316 -3316

7547.7547.8-331675

distribution 83 3 47.83

3.3.1

Appropriation

to surplus

reserves

3.3.2

Appropriation

to general

reserve

642025 Semi-Annual Report of Changchai Company Limited

3.3.3-3316-3316

Appropriation 7547. 7547.8 -33167547.83

to shareholders 83 3

3.3.4 Other

3.4 Transfers

within

shareholders’

equity

3.4.1 Increase

in capital (or

share capital)

from capital

reserves

3.4.2 Increase

in capital (or

share capital)

from surplus

reserves

3.4.3 Loss

offset by

surplus

reserves

652025 Semi-Annual Report of Changchai Company Limited

3.4.4 Changes

in defined

benefit

schemes

transferred to

retained

earnings

3.4.5 Other

comprehensive

income

transferred to

retained

earnings

3.4.6 Other

3.5 Specific 650615. 65061 650615.8

reserve 85 5.85 5

3.5.1 Increase 308316 30831 3083166

in the period 6.06 66.06 .06

3.5.2 Used in 243255 24325 2432550

the period 0.21 50.21 .21

3.6 Other

4. Balance as

7056925 64050at the end of 9675.8 622942 200827 363695

101933722

3668390234.749986344728807.00

the period 4

921.8205.37592.342.034082.81917.21

Legal representative: Xie Guozhong General Manager: Xie Guozhong Head of the accounting department: Jiang He

662025 Semi-Annual Report of Changchai Company Limited

8. Statements of Changes in Shareholders’ Equity of the Company as the Parent

Current Period

Unit: RMB

2025 Semi-Annual

Other equity instruments Capit Other

Item Less: Ot TotalPreferr Perpet al comprehen Specific Surplus RetainedShare capital Treasury he shareholders

ed ual Other reser sive reserve reserves earningsstock r ’ equity

shares bonds ves income

1. Balance as at the end 705692507. 65941870 64306754 19117263. 367826665. 100060416 33957268

of the prior period 00 0.67 9.91 36 27 5.79 52.00

Add: Adjustment for

change in accounting

policy

Adjustment for

correction of previous

error

Other adjustments

2. Balance as at the 705692507. 65941870 64306754 19117263. 367826665. 100060416 33957268

beginning of the period 00 0.67 9.91 36 27 5.79 52.00

3. Increase/ decrease in

the period (“-” for 66731800.00 115542.01

56277154.5123124496

7.58

decrease)

3.1 Total 66731800 63334079.6 130065879

comprehensive income .00 4 .64

672025 Semi-Annual Report of Changchai Company Limited

3.2 Capital increased

and reduced by

shareholders

3.2.1 Ordinary shares

increased by

shareholders

3.2.2 Capital increased

by holders of other

equity instruments

3.2.3 Share-based

payments included in

shareholders’ equity

3.2.4 Other

3.3 Profit distribution -7056925.07 -7056925.07

3.3.1 Appropriation to

surplus reserves

3.3.2 Appropriation to

-7056925.07-7056925.shareholders 07

3.3.3 Other

3.4 Transfers within

shareholders’ equity

3.4.1 Increase in capital

(or share capital) from

capital reserves

682025 Semi-Annual Report of Changchai Company Limited

3.4.2 Increase in capital

(or share capital) from

surplus reserves

3.4.3 Loss offset by

surplus reserves

3.4.4 Changes in

defined benefit

schemes transferred to

retained earnings

3.4.5 Other

comprehensive income

transferred to retained

earnings

3.4.6 Other

3.5 Specific reserve 115542.01 115542.01

3.5.1 Increase in the 2435798.3 2435798.3

period 4 4

3.5.2 Used in the period 2320256.3 2320256.33 3

3.6 Other

4. Balance as at the end 705692507. 65941870 70979934 19232805. 367826665. 105688132 35188513

of the period 00 0.67 9.91 37 27 0.36 48.58

Prior Period

Unit: RMB

692025 Semi-Annual Report of Changchai Company Limited

2024 Semi-Annual

Other equity

instruments Other

Item Less: TotalShare Capital comprehen Specific Surplus Retained

Preferr Perpet Treasury Other shareholderscapital Oth reserves sive reserve reserves earnings

ed ual stock ’ equity

er income

shares bonds

1. Balance as at the

end of the prior 705692507 659418 66718032 19010793. 363695592. 9965920 34115899.00 700.67 1.82 43 34 57.25 72.51

period

Add: Adjustment for

change in accounting

policy

Adjustment for

correction of previous

error

Other adjustments

2. Balance as at the

beginning of the 705692507 659418 66718032 19010793. 363695592. 9965920 34115899.00 700.67 1.82 43 34 57.25 72.51

period

3. Increase/ decrease

in the period (“-” for -44237400.00 183198.84

3645842-7595772.1

9.006

decrease)

3.1 Total

comprehensive -4423740 6962597 25388576.0.00 6.83 83

income

702025 Semi-Annual Report of Changchai Company Limited

3.2 Capital increased

and reduced by

shareholders

3.2.1 Ordinary shares

increased by

shareholders

3.2.2 Capital

increased by holders

of other equity

instruments

3.2.3 Share-based

payments included in

shareholders’ equity

3.2.4 Other

3.3 Profit distribution -331675 -33167547.47.83 83

3.3.1 Appropriation to

surplus reserves

3.3.2 Appropriation to -331675 -33167547.

shareholders 47.83 83

3.3.3 Other

3.4 Transfers within

shareholders’ equity

712025 Semi-Annual Report of Changchai Company Limited

3.4.1 Increase in

capital (or share

capital) from capital

reserves

3.4.2 Increase in

capital (or share

capital) from surplus

reserves

3.4.3 Loss offset by

surplus reserves

3.4.4 Changes in

defined benefit

schemes transferred

to retained earnings

3.4.5 Other

comprehensive

income transferred to

retained earnings

3.4.6 Other

3.5 Specific reserve 183198.84 183198.84

3.5.1 Increase in the 2333560.4 2333560.4

period 5 5

3.5.2 Used in the 2150361.6 2150361.6

period 1 1

3.6 Other

722025 Semi-Annual Report of Changchai Company Limited

4. Balance as at the 705692507 659418 62294292 19193992. 363695592. 1033050 34039942

end of the period .00 700.67 1.82 27 34 486.25 00.35

Legal representative: Xie Guozhong General Manager: Xie Guozhong Head of the accounting department: Jiang He

732025 Semi-Annual Report of Changchai Company Limited

III. Company Profile

1. Registered location organization form and headquarters address of the Company

Changchai Company Limited (hereinafter referred to as “the Company”) was founded on 5 May 1994 which is a

company limited by shares promoted solely by Changzhou Diesel Engine Plant through the approval by the State

Commission for Restructuring the Economic Systems with document TGS [1993] No. 9 on 15 January 1993 by

way of public offering of shares. With the approval of the People’s Government of Jiangsu Province SZF [1993]

No. 67 as well as reexamined and approved by China Securities Regulatory Commission (“CSRC”) through

document ZJFSZ (1994) No. 9 the Company initially issued A shares to the public from 15 March 1994 to 30

March 1994. As approved by the Shenzhen Stock Exchange through document SZSFZ (1994) No. 15 such

tradable shares of the public got listing on 1 July 1994 at Shenzhen Stock Exchange with “Changchai” for short of

stock as well as “0570” as stock code (present stock code is “000570”).In 1996 upon recommendation by Document No. 13 [1996] of the General Office of Jiangsu Provincial People's

Government preliminary review by Document No. 24 [1996] of Shenzhen Securities Regulatory Office and

approval by Document No. 27 [1996] of the State Council Securities Commission the Company privately placed

100 million B-shares to qualified investors from August 27 to August 30 1996. The shares were listed on

September 13 1996 with the stock abbreviation "Changchai B" and stock code "2570" (current stock code:

"200570").Through years of bonus share distributions rights offerings capital reserve conversions and additional share

issuances as of June 30 2025 the Company's total issued share capital reached 705692507 shares with

registered capital of RMB 705692507.Registered Address: 123 Huaide Middle Road Changzhou Jiangsu Province

Headquarters Address: 123 Huaide Middle Road Changzhou Jiangsu Province

Unified Social Credit Code: 91320400134792410W

2. Principal Business Operations of the Company

The Company operates in the manufacturing industry with its business scope primarily covering: the

manufacturing and sales of diesel engines diesel engine components and castings gasoline engines gasoline

engine components grain harvesting machinery rotary tillers walking tractors molds and fixtures as well as the

assembly and sales of diesel engine units and gasoline engine units.The Company's main products or services include: the production and sales of small and medium-sized

single-cylinder and multi-cylinder diesel engines under the "Changchai" brand. The diesel engines produced and

sold by the Company are mainly used in tractors combine harvesters light commercial vehicles agricultural

equipment small construction machinery generator sets and marine engines.During the reporting period there were no changes to the Company's core business operations.

3. Authorization of Financial Statements

The financial report has been approved to be issued by the Board of Directors on August 20 2025.IV. Basis for Preparation of the Financial Report

1. Basis for Preparation

With the going-concern assumption as the basis and based on transactions and other events that actually occurred

the Group prepared financial statements in accordance with The Accounting Standards for Business

742025 Semi-Annual Report of Changchai Company Limited

Enterprises—Basic Standard issued by the Ministry of Finance with Decree No. 33 and revised with Decree No.

76 the various specific accounting standards the Application Guidance of Accounting Standards for Business

Enterprises the Interpretation of Accounting Standards for Business Enterprises and other regulations issued andrevised from 15 February 2006 onwards (hereinafter jointly referred to as “the Accounting Standards for BusinessEnterprises” “China Accounting Standards” or “CAS”) as well as the Rules for Preparation Convention of

Disclosure of Public Offering Companies No.15 – General Regulations for Financial Reporting (revised in 2023)

by China Securities Regulatory Commission.In accordance with relevant provisions of the Accounting Standards for Business Enterprises the Group adopted

the accrual basis in accounting. Except for some financial instruments where impairment occurred on an asset an

impairment reserve was withdrawn accordingly pursuant to relevant requirements.

2. Continuation

These financial statements are prepared on a going concern basis. The Company has the ability to continue as a

going concern for at least 12 months from the end of the reporting period.V. Important Accounting Policies and Estimations

Notification of specific accounting policies and accounting estimations:

The Company and its subsidiaries are principally engaged in the production and sales of small-to-medium sized

single-cylinder and multi-cylinder diesel engines under the 'Changchai' trademark. In accordance with their actual

production and operating characteristics and the relevant Accounting Standards for Business Enterprises the

Company and its subsidiaries have formulated specific accounting policies and accounting estimates for various

transactions and events as detailed in the following descriptions.

1. Statement of Compliance with the Accounting Standards for Business Enterprises

The financial statements prepared by the Company comply with the requirements of the Accounting Standards for

Business Enterprises (ASBE) and present fairly in all material respects the consolidated and parent company's

financial position as of June 30 2025 and the consolidated and parent company's operating results and cash flows

for the year then ended.

2. Fiscal Period

The Company's accounting periods are divided into fiscal years and interim periods. An interim accounting period

refers to a reporting period shorter than a full fiscal year. The Company adopts the Gregorian calendar year as its

fiscal year which starts from January 1st and ends on December 31st each year.

3. Operating Cycle

A normal operating cycle refers to a period from the Group purchasing assets for processing to realizing cash or

cash equivalents. An operating cycle for the Group is 12 months which is also the classification criterion for the

liquidity of its assets and liabilities.

752025 Semi-Annual Report of Changchai Company Limited

4. Currency Used in Bookkeeping

Renminbi is the functional currency of the Company.

5. Accounting Methods for Business Combinations under the Same Control and Business Combinations not

under the Same Control

Business Combination refers to transactions or events that integrate two or more separate enterprises into a single

reporting entity. Business combinations are categorized into Business Combinations under the Same Control and

Business Combinations not under the Same Control.

(1) Business combinations under the same control

The enterprises involved in combination are ultimately controlled by the same party or parties before and after the

combination. The control is not temporary and the combination is under the same control. For business

combination under the same control the party that obtains control over other participating enterprises on the

purchase date is the acquirer and other enterprises that participate in the combination are the acquirees.Combination date refers to the date on which the combining party actually obtains control to the combined party.The Company measures the assets and liabilities obtained from consolidation of enterprises according to the book

value of consolidated party’s assets and liabilities (including the goodwill arising from ultimate controller’s

acquisition of the consolidated party) in the ultimate controller’s consolidated financial statement on the

consolidation date; adjusts the capital premium in capital reserve by the difference between obtained net asset

book value and paid consolidated consideration book value (or total par value of shares issued) and adjusts

retained earnings if the capital premium in capital reserve is insufficient to offset.The direct expenses generated by the acquirer for the purpose of business combinations shall be recorded into the

profits and losses for the current period.

(2) Business combinations not under the same control

A business combination involving enterprises that are not ultimately controlled by the same party or parties both

before and after the combination is a business combination not under common control. In a business combination

not under common control the party that obtains control over the other combining enterprises on the acquisition

date is the acquirer and the other enterprises participating in the combination are the acquirees. The acquisition

date is the date on which the acquirer effectively obtains control of the acquiree.For a business combination not under common control the cost of combination includes the fair value at the

acquisition date of assets given liabilities incurred or assumed and equity instruments issued by the acquirer in

exchange for control of the acquiree. Professional fees such as audit legal valuation and consulting services as

well as other administrative costs related to the business combination are expensed as incurred. Transaction costs

incurred by the acquirer in issuing equity or debt instruments as consideration for the combination are included in

the initial recognition amount of the equity or debt instruments. Any contingent consideration is included in the

cost of combination at its fair value at the acquisition date. If new or additional evidence relating to circumstances

existing at the acquisition date arises within twelve months after the acquisition date and results in an adjustment

to the contingent consideration the amount of goodwill is adjusted accordingly. The acquirer measures the cost of

combination and the identifiable assets and liabilities acquired at their fair values at the acquisition date. The

excess of the cost of combination over the acquirer's interest in the fair value of the identifiable net assets of the

acquiree at the acquisition date is recognized as goodwill. If the cost of combination is less than the acquirer's

interest in the fair value of the identifiable net assets of the acquiree the acquirer first reassesses the measurement

of the identifiable assets liabilities and contingent liabilities acquired and the cost of combination. If the cost of

762025 Semi-Annual Report of Changchai Company Limited

combination remains less than the acquirer's interest in the fair value of the identifiable net assets of the acquiree

after the reassessment the difference is recognized in profit or loss for the period.If the acquirer obtains deductible temporary differences of the acquiree that do not meet the recognition criteria

for deferred tax assets at the acquisition date and are therefore not recognized and if within twelve months after

the acquisition date new or additional information becomes available indicating that the relevant circumstances

existed at the acquisition date and that the economic benefits associated with the deductible temporary differences

of the acquiree at the acquisition date are probable the related deferred tax assets are recognized with a

corresponding decrease in goodwill. If the goodwill is insufficient to absorb the decrease the excess is recognized

in profit or loss. In all other cases deferred tax assets arising from a business combination are recognized in profit

or loss.A business combination not under common control achieved in stages through multiple transactions is accounted

for by reference to the preceding paragraphs and Note V.14 "Long-term equity investments" if the transactions are

part of a single arrangement. If the transactions are not part of a single arrangement the accounting treatment is

differentiated between the separate financial statements and the consolidated financial statements:

In the separate financial statements the initial cost of the investment is the sum of the carrying amount of the

equity investment in the acquiree held prior to the acquisition date and the cost of the additional investment

incurred on the acquisition date. If the equity investment in the acquiree held prior to the acquisition date involves

other comprehensive income the related other comprehensive income is accounted for on the same basis as if the

acquiree had directly disposed of the related assets or liabilities when the investment is disposed of (i.e. except

for the relevant share of changes arising from the acquiree's remeasurement of defined benefit plan net liabilities

or assets accounted for under the equity method the remainder is reclassified to investment income in the current

period).In the consolidated financial statements the equity investment in the acquiree held prior to the acquisition date is

remeasured at its fair value on the acquisition date with any difference between the fair value and the carrying

amount recognized in investment income for the period. If the equity investment in the acquiree held prior to the

acquisition date involves other comprehensive income the related other comprehensive income is accounted for

on the same basis as if the acquiree had directly disposed of the related assets or liabilities (i.e. except for the

relevant share of changes arising from the acquiree's remeasurement of defined benefit plan net liabilities or assets

accounted for under the equity method the remainder is reclassified to investment income in the period in which

the acquisition date falls).

6. Criteria for Determining Control and Methods for Preparing Consolidated Financial Statements

(1) Criteria for Determining Control

The scope of consolidation is determined based on control. Control means that the Company has power over an

investee is exposed or has rights to variable returns from its involvement with the investee and has the ability to

use its power over the investee to affect the amount of the returns. This generally includes situations where: the

parent holds more than half of the voting rights of the investee; or the parent holds half or less of the voting rights

but has more than half of the voting rights through agreements with other investors; or has the power to govern the

financial and operating policies of the investee under the investee’s articles of association or agreements; or has

the power to appoint or remove the majority of the members of the board of directors of the investee; or has the

majority of voting rights at the board of directors of the investee.

(2) Methods for Preparing Consolidated Financial Statements

The Company includes subsidiaries in the consolidated financial statements from the date on which it obtains

772025 Semi-Annual Report of Changchai Company Limited

control over the subsidiaries’ net assets and operating decisions and excludes them from the date on which such

control ceases. For subsidiaries disposed of the results of operations and cash flows prior to the disposal date are

properly included in the consolidated income statement and consolidated cash flow statement; for subsidiaries

disposed of during the period the opening balances of the consolidated balance sheet are not adjusted. For

subsidiaries acquired in business combinations not under common control their results of operations and cash

flows after the acquisition date are properly included in the consolidated income statement and consolidated cash

flow statement and the opening balances and comparative figures in the consolidated financial statements are not

adjusted. For subsidiaries acquired in business combinations under common control and entities acquired through

mergers their results of operations and cash flows from the beginning of the period in which the combination

occurs to the combination date are properly included in the consolidated income statement and consolidated cash

flow statement and the comparative figures in the consolidated financial statements are adjusted accordingly.When preparing the consolidated financial statements if the accounting policies or reporting periods adopted by a

subsidiary differ from those of the Company the subsidiary’s financial statements are adjusted to conform to the

Company’s accounting policies and reporting periods. For subsidiaries acquired in business combinations not

under common control their financial statements are adjusted based on the fair values of the identifiable net assets

at the acquisition date.All significant intercompany balances transactions and unrealized profits are eliminated in full in the consolidated

financial statements.The portion of equity and net profit or loss of subsidiaries attributable to non-controlling interests is presented

separately in the consolidated financial statements under equity and net profit respectively. The portion of net

profit or loss of subsidiaries attributable to non-controlling interests is presented as “non-controlling interests”

under net profit in the consolidated income statement. Losses attributable to non-controlling interests in a

subsidiary that exceed the non-controlling interests’ share of equity in the subsidiary at the beginning of the period

are allocated against non-controlling interests.When control over a former subsidiary is lost due to disposal of part of the equity investment or other reasons the

remaining equity interest is remeasured at its fair value at the date when control is lost. The difference between the

sum of the consideration received from the disposal and the fair value of the remaining equity interest and the

share of the carrying amount of the former subsidiary’s net assets attributable to the original equity interest from

the acquisition date is recognized in profit or loss for the period in which control is lost. Other comprehensive

income related to the equity investment in the former subsidiary is accounted for on the same basis as if the

investee had directly disposed of the related assets or liabilities when control is lost (i.e. except for the relevant

share of changes arising from the investee’s remeasurement of defined benefit plan net liabilities or assets the

remainder is reclassified to profit or loss for the current period). Subsequently the remaining equity interest is

accounted for in accordance with the relevant provisions of Accounting Standards for Business Enterprises No. 2

– Long-term Equity Investments or Accounting Standards for Business Enterprises No. 22 – Recognition and

Measurement of Financial Instruments. For details see Note 5.14 “Long-term Equity Investments” or Note V.10

“Financial Instruments”.When the Company loses control over a subsidiary through multiple transactions that involve disposing of equity

investments in the subsidiary step by step it is necessary to determine whether the transactions should be

accounted for as a single transaction. The terms conditions and economic effects of the transactions meet one or

more of the following circumstances which generally indicate that the transactions should be accounted for as a

single transaction: (1) the transactions are entered into simultaneously or in contemplation of one another; (2) the

transactions form a single transaction to achieve an overall commercial effect; (3) the occurrence of one

transaction depends on the occurrence of at least one other transaction; or (4) one transaction considered alone is

782025 Semi-Annual Report of Changchai Company Limited

not economically justified but is economically justified when considered together with other transactions. If the

transactions are not part of a single transaction each transaction is accounted for separately as appropriate underthe principles applicable to “partial disposal of long-term equity investments in subsidiaries without loss ofcontrol” and “loss of control over former subsidiaries due to disposal of part of equity investments or otherreasons”. If the transactions are part of a single transaction they are accounted for as a single transaction

involving disposal of the subsidiary and loss of control; however the difference between the consideration

received from each disposal before the loss of control and the share of the subsidiary’s net assets attributable to

the disposed investment is recognized as other comprehensive income in the consolidated financial statements and

reclassified to profit or loss for the period in which control is lost.

7. Classification of Joint Arrangements and Accounting Treatment for Joint Operations

A joint arrangement is an arrangement of which two or more parties have joint control. The Company classifies

joint arrangements into joint operations and joint ventures based on the rights and obligations arising from the

arrangement. A joint operation is a joint arrangement whereby the Company has rights to the assets and

obligations for the liabilities relating to the arrangement. A joint venture is a joint arrangement whereby the

Company has rights to the net assets of the arrangement.The Company accounts for its investments in joint ventures using the equity method applying the accounting

policies described in Note V.14(2)* "Long-term Equity Investments Accounted for Using the Equity Method".As a joint operator in a joint operation the Company recognizes its individually held assets and assumed liabilities

as well as its share of jointly held assets and jointly assumed liabilities; recognizes revenue from the sale of its

share of the output from the joint operation; recognizes its share of revenue arising from the sale of output by the

joint operation; and recognizes expenses it incurs individually as well as its share of expenses incurred by the joint

operation.When the Company as a joint operator contributes or sells assets (which do not constitute a business the same

below) to a joint operation or purchases assets from a joint operation the Company only recognizes the portion of

gains or losses arising from the transaction that is attributable to the other joint operators until such assets are sold

to third parties. If these assets meet the criteria for impairment losses as stipulated in Accounting Standards for

Business Enterprises No. 8 - Impairment of Assets and other relevant standards the Company fully recognizes

such losses for assets contributed or sold to the joint operation by the Company and recognizes its share of such

losses for assets purchased from the joint operation by the Company.

8. Determination of cash and cash equivalents

The Company’s cash and cash equivalents include cash on hand deposits that can be used for payment at any time

investments that owned by the Company which are in short-term (usually due within three months from the

purchase date) highly liquid easy to convert to a known amount of cash low risk of value change.

9. Foreign currency operations

(1) Translation Methods for Foreign Currency Transactions

The Company translates foreign currency transactions into the functional currency amount at the spot exchange

rate on the transaction date upon initial recognition. However for foreign currency exchange transactions or

transactions involving currency exchange conducted by the Company the actual exchange rate adopted is used for

792025 Semi-Annual Report of Changchai Company Limited

translation into the functional currency amount.

(2) Translation Methods for Foreign Currency Monetary Items and Non-monetary Items

At the balance sheet date foreign currency monetary items are translated using the spot exchange rate on that date.The resulting exchange differences are recognized in profit or loss except for: * exchange differences arising

from foreign currency-specific borrowings related to the acquisition or construction of qualifying assets which

are accounted for in accordance with the principles for capitalizing borrowing costs; and * exchange differences

arising from changes in the carrying amount of available-for-sale foreign currency monetary items other than

amortized cost which are recognized in other comprehensive income.Non-monetary items denominated in foreign currency and measured at historical cost continue to be translated

using the spot exchange rate on the transaction date. Non-monetary items denominated in foreign currency and

measured at fair value are translated using the spot exchange rate on the date when the fair value is determined.The difference between the translated functional currency amount and the original functional currency amount is

treated as a fair value change (including exchange rate effects) and recognized in profit or loss or other

comprehensive income.

10. Financial Instruments

A financial asset or financial liability is recognized when the Company becomes a party to the financial

instrument contract.

(1) Classification confirmation and measurement of financial assets

Based on business model of managing financial assets and contractual cash flow characteristics of financial assets

the Company divides financial assets into: financial assets measured at amortized cost; financial assets measured

at fair value with changes included in other comprehensive income; financial assets measured at fair value through

profit and loss.Financial assets are measured at fair value at initial recognition. For the financial assets at fair value and through

current profit or loss the transaction expenses thereof should be recognized directly in profit or loss; for other

categories of financial assets the transaction expenses thereof should be recognized into initially recognized

amount. For the accounts receivable or bills receivable arising from product sales or labor service provision

excluding or not considering significant financing components the Company regards the amount of consideration

expected to charge as the initial recognition amount.* Financial assets measured at amortized costs

The corporate business model for managing financial assets measured at amortized cost aims at charging

contractual cash flow and the contractual cash flow characteristics of such financial assets are consistent with

basic borrowing and loan arrangements namely cash flow is generated on a specific date only for payment of

principal and interests based on outstanding principal amount. The Company utilizes effective interest rate method

for such financial assets and performs subsequent measurement as per amortized cost with gains or losses arising

from amortization or impairment included in current profits and losses.* Financial assets measured at fair value with changes included in other comprehensive income

The corporate business model for managing such financial assets aims at both contractual cash flow charging and

sales and the contractual cash flow characteristics of such financial assets are consistent with basic borrowing and

loan arrangements. The Company measures such financial assets at fair value with changes included in other

comprehensive income but impairment losses or gains exchange gains and losses and interest income calculated

according to the actual interest rate method are included in current profits and losses.

802025 Semi-Annual Report of Changchai Company Limited

In addition the Company designates some non-trading equity instrument investments as financial assets measured

at fair value with changes included in other comprehensive income. The Company records relevant dividend

income of such financial assets into current profits and losses and records fair value changes into other

comprehensive income. When such financial assets are derecognized the cumulative gains or losses previously

recorded in other comprehensive income will transfer from other comprehensive income into retained earnings

excluded in current profits and losses.* Financial Liabilities measured at fair value through profit and loss

The Company classifies the above financial assets measured at amortized cost and the financial assets other than

the financial assets measured at fair value with changes included in other comprehensive income as the financial

assets measured at fair value through profit and loss. In addition during initial recognition in order to eliminate or

significantly reduce accounting mismatches the Company designates some financial assets as financial assets

measured at fair value through profit and loss. For such financial assets the Company uses fair value for

subsequent measurement and fair value changes are included in current profits and losses.

(2) Classification recognition and measurement of financial liabilities

Financial liabilities are classified during initial recognition as the financial liabilities measured at fair value

through profit and loss and other financial liabilities. For financial liabilities at fair value through profit or loss

the transaction expenses thereof should be recognized directly in current profit or loss and for other financial

liabilities the transaction expenses thereof should be recognized into initially recognized amount.* Financial liabilities measured at fair value through profit and loss

Financial liabilities measured at fair value through profit and loss contain transactional financial liabilities

(including derivatives that belong to financial liabilities) and financial liabilities designated as measured at fair

value during initial recognition with changes included in current profits and losses.Transactional financial liabilities (including derivatives that belong to financial liabilities) are subsequently

measured at fair value and except for those related to hedge accounting the fair value changes are included in

current profits and losses.The financial liabilities designated as measured at fair value with changes included in current profits and losses

such liabilities are caused by the Company’s own credit risk changes with fair value changes included in other

comprehensive income and when the liabilities are derecognized they are included in other comprehensive

income caused by own credit risk changes with cumulative fair value changes transferred into retained earnings.The remaining fair value changes are included in current profits and losses. If treatment of own credit risk change

impact of such financial liabilities in the above manner will cause or expand accounting mismatch in profits and

losses the Company includes all gains or losses of such financial liabilities (including the amount of corporate

own credit risk change impact) in current profits and losses.* Other financial liabilities

Except the financial liabilities and financial guarantee contract arising from financial asset transfer at variance

with derecognition conditions or continuous involvement of transferred financial assets other financial liabilities

are classified as financial liabilities measured at amortized cost and subsequently measured at amortized cost

with gains or losses resulting from derecognition or amortization included in current profits and losses.

(3) Recognition basis and measurement method of financial assets transfer

Financial assets are derecognized in one of the following conditions: * the contractual right to receive cash flow

of such financial assets is terminated; * such financial assets have been transferred and almost all risks and

rewards on the financial asset Ownership are transferred to the transferee; * such financial assets have been

transferred and although the Company has neither transferred nor retained almost all risks and rewards on the

812025 Semi-Annual Report of Changchai Company Limited

financial asset Ownership it has given up control of such financial assets.If the enterprise neither transfers nor retains substantially all the risks and rewards of Ownership of a financial

asset and it has not abandoned the control of that financial asset the relevant financial asset is recognized at the

extent of continuing involvement in the transferred financial asset and the corresponding liability is recognized

accordingly. The degree of continuous involvement in the transferred financial asset refers to the risk level that the

enterprise faces due to the change of the value of the financial asset.Where a transfer of a financial asset in its entirely meets the criteria of de-recognition the difference between the

carrying amount of the financial asset transferred and the sum of the consideration received from the transfer and

any cumulative change in fair value that has been recognized in other comprehensive income is recognized in

current profit or loss.Where a transfer of financial asset partly meets the criteria of de-recognition the carrying amount of the financial

asset transferred should be amortized between the part that is derecognized and the part that is not derecognized

according to the fair value and the difference between the sum of the consideration received from the transfer and

any cumulative change in fair value that has been recognized in other comprehensive income and should be

amortized to the derecognized part and tthe amortized carrying amount of the above-mentioned financial asset

shall be recorded into current profit or loss.When the Company uses financial assets sold with recourse or sells financial assets held in an endorsement it

must determine whether all risks and rewards of Ownership of the financial assets have been almost transferred. If

all the risks and rewards of Ownership of the financial asset are almost transferred to the transferee and the

financial asset is derecognized; if all the risks and rewards on the Ownership of the financial asset are retained the

financial asset is not derecognized; all the risks and rewards of Ownership of financial assets are not almost

transferred or retained continue to determine whether the Company retains the control over the assets and

perform the accounting operation based on the principles described in the preceding paragraphs.

(4) De-recognition of financial liabilities

If current obligations of financial liabilities (or a part thereof) are removed the Company derecognizes such

financial liabilities (or a part thereof). If the Company (borrower) signs an agreement with the lender to replace

the original financial liabilities by bearing new financial liabilities and contract clauses of new financial liabilities

and original financial liabilities are substantially different the original financial liabilities are derecognized while

recognizing a new financial liability. If the Company makes substantial modification to the contractual clauses of

original financial liabilities (or a part thereof) the original financial liabilities are derecognized and a new

financial liability is recognized according to the clauses after modification.If financial liabilities (or a part thereof) are derecognized the Company records the difference between their book

value and consideration paid (including non-cash assets transferred out or liabilities assumed) into current profits

and losses.

(5) Offset of financial assets and financial liabilities

When the Company has legal right to offset financial assets and financial liabilities of the recognized amount and

such legal rights are currently enforceable meanwhile the Company plans to settle by net assets or concurrently

liquidate such financial assets and repay such financial liabilities financial assets and financial liabilities are

presented in the balance sheet by net amounts after mutual offset. In addition financial assets and financial

liabilities are separately presented in the balance sheet which are not offset by each other.

(6) Determining method of the fair value of financial assets and financial liabilities

Fair value refers to the price that a market participant can be received for the sale of an asset or the price he needs

to pay for transferring a liability in an orderly transaction occurring on the measurement date. Where the financial

822025 Semi-Annual Report of Changchai Company Limited

instruments exist on active market the Company determines their fair value by using quotation on active market.Quoted market prices in an active market refer to the prices that are readily to be get regularly from the exchange

the broker the trade association pricing services institution etc. and they represent the actual market transaction

prices in the fair transactions. Where the financial instruments do not exist on active market the Company

determines their fair value by using valuation techniques. Valuation techniques include refers to the prices used in

recent market transactions by the parties that are familiar to the situation and are voluntary to participate in the

transaction refers to the current fair values of other essentially the same financial instruments discount cash flow

valuation option pricing models etc. At the time of valuation the Company leverages valuation techniques that

are applicable in the current circumstances and adequately supported by available data and other information

chooses the input value consistent with the characteristics of assets or liabilities considered by market participants

in transaction of relevant assets or liabilities and prefers to use the relevant observable input value. The value that

cannot be inputted is utilized when the relevant observable input value is unavailable or unfeasible to obtain.

11. Impairment of financial assets

The Company assesses impairment losses for the following financial assets: Financial assets measured at

amortized cost; Debt instruments measured at fair value through other comprehensive income (FVOCI); These

primarily include: Notes receivable; Accounts receivable; Contract assets; Other receivables; Debt investments;

Other debt investments; Long-term receivables; Additionally impairment provisions and credit impairment losses

for certain financial guarantee contracts are recognized in accordance with the accounting policies outlined below.

(1) Method for Recognizing Impairment Provisions

The Company measures expected credit losses (ECL) for the above items using either the general approach or the

simplified approach depending on their applicability and recognizes corresponding credit impairment losses.Credit loss refers to the present value of all contractual cash flows the Company is entitled to receive under the

contract discounted at the original effective interest rate minus the present value of all expected cash flows to be

collected. For purchased or originated credit-impaired (POCI) financial assets the discount rate applied is the

credit-adjusted effective interest rate.General Approach for ECL Measurement

At each reporting date the Company assesses whether the credit risk of a financial asset has increased

significantly since initial recognition:

If credit risk has increased significantly the Company measures the loss allowance at an amount equal to lifetime

ECL.If credit risk has not increased significantly the loss allowance is measured at 12-month ECL.The assessment incorporates all reasonable and supportable information including forward-looking data.For financial instruments with low credit risk at the reporting date the Company assumes no significant increase

in credit risk since initial recognition and applies the 12-month ECL approach.

(2) Criteria for Determining Significant Increase in Credit Risk

A significant increase in credit risk is presumed if the probability of default (PD) over the remaining lifetime at

the reporting date is substantially higher than the PD estimated at initial recognition. Unless exceptional

circumstances exist the Company uses changes in the 12-month PD as a reasonable proxy for lifetime PD

changes to determine whether credit risk has increased significantly.Factors considered in assessing significant increases in credit risk:

Actual or expected material deterioration in the debtor’s operating performance;

832025 Semi-Annual Report of Changchai Company Limited

Material adverse changes in the debtor’s regulatory economic or technological environment;

Significant decline in collateral value or quality of third-party guarantees/credit enhancements which may reduce

the debtor’s economic incentive to repay or affect PD;

Material changes in the debtor’s expected behavior or repayment patterns;

Changes in the Company’s credit management practices for the financial instrument.Low credit risk presumption:

At the reporting date if a financial instrument is determined to have low credit risk the Company assumes no

significant increase in credit risk since initial recognition. A financial instrument is considered low risk if:

The debtor has a strong capacity to meet short-term contractual cash flow obligations;

Adverse economic or operational conditions over a longer period would not necessarily impair the debtor’s ability

to fulfill its obligations.

(3) Portfolio-Based Assessment of Expected Credit Risk

The Company evaluates credit risk individually for financial assets with distinctly different risk profiles such as:

Receivables under dispute litigation or arbitration;

Receivables with clear evidence indicating the debtor’s inability to repay.For all other financial assets the Company groups them based on shared credit risk characteristics including:

Financial instrument type

Credit risk rating

Aging profile (e.g. current overdue segments)

(4) Accounting Treatment for Financial Asset Impairment

At period-end the Company calculates ECL for each category of financial assets:

If the ECL exceeds the current carrying amount of the impairment allowance the difference is recognized as an

impairment loss;

If the ECL is lower than the current allowance the difference is recognized as an impairment gain.

(5) Method for recognizing credit losses of various financial assets

* Bills receivable

The Company measures loss provision for bills receivable based on the amount equivalent to expected credit

losses throughout the existence period. Based on credit risk characteristics of bills receivable they are divided into

different portfolios:

Items Basis of determining the portfolio

Bank acceptance bill Acceptors are banks with low credit risks

Bank Acceptance Draft (Issued by Finance Companies) Issued by Finance Companies

Commercial acceptance bill All of commercial acceptance bill

* Accounts receivable and contract assets

With regard to accounts receivable and contract assets excluding major financing components the Company

measures loss reserve at the amount equivalent to the expected credit loss throughout the duration.With regard to accounts receivable and contract assets including major financing components the Company

chooses to always measure loss reserve at the amount equivalent to the expected credit loss throughout the

duration.

842025 Semi-Annual Report of Changchai Company Limited

In addition to accounts receivable with individual assessment of credit risks they are divided into different

portfolios based on their credit risk characteristics:

Items Basis of determining the portfolio

Credit risk characteristics portfolio Portfolio based on aging of receivables as credit risk characteristic

Related party within consolidation scope Related party within consolidation scope

a. The aging of the Company's receivables is calculated from the date of occurrence.For the portfolio the aging-based grouping method is adopted to measure expected credit losses (ECL):

Provision ratios of notes Provision ratios of Provision ratios of Provision ratios of other

Aging

Receivable (%) accounts receivable (%) contract assets (%) receivables (%)

Within 1 2.00 2.00 2.00 2.00

year

1-2 years 5.00 5.00 5.00 5.00

2-3 years 15.00 15.00 15.00 15.00

3-4 years 30.00 30.00 30.00 30.00

4-5 years 60.00 60.00 60.00 60.00

Over 5 100.00 100.00 100.00 100.00

years

b. Criteria for Recognizing Individually Assessed Bad Debt Provisions:

A financial asset is considered credit-impaired when one or more events that have a detrimental impact on the

asset's expected future cash flows occur. Observable evidence of credit impairment includes but is not limited to

the following:

The issuer or debtor is experiencing significant financial difficulties.The debtor has breached contractual terms such as defaulting or delaying payments of interest or principal.The creditor has granted concessions to the debtor (e.g. payment extensions reduced interest rates or principal

forgiveness) that would not otherwise be considered due to the debtor's financial distress.The debtor is likely to enter bankruptcy or undergo financial restructuring.The active market for the financial asset has disappeared due to the financial difficulties of the issuer or debtor.The financial asset was acquired or originated at a significant discount reflecting incurred credit losses.Credit impairment may result from a combination of factors and does not necessarily stem from a single

identifiable event.* Receivables Financing

Financial assets classified as notes receivable and accounts receivable measured at fair value through other

comprehensive income (FVTOCI) shall be presented as follows:

"Receivables financing" for portions with original maturities of one year or less from the date of acquisition;

"Other debt investments" for portions with original maturities exceeding one year from the date of acquisition.

852025 Semi-Annual Report of Changchai Company Limited

Except for individually assessed accounts receivable these financial assets are grouped into different portfolios

based on their credit risk characteristics.Item Basis of determining the portfolio

Notes receivable Bank acceptance drafts issued by banks with high credit ratings

Accounts receivable This portfolio uses the aging of receivables as the credit risk characteristic.* Other receivables

The Company measures impairment losses based on whether the credit risks of other receivables have increased

significantly since initial recognition by using the amount equivalent to expected credit losses within the next 12

months or throughout the existence period. In addition to other receivables with individual assessment of credit

risks they are divided into different portfolios based on their credit risk characteristics:

Item Basis of determining the portfolio

Aging portfolio Other receivables excluding related parties

Related party within consolidation

Other receivables from related parties within the scope of consolidation

scope

12. Inventories

(1) Classification of Inventories

Inventories mainly include raw materials materials in outside processing work in progress finished goods and

low-value consumables.

(2) Measurement Method for Issuance

All categories of inventories are purchased and received at planned costs and issued using the weighted average

method. Finished goods costs are transferred at actual costs incurred during the period while cost of sales is

recognized using the weighted average method.

(3) Inventory Counting System

The perpetual inventory system is adopted.

(4) Amortization Method for Low-Value Consumables and Packaging Materials

Low-value consumables are fully amortized upon issuance (one-time amortization method). Packaging materials

are fully amortized upon issuance (one-time amortization method).

(5) Recognition Criteria and Provision Method for Inventory Write-Down

The net realizable value (NRV) of inventory refers to the estimated selling price in the ordinary course of business

minus the estimated costs to complete selling expenses and related taxes. The determination of NRV is based on

reliable evidence while also considering the purpose of holding the inventory and the impact of events after the

reporting period.At the balance sheet date inventories are measured at the lower of cost or NRV. Based on a comprehensive

year-end physical count provisions are made for inventories that are damaged obsolete priced below cost or

otherwise unrecoverable. Write-downs are recognized for individual inventory items where cost exceeds NRV

with the loss recorded in profit or loss.Methods for Determining NRV:

862025 Semi-Annual Report of Changchai Company Limited

Finished goods merchandise and materials held for sale: NRV = Estimated selling price ? Estimated

selling expenses ? Related taxes.Materials requiring further processing: NRV = Estimated selling price of finished products ? Estimated

costs to complete ? Estimated selling expenses ? Related taxes.Partial contract pricing: If part of an inventory item has a contract price while the remainder does not

NRV is determined separately.Aggregate assessment: For inventories with similar use or produced/sold in the same region

write-downs are assessed collectively if individual valuation is impractical.High-volume low-cost items: Write-downs are assessed by inventory category.If the factors that previously caused inventory write-downs no longer exist resulting in NRV exceeding the

carrying amount the reversal (limited to the original provision amount) is recognized in profit or loss.

13. Assets held for sale

(1) Non-current Assets and Disposal Groups Held-for-sale

The Company classifies a non-current asset or disposal group as held-for-sale if its carrying amount will be

recovered principally through a sale transaction (including non-monetary asset exchanges with commercial

substance the same applies below) rather than through continuing use. The specific criteria are that all of the

following conditions are met: (i) the non-current asset or disposal group is available for immediate sale in its

present condition subject only to terms that are usual and customary for sales of such assets or disposal groups; (ii)

the Company has approved the sale plan and obtained a firm purchase commitment; and (iii) the sale is expected

to be completed within one year. A disposal group refers to a group of assets to be disposed of by sale or

otherwise together as a group in a single transaction and liabilities directly associated with those assets that will

be transferred in the transaction. If the goodwill acquired in a business combination was allocated to a

cash-generating unit or group of cash-generating units to which the disposal group belongs under Accounting

Standards for Business Enterprises No. 8—Impairment of Assets the disposal group shall include the goodwill

allocated to it.When initially measuring or remeasuring non-current assets or disposal groups classified as held-for-sale at the

balance sheet date if their carrying amount exceeds their fair value less costs to sell the carrying amount is

written down to fair value less costs to sell. The amount of the write-down is recognized as an impairment loss in

profit or loss for the current period and a provision for impairment of held-for-sale assets is made. For disposal

groups the recognized impairment loss is first allocated to reduce the carrying amount of any goodwill in the

disposal group and then to reduce the carrying amounts of the other non-current assets in the disposal group that

are subject to the measurement requirements of Accounting Standards for Business Enterprises No.

42—Non-current Assets Held-for-sale and Discontinued Operations (hereinafter referred to as the "held-for-sale

standards") on a pro-rata basis. If the fair value less costs to sell of a held-for-sale disposal group increases in

subsequent balance sheet dates the previously recognized impairment loss shall be reversed. The reversal is

limited to the cumulative impairment loss recognized for the non-current assets in the disposal group that are

subject to the measurement requirements of the held-for-sale standards after classification as held-for-sale and the

reversal amount is recognized in profit or loss for the current period. The carrying amounts of the non-current

assets in the disposal group that are subject to the measurement requirements of the held-for-sale standards

(excluding goodwill) are increased on a pro-rata basis according to their relative carrying amounts. The carrying

amount of goodwill that has been reduced as well as impairment losses recognized for non-current assets subject

to the measurement requirements of the held-for-sale standards before classification as held-for-sale shall not be

872025 Semi-Annual Report of Changchai Company Limited

reversed.Non-current assets in a disposal group classified as held-for-sale are not depreciated or amortized while interest

and other expenses on liabilities in a held-for-sale disposal group continue to be recognized.When a non-current asset or disposal group no longer meets the criteria for classification as held-for-sale the

Company ceases to classify it as held-for-sale or removes the non-current asset from the held-for-sale disposal

group and measures it at the lower of: (i) its carrying amount before classification as held-for-sale adjusted for

any depreciation amortization or impairment that would have been recognized had it not been classified as

held-for-sale; and (ii) its recoverable amount.

(2) Criteria for Identifying and Presentation Methods for Discontinued Operations

A discontinued operation is a component of the Company that either has been disposed of or is classified as

held-for-sale and meets any of the following criteria: (i) the component represents a separate major line of

business or geographical area of operations; (ii) the component is part of a single coordinated plan to dispose of a

separate major line of business or geographical area of operations; or (iii) the component is a subsidiary acquired

exclusively with a view to resale.The Company presents the relevant profit or loss from discontinued operations in the income statement and

discloses the effects of discontinued operations in the notes.

14. Long-term Equity Investments

The long-term equity investments referred to in this section are those in which the Company has control joint

control or significant influence over the investee. Long-term equity investments in which the Company does not

have control joint control or significant influence are accounted for as financial assets measured at fair value

through profit or loss. For non-trading investments the Company may elect at initial recognition to classify them

as financial assets measured at fair value through other comprehensive income as detailed in Note V.10 "Financial

Instruments."

Joint control refers to the Company's shared control over an arrangement in accordance with relevant agreements

where decisions regarding the relevant activities of the arrangement require unanimous consent from all parties

sharing control. Significant influence refers to the Company's power to participate in the financial and operating

policy decisions of the investee but not to control or jointly control those policies with other parties.

(1) Determination of Investment Cost

For long-term equity investments acquired through business combinations under common control the initial

investment cost is measured at the share of the carrying value of the acquiree's equity in the consolidated financial

statements of the ultimate controlling party on the combination date. The difference between the initial investment

cost and the sum of the cash paid the carrying value of non-cash assets transferred and liabilities assumed is

adjusted against capital reserve. If capital reserve is insufficient the remaining difference is adjusted against

retained earnings. If equity instruments are issued as consideration the initial investment cost is measured at the

share of the carrying value of the acquiree's equity in the consolidated financial statements of the ultimate

controlling party on the combination date with the total par value of the shares issued recognized as share capital.The difference between the initial investment cost and the total par value of the shares issued is adjusted against

capital reserve. If capital reserve is insufficient the remaining difference is adjusted against retained earnings. For

step-by-step acquisitions of equity in an acquiree under common control that ultimately result in a business

combination under common control the transactions are accounted for separately based on whether they

constitute a "package transaction." If they constitute a "package transaction" the transactions are treated as a

single transaction to obtain control. If not the initial investment cost on the combination date is measured at the

882025 Semi-Annual Report of Changchai Company Limited

share of the carrying value of the acquiree's equity in the consolidated financial statements of the ultimate

controlling party. The difference between the initial investment cost and the sum of the carrying value of the

long-term equity investment before the combination and the carrying value of additional consideration paid on the

combination date is adjusted against capital reserve. If capital reserve is insufficient the remaining difference is

adjusted against retained earnings. Other comprehensive income recognized for equity investments held before the

combination date under the equity method or as financial assets measured at fair value through other

comprehensive income is not accounted for at this stage.For long-term equity investments acquired through business combinations not under common control the initial

investment cost is measured at the combination cost on the acquisition date. The combination cost includes the

sum of the fair value of assets paid liabilities incurred or assumed and equity instruments issued by the acquirer.For step-by-step acquisitions of equity in an acquiree that ultimately result in a business combination not under

common control the transactions are accounted for separately based on whether they constitute a "package

transaction." If they constitute a "package transaction" the transactions are treated as a single transaction to obtain

control. If not the initial investment cost of the long-term equity investment accounted for under the cost method

is the sum of the carrying value of the previously held equity investment and the additional investment cost. Other

comprehensive income related to the previously held equity investment accounted for under the equity method is

not accounted for at this stage.Intermediary fees such as audit legal and valuation consulting services as well as other related administrative

expenses incurred by the combining or acquiring party for the business combination are recognized in profit or

loss when incurred.For other equity investments not formed through business combinations the initial measurement is based on cost

which is determined according to the actual cash purchase price paid by the Company the fair value of equity

instruments issued by the Company the value agreed in the investment contract or agreement the fair value or

original carrying value of assets exchanged in non-monetary asset exchanges or the fair value of the long-term

equity investment itself. Directly attributable costs taxes and other necessary expenses are also included in the

investment cost. For additional investments that enable the Company to exert significant influence or joint control

over the investee (but not control) the cost of the long-term equity investment is the sum of the fair value of the

previously held equity investment determined in accordance with Accounting Standards for Business Enterprises

No. 22—Recognition and Measurement of Financial Instruments and the additional investment cost.

(2) Subsequent Measurement and Profit/Loss Recognition Methods

Long-term equity investments in which the Company has joint control (excluding joint operations) or significant

influence are accounted for using the equity method. Additionally the Company's financial statements use the cost

method to account for long-term equity investments that enable the Company to control the investee.* Long-term Equity Investments Accounted for Using the Cost Method

Under the cost method long-term equity investments are measured at initial investment cost with adjustments

made for additional investments or disposals. Investment income for the period is recognized based on the

Company's share of cash dividends or profits declared by the investee excluding any dividends or profits declared

but not yet distributed at the time of investment.* Long-term Equity Investments Accounted for Using the Equity Method

Under the equity method if the initial investment cost exceeds the Company's share of the investee's identifiable

net assets at fair value at the investment date the initial investment cost is not adjusted. If the initial investment

cost is less than the Company's share of the investee's identifiable net assets at fair value at the investment date

the difference is recognized in profit or loss and the cost of the long-term equity investment is adjusted

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accordingly.Under the equity method the Company recognizes investment income and other comprehensive income based on

its share of the investee's net profit or loss and other comprehensive income adjusting the carrying value of the

long-term equity investment accordingly. The carrying value is reduced by the Company's share of profits or cash

dividends declared by the investee. For other changes in the investee's equity not included in net profit or loss

other comprehensive income or profit distribution the carrying value of the long-term equity investment is

adjusted and recognized in capital reserve. When recognizing the share of the investee's net profit or loss the

investee's net profit is adjusted based on the fair value of identifiable assets at the investment date. If the investee's

accounting policies or reporting periods differ from the Company's the investee's financial statements are adjusted

to align with the Company's policies and periods before recognizing investment income and other comprehensive

income.For transactions between the Company and its associates or joint ventures where the assets contributed or sold do

not constitute a business unrealized internal transaction profits or losses attributable to the Company are

eliminated based on the Company's share and investment income is recognized after this adjustment. However

unrealized internal transaction losses attributable to impairment losses on the transferred assets are not eliminated.If the Company contributes assets constituting a business to a joint venture or associate and obtains long-term

equity investment without control the fair value of the contributed business is used as the initial investment cost

of the new long-term equity investment. The difference between the initial investment cost and the carrying value

of the contributed business is fully recognized in profit or loss. Similarly if the Company sells assets constituting

a business to a joint venture or associate the difference between the consideration received and the carrying value

of the business is fully recognized in profit or loss. If the Company purchases assets constituting a business from

an associate or joint venture the transaction is accounted for under Accounting Standards for Business Enterprises

No. 20—Business Combinations with gains or losses fully recognized.When recognizing the share of the investee's net losses the carrying value of the long-term equity investment and

other long-term interests that substantially constitute a net investment in the investee are reduced to zero. If the

Company has an obligation to assume additional losses a provision is recognized for the estimated obligation and

included in investment losses for the period. If the investee subsequently reports net profits the Company resumes

recognizing its share of profits after offsetting unconfirmed loss shares.* Acquisition of Minority Interests

When preparing consolidated financial statements the difference between the additional long-term equity

investment from acquiring minority interests and the share of the subsidiary's net assets calculated based on the

additional Ownership percentage continuously measured from the acquisition date (or combination date) is

adjusted against capital reserve. If capital reserve is insufficient the remaining difference is adjusted against

retained earnings.* Disposal of Long-term Equity Investments

In consolidated financial statements if the parent partially disposes of its long-term equity investment in a

subsidiary without losing control the difference between the disposal proceeds and the share of the subsidiary's

net assets corresponding to the disposed long-term equity investment is recognized in equity. If the partial disposal

results in loss of control over the subsidiary the relevant accounting policy described in Note 5.6(2) "Preparation

Methods for Consolidated Financial Statements" applies.For other disposals of long-term equity investments the difference between the carrying value of the disposed

equity and the actual proceeds is recognized in profit or loss.For long-term equity investments accounted for under the equity method if the remaining equity after disposal

902025 Semi-Annual Report of Changchai Company Limited

continues to be accounted for under the equity method the portion of other comprehensive income previously

recognized in equity is accounted for on the same basis as if the investee had directly disposed of the related assets

or liabilities. Changes in equity recognized due to other changes in the investee's equity (excluding net profit or

loss other comprehensive income and profit distribution) are proportionally reclassified to profit or loss.For long-term equity investments accounted for under the cost method if the remaining equity after disposal

continues to be accounted for under the cost method other comprehensive income recognized before obtaining

control under the equity method or financial instrument standards is accounted for on the same basis as if the

investee had directly disposed of the related assets or liabilities and proportionally reclassified to profit or loss.Changes in equity recognized under the equity method due to other changes in the investee's equity (excluding net

profit or loss other comprehensive income and profit distribution) are proportionally reclassified to profit or loss.If the Company loses control of an investee due to partial disposal of equity investments in its separate financial

statements the remaining equity that enables the Company to exert joint control or significant influence over the

investee is reclassified to the equity method with adjustments made as if the equity method had been applied from

the initial acquisition. If the remaining equity does not enable joint control or significant influence it is

reclassified under the financial instrument standards with the difference between fair value and carrying value at

the date of losing control recognized in profit or loss. Other comprehensive income recognized before obtaining

control under the equity method or financial instrument standards is accounted for on the same basis as if the

investee had directly disposed of the related assets or liabilities. Changes in equity recognized under the equity

method due to other changes in the investee's equity (excluding net profit or loss other comprehensive income

and profit distribution) are reclassified to profit or loss at the date of losing control. For remaining equity

accounted for under the equity method other comprehensive income and other equity changes are proportionally

reclassified. For remaining equity reclassified under the financial instrument standards other comprehensive

income and other equity changes are fully reclassified.If the Company loses joint control or significant influence over an investee due to partial disposal of equity

investments the remaining equity is reclassified under the financial instrument standards with the difference

between fair value and carrying value at the date of losing joint control or significant influence recognized in

profit or loss. Other comprehensive income recognized under the equity method is accounted for on the same

basis as if the investee had directly disposed of the related assets or liabilities when the equity method is

discontinued. Changes in equity recognized due to other changes in the investee's equity (excluding net profit or

loss other comprehensive income and profit distribution) are fully reclassified to investment income when the

equity method is discontinued.If the Company disposes of its equity investments in a subsidiary step-by-step through multiple transactions until

control is lost and these transactions constitute a "package transaction" they are treated as a single transaction to

dispose of the subsidiary's equity investments and lose control. Before losing control the difference between the

disposal proceeds and the carrying value of the disposed equity corresponding to the long-term equity investment

is initially recognized in other comprehensive income and reclassified to profit or loss at the time control is lost.

15. Investment Properties

Investment properties refer to properties held to earn rental income or for capital appreciation or both. These

include leased land use rights land use rights held for future appreciation and transfer and leased buildings.Investment properties are initially measured at cost. Subsequent expenditures related to investment properties are

capitalized if it is probable that future economic benefits associated with the property will flow to the Company

and the cost can be measured reliably. All other subsequent expenditures are recognized in profit or loss as

912025 Semi-Annual Report of Changchai Company Limited

incurred.The Company applies the cost model for subsequent measurement of investment properties and depreciates or

amortizes them using policies consistent with those applied to buildings or land use rights.The impairment testing method and provision method for investment properties are detailed in Note V.20

"Impairment of Long-term Assets."

When owner-occupied properties or inventories are converted to investment properties or vice versa the carrying

amount prior to conversion is used as the post-conversion carrying amount.When the use of an investment property changes to owner-occupied the property is reclassified as fixed assets or

intangible assets from the date of change. When the use of owner-occupied property changes to rental or capital

appreciation purposes the fixed asset or intangible asset is reclassified as an investment property from the date of

change.For conversions:

To investment properties measured using the cost model the pre-conversion carrying amount is used as the

post-conversion carrying amount.To investment properties measured using the fair value model the fair value at the conversion date is used as the

post-conversion carrying amount.An investment property is derecognized when disposed of or permanently withdrawn from use with no expected

future economic benefits. Gains or losses from the sale transfer retirement or damage of investment properties

are calculated as the disposal proceeds minus the carrying amount and related taxes/expenses and are recognized

in profit or loss.

16. Fixed Assets

(1) Recognition Criteria for Fixed Assets

Fixed assets are tangible assets held for the production of goods provision of services rental or administrative

purposes with a useful life exceeding one accounting year. Fixed assets are recognized only when it is probable

that related economic benefits will flow to the Company and their costs can be reliably measured. Fixed assets are

initially measured at cost taking into account the effects of estimated abandonment costs.

(2) Depreciation Methods for Various Categories of Fixed Assets

Depreciation of fixed assets is calculated on a straight-line basis over their useful lives commencing from the

month following the date when the assets are ready for intended use. The useful lives estimated residual values

and annual depreciation rates for each category of fixed assets are as follows:

Estimated useful life

Category Depreciation method Depreciation rate (%)

(years)

Houses and buildings Straight-line method 20-40 2.50-5

Machinery equipment Straight-line method 6-15 6.67-16.67

Transportation equipment Straight-line method 5-10 10-20

Other equipment Straight-line method 5-10 10-20

(2) Estimated residual value refers to the amount that the Company currently expects to obtain from disposal of

the asset after deducting estimated disposal expenses assuming the fixed asset has reached the end of its expected

922025 Semi-Annual Report of Changchai Company Limited

useful life and is in the expected condition at that time.

(3) The impairment testing method and provision method for fixed assets are detailed in Note V.20 "Impairment of

Long-term Assets."

(4) Other Disclosures

Subsequent expenditures related to fixed assets are capitalized if it is probable that future economic benefits

associated with the fixed asset will flow to the Company and the cost can be measured reliably. The carrying

amount of replaced parts is derecognized. All other subsequent expenditures are recognized in profit or loss as

incurred.A fixed asset is derecognized when it is disposed of or when no future economic benefits are expected from its use

or disposal. Gains or losses arising from the sale transfer retirement or damage of fixed assets are calculated as

the disposal proceeds minus the carrying amount and related taxes/expenses and are recognized in profit or loss.The Company reviews the useful lives estimated residual values and depreciation methods of fixed assets at least

at each financial year-end. Changes in estimates are accounted for as changes in accounting estimates.

17. Construction in progress

The Company classifies construction in progress into two types: self-constructed and contractor-constructed.Construction in progress is transferred to fixed assets when the project is completed and reaches the intended

usable condition. The criteria for determining the intended usable condition shall meet any of the following

circumstances:

The physical construction (including installation) of the fixed asset has been fully completed or

substantially completed;

Trial production or test operation has been conducted and the results indicate that the asset can operate

normally or stably produce qualified products or the test operation results show that it can operate or

function normally;

The amount of expenditures on the construction of the fixed asset is minimal or almost no longer

occurs;

The constructed or acquired fixed asset has met or substantially met the design or contract requirements.When construction in progress reaches the intended usable condition it is transferred to fixed assets at the actual

project cost. For projects that have reached the intended usable condition but have not yet completed final

settlement they are first transferred to fixed assets at an estimated value. After final settlement is completed the

original provisional value is adjusted to the actual cost but no adjustment is made to previously calculated

depreciation.The impairment testing method and provision method for construction in progress are detailed in Note V.20

"Impairment of Long-term Assets."

18. Borrowing Costs

Borrowing costs include interest expenses on borrowings amortization of discounts or premiums ancillary costs

and exchange differences arising from foreign currency borrowings. Borrowing costs directly attributable to the

acquisition construction or production of a qualifying asset are capitalized when:

Expenditures for the asset have been incurred;

Borrowing costs have been incurred; and

932025 Semi-Annual Report of Changchai Company Limited

Activities necessary to prepare the asset for its intended use or sale have commenced.Capitalization ceases when the qualifying asset reaches its intended usable or saleable condition. All other

borrowing costs are recognized as expenses in the period in which they are incurred.For specific borrowings the amount to be capitalized is the actual interest expense incurred during the period less

any interest income earned on the unused portion of the borrowings deposited in banks or from temporary

investments.For general borrowings the amount to be capitalized is determined by multiplying the weighted average of

accumulated expenditures on the qualifying asset in excess of specific borrowings by the capitalization rate

applicable to the general borrowings. The capitalization rate is calculated based on the weighted average interest

rate of the general borrowings.During the capitalization period exchange differences on foreign currency specific borrowings are fully

capitalized while exchange differences on foreign currency general borrowings are recognized in profit or loss.A qualifying asset refers to assets such as fixed assets investment properties and inventories that require a

substantial period of time for their acquisition construction or production before they are ready for their intended

use or sale.If the acquisition construction or production of a qualifying asset is interrupted abnormally and the interruption

lasts for more than three consecutive months the capitalization of borrowing costs shall be suspended until the

acquisition construction or production activities recommence.A qualifying asset refers to assets such as fixed assets investment properties and inventories that require a

substantial period of time for their acquisition construction or production before they are ready for their intended

use or sale.

19. Intangible Assets

(1) Intangible Assets

Intangible assets refer to identifiable non-monetary assets without physical form that are owned or controlled by

the Company.Intangible assets are initially measured at cost. Expenditures related to intangible assets are capitalized if it is

probable that future economic benefits will flow to the Company and the costs can be reliably measured. All other

expenditures are recognized as expenses when incurred.Land use rights acquired are normally accounted for as intangible assets. For self-constructed buildings such as

factories the related land use rights expenditures and building construction costs are accounted for as intangible

assets and fixed assets separately. For purchased buildings the purchase price is allocated between the land use

rights and buildings. If the allocation cannot be made reasonably the entire amount is accounted for as fixed

assets.Intangible assets with finite useful lives are amortized on a straight-line basis over their estimated useful lives

from the date when they are available for use based on the original cost less estimated residual value and

accumulated impairment losses. Intangible assets with indefinite useful lives are not amortized.At the end of each period the useful lives and amortization methods of intangible assets with finite useful lives

are reviewed. Any changes are treated as changes in accounting estimates. In addition the useful lives of

intangible assets with indefinite useful lives are reviewed. If evidence indicates that the period of economic

benefits from the intangible asset is foreseeable its useful life is estimated and amortized according to the policy

for intangible assets with finite useful lives.

942025 Semi-Annual Report of Changchai Company Limited

(2) Research and Development Expenditures

The Company classifies internal research and development project expenditures into research phase expenditures

and development phase expenditures.Expenditures in the research phase are recognized as expenses when incurred.The Company's R&D expenditures include materials consumed labor and service costs amortization of R&D

equipment amortization of other intangible assets and fixed assets used in the development process and utilities

expenses.The Company's specific criteria for distinguishing between research phase and development phase expenditures:

The research phase refers to the stage of original and planned investigation undertaken to gain new scientific or

technical knowledge. The development phase refers to the stage of applying research findings or other knowledge

to a plan or design to produce new or substantially improved materials devices products etc. before commercial

production or use.Development phase expenditures are recognized as intangible assets only when all the following conditions are

met. Otherwise they are recognized as expenses when incurred:

* Technical feasibility of completing the intangible asset for use or sale;

* Intention to complete and use or sell the intangible asset;

* Ability to generate economic benefits including demonstrating a market for products using the intangible asset

or for the intangible asset itself or its usefulness for internal use;

* Availability of adequate technical financial and other resources to complete development and to use or sell the

intangible asset;

* Ability to reliably measure expenditures attributable to the development phase.The Company's specific conditions for capitalizing development phase expenditures: technical feasibility of

completion; intention to complete and use/sell; ability to generate economic benefits; availability of adequate

resources; and reliable measurement of attributable expenditures.If research phase and development phase expenditures cannot be distinguished all R&D expenditures are

recognized as expenses when incurred.

(3) Impairment Testing Method and Provision Method for Intangible Assets

The impairment testing method and provision method for intangible assets are detailed in Note V.20 "Impairment

of Long-term Assets."

20. Long-term Asset Impairment

For non-current non-financial assets such as fixed assets construction in progress intangible assets with finite

useful lives right-of-use assets investment properties measured at cost model and long-term equity investments

in subsidiaries joint ventures and associates the Company assesses at each balance sheet date whether there is

any indication of impairment. If any such indication exists the recoverable amount of the asset is estimated to

determine the impairment loss. Goodwill intangible assets with indefinite useful lives and intangible assets not

yet available for use are tested for impairment annually regardless of whether there is any indication of

impairment.When the recoverable amount is less than the carrying amount an impairment loss is recognized for the difference.The recoverable amount is the higher of an asset's fair value less costs of disposal and its value in use. Fair value

is determined based on the price in the sales agreement under fair transactions; if there is no sales agreement but

952025 Semi-Annual Report of Changchai Company Limited

an active market exists fair value is determined based on the asset's bid price; if neither exists fair value is

estimated based on the best available information. Costs of disposal include legal fees related taxes

transportation costs and other direct costs to bring the asset to a saleable condition. Value in use is determined by

discounting the estimated future cash flows expected from the asset's continuing use and ultimate disposal at an

appropriate discount rate. Impairment losses are calculated and recognized for individual assets. If it is difficult to

estimate the recoverable amount of an individual asset the recoverable amount is determined for the

cash-generating unit to which the asset belongs. A cash-generating unit is the smallest identifiable group of assets

that generates cash inflows independently.For goodwill presented separately in the financial statements the carrying amount of goodwill is allocated to

cash-generating units or groups of cash-generating units expected to benefit from the synergies of the business

combination when performing impairment tests. If the recoverable amount of a cash-generating unit or group of

units including allocated goodwill is less than its carrying amount the impairment loss is recognized. The

impairment loss is first allocated to reduce the carrying amount of goodwill allocated to the unit or group then to

other assets of the unit or group pro rata based on their carrying amounts.Once recognized impairment losses for the above assets are not reversed in subsequent periods.

21. Long-term Deferred Expenses

Long-term deferred expenses refer to expenses incurred but to be amortized over more than one year in the current

and future periods. The Company measures long-term deferred expenses at actual cost and amortizes them evenly

over the expected benefit period. For long-term deferred expenses that will not benefit future accounting periods

their carrying amounts are fully recognized in profit or loss when determined.

22. Contract Liabilities

Contract liabilities represent the Company's obligation to transfer goods or services to customers for which

consideration has been received or is receivable. If the customer has paid consideration or the Company has

obtained an unconditional right to payment before transferring goods or services the Company presents the

amount received or receivable as a contract liability at the earlier of when payment is actually received or when

payment is due. Contract assets and liabilities under the same contract are presented net while those under

different contracts are not offset.

23. Employee Benefits

The Company's employee benefits mainly include short-term employee benefits post-employment benefits and

termination benefits.Short-term benefits mainly include wages bonuses allowances and subsidies employee welfare expenses

medical insurance maternity insurance work injury insurance housing provident fund labor union funds and

employee education funds and non-monetary benefits. The Company recognizes actual short-term employee

benefits as liabilities during the accounting periods when employees render services and charges them to profit or

loss or relevant asset costs. Non-monetary benefits are measured at fair value.Post-employment benefits mainly include basic pension insurance and unemployment insurance.Post-employment benefit plans include defined contribution plans. For defined contribution plans the

corresponding payable amounts are charged to relevant asset costs or profit or loss when incurred.

962025 Semi-Annual Report of Changchai Company Limited

Termination benefits are recognized as employee benefit liabilities when the Company can no longer unilaterally

withdraw the termination benefits offered under the redundancy plan or proposal or when the Company

recognizes costs related to restructuring involving termination benefits whichever is earlier and charged to profit

or loss. However termination benefits expected to be paid more than twelve months after the reporting period are

treated as other long-term employee benefits.Internal retirement plans are accounted for using the same principles as termination benefits above. The Company

recognizes salaries and social insurance contributions to be paid to internally retired employees from the date they

stop rendering services to the normal retirement date as profit or loss (termination benefits) when the recognition

criteria for provisions are met.Other long-term employee benefits provided by the Company are accounted for as defined contribution plans if

they meet the criteria; otherwise they are accounted for as defined benefit plans.

24. Provisions

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past

event it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable

estimate can be made of the amount of the obligation.Provisions are initially measured at the best estimate of the expenditure required to settle the present obligation

and the carrying amounts are reviewed at each balance sheet date.If all or part of the expenditure required to settle a provision is expected to be reimbursed by a third party the

reimbursement is recognized as a separate asset when its receipt is virtually certain and the amount recognized

does not exceed the carrying amount of the provision.

25. Share-based Payment

(1) Accounting Treatment for Share-based Payment

Share-based payment refers to transactions in which equity instruments are granted or liabilities based on equity

instruments are assumed in exchange for services provided by employees or other parties. Share-based payments

are classified into equity-settled share-based payments and cash-settled share-based payments.* Equity-settled Share-based Payment

For equity-settled share-based payments to obtain employee services the fair value of the equity instruments

granted is measured at the grant date.If the vesting of the equity instruments is conditional upon completing a specified service period or meeting

performance conditions the fair value is recognized over the vesting period on a straight-line basis based on

the best estimate of the number of instruments expected to vest with corresponding increases in capital

reserves.If the equity instruments vest immediately upon grant the fair value is recognized as an expense on the grant

date with a corresponding increase in capital reserves.At each balance sheet date during the vesting period the Company revises its estimate of the number of equity

instruments expected to vest based on the latest information (e.g. changes in the number of employees eligible for

vesting). Any adjustments are recognized in the current period’s costs or expenses with corresponding

adjustments to capital reserves.For equity-settled share-based payments to obtain services from non-employees:

972025 Semi-Annual Report of Changchai Company Limited

If the fair value of the services received can be reliably measured the expense is recognized based on the fair

value of the services at the acquisition date.If the fair value of the services cannot be reliably measured but the fair value of the equity instruments can the

expense is recognized based on the fair value of the equity instruments at the service acquisition date with a

corresponding increase in shareholders’ equity.* Cash-settled Share-based Payment

Cash-settled share-based payments are measured at the fair value of the liability incurred determined based on

shares or other equity instruments.If the instruments vest immediately upon grant the liability is recognized on the grant date as an expense.If vesting is conditional upon completing a service period or meeting performance conditions the expense is

recognized over the vesting period based on the best estimate of the number of instruments expected to vest

with a corresponding increase in liabilities.At each balance sheet date until settlement the liability is remeasured at fair value with changes recognized in

profit or loss.

(2) Accounting for Modifications or Terminations of Share-based Payment Plans

If a modification increases the fair value of the equity instruments granted the incremental fair value (i.e.the difference between the fair value before and after modification) is recognized as additional service cost.If a modification reduces the total fair value or is otherwise unfavorable to employees the original

accounting treatment continues as if the modification never occurred unless the equity instruments are

partially or fully canceled.If granted equity instruments are canceled during the vesting period the remaining unvested amount is

recognized immediately in profit or loss as an accelerated vesting expense with a corresponding adjustment

to capital reserves. If employees or other parties fail to meet non-vesting conditions (despite having the

option to do so) the grant is treated as canceled.

(3) Accounting for Share-based Payments Involving the Company’s shareholders or Controlling Parties

For share-based payment transactions between the Company and its shareholders or controlling parties where one

party (the settlement entity) is within the Company’s consolidated scope and the other (the service recipient) is

outside:

Consolidated Financial Statements Treatment:

If the settlement entity settles using its own equity instruments the transaction is treated as an equity-settled

share-based payment. Otherwise it is treated as a cash-settled share-based payment.If the settlement entity is an investor in the service recipient it recognizes a long-term equity investment at

the grant-date fair value of the equity instruments or liability with a corresponding increase in capital

reserves (other capital reserves) or liabilities.If the service recipient has no settlement obligation or grants its own equity instruments to employees the

transaction is treated as equity-settled. If the service recipient has a settlement obligation and grants

instruments other than its own equity the transaction is treated as cash-settled.Individual Financial Statements Treatment:

For transactions between entities within the Company’s consolidated scope where the service recipient and

settlement entity differ each entity accounts for the transaction in its individual financial statements following the

above principles.

982025 Semi-Annual Report of Changchai Company Limited

26. Other Financial Instruments Such as Preference Shares and Perpetual Bonds

(1) Classification of Perpetual Bonds and Preference Shares

Financial instruments such as perpetual bonds and preference shares issued by the Company shall be classified as

equity instruments only if they meet all of the following conditions:

* The instrument does not impose any contractual obligation to deliver cash or other financial assets to another

party or to exchange financial assets or liabilities under potentially unfavorable conditions;

* If settlement may or must occur using the Company’s own equity instruments in the future:

For non-derivative instruments there is no contractual obligation to deliver a variable number of the

Company’s own equity instruments for settlement;

For derivative instruments settlement can only be made by exchanging a fixed number of the Company’s

own equity instruments for a fixed amount of cash or other financial assets.Financial instruments issued by the Company that do not meet the above conditions shall be classified as financial

liabilities.For compound financial instruments issued by the Company:

The liability component is measured at fair value and recognized as a liability.The residual amount (total proceeds received minus the fair value of the liability component) is recognized as

"other equity instruments."

Transaction costs are allocated between the liability and equity components in proportion to their respective

shares of the total issuance proceeds.

(2) Accounting Treatment for Perpetual Bonds and Preference Shares

For perpetual bonds and preference shares classified as financial liabilities:

Interest dividends gains/losses and gains/losses from redemption or refinancing are recognized in profit or loss

except for borrowing costs eligible for capitalization (see Note III.18 "Borrowing Costs").For perpetual bonds and preference shares classified as equity instruments:

Issuance (including refinancing) repurchase sale or cancellation is treated as a change in equity with related

transaction costs deducted from equity.Distributions to holders of equity instruments are treated as profit distributions.The Company does not recognize changes in the fair value of equity instruments.

27. Revenue

The Company recognizes revenue when control of the relevant goods is transferred to the customer provided all

the following conditions are met: the contract has been approved by all parties who are committed to fulfilling

their respective obligations; the contract clearly specifies the rights and obligations of each party regarding the

goods or services to be transferred; the contract contains clear payment terms related to the goods to be transferred;

the contract has commercial substance meaning its performance will change the risk timing or amount of the

Company's future cash flows; and the consideration to which the Company is entitled for transferring goods to the

customer is probable of collection.At contract inception the Company identifies the distinct performance obligations in the contract and allocates the

transaction price to each performance obligation based on the relative stand-alone selling prices of the goods or

services promised. In determining the transaction price the Company considers the effects of variable

992025 Semi-Annual Report of Changchai Company Limited

consideration significant financing components in the contract non-cash consideration and consideration payable

to customers.For each performance obligation the Company recognizes revenue over time by measuring progress toward

complete satisfaction of that performance obligation if any of the following criteria are met: the customer

simultaneously receives and consumes the benefits as the Company performs; the customer controls the asset as it

is created or enhanced; or the asset has no alternative use and the Company has an enforceable right to payment

for performance completed to date. Progress is measured using an input method appropriate to the nature of the

goods transferred. When progress cannot be reasonably measured revenue is recognized to the extent of costs

incurred that are expected to be recoverable until progress can be reasonably measured.If none of the above criteria are met revenue is recognized at the point in time when control of the goods is

transferred to the customer. In assessing whether control has transferred the Company considers indicators

including: the Company's present right to payment; transfer of legal title; physical possession; transfer of

significant risks and rewards of Ownership; customer acceptance; and other indicators of control transfer.For contracts with variable consideration the Company estimates the amount using either the expected value or

most likely amount method. The transaction price including variable consideration does not exceed the amount for

which it is highly probable that cumulative revenue recognized will not reverse when uncertainty is resolved. At

each reporting date the Company reassesses estimates of variable consideration included in the transaction price.Consideration payable to a customer is deducted from the transaction price unless it is for distinct goods or

services with the reduction recognized at the later of revenue recognition or payment (or commitment to pay)

date.The Company assesses whether it is a principal or agent based on whether it controls the goods or services before

transfer to the customer. As principal revenue is recognized at the gross amount of consideration; as agent

revenue is recognized at the net amount retained after paying other parties.The Company's specific revenue recognition methods are as follows:

Sales contracts typically contain a single performance obligation to transfer goods satisfied at a point in time.Domestic sales revenue is recognized when: goods are delivered and accepted per contract; payment is received or

collectability is probable; significant risks/rewards are transferred; and legal title passes.Export sales revenue is recognized when: goods are cleared through customs with bill of lading obtained; payment

is received or collectability is probable; significant risks/rewards are transferred; and legal title passes.Interest income is recognized based on time and effective interest rate.

28. Contract Costs

Contract costs comprise costs to fulfill and costs to obtain contracts.Costs to fulfill are capitalized as assets if:

(1) Directly related to a contract (labor materials overhead client-reimbursable costs);

(2) Enhance resources for future performance; and

(3) Probable of recovery.

Incremental costs to obtain contracts are capitalized if probable of recovery unless the amortization period would

be one year or less.Capitalized contract costs are amortized consistently with revenue recognition.Impairment losses are recognized when carrying amount exceeds the higher of:

1002025 Semi-Annual Report of Changchai Company Limited

(1) Expected remaining consideration; and

(2) Estimated costs to complete transfer.

Reversals cannot exceed the carrying amount that would have existed without impairment.

29. Government Grants

Government grants refer to monetary or non-monetary assets obtained by the Company from the government

without compensation excluding capital contributions made by the government as an investor with corresponding

Ownership rights. Government grants are classified into asset-related government grants and income-related

government grants. Grants obtained for the acquisition or construction of long-term assets through other means

are defined as asset-related government grants; other government grants are defined as income-related

government grants. If government documents do not explicitly specify the grant recipient the following methods

are used to classify the grants:

(1) For government documents that specify particular projects classification is based on the relative proportion of

expenditures forming assets versus expenses in the project budget with this proportion reviewed at each balance

sheet date and adjusted if necessary;

(2) For government documents that only provide general descriptions of usage without specifying particular

projects the grants are treated as income-related government grants.Government grants in the form of monetary assets are measured at the amount received or receivable.Government grants in the form of non-monetary assets are measured at fair value; if fair value cannot be reliably

determined they are measured at nominal amount. Government grants measured at nominal amount are directly

recognized in current period profit or loss.The Company generally recognizes and measures government grants based on the actual amount received.However at period-end if there is conclusive evidence that the Company meets the relevant conditions of fiscal

support policies and expects to receive fiscal support funds the grants are measured at the receivable amount.Government grants measured at receivable amount must simultaneously meet the following conditions:

(1) The receivable grant amount has been confirmed by the competent government authority or can be reasonably

estimated based on officially released fiscal fund management regulations with no significant uncertainty

expected in the amount;

(2) The grants are based on fiscal support projects and corresponding fiscal fund management regulations

officially released by local finance departments in accordance with the "Government Information Disclosure

Regulations" and such regulations must be universally applicable (available to any enterprise meeting the

specified conditions) rather than specifically designed for particular enterprises;

(3) The relevant grant approval documents clearly specify the payment timeline and the payment is supported by

corresponding fiscal budgets thereby reasonably ensuring receipt within the stipulated period.Asset-related government grants are recognized as deferred income and systematically amortized into current

period profit or loss over the useful life of the relevant assets. Income-related government grants used to

compensate for future related costs expenses or losses are recognized as deferred income and amortized into

current period profit or loss when the related costs expenses or losses are recognized; those used to compensate

for already incurred related costs expenses or losses are directly recognized in current period profit or loss.Government grants containing both asset-related and income-related components are accounted for separately by

component; if the components cannot be reasonably distinguished the entire grant is classified as income-related.Government grants related to the Company's ordinary activities are recognized in other income or offset against

1012025 Semi-Annual Report of Changchai Company Limited

related costs and expenses based on the economic substance of the transaction; grants unrelated to ordinary

activities are recognized in non-operating income or expenses.When recognized government grants need to be returned any remaining deferred income balance is first

offset with any excess recognized in current period profit or loss; in other cases the return is directly recognized

in current period profit or loss.

30. Deferred Tax Assets/Deferred Tax Liabilities

Deferred tax assets or deferred tax liabilities are recognized based on the differences between the carrying

amounts and tax bases of assets and liabilities (including items not recognized as assets or liabilities but having

determinable tax bases under tax laws) calculated using the applicable tax rates expected to apply when the assets

are recovered or liabilities are settled.Deferred tax assets are recognized only to the extent that it is probable that taxable profit will be available against

which the deductible temporary differences can be utilized. At the balance sheet date if there is conclusive

evidence indicating sufficient taxable profit will likely be available in future periods to utilize deductible

temporary differences previously unrecognized deferred tax assets are recognized.At each balance sheet date the carrying amounts of deferred tax assets are reviewed. If it is no longer probable

that sufficient taxable profit will be available to realize the benefit of the deferred tax asset the carrying amount is

reduced. The reduction is reversed when it becomes probable that sufficient taxable profit will be available.The Company's current tax and deferred tax are recognized as income tax expense or income in profit or loss

except for income taxes arising from: business combinations; and transactions or events recognized directly in

equity.When the Company has a legally enforceable right to settle current tax assets and liabilities on a net basis and

intends either to settle on a net basis or to realize the asset and settle the liability simultaneously current tax assets

and current tax liabilities are presented net.

31. Leases

(1) The Company as a Lessee

The Company's leased assets are primarily buildings.At the commencement date of the lease term the Company recognizes right-of-use assets and lease liabilities for

leases other than short-term leases and leases of low-value assets and recognizes depreciation expenses and

interest expenses separately during the lease term.For short-term leases and leases of low-value assets the Company recognizes lease payments on a straight-line

basis as expenses in the respective periods of the lease term.* Right-of-use Assets

Right-of-use assets represent the lessee's right to use the leased asset during the lease term. At the commencement

date of the lease term right-of-use assets are initially measured at cost which includes:

The initial measurement amount of the lease liability;

Lease payments made at or before the commencement date less any lease incentives received;

Initial direct costs incurred by the lessee;

Estimated costs to be incurred by the lessee for dismantling and removing the leased asset restoring the site where

the asset is located or returning the asset to the condition required by the lease terms.

1022025 Semi-Annual Report of Changchai Company Limited

The Company depreciates right-of-use assets using the straight-line method by category. For assets where

Ownership is reasonably certain to be obtained at the end of the lease term depreciation is calculated over the

remaining useful life of the leased asset. For assets where Ownership cannot be reasonably determined

depreciation is calculated over the shorter of the lease term or the remaining useful life of the leased asset.The Company determines whether right-of-use assets are impaired and accounts for them in accordance with the

relevant provisions of Accounting Standards for Business Enterprises No. 8—Impairment of Assets.* Lease Liabilities

Lease liabilities are initially measured at the present value of lease payments not yet paid at the commencement

date of the lease term. Lease payments include:

Fixed payments (including in-substance fixed payments) less any lease incentives;

Variable lease payments that depend on an index or rate;

Amounts expected to be payable under residual value guarantees provided by the lessee;

The exercise price of purchase options if the lessee is reasonably certain to exercise the option;

Payments required to exercise termination options if the lease term reflects the lessee exercising the termination

option.The Company uses the interest rate implicit in the lease as the discount rate; if this cannot be reasonably

determined the Company's incremental borrowing rate is used. Interest expenses on lease liabilities are calculated

using a fixed periodic interest rate and recorded in financial expenses. The periodic interest rate is the discount

rate or revised discount rate used by the Company.Variable lease payments not included in the measurement of lease liabilities are recognized in profit or loss when

incurred.When the Company's assessment of renewal options termination options or purchase options changes the lease

liability is remeasured at the present value of the revised lease payments using the revised discount rate with

corresponding adjustments to the carrying amount of the right-of-use asset. When in-substance fixed payments

expected payments under residual value guarantees or variable lease payments dependent on an index or rate

change the lease liability is remeasured at the present value of the revised lease payments using the original

discount rate with corresponding adjustments to the carrying amount of the right-of-use asset.* Short-term Leases and Leases of Low-value Assets

For short-term leases (leases with a term of 12 months or less at commencement date) and leases of low-value

assets (value below RMB 2000) the Company applies a simplified approach by not recognizing right-of-use

assets or lease liabilities and instead recognizes lease payments on a straight-line basis or another systematic and

rational basis as expenses in the respective periods of the lease term.

(2) The Company as a Lessor

* Operating Leases

The Company recognizes lease receipts from operating leases as rental income on a straight-line basis over the

lease term. Variable lease payments not included in lease receipts are recognized in profit or loss when incurred.* Finance Leases

At the commencement date of the lease term the Company recognizes finance lease receivables and derecognizes

the leased assets. Finance lease receivables are initially measured at the net investment in the lease (the sum of the

unguaranteed residual value and the present value of lease receipts not yet received at the commencement date

discounted using the interest rate implicit in the lease) with interest income recognized during the lease term

using a fixed periodic interest rate. Variable lease payments not included in the measurement of the net investment

1032025 Semi-Annual Report of Changchai Company Limited

in the lease are recognized in profit or loss when incurred.

32. Methods for Determining Materiality Thresholds and Basis for Selection

√Applicable □Not applicable

Disclosure Matters Involving Materiality Materiality Threshold Determination Methods and Selection

Judgment Criteria Basis

Significant individually assessed receivables Receivables with ending balance exceeding RMB

with specific bad debt provisions 1000000

Construction in progress projects either transferred to fixed

Material construction in progress

assets or with ending balance exceeding RMB 3000000

Significant accounts payable aged over one Accounts payable with ending balance exceeding RMB

year or past due 1000000

Advance receipts with ending balance exceeding RMB

Material advance receipts aged over one year

1000000

Contract liabilities with ending balance exceeding RMB

Material contract liabilities aged over one year

1000000

Other payables with ending balance exceeding RMB

Material other payables aged over one year

1000000

Significant cash receipts related to investing Individual investing activities with cash inflows exceeding

activities RMB 3000000

Significant cash payments related to investing Individual investing activities with cash outflows exceeding

activities RMB 3000000

Subsidiaries whose total assets exceed 5% of consolidated

Material non-wholly owned subsidiaries

total assets

33. Other Significant Accounting Policies and Accounting Estimates

Debt Restructuring

(1) Timing of Recognizing Debt Restructuring Gains and Losses

The Company may derecognize the relevant receivables and payables and recognize gains and losses related to

debt restructuring only on the debt restructuring completion date when the derecognition conditions for financial

assets and financial liabilities are met. The debt restructuring completion date refers to the date when the board of

directors and shareholders' meeting resolutions have been approved the debt restructuring agreement has been

signed or the court ruling has been issued the relevant assets have been transferred to the creditor the debt has

been converted into capital or the modified debt terms have commenced execution.

1042025 Semi-Annual Report of Changchai Company Limited

For debt restructuring through asset settlement the recognition point is when the relevant assets have been

delivered and the Ownership transfer procedures have been completed. For debt restructuring through conversion

of debt into equity the recognition point is when the industrial and commercial registration procedures or the

equity registration with the registration authority have been completed. For debt restructuring through

modification of debt terms the recognition point is when it is determined that the terms can be performed and

execution has commenced. Debt restructuring negotiations that commenced during the reporting period but were

completed after the balance sheet date are not treated as post-balance-sheet events.

(2) Accounting Treatment by the Creditor

When the Company acts as a creditor the difference between the fair value of the relinquished claim and its

carrying amount is recognized in profit or loss.

(3) Accounting Treatment by the Debtor

A. For debt restructuring through asset settlement the relevant assets and the settled debt are derecognized when

the derecognition conditions are met. The difference between the carrying amount of the settled debt and the

carrying amount of the transferred assets is recognized in profit or loss.B. For debt restructuring through conversion of debt into equity instruments the settled debt is derecognized when

the derecognition conditions are met. The difference between the carrying amount of the settled debt and the

amount determined based on the fair value of the equity instruments is recognized in profit or loss.C. For debt restructuring through modification of other terms the restructured debt is re-recognized and

remeasured. The difference between the remeasured debt and the original debt is recognized in profit or loss.D. For debt restructuring through settlement with multiple assets or a combination of methods the equity

instruments and restructured debt are recognized and measured in accordance with the Accounting Standards for

Business Enterprises. The difference between the carrying amount of the settled debt and the sum of the carrying

amounts of the transferred assets and the recognized amounts of the equity instruments and restructured debt is

recognized in profit or loss.

34. Changes in Main Accounting Policies and Estimates

(1) Change of Accounting Policies

√ Applicable □ Not applicable

(2) Changes in Accounting Estimates

□Applicable √Not applicable

(3) Adjustments to Opening Balance Sheet Items for Initial Application of New Accounting Standards

Effective 2025

□Applicable √Not applicable

1052025 Semi-Annual Report of Changchai Company Limited

VI. Taxation

1. Main Taxes and Tax Rate

Category of taxes Tax rate

Output VAT is calculated on taxable revenue at rates of 13% 9% 6%

VAT and 5% with VAT payable being the balance after deducting input VAT

credits allowable in the current period.Urban maintenance and Payment is calculated and made in accordance with local tax regulations

construction tax applicable to each tax-paying unit.Enterprise income tax See the table below for details.Notes of the disclosure situation of the taxpaying bodies with different enterprises income tax rates

Name Income tax rate

Changchai Company Limited 15%

Changchai Wanzhou Diesel Engine Co. Ltd. 15%

Changzhou Changchai Benniu Diesel Engine Fittings Co. Ltd. 25%

Changzhou Horizon Investment Co. Ltd. 25%

Changzhou Fuji Changchai Robin Gasoline Engine Co. Ltd. 15%

Jiangsu Changchai Machinery Co. Ltd. 25%

Changzhou Xingsheng Real Estate Management Co. Ltd. 5%

Zhenjiang Siyang Diesel Engine Manufacturing Co. Ltd. 15%

2. Tax Preference

(1) On November 6 2024 the Company renewed its High-Tech Enterprise Certification and continued to enjoy a

preferential corporate income tax rate of 15% during the reporting period.

(2) Controlled subsidiary Changchai Wanzhou Diesel Engine Co. Ltd. qualifies for the 15% reduced corporate

income tax rate from January 1 2011 to December 31 2030 under the Notice on Tax Policies for the

Implementation of the Western Development Strategy (jointly issued by the Ministry of Finance General

Administration of Customs and State Taxation Administration) and the Announcement on Extending Western

Development Enterprise Income Tax Policies (Ministry of Finance Announcement [2020] No. 23).

(3) On November 6 2023 wholly-owned subsidiary Changzhou Fuji Changchai Robin Gasoline Engine Co. Ltd.

renewed its High-Tech Enterprise Certification and applied the 15% preferential tax rate during the reporting

period.

(4) Wholly-owned subsidiary Changzhou Xingsheng Property Management Co. Ltd. as a qualified small and

low-profit enterprise applied the 5% reduced tax rate for such entities during the reporting period.

1062025 Semi-Annual Report of Changchai Company Limited

(5) Subsidiary Zhenjiang Siyang Diesel Engine Manufacturing Co. Ltd. obtained its High-Tech Enterprise

Certification on December 12 2022 and maintained the 15% preferential tax rate during the reporting period.VII. Notes to Major Items in the Consolidated Financial Statements of the Company

1. Monetary Assets

Unit: RMB

Item Ending balance Beginning balance

Cash on hand 112615.57 84482.59

Bank deposits 753342442.15 933972475.61

Other monetary assets 104903403.70 129643534.39

Total 858358461.42 1063700492.59

Including: Total amount of funds

deposited overseas

Total amount of funds with usage

restrictions due to mortgage 144207257.20 171018607.75

pledge freezing or other reasons

Additional Notes:

At the end of the reporting period other monetary funds included:

Accrued interest on time deposits: RMB 312507.76

Restricted funds comprising:

Bill guarantees: RMB 102991363.01

Guarantee bonds and performance bonds: RMB 1903386.43

Time deposits: RMB 39312507.76

2. Trading Financial Assets

Unit: RMB

Item Ending balance Beginning balance

Financial assets at fair value

through profit or loss 420234569.30 303667459.65

Of which:

Stocks 67168729.00 52598990.00

Financial products 353065840.30 251068469.65

Of which:

Total 420234569.30 303667459.65

1072025 Semi-Annual Report of Changchai Company Limited

3. Notes Receivable

(1) Notes Receivable Listed by Category

Unit: RMB

Item Ending balance Beginning balance

Bank acceptance bill 144816296.81 318814017.13

Total 144816296.81 318814017.13

(2) Disclosure by Withdrawal Methods for Bad Debts

Unit: RMB

Ending balance Beginning balance

Carrying amount Bad debt Bad debtprovision Carrying amount provision

Category Carryi Carry

Withdr ng Withdr ing

Amou Propor Amou awal value Amoun Proport Amoun awal value

nt tion nt propor t ion t proport

tion ion

Notes

receivable for

which bad

debt 0.00 0.00% 0.00 0.00% 0.00 0.00 0.00% 0.00 0.00% 0.00

provision

separately

accrued

Of which:

Notes

receivable for

which bad 14481 100.00 14481 31881 100.00 3188debt 6296. % 0 0.00% 6296. 4017.1 % 0.00 0.00% 1401provision 81 81 3 7.13

accrued by

group

Of which:

Bank 14481 14481 31881

acceptance 6296. 100.00 0 0.00% 6296. 4017.1 100.00

3188

% % 0.00 0.00% 1401bills 81 81 3 7.13

14481

Total 6296. 100.00

14481318813188

%00.00%6296.4017.1

100.00

%0.000.00%1401818137.13

The allowance for doubtful accounts on notes receivable was recognized based on the general expected credit loss

model.□Applicable √Not applicable

1082025 Semi-Annual Report of Changchai Company Limited

(3) Notes Receivable Pledged by the Company at the Period-end: None

(4) Notes Receivable which been Had Endorsed by the Company or had been Discounted but had not Due

on the Balance Sheet Date at the Period-end

Unit: RMB

Amount of recognition termination Amount of not terminated

Item

at the period-end recognition at the period-end

Bank acceptance bill 85332514.94

Total 85332514.94

(5) Notes Transferred to Accounts Receivable Due to Non-performance by Issuers at Period-end

As of the period-end there were no notes transferred to accounts receivable due to non-performance by issuers.

4. Accounts Receivable

(1) Disclosure by Aging

Unit: RMB

Aging Ending carrying amount Beginning carrying amount

Within 1 year (including 1 year) 1263684510.89 441388545.87

1 to 2 years 8053442.86 6801120.23

2 to 3 years 2139949.67 936696.44

Over 3 years 139096251.41 140104147.16

3 to 4 years 4156657.52 4100421.27

4 to 5 years 5117397.97 4863744.65

Over 5 years 129822195.92 131139981.24

Total 1412974154.83 589230509.70

(2) Disclosure by Withdrawal Methods for Bad Debts

Unit: RMB

Ending balance Beginning balance

Carrying Bad debt Carrying Bad debt

amount provision amount provision

Category CarryiWithd Withd Carryinng

Amou Propo Amou rawal g valuevalue Amou Propor Amou rawal

nt rtion nt propo nt tion nt propor

rtion tion

1092025 Semi-Annual Report of Changchai Company Limited

Accounts

receivable

withdrawal of 2538 2538 2685 26856

100.0100.0

bad debt 6678. 1.80% 6678. 0.00 6788. 4.56% 788.6 0.00

0%0%

provision 05 05 69 9

separately

accrued

Of which:

Accounts

receivable

138713511252562311811

withdrawal of 98.20 95.44 21.00 444254

587429899.74%457573729480.

bad debt % % % 240.02

76.782.5884.201.0199

provision by

group

Of which:

Accounts

receivable for

which bad debt 1387 1351 1252 5623 11811

98.2095.4421.00444254

provision 5874 2989 9.74% 4575 7372 9480.%%%240.02

accrued by 76.78 2.58 84.20 1.01 99

credit risk

features group

141216051252589214497

444254

Total 9741 —— 1657 —— 4575 3050 —— 6269. ——

240.02

54.830.6384.209.7068

Individually Assessed Bad Debt Provisions: RMB 25386678.05 including significant impairment items of RMB

23609074.17. The details are presented below:

Unit: RMB

Beginning balance Ending balance

Withdraw

Name ReasonCarrying Bad debt Carrying Bad debt al

for

amount provision amount provision proportio

withdraw

n

Customer 1 5972101.90 5972101.90 5972101.90 5972101.90 100.00% Difficultto recover

Customer 2 4592679.05 4592679.05 4592679.05 4592679.05 100.00% Difficultto recover

Customer 3 2797123.26 2797123.26 2797123.26 2797123.26 100.00% Difficultto recover

Customer 4 2584805.83 2584805.83 2584805.83 2584805.83 100.00% Difficultto recover

1102025 Semi-Annual Report of Changchai Company Limited

Customer 5 2025880.18 2025880.18 2025880.18 2025880.18 100.00% Difficultto recover

Customer 6 1902326.58 1902326.58 1902326.58 1902326.58 100.00% Difficultto recover

Customer 7 1759397.30 1759397.30 1759397.30 1759397.30 100.00% Difficultto recover

Customer 8 1564000.07 1564000.07 1564000.07 1564000.07 100.00% Difficultto recover

Customer 9 1470110.64 1470110.64 0.00 0.00 —— Difficultto recover

Customer 10 410760.00 410760.00 410760.00 410760.00 100.00% Difficultto recover

Total 25079184.81 25079184.81 23609074.17 23609074.17 -- --

Withdrawal of bad debt provision by group: Provision for bad debts by credit risk characteristic group

Unit: RMB

Ending balance

Name

Carrying amount Bad debt provision Withdrawal proportion

Within 1 year 1263684510.89 25273690.22 2.00%

1 to 2 years 8053442.86 402672.14 5.00%

2 to 3 years 2139949.67 320992.45 15.00%

3 to 4 years 3614394.86 1084318.46 30.00%

4 to 5 years 5117397.97 3070438.78 60.00%

Over 5 years 104977780.53 104977780.53 100.00%

Total 1387587476.78 135129892.58 --

The allowance for doubtful accounts on accounts receivable was recognized based on the general expected credit

loss model:

□Applicable √Not applicable

(3) Bad Debt Provision Withdrawal Reversed or Recovered in the Current Period

Withdrawal of bad debt provision:

Unit: RMB

Changes in the current period

Beginning

Category Reversed or Ending balancebalance Withdrawal Verification Others

recovered

Bad debt

provision

26856788.691470110.6425386678.05

separately

accrued

1112025 Semi-Annual Report of Changchai Company Limited

Withdrawal

of bad debt

118119480.9917010411.59135129892.58

provision by

group

Total 144976269.68 17010411.59 1470110.64 160516570.63

(4) Accounts Receivable Written-off in Current Period

Unit: RMB

Item Written-off amount

Accounts receivable with actual verification 1470110.64

Of which the verification of significant accounts receivable:

Unit: RMB

Nature of the Arising fromName of the accounts Verified amount Reason for

Verification

entity verification procedures

related-party

receivable performed transactions ornot

Accounts The court-ruled Minutes of the

Customer 1 receivable for 1470110.64 termination of

goods bankruptcy

Executive No

liquidation. Office

Total 1470110.64

(5) Top 5 of the Ending Balance of the Accounts Receivable and the Contract Assets Collected according to

Arrears Party

Unit: RMB

Ending balance

Proportion to of bad debt

Name of the Ending balance Ending balance

Ending balance total ending provision of

of accounts of contract of accounts balance of accountsentity receivable assets receivable and accounts receivable andcontract assets receivable and impairment

contract assets provision for

contract assets

Customer 1 574387933.74 0.00 574387933.74 40.65% 11487758.68

Customer 2 245184220.00 0.00 245184220.00 17.35% 5172394.61

Customer 3 68402423.71 0.00 68402423.71 4.84% 1368048.47

Customer 4 48905454.18 0.00 48905454.18 3.46% 978109.09

Customer 5 44809044.30 0.00 44809044.30 3.17% 896180.89

Total 981689075.93 0.00 981689075.93 69.47% 19902491.74

1122025 Semi-Annual Report of Changchai Company Limited

5. Accounts Receivable Financing

(1) Accounts Receivable Financing Listed by Category

Unit: RMB

Item Ending balance Beginning balance

Bank acceptance bills 39513968.25 223261002.76

Total 39513968.25 223261002.76

(2) Notes Receivable Pledged by the Company at the Period-end: None

(3) Accounts receivable financing which had been endorsed by the Company or had discounted but had not

due at the period-end

Unit: RMB

Amount of recognition termination Amount of not terminated

Category

at the period-end recognition at the period-end

Bank acceptance bill 491724648.34

Total 491724648.34

(4) Changes in Receivables Financing and Fair Value Fluctuations During the Reporting Period

Unit: RMB

Beginning balance Changes in the current period Ending balance

Item FairFair Value Fair Value

Cost Cost Cost Value

Changes Changes

Changes

Notes

223261002.76-183747034.5139513968.25

Receivable

6. Other Receivables

Unit: RMB

Item Ending balance Beginning balance

Interest receivable 0.00 0.00

Dividend receivable 5016960.00 7165080.00

Other receivables 4163878.09 2682361.82

Total 9180838.09 9847441.82

1132025 Semi-Annual Report of Changchai Company Limited

（1）Dividend receivable

Unit: RMB

Projects (or Investee Entities) Ending balance Beginning balance

Jiangsu Bank 5016960.00 7165080.00

Total 5016960.00 7165080.00

（2）Other Receivables

1) Other Receivables Classified by Accounts Nature

Unit: RMB

Nature Ending carrying value Beginning carrying value

Margin and cash pledge 1300.00 1300.00

Intercourse funds 24460949.84 23292830.56

Petty cash and borrowings by

1229119.81865253.08

employees

Other 14168017.12 14177743.14

Total 39859386.77 38337126.78

2) Disclosure by Aging

Unit: RMB

Aging Ending carrying amount Beginning carrying amount

Within 1 year (including 1 year) 3995234.65 2514999.73

1 to 2 years 115661.98 103639.66

2 to 3 years 364826.07 354590.84

Over 3 years 35383664.07 35363896.55

3 to 4 years 291173.68 281647.36

4 to 5 years 40541.20 30300.00

Over 5 years 35051949.19 35051949.19

Total 39859386.77 38337126.78

3) Disclosure by Withdrawal Methods for Bad Debts

√Applicable □Not applicable

Provision for bad debts based on general model of expected credit losses

Unit: RMB

1142025 Semi-Annual Report of Changchai Company Limited

First stage Second stage Third stage

Expected loss in Expected loss in

Bad debt provision Expected credit the duration (credit the duration Total

loss of the next

impairment not (credit impairment

12 months

occurred) occurred)

Balance of 1 January

50296.5944388.9835560079.3935654764.96

2025

Balance of 1 January

2025 in the Current

Period

--Transfer to Second

stage

-- Transfer to Third stage

-- Reverse to Second

stage

-- Reverse to First stage

Withdrawal of the

40743.7240743.72

Current Period

Reversal of the Current

Period

Write-offs of the Current

Period

Verification of the

Current Period

Other changes

Balance of 30 June 2025 91040.31 44388.98 35560079.39 35695508.68

The basis for the division of each stage and the withdrawal proportion of bad debt provision: None

Changes of carrying amount with significant changes in amount of loss provision in the current period

□Applicable √Not applicable

4) Bad Debt Provision Withdrawn Reversed or Recovered in the Current Period

Withdrawal of bad debt provision:

Unit: RMB

Changes in the current period

Beginning Ending

Category

balance Reversed or Charged-off OtherWithdrawal balance

recovered /Written-off s

1152025 Semi-Annual Report of Changchai Company Limited

Bad debt

provision

5615869.555615869.55

separately

accrued

Withdrawal of

bad debt

30038895.4140743.7230079639.13

provision by

group

Total 35654764.96 40743.72 35695508.68

5）Write-off of Other Receivables During the Reporting Period: None

6) Top 5 of the Ending Balance of Other Receivables Collected according to the Arrears Party

Unit: RMB

Proportion to

total ending Ending

Name of the entity Nature Ending balance Aging balance of balance of bad

other debt provision

receivables %

Changzhou Compressor Intercourse

2940000.00 Over 5 years 7.38% 2940000.00

Factory funds

Changchai Group Imp. Intercourse

2853188.02 Over 5 years 7.16% 2853188.02

& Exp. Co. Ltd. funds

Changzhou New

Intercourse

District Accounting 1626483.25 Over 5 years 4.08% 1626483.25

funds

Center

Changchai Group Intercourse

1128676.16 Over 5 years 2.83% 1128676.16

Settlement Center funds

Chuangye Diesel Intercourse

1000000.00 Over 5 years 2.51% 1000000.00

Engine Repair Factory funds

Total 9548347.43 23.96% 9548347.43

7. Prepayments

(1) Prepayment Listed by Aging Analysis

Unit: RMB

Ending balance Beginning balance

Aging

Amount Proportion Amount Proportion

1162025 Semi-Annual Report of Changchai Company Limited

Within 1 year 12575782.99 91.50% 11874660.61 93.32%

1 to 2 years 557791.77 4.06% 355228.45 2.79%

2 to 3 years 591751.85 4.31% 489219.64 3.84%

Over 3 years 18873.12 0.14% 6850.00 0.05%

Total 13744199.73 -- 12725958.70 --

(2) Top 5 Prepayment in Ending Balance Collected according to the Prepayment Target

Unit: RMB

Name of the entity Ending balance Proportion of Total PrepaymentBalance at Period-End (%)

Suppliers 1 7817369.19 56.88%

Suppliers 2 686364.94 4.99%

Suppliers 3 672454.04 4.89%

Suppliers 4 553229.00 4.03%

Suppliers 5 377033.06 2.74%

Total 10106450.23 73.53%

8. Inventories

Whether the Company needs to comply with the disclosure requirements for the real estate industry: No

(1) Category of Inventory

Unit: RMB

Ending balance Beginning balance

Depreciation Depreciation

reserves of reserves of

inventories inventories

Item or orCarrying Carrying Carrying Carrying

impairment impairment

amount value amount value

provision for provision for

contract contract

performance performance

costs costs

Raw 227059659. 9276544.07 217783115. 210549278. 9266290.45 201282988.materials 84 77 77 32

1172025 Semi-Annual Report of Changchai Company Limited

Materials

processed on 17687468.0 0.00 17687468.0 13598683.12 2 3 0.00

13598683.1

3

commission

Goods in 76560884.2 3708580.55 72852303.7 79357978.3 4128144.66 75229833.6

process 7 2 4 8

Finished 285159910. 31001488.6 254158422. 559878239. 32330091.1 527548148.goods 70 9 01 54 6 38

Low priced

and easily 1486523.64 0.00 1486523.64 1542344.91 0.00 1542344.91

worn articles

Total 607954446. 43986613.3 563967833. 864926524. 45724526.2 819201998.47 1 16 69 7 42

(2) Falling Price Reserves of Inventory and Impairment Reserves for Contract Performance Costs

Unit: RMB

Increase Decrease

Beginning

Item Transferred-ba Other Ending balancebalance Withdrawal Others ck or

s

charged-off

Raw materials 9266290.45 196786.24 186532.62 9276544.07

Goods in

4128144.66419564.113708580.55

process

Finished goods 32330091.16 811192.63 2139795.10 31001488.69

Total 45724526.27 1007978.87 2745891.83 43986613.31

9. Other Current Assets

Unit: RMB

Item Ending balance Beginning balance

The VAT tax credits 19196570.08 51823671.46

Prepaid corporate income tax 418076.10 2705816.46

Prepaid expense 62132.52 75533.75

Total 19676778.70 54605021.67

10. Other Equity Instrument Investment

Unit: RMB

Item Beginnin Gains Losses Accumul Accumul Dividend Ending Reasong balance recorded recorded ated gains ated income balance for

1182025 Semi-Annual Report of Changchai Company Limited

in other in other recorded losses recognize assigning

comprehe comprehe in other recorded d in to

nsive nsive comprehe in other current measure

income in income in nsive comprehe year in fair

the the income in nsive value of

current current the income in which

period period current the changes

period current included

period other

comprehe

nsive

income

Non-tradi Non-tradi

ng equity 9411200 7850800 8350580 5016960 1019628 ng equity

investme 58.72 0.00 58.72 .00 058.72 investme

nt nt

94112007850800835058050169601019628

Total

58.720.0058.72.00058.72

Non-trading equity instrument investment disclosed by category

Unit: RMB

Reason for

assigning to

Amount of measure by Reason for

Dividend other fair value of

other

Item income Accumulated Accumulated comprehensi which

comprehensi

recognized e gains e losses ve transferred changes are

ve income

to retained included to transferred to

earnings other retained

comprehensi earnings

ve income

Changzhou

Synergetic

Innovation Non-trading

248637058.

Private equity

72

Equity Fund investment

(Limited

Partnership)

Non-trading

Foton Motor 349811000.equity

Co. Ltd. 00

investment

Bank of Non-trading

236610000.

Jiangsu Co. 5016960.00 equity

00

Ltd. investment

11. Long-term Equity Investment

Unit: RMB

1192025 Semi-Annual Report of Changchai Company Limited

Increase/decrease

Begin Gain Endin

Begin ning or Adjus Cash Withd Endin g

ning balan loss tment bonus rawal g balan

Invest balan ce of Addit Redu recog

of Chan or of balan ce of

ees ce depre ional ced nized

other

comp ges in profit depre

ce depre

(carry ciatio invest invest under other annou ciatio Other (carry ciatio

ing n ment ment the rehen equity nced n ing n

value) reserv equity sive to reserv value) reserv

es metho incom issue es es

d e

I. Joint venture

Subto

tal 0.00 0.00 0.00 0.00

II. Associated enterprises

Beijin

g

Tsing

hua

Indust

rial

44184418

Invest 0.00 0.00

2.502.50

ment

Mana

geme

nt

Co.Ltd.Subto 4418 4418

tal 0.00 0.002.50 2.50

44184418

Total 0.00 0.00

2.502.50

The recoverable amount is determined based on the net amount of the fair value minus disposal costs

□ Applicable √ Not applicable

The recoverable amount is determined by the present value of the forecasted future cash flow.□ Applicable √ Not applicable

The reason for the discrepancy between the foregoing information and the information used in the impairment

tests in prior years or external information: Not applicable

The reason for the discrepancy between the information used in the Company's impairment tests in prior years and

the actual situation of those years: Not applicable

12. Other Non-current Financial Assets

Unit: RMB

1202025 Semi-Annual Report of Changchai Company Limited

Item Ending balance Beginning balance

Financial Assets at Fair Value Through Profit or

Loss (Including: Equity Instrument Investments) 377869217.49 377869217.49

Total 377869217.49 377869217.49

13. Investment Property

(1) Investment Property Adopting the Cost Measurement Mode

√ Applicable □ Not applicable

Unit: RMB

Item Houses and buildings Total

I. Original carrying value

1. Beginning balance 93077479.52 93077479.52

2. Increased amount of the period

(1) Outsourcing

(2) Transfer from inventories/fixed

assets/construction in progress

(3) Enterprise combination increase

3. Decreased amount of the period

(1) Disposal

(2) Other transfer

4. Ending balance 93077479.52 93077479.52

II. Accumulative depreciation and

accumulative amortization

1. Beginning balance 55336634.97 55336634.97

2. Increased amount of the period 1048356.78 1048356.78

(1) Withdrawal or amortization 1048356.78 1048356.78

3. Decreased amount of the period

(1) Disposal

(2) Other transfer

4. Ending balance 56384991.75 56384991.75

III. Depreciation reserves

1. Beginning balance

2. Increased amount of the period

(1) Withdrawal

3. Decreased amount of the period

1212025 Semi-Annual Report of Changchai Company Limited

(1) Disposal

(2) Other transfer

4. Ending balance

IV. Carrying value

1. Ending carrying value 36692487.77 36692487.77

2. Beginning carrying value 37740844.55 37740844.55

The recoverable amount is determined based on the net amount of the fair value minus disposal costs

□ Applicable √ Not applicable

The recoverable amount is determined by the present value of the forecasted future cash flow.□ Applicable √ Not applicable

The reason for the discrepancy between the foregoing information and the information used in the impairment

tests in prior years or external information: Not applicable

The reason for the discrepancy between the information used in the Company's impairment tests in prior years and

the actual situation of those years: Not applicable

14. Fixed Assets

Unit: RMB

Item Ending balance Beginning balance

Fixed assets 577527877.32 615414505.40

Disposal of fixed assets 1430563.00 0.00

Total 578958440.32 615414505.40

(1) List of Fixed Assets

Unit: RMB

Houses and Machinery Transportation Other

Item Total

buildings equipment equipment equipment

I. Original

carrying value

1. Beginning

642502995.831119970538.2216042052.1062228077.381840743663.53

balance

2. Increased

amount of the 90458.72 101547.80 48672.57 792034.50 1032713.59

period

(1) Purchase 61946.91 48672.57 792034.50 902653.98

1222025 Semi-Annual Report of Changchai Company Limited

(2) Transfer

from

90458.7239600.89130059.61

construction in

progress

(3) Enterprise

combination

increase

3. Decreased

amount of the 53218825.87 13000.00 24910.85 53256736.72

period

(1) Disposal or

53218825.8713000.0024910.8553256736.72

scrap

4. Ending

642593454.551066853260.1516077724.6762995201.031788519640.40

balance

II. Accumulated

Depreciation

1. Beginning

307135363.74863454931.2310774847.0243666795.441225031937.43

balance

2. Increased

amount of the 9960597.51 24780063.27 661454.95 2855756.32 38257872.05

period

(1) Withdraw 9960597.51 24780063.27 661454.95 2855756.32 38257872.05

3. Decreased

amount of the 0.00 52557356.25 13000.00 24910.85 52595267.10

period

(1) Disposal or

52557356.2513000.0024910.8552595267.10

scrap

4. Ending

317095961.25835677638.2511423301.9746497640.911210694542.38

balance

III. Impairment

Provision

1. Beginning

297220.70297220.70

balance

2. Increased

amount of the 0.00

period

(1) Withdraw 0.00

1232025 Semi-Annual Report of Changchai Company Limited

3. Decreased

amount of the 0.00

period

(1) Disposal or

0.00

scrap

4. Ending

297220.70297220.70

balance

IV. Carrying

value

1. Ending

325497493.30230878401.204654422.7016497560.12577527877.32

carrying value

2. Beginning

335367632.09256218386.295267205.0818561281.94615414505.40

carrying value

(2) List of Temporarily Idle Fixed Assets

Unit: RMB

Original Accumulative Depreciation

Item Carrying value Note

carrying value depreciation reserves

Houses and

59157112.1653291756.215865355.95

buildings

Transportation Refer to note 1

15654026.8614471987.161182039.70

equipment

Other equipment 55205.86 42500.63 12705.23

Machinery

309407.5012186.80297220.70

equipment

Note 1: Due to public interest requirements for urban redevelopment the People's Government of Xinbei District

Changzhou has decided to expropriate buildings within the scope of the Sanjing Subdistrict Foundry Plant and

surrounding area urban renewal project (Phase I). The expropriation area covers the Company's former foundry

base where some fixed assets of the original foundry base remain idle.

(3) Disposal of Fixed Assets

Unit: RMB

Item Ending balance Beginning balance

Compensation for Tenants of

Street-Facing Shops Along Metro 1430563.00 0.00

Line 5 Due to Demolition

Total 1430563.00 0.00

1242025 Semi-Annual Report of Changchai Company Limited

15. Construction in Progress

Unit: RMB

Item Ending balance Beginning balance

Construction in progress 5332994.97 3376866.69

Engineering materials 0.00 0.00

Total 5332994.97 3376866.69

(1) List of Construction in Progress

Unit: RMB

Ending balance Beginning balance

Item Carrying Depreciatio Carrying Carrying Depreciati Carrying

amount n reserves value amount on reserves value

Technology

Center

Innovation

597345.00597345.00898041.60898041.60

Capability

Construction

Project

Equipment

Installation

4735649.974735649.972478825.092478825.09

Pending

Project

Miscellaneous

Engineering 5332994.97 5332994.97 3376866.69 3376866.69

Works

(2) Significant Changes in Construction-in-Progress Projects During the Current Period

Unit: RMB

Transfers to

Beginning Transfers to Ending Sources of

Item New additions intangible

balance fixed assets balance Funds

assets

Equipme

nt Equity

2478825.092386884.49130059.614735649.97

Installatio Funds

n Works

Total 2478825.09 2386884.49 130059.61 4735649.97 --

1252025 Semi-Annual Report of Changchai Company Limited

（3）Impairment Test of Construction in Progress

□Applicable √Not applicable

16. Intangible Assets

(1) List of Intangible Assets

Unit: RMB

Trademark use

Item Land use right Software License fee Total

right

I. Original carrying

value

1. Beginning balance 205187775.71 21573652.88 5538000.00 1650973.47 233950402.06

2. Increased amount of

the period

(1) Purchase

(2) Internal R&D

(3) Business

combination increase

3. Decreased amount

of the period

(1) Disposal

4. Ending balance 205187775.71 21573652.88 5538000.00 1650973.47 233950402.06

II. Accumulated

amortization

1. Beginning balance 67655245.52 18451335.78 4348933.06 689101.84 91144616.20

2. Increased amount of

2090911.68655417.29274399.9782830.663103559.60

the period

(1) Withdrawal 2090911.68 655417.29 274399.97 82830.66 3103559.60

3. Decreased amount

of the period

(1) Disposal

4. Ending balance 69746157.20 19106753.07 4623333.03 771932.50 94248175.80

III. Depreciation

reserves

1. Beginning balance

2. Increased amount of

the period

1262025 Semi-Annual Report of Changchai Company Limited

(1) Withdrawal

3. Decreased amount

of the period

(1) Disposal

4. Ending balance

IV. Carrying value

1. Ending carrying

135441618.512466899.81914666.97879040.97139702226.26

value

2. Beginning carrying

137532530.193122317.101189066.94961871.63142805785.86

value

17. Long-term Prepaid Expenses

Unit: RMB

Beginning Amortized Ending

Item Increase Decrease

balance amount balance

Trademark renewal fee 276383.95 205967.03 49982.25 432368.73

External power line

2388173.11159211.562228961.55

access project

Total 2664557.06 205967.03 209193.81 2661330.28

18. Deferred Income Tax Assets/Deferred Income Tax Liabilities

(1) Deferred Income Tax Assets that Had not Been Off-set

Unit: RMB

Ending balance Beginning balance

Item Deductible DeductibleDeferred income Deferred income

temporary temporary

tax assets tax assets

difference difference

Bad debt provision 29469410.60 4420411.59 12526884.12 1949082.99

Provisions 61700.00 9255.00 61700.00 9255.00

Advance tax paid

on pre-collected

demolition 30000000.00 4500000.00 30000000.00 4500000.00

compensation

Total 59531110.60 8929666.59 42588584.12 6458337.99

1272025 Semi-Annual Report of Changchai Company Limited

(2) Deferred Income Tax Liabilities Had Not Been Offset

Unit: RMB

Ending balance Beginning balance

Item Taxable temporary Deferred income Taxable temporary Deferred income

difference tax liabilities difference tax liabilities

Assets evaluation

appreciation for

business

combination not 5308792.40 796318.85 5308792.40 796318.85

under the same

control

Changes of fair

value of other

equity instrument 1101483992.45 169053955.53 1008689955.98 153653533.48

investments

Total 1106792784.85 169850274.38 1013998748.38 154449852.33

(3) List of Unrecognized Deferred Income Tax Assets

Unit: RMB

Item Ending balance Beginning balance

Deductible temporary differences 210729282.02 214123380.22

Deductible tax losses 94504005.70 94504005.70

Total 305233287.72 308627385.92

(4) Deductible Losses of Unrecognized Deferred Income Tax Assets will be due in the Following Years

Unit: RMB

Years Ending balance Beginning balance

20294463227.364463227.36

20301489106.181489106.18

20311470853.201470853.20

203218875202.0327506664.76

203350340092.0150340092.01

20349234062.199234062.19

2035991941.62

Total 86864484.59 94504005.70

1282025 Semi-Annual Report of Changchai Company Limited

19. Other Non-current Assets

Unit: RMB

Ending balance Beginning balance

Item Depreciati DepreciatiCarrying Carrying

on Carrying value on Carrying value

amount amount

reserves reserves

Prepayments

for the

acquisition 1448809.45 1448809.45 1448809.45 1448809.45

of long-term

assets

Assets held

for disposal 2924287.85 2924287.85 2924287.85 2924287.85

Total 4373097.30 4373097.30 4373097.30 4373097.30

20. Assets with Restricted Ownership or Right of Use

Unit: RMB

Ending balance Beginning balance

Item Carrying Carrying Type of Status of Carrying Carrying Type of Status of

amount value restriction restriction amount value restriction restriction

Bank

Bank

Acceptan

Acceptan

ce Bill

ce Bill

Guarante

Guarante

es Letter

es Letter

of

of

Guarante

Guarante

e

Occupied e Occupied

Monetary 1442072 1442072 1710186 1710186 Deposits

as cash Deposits as cash

assets 57.20 57.20 07.75 07.75 Performa

deposit Performa deposit

nce

nce

Bonds

Bonds

Time

Time

Deposits

Deposits

and

and

Accrued

Accrued

Interest

Interest

etc.Notes Payment At the

receivabl 7087820 7087820 Obligatio end of the

e -- 0.00 0.00 ns for reporting

outstandi Discounte period

1292025 Semi-Annual Report of Changchai Company Limited

ng d Bills the

discounte Before Company

d notes Maturity had

discounte

d bills

that

remained

outstandi

ng as of

the

balance

sheet date

At the

At the

end of the

end of the

reporting

reporting

period

period

the

Notes Payment Payment the

Company

receivabl Obligatio Obligatio Company

had

e -- ns for ns for had

8533251 8533251 endorsed 1638581 1638581

outstandi Transferr Transferr endorsed

4.94 4.94 bills that 35.20 35.20

ng ed Bills ed Bills bills that

remained

transferre Before Before remained

outstandi

d notes Maturity Maturity outstandi

ng as of

ng as of

the

the

balance

balance

sheet

sheet date

date.

2295397229539740575494057549

Total

72.1472.1442.9542.95

21. Short-term Borrowings

(1) Category of Short-term Borrowings

Unit: RMB

Item Ending balance Beginning balance

Bank acceptance bills with

0.0094471787.41

financing nature

Total 0.00 94471787.41

1302025 Semi-Annual Report of Changchai Company Limited

22. Notes Payable

Unit: RMB

Item Ending balance Beginning balance

Bank acceptance bill 631444212.92 491643629.88

Total 631444212.92 491643629.88

At the end of the current period there were no notes payable due and not paid.

23. Accounts Payable

(1) List of Accounts Payable

Unit: RMB

Item Ending balance Beginning balance

Payment for goods 716427585.20 690733575.75

Total 716427585.20 690733575.75

(2) Significant Accounts Payable Aging over One Year or Overdue

Unit: RMB

Item Ending balance Unpaid/ Un-carried-over reason

Payables for goods and services 75525725.11 Not yet settled

Payables for construction works

and equipment 6611150.27 Not yet settled

Total 82136875.38

24. Other Payables

Unit: RMB

Item Ending balance Beginning balance

Interest payable 0.00 0.00

Dividends payable 3891433.83 3891433.83

Other payables 126240298.01 113845527.69

Total 130131731.84 117736961.52

(1) Dividends Payable

Unit: RMB

Item Ending balance Beginning balance

Ordinary share dividends 3243179.97 3243179.97

1312025 Semi-Annual Report of Changchai Company Limited

Dividends for non-controlling

648253.86648253.86

shareholders

Total 3891433.83 3891433.83

The reason for non-payment for over one year: Not received by shareholders yet.

(2) Other Payables

1) Other Payables Listed by Nature of Account

Unit: RMB

Item Ending balance Beginning balance

Margin & cash pledged 2635426.32 2595993.50

Intercompany balances 7250284.54 14989385.23

Personal advances and receivables 685263.25 647001.19

Sales discounts and product

98296760.6678652203.86

warranties

Other 17372563.24 16960943.91

Total 126240298.01 113845527.69

2) Significant Other Payables Aging over One Year

The significant other payables with aging over one year at period-end mainly consist of unsettled temporary

receipts and outstanding payables.

25. Advances from customers

(1) List of Advances from customers

Unit: RMB

Item Ending balance Beginning balance

Advance rental receipts 222448.06 183376.84

Advance receipts for land

30000000.0030000000.00

compensation

Total 30222448.06 30183376.84

26. Contract liabilities

Unit: RMB

Item Ending balance Beginning balance

Advance receipts from contracts 23469340.44 31640879.59

1322025 Semi-Annual Report of Changchai Company Limited

Total 23469340.44 31640879.59

27. Employee benefits payable

(1) List of employee benefits payable

Unit: RMB

Item Beginning balance Increase Decrease Ending balance

I. Short-term salary 48792254.98 149916121.34 186829552.69 11878823.63

II.Post-employment

16563731.0216563731.02

benefit-defined

contribution plans

III. Termination

benefits

IV. Current portion

of other benefits

Total 48792254.98 166479852.36 203393283.71 11878823.63

(2) List of Short-term Salary

Unit: RMB

Beginning

Item Increase Decrease Ending balance

balance

1. Salary bonus

40690742.07126058062.82162971494.173777310.72

allowance subsidy

2.Employee welfare 1592.74 1532653.23 1532653.23 1592.74

3. Social insurance 9190596.41 9190596.41

Of which: Medical

7639627.527639627.52

insurance premiums

Work-related injury

764992.76764992.76

insurance

Maternity insurance 785976.13 785976.13

4. Housing fund 10791951.00 10791951.00

5.Labor union budget

and employee education 8099920.17 2342857.88 2342857.88 8099920.17

budget

1332025 Semi-Annual Report of Changchai Company Limited

6. Short-term absence

with salary

7. Short-term profit

sharing scheme

Total 48792254.98 149916121.34 186829552.69 11878823.63

(3) List of Defined Contribution Plans

Unit: RMB

Beginning

Item Increase Decrease Ending balance

balance

1. Basic pension

16054596.2016054596.20

benefits

2. Unemployment

509134.82509134.82

insurance

3. Enterprise annuities

Total 16563731.02 16563731.02

28. Taxes Payable

Unit: RMB

Item Ending balance Beginning balance

VAT 529550.32 239602.32

Corporate income tax 385112.82 611800.65

Personal income tax 151818.37 210290.78

Urban maintenance and

construction tax 44166.17 19983.59

Property tax 1715080.20 1715080.20

Land use tax 943261.64 943261.64

Stamp duty 351365.61 437390.87

Education Surcharge 31747.23 14240.95

Comprehensive fees 23907.97 22673.70

Environmental protection tax 4176010.33 4214324.70

29. Other Current Liabilities

Unit: RMB

Item Ending balance Beginning balance

1342025 Semi-Annual Report of Changchai Company Limited

Sale service fee 629835.18 485055.17

Transportation storage fee 525632.32 353692.31

Electric charge 2882683.36 2530866.25

Tax to be transferred 4025698.40 3818328.30

Estimated share value added tax 744480.00 745360.75

Obligation to pay bills transferred

85332514.94163858135.20

before maturity

Other withholding expenses 4106902.46 3273239.95

Total 98247746.66 175064677.93

30. Provisions

Unit: RMB

Item Ending balance Beginning balance Reason for formation

Product warranty 72125778.35 73002860.52 Estimated after-salesexpenses

Total 72125778.35 73002860.52

31. Deferred Income

Unit: RMB

Beginning Reason for

Item Increase Decrease Ending balance

balance formation

Government

Government

29386167.02 1704864.73 27681302.29 funding

grants

appropriation

Total 29386167.02 1704864.73 27681302.29 --

Note:

Liability items involving government grants

Unit: RMB

Amount

recorded into

Related to

Beginning Amount of other income

Item Ending balance assets/related

balance new subsidy in the

income

Reporting

Period

National major project

special allocations- Flexible

processing production line 8482569.00 759633.00 7722936.00 Related to assets

for cylinders of diesel

engines

1352025 Semi-Annual Report of Changchai Company Limited

Remove compensation 16515843.12 332986.81 16182856.31 Related to assets

Research and development

and industrialization

allocations of national III/IV

4387754.90 612244.92 3775509.98 Related to assets

standard high-powered

efficient diesel engine for

agricultural use

Total 29386167.02 1704864.73 27681302.29 ——

32. Share Capital

Unit: RMB

Increase/decrease (+/-)

Beginning Bonus Ending

balance New shares Bonus issue from Other Subtotal balance

issued shares

profit

The sum of 70569250 70569250

shares 7.00 7.00

33. Capital Reserves

Unit: RMB

Item Beginning balance Increase Decrease Ending balance

Capital premium

620338243.21620338243.21

(premium on stock)

Other capital reserves 20171432.63 20171432.63

Total 640509675.84 640509675.84

34. Other Comprehensive Income

Unit: RMB

Item Beginn Reporting Period Ending

1362025 Semi-Annual Report of Changchai Company Limited

ing Less: balance

balanc Less:Recorded

e Recorded inin other

other

comprehe Attributa

Income comprehensiv Attributa

nsive Less: ble to

before e income in ble to

income in Income the

taxation prior period non-cont

prior tax Compan

in the and rolling

period and expens y as the

Current transferred in interests

transferred e parent

Period retained after tax

in profit or after tax

earnings in

loss in the

the Current

Current

Period

Period

I. Other

comprehens

ive income 64306

that will not 785080 11776 667318 7097993

7549.9

be 00.00 200.00 00.00 49.91

reclassified 1

to profit or

loss

Changes in

fair value of 64306

785080117766673187097993

other equity 7549.9

00.00200.0000.0049.91

instrument 1

investment

Total of 64306

other 785080 11776 667318 7097993

7549.9

comprehens 00.00 200.00 00.00 49.91

ive income 1

Other notes including the adjustment of the effective gain/loss on cash flow hedges to the initial recognized

amount: None

35. Specific Reserve

Unit: RMB

Item Beginning balance Increase Decrease Ending balance

Safety production

21959066.356005031.873422736.1324541362.09

cost

Total 21959066.35 6005031.87 3422736.13 24541362.09

1372025 Semi-Annual Report of Changchai Company Limited

36. Surplus Reserves

Unit: RMB

Item Beginning balance Increase Decrease Ending balance

Statutory surplus

reserves 354669807.37 354669807.37

Discretional surplus

reserves 13156857.90 13156857.90

Total 367826665.27 367826665.27

Surplus reserve explanation: Pursuant to the Company Law of the People's Republic of China and the company's

articles of association the Company appropriates 10% of its net profit as statutory surplus reserve.

37. Retained Earnings

Unit: RMB

Item Reporting Period Same period of last year

Beginning balance of retained

earnings before adjustments 983627999.95 1002436724.71

Total retained earnings at the

beginning of the adjustment period

(“+” means up “-” means down)

Beginning balance of retained

earnings after adjustments 983627999.95 1002436724.71

Add: Net profit attributable to

shareholders of the Company as 73422814.69 50097655.15

the parent

Less: Withdrawal of statutory

surplus reserves

Withdrawal of discretional

surplus reserves

Withdrawal of general

reserve

Dividend of ordinary shares

7056925.0733167547.83

payable

Dividends of ordinary shares

transferred as share capital

Ending retained earnings 1049993889.57 1019366832.03

Adjustments to opening retained earnings details:

(1) Retrospective adjustment due to the Accounting Standards for Business Enterprises and related new

regulations: RMB 0.00 impact on opening retained earnings.

(2) Change in accounting policies: RMB 0.00 impact on opening retained earnings.

(3) Correction of material accounting errors: RMB 0.00 impact on opening retained earnings.

(4) Changes in consolidation scope due to transactions under common control: RMB 0.00 impact on opening

1382025 Semi-Annual Report of Changchai Company Limited

retained earnings.

(5) Other adjustments net impact on opening retained earnings: RMB 0.00.

38. Operating Revenue and Cost of Sales

Unit: RMB

Reporting Period Same period of last year

Item

Operating revenue Cost of sales Operating revenue Cost of sales

Main operations 1537977952.94 1342621700.34 1477768073.74 1232962844.33

Other operations 23208672.89 18852404.99 18141078.89 14141225.72

Total 1561186625.83 1361474105.33 1495909152.63 1247104070.05

Revenue-related information:

Contract Segment revenue 1 Total

Classification Operating revenue Cost of sales Operating revenue Cost of sales

By business type

Of which:

Diesel Engines -

560334413.42503705338.31560334413.42503705338.31

Single-Cylinder

Diesel Engines -

817669643.35724204343.91817669643.35724204343.91

Multi-Cylinder

Other Products 99606060.35 61214042.02 99606060.35 61214042.02

Parts &

60367835.8253497976.1060367835.8253497976.10

Accessories

By geographical

segment

Of which:

Domestic Sales 1304033625.65 1115976436.06 1304033625.65 1115976436.06

Export sales 233944327.29 226645264.28 233944327.29 226645264.28

Total 1537977952.94 1342621700.34 1537977952.94 1342621700.34

The revenue amount corresponding to performance obligations under contracts signed as of the end of the

reporting period that have not yet been fulfilled or partially fulfilled is RMB 0.00.

39. Taxes and Surtaxes

Unit: RMB

Item Reporting Period Same period of last year

Urban maintenance and

1698090.571206347.65

construction tax

1392025 Semi-Annual Report of Changchai Company Limited

Education surcharge 1333390.93 892462.87

Property tax 3460896.66 3460896.66

Land use tax 2237252.61 2237252.61

Vehicle and vessel use tax 1401.76 403.52

Stamp duty 1146892.36 1054326.09

Environment tax 51228.57 102132.33

Other 5269.40

Total 9929153.46 8959091.13

40. Administrative Expense

Unit: RMB

Item Reporting Period Same period of last year

Employee benefits 28224056.35 27401986.86

Office expenses 5107134.84 5393754.21

Depreciation and amortization 8395187.65 8902514.69

Safety expenses 3422736.13 2432550.21

Repair charge 358383.99 529280.85

Inventory scrap and inventory loss

(profit) 129856.36 133065.37

Consulting fees 121539.52 0.00

Insurance premiums 842173.89 877421.66

Utilities expenses 949597.73 913006.72

Other 3167743.10 6897048.89

Total 50718409.56 53480629.46

41. Selling Expense

Unit: RMB

Item Reporting Period Same period of last year

Employee benefits 23101018.93 21109483.94

Office expenses 4210906.58 2588140.70

Advertising and exhibition

expenses 645263.25 55147.17

Depreciation and amortization 356069.67 357084.57

Other 1581025.65 1023928.74

Total 29894284.08 25133785.12

1402025 Semi-Annual Report of Changchai Company Limited

42. Development Costs

Unit: RMB

Item Reporting Period Same period of last year

Direct input expense 21849718.28 22523758.26

Employee benefits 11604885.34 11317402.28

Depreciation and amortization 2761687.13 2749281.31

Entrusted development charges 2675614.58 2174805.19

Other 38891905.33 38765247.04

43. Finance Costs

Unit: RMB

Item Reporting Period Same period of last year

Interest expense 704087.32 1546928.49

Less: Interest income 7108599.23 7969452.65

Net foreign exchange gains or

773408.70-2334179.75

losses

Other 12156.41 142352.25

Total -5618946.80 -8614351.66

44. Other Income

Unit: RMB

Amount included in

Same period of last non-recurring profit or

Sources Reporting Period

year loss for the current

period

VAT additional deduction 4683847.30

Withholding individual income

53705.85

tax handling fee refund

Government grants recognized

directly in current period profit 85535.00 248837.64 64535.00

or loss

Government grants related to

deferred income 1704864.73 1704864.73

The details of government subsidies are as follows:

Unit: RMB

Asset-related

Items Reporting Period grants/

Income-related

1412025 Semi-Annual Report of Changchai Company Limited

grants

National Major Special Fund Allocation - Flexible Machining

759633.00 Asset-related grants

Production Line for Diesel Engine Cylinder Blocks

Demolition Compensation - Hehai Road Land 133666.75 Asset-related grants

Demolition Compensation - Hehai Road Base Main Workshop 199320.06 Asset-related grants

National III/IV Standard High-Power Efficient Agricultural Diesel Asset-related grants

612244.92

Engine R&D and Industrialization Fund

Income-related

2024 Postdoctoral Work Assessment and Incentive Award 50000.00

grants

Municipal Science and Technology Innovation Incentive Fund & Income-related

14535.00

Technology Program Grant grants

Income-related

Job Stabilization Subsidy 21000.00

grants

Total 1790399.73 ——

45. Gain on Changes in Fair Value

Unit: RMB

Sources Reporting Period Same period of last year

Held-for-trading financial assets 15685633.55 -34487453.74

Total 15685633.55 -34487453.74

46. Investment Income

Unit: RMB

Item Reporting Period Same period of last year

Investment income from holding of trading

270311.71654815.85

financial assets

Investment income from disposal of trading

3198458.89

financial assets

Dividend income from holding of other equity

5016960.0010998000.00

instrument investment

Interest Income from Debt Investments During

499852.62

Holding Period

Securities Lending Business Revenue 74524.00

Investment Income from Wealth Management

474575.113371852.31

Products

1422025 Semi-Annual Report of Changchai Company Limited

Accounts Receivable Financing - Discount Interest

-1389349.23-1300004.16

on Bank Acceptance Bills

Total 7570956.48 14299040.62

47. Credit Impairment Loss

Unit: RMB

Item Reporting Period Same period of last year

Bad debt loss of accounts

-17010411.59-17840474.15

receivable

Bad debt loss of other receivables -40743.72 2191.49

Total -17051155.31 -17838282.66

48. Asset Impairment Loss

Unit: RMB

Item Reporting Period Same period of last year

Loss on inventory valuation and

contract performance cost -1007978.87 -359995.80

Total -1007978.87 -359995.80

49. Asset Disposal Income

Unit: RMB

Amount included in

Same period of last non-recurring profit or

Sources Reporting Period

year loss for the current

period

Disposal income of fixed assets

2797353.31408245.542797353.31

and intangible assets

50. Non-operating Income

Unit: RMB

Amount included in

Item Reporting Period Same period of last year non-recurring profit or

loss for the current period

Income from penalty 20162.47 13396.22 20162.47

Accounts not required to be

410870.50

paid

1432025 Semi-Annual Report of Changchai Company Limited

Other 121955.83 646668.47 121955.83

Total 142118.30 1070935.19 142118.30

51. Non-operating Expense

Unit: RMB

Amount included in

Item Reporting Period Same period of last year non-recurring profit or

loss for the current period

Donation 264014.59

Other 28702.13 3720.00 28702.13

Total 28702.13 267734.59 28702.13

52. Income Tax Expense

(1) List of Income Tax Expense

Unit: RMB

Item Reporting Period Same period of last year

Current income tax expense 12376782.62 12974889.92

Deferred income tax expense 1152893.45 -8660218.60

Total 13529676.07 4314671.32

(2) Adjustment Process of Accounting Profit and Income Tax Expense

Unit: RMB

Item Reporting Period

Profit before taxation 90533893.08

Current income tax expense accounted at statutory/applicable tax rate 13580083.96

Influence of applying different tax rates by subsidiaries 1425300.84

Influence of income tax before adjustment

Influence of non-taxable income -752544.00

Impact of non-deductible costs expenses and losses 612353.25

Impact of utilizing previously unrecognized deductible tax losses

Impact of unrecognized deductible temporary differences and tax losses in

current period 1129808.34

Impact of super-deduction incentives on income tax -2465326.32

Income tax expense 13529676.07

1442025 Semi-Annual Report of Changchai Company Limited

53. Other Comprehensive Income

See Note VII 34 for details.

54. Cash Flow Statement

(1) Cash Related to Operating Activities

Cash Generated from Other Operating Activities

Unit: RMB

Item Reporting Period Same period of last year

Subsidy and appropriation 55752.64 55752.64

Other intercourses in cash 6861841.50 4561973.63

Interest income 7108599.23 7969452.65

Other 264430.97 201272.35

Total 14290624.34 12788451.27

Cash Used in Other Operating Activities

Unit: RMB

Item Reporting Period Same period of last year

Expense-type Expenditures 108145899.71 93802271.50

Other transactions 704087.32 1546928.49

Other 698581.31 789612.45

Total 109548568.34 96138812.44

55. Supplemental Information for Cash Flow Statement

(1) Supplemental Information for Cash Flow Statement

Unit: RMB

Supplemental information Reporting Period Same period of lastyear

1. Reconciliation of net profit to net cash flows generated from

operating activities

Net profit 77004217.01 53975129.61

Add: Provision for impairment of assets 1007978.87 -359995.80

Credit impairment loss 17051155.31

Depreciation of fixed assets of investment properties 39306228.83 38972508.82

Depreciation of right-of-use assets

Amortization of intangible assets 3103559.60 3046858.77

1452025 Semi-Annual Report of Changchai Company Limited

Amortization of long-term deferred expenses 209193.81 500129.64

Losses on disposal of fixed assets intangible assets and

other long-term assets (gains by “-”) -2797353.31 -408245.54

Losses on the scrapping of fixed assets (gains by “-”)

Losses on the changes in fair value (gains by “-”) -15685633.55 34487453.74

Financial expenses (gains by “-”) 1477496.02 -8614351.66

Investment losses (gains by “-”) -8960305.71 -14299040.62

Decrease in deferred income tax assets (increase by “-”) -2471328.60 -2655243.07

Increase in deferred income tax liabilities (decrease by

“-”)3624222.05-16785433.67

Decrease in inventory (increase by “-”) 252488273.43 169505166.76

Decrease in accounts receivable from operating

activities (increase by “-”) -585436816.45 -431702702.30

Increase in payables from operating activities (decrease

by “-”) 145773002.06 12523252.32

Other

Net cash flows generated from operating activities -74306110.63 -161814513.00

2. Investing and financing activities that do not involve cash

receipts and payment:

Debt transferred as capital

Convertible corporate bond due within one year

Fixed assets from financing lease

3. Net increase in cash and cash equivalents

Ending balance of cash 714151204.22 643940187.59

Less: Beginning balance of cash 892681884.84 971629523.46

Add: Ending balance of cash equivalents

Less: Beginning balance of cash equivalents

Net increase in cash and cash equivalents -178530680.62 -327689335.87

(2) Cash Flows from Significant Investing Activities Received or Paid

Unit: RMB

Item Reporting Period

Cash received from significant investing activities

Including: Cash Received from Redemption of Wealth

Management Products Structured Deposits and Debt 643428229.00

Investments

Cash paid for significant investing activities

Including: Cash paid for purchase of wealth management

products and structured deposits 744553500.00

1462025 Semi-Annual Report of Changchai Company Limited

(3) Cash and Cash Equivalents

Unit: RMB

Item Ending balance Beginning balance

I. Cash 714151204.22 892681884.84

Including: Cash on hand 112615.57 84482.59

Bank deposit on demand 713413662.01 891972475.61

Other monetary assets on demand 624926.64 624926.64

Accounts deposited in the central bank

available for payment

Deposits in other banks

Accounts of interbank

II. Cash equivalents

Of which: Bond investment expired within

three months

III. Ending balance of cash and cash

714151204.22892681884.84

equivalents

Of which: Cash and cash equivalents with

restriction in use for the Company as the

parent or subsidiaries of the Group

(4) Disclosure of changes in financing-related liabilities from opening to closing balances by category

Unit: RMB

Increase Decrease

Opening Closing

Item Cash Non-cash Non-cash

balance Cash changes balance

changes changes changes

Short-term

borrowing 94471787.41 94471787.41 0.00

s

Other

payables-d

3891433.830.003891433.83

ividends

payable

Total 98363221.24 94471787.41 3891433.83

1472025 Semi-Annual Report of Changchai Company Limited

56. Foreign Currency Monetary Items

(1) Foreign Currency Monetary Items

Unit: RMB

Item Ending foreign currency Exchange rate Ending balance convertedbalance to RMB

Monetary assets 245480049.55

Of which: USD 34241839.01 7.1586 245123628.74

HKD 390833.72 0.91195 356420.81

Accounts receivable 117699051.07

Of which: USD 16510399.71 7.1884 118683357.28

Contract liabilities 984306.21

Of which: EUR 117145.84 8.4024 984306.21

(2) Notes to Overseas Entities Including: for Significant Oversea Entities Main Operating Place Recording

Currency and Selection Basis Shall Be Disclosed; if there Are Changes in Recording Currency Relevant

Reasons Shall Be Disclosed.□Applicable √Not applicable

57. Lease

(1) The Company Was Lessor:

Operating leases with the Company as lessor

√Applicable □Not applicable

Unit: RMB

Of which: income related to

Item Rental income variable lease payments not

included in lease receipts

Lease income 900700.15

Total 900700.15

Finance leases with the Company as lessor

□Applicable √Not applicable

Undiscounted lease receipts for each of the next five years

?Applicable √Not applicable

Reconciliation of undiscounted lease receipts to net investment in leases: Not applicable

VIII. Research and Development Expenditure

Unit: RMB

1482025 Semi-Annual Report of Changchai Company Limited

Item Amount for the current period Amount for the previous period

Direct input 21849718.28 22523758.26

Employee remuneration 11604885.34 11317402.28

Depreciation and amortization 2761687.13 2749281.31

Outsourcing development fees 2675614.58 2174805.19

Others 38891905.33 38765247.04

Total 38891905.33 38765247.04

Of which: Expensed research and

development expenditure 0.00 0.00

IX. Changes in the Scope of Consolidation

1. Changes in the Scope of Consolidation Due to Other Reasons

Description of changes in the scope of consolidation caused by other factors (e.g. newly established subsidiaries

liquidated subsidiaries etc.) and related circumstances:

During the reporting period wholly-owned subsidiary Changzhou Fuji Changchai Robin Gasoline Engine Co.Ltd. ("Changchai Robin") absorbed and succeeded all assets liabilities business operations and other rights and

obligations of wholly-owned subsidiary Changzhou Changchai Horizon Agricultural Equipment Co. Ltd.("Horizon Agricultural Equipment") through a statutory merger. In February 2025 the Company received the

Registration Notice (No. Deng Zi [2025] 02270081) issued by the Administrative Service Office of Changzhou

High-Tech Industrial Development Zone (Xinbei District) confirming the deregistration of Horizon Agricultural

Equipment’s independent legal entity status and the completion of the merger between the two wholly-owned

subsidiaries.X. Equity in Other Entities

1. Equity in Subsidiary

(1) Subsidiaries

Unit: RMB

Nature Holding percentage

Main Registra

Registered of (%) Way of

Name operating tion

capital busine gaining

place place Indirect

ss Directly ly

Changchai Wanzhou

Chongqi Chongqi Indust

Diesel Engine Co. 85000000.00 60.00% Set-up

ng ng ry

Ltd.

1492025 Semi-Annual Report of Changchai Company Limited

Changzhou

Changchai Benniu Changzh Changz Indust

55063000.00 99.00% 1.00% Set-up

Diesel Engine ou hou ry

Fittings Co. Ltd.Changzhou Horizon Changzh Changz Servic

40000000.00 100.00% Set-up

Investment Co. Ltd. ou hou e

Combinati

Changzhou Fuji

on not

Changchai Robin Changzh Changz Indust

37250000.00 100.00% under the

Gasoline Engine Co. ou hou ry

same

Ltd.control

Jiangsu Changchai Changzh Changz Indust

300000000.00 100.00% Set-up

Machinery Co. Ltd. ou hou ry

Changzhou

Xingsheng Property Changzh Changz Servic

1000000.00 100.00% Set-up

Management Co. ou hou e

Ltd.Zhenjiang Siyang Combinati

Diesel Engine on not

Manufacturing Co. 2000000.00

Zhenjian Zhenjia Indust

g ng ry 49.00% under the

Ltd. samecontrol

Notes:

1. Zhenjiang Siyang Diesel Engine Manufacturing Co. Ltd. (Zhenjiang Siyang)

The Company holds a 49% equity stake in Zhenjiang Siyang making it the largest shareholder.Other shareholders are dispersed with no single entity holding significant influence.Board Composition: Among the 7 board members 4 are appointed by the Company including the Chairman.Control Status: The Company is the de facto controller of Zhenjiang Siyang meeting the consolidation criteria

under applicable accounting standards.

2. Merger of Wholly-Owned Subsidiaries

Changchai Robin (wholly-owned subsidiary) absorbed and succeeded all assets liabilities business operations

and other rights/obligations of Horizon Agricultural Equipment (wholly-owned subsidiary) through a statutory

merger.As of February 2025 Horizon Agricultural Equipment’s independent legal entity status was deregistered

completing the merger process.

(2) Significant Non-wholly-owned Subsidiary

Unit: RMB

Name Shareholding The profit or loss Declaring Balance of

1502025 Semi-Annual Report of Changchai Company Limited

proportion of attributable to the dividends non-controlling

non-controllin non-controlling distributed to interests at the

g interests interests non-controlling period-end

interests

Changchai Wanzhou

40.00%450580.7321010950.99

Diesel Engine Co. Ltd.Zhenjiang Siyang Diesel

Engine Manufacturing 51.00% 3161584.44 60791034.94

Co. Ltd.Holding proportion of non-controlling interests in subsidiary different from voting proportion: Not applicable

(3) The Main Financial Information of Significant Not Wholly-owned Subsidiary

Unit: RMB

Ending balance Beginning balance

Non Non-

Non- Curre Non- Curre

Name Curre -cur Total Curre curre Totalcurre Total nt curre Total nt

nt rent liabili nt nt liabili

nt assets liabili nt assets liabili

assets liab ties assets liabili ties

assets ties assets ties

ility ty

Changch

ai

4602210567081455145544922153664515331533

Wanzho

9166793371009722972206972357305449234923

u Diesel.63.50.13.65.65.17.74.91.96.96

Engine

Co. Ltd.Zhenjian

g Siyang

Diesel 1049 2172 1266 9015 617 9076 1048 2269 1275 1653 1659

6170

Engine 0707 6905 3397 178. 00.0 878. 4937 5139 4451 7400 9100

0.00

Manufac 1.31 .36 6.67 99 0 99 4.35 .48 3.83 .72 .72

turing

Co. Ltd.Unit: RMB

Reporting Period Same period of last year

Cash Cash

Total Total

Name flows flowsOperating comprehe Operating comprehe

Net profit from Net profit from

revenue nsive revenue nsive

operating operating

income income

activities activities

1512025 Semi-Annual Report of Changchai Company Limited

Changcha

i

Wanzhou 2500485 1126451 1126451 638950.0 2043683 487315.7 487315.7

Diesel 8.48 .83 .83 1 8.02 6 6

494183.8

9

Engine

Co. Ltd.Zhenjian

g Siyang

Diesel

Engine 4206635 6199185 6199185 7429071 4021227 6294954 62949541.38 .17 .17 .74 1.49 .12 .12 291189.2

Manufact 0

uring

Co. Ltd.

2. Equity in the Structured Entity Excluded in the Scope of Consolidated Financial Statements

Notes to the structured entity excluded in the scope of consolidated financial statements:

In 2017 the Company set up Changzhou Xietong Private Equity Fund (Limited Partnership) together with

Synergetic Innovation Fund Management Co. Ltd. through joint investment. On 18 October 2018 and 3

December 2020 new partners were respectively added. Partnership Shares transfer was made on 29 December

2022 and 10 October 2023. In line with the revised Partnership Agreement the general partner is Synergetic

Innovation Fund Management Co. Ltd. and the limited partners are Changchai Company Limited Changzhou

Zhongyou Petroleum Sales Co. Ltd. Changzhou Fuel Co. Ltd. Tong Yinzhu Tong Yinxin Anhui Haiyunzhou

Equity Investment Partnership Enterprise (Limited) Shenzhen Jiaxin One Venture Capital Partnership (limited

partnership)Zhong Wende and Qingdao Yinjiahui Industrial Investment Partnership Enterprise (Limited

Partnership). In accordance with the Partnership Agreement the limited partner does not execute the partnership

affairs. Thus the Company does not control Changzhou Xietong Private Equity Fund (Limited Partnership) and

did not include it into the scope of consolidated financial statements.XI. Government Grants

1. Government Grants Recognized at the End of the Reporting Period at the Amount Receivable

□Applicable √Not applicable

Reasons for failing to receive government grants in the estimated amount at the estimated point in time

□Applicable √Not applicable

2. Liability Items Involving Government Grants

√Applicable ?Not applicable

Unit: RMB

Accounting Beginning Amount of Amount Amount Other Ending Related to

items balance new recorded recorded assets/relatsubsidy changes balanceinto into other ed income

1522025 Semi-Annual Report of Changchai Company Limited

non-operati income in

ng income the

in the Reporting

Reporting Period

Period

Deferred 29386167 1704864. 27681302 Related to

income .02 73 .29 assets

3. Government Grants Recognized as Current Profit or Loss

√Applicable ?Not applicable

Unit: RMB

Accounting items Amount for the current period Amount for the previous period

Other income 1790399.73 1897949.73

XII. The Risk Related to Financial Instruments

1. Various Types of Risks Arising from Financial Instruments

The Company’s principal financial instruments include financial assets at fair value through profit or loss other

equity instrument investments other non-current financial assets accounts receivable accounts payable etc.Detailed disclosures of these financial instruments are provided in the relevant sections of Note VII. The risks

associated with these financial instruments as well as the Company’s risk management policies to mitigate such

risks are described below. The Company’s management manages and monitors these risk exposures to ensure

they remain within defined limits.The Company employs sensitivity analysis to assess the potential impact of reasonably possible changes in risk

variables on current period profit or loss or shareholders’ equity. Since risk variables rarely change in isolation and

the correlation between variables significantly influences the ultimate impact of changes in any single variable

the following analysis assumes each variable changes independently.

1. Risk Management Objectives and Policies

The Company’s risk management objectives are to achieve an appropriate balance between risk and return

minimize the adverse impact of risks on operational performance and maximize the interests of shareholders and

other equity investors. Based on these objectives the Company’s fundamental risk management strategy involves

identifying and analyzing risks establishing risk tolerance thresholds implementing risk management measures

and conducting reliable monitoring to maintain risks within defined limits.

(1) Market Risk

* Foreign Exchange Risk

Foreign exchange risk refers to the risk of loss due to exchange rate fluctuations. The Company is primarily

exposed to foreign exchange risk related to USD and EUR. Apart from overseas operations denominated in USD

and EUR the Company’s other major business activities are settled in RMB. As of June 30 2025 the Company’s

foreign currency monetary items include cash and cash equivalents accounts receivable and accounts payable

(see Note VII.57). The foreign exchange risk arising from these assets and liabilities may impact the Company’s

financial performance.The Company closely monitors the effects of exchange rate fluctuations on its foreign exchange risk exposure.* Interest Rate Risk – Cash Flow Variability Risk

The Company’s exposure to cash flow variability due to interest rate changes primarily relates to floating-rate

1532025 Semi-Annual Report of Changchai Company Limited

bank deposits. The Company’s policy is to maintain these deposits at floating rates.* Other Price Risk

The Company’s investments classified as financial assets at fair value through profit or loss or fair value through

other comprehensive income are measured at fair value at the balance sheet date. Consequently the Company is

exposed to price volatility in the securities market. The Company mitigates equity price risk by maintaining a

diversified portfolio of equity securities.

(2) Credit Risk

Credit risk refers to the risk that one party to a financial instrument fails to fulfill its obligations resulting in

financial loss to the other party.The Company’s credit risk primarily arises from receivables. To manage this risk the Company has implemented

the following measures:

* Transactions are conducted only with approved and creditworthy third parties.* Credit assessments are performed for all customers requesting credit terms.* Accounts receivable balances are continuously monitored to avoid significant bad debt exposure.Credit Risk Exposure:

* Cash and bank acceptance bills have low credit risk as they involve reputable highly rated banks.* Other financial assets (e.g. accounts receivable other receivables) are exposed to counterparty default risk

with maximum exposure equal to their carrying amounts.The Company does not require collateral as it transacts only with approved and creditworthy parties. Credit risk

concentration is managed by customer. As of June 30 2025 69.47% of the Company’s accounts receivable

balance was attributable to its top five customers. No collateral or credit enhancements are held for accounts

receivable.Criteria for Significant Increase in Credit Risk:

At each reporting date the Company assesses whether credit risk has increased significantly since initial

recognition. This evaluation considers qualitative and quantitative factors including historical data external credit

ratings and forward-looking information.A significant increase in credit risk is deemed to occur when one or more of the following triggers are met:

* Quantitative: Probability of default (PD) increases by a material margin compared to initial recognition.* Qualitative: Material adverse changes in the debtor’s financial condition or inclusion in a watchlist.Definition of Credit-Impaired Assets:

To determine credit impairment the Company aligns with internal risk management objectives and considers

quantitative and qualitative indicators including:

* Significant financial difficulty of the debtor;

* Breach of contract (e.g. payment default or delinquency);

* Concessions granted due to the debtor’s financial distress;

* Likelihood of bankruptcy or restructuring;

* Disappearance of an active market for the asset;

* Purchase or origination of a financial asset at a deep discount reflecting credit loss.Expected Credit Loss (ECL) Measurement Parameters:

ECL is measured based on 12-month or lifetime expected credit losses depending on whether credit risk has

1542025 Semi-Annual Report of Changchai Company Limited

increased significantly or impairment has occurred. Key parameters include:

* Probability of Default (PD): Likelihood of default within 12 months or the remaining lifetime. Adjusted for

forward-looking macroeconomic factors.* Loss Given Default (LGD): Expected loss severity upon default varying by counterparty type recourse and

collateral.* Exposure at Default (EAD): Amount expected to be owed at the time of default.Forward-Looking Information:

ECL calculations incorporate forward-looking macroeconomic indicators analyzed through historical data

regression and expert judgment.

(3) Liquidity Risk

The Company manages liquidity risk by maintaining sufficient cash and cash equivalents monitored to meet

operational needs and mitigate cash flow volatility. Management ensures compliance with borrowing agreements

and monitors bank loan utilization.

2. Financial Assets

(1) Classification of Transfer Methods

√Applicable ?Not applicable

Unit: RMB

Transfer Nature of Amount of Recognition

method transferred transferred termination or Basis for recognition terminationfinancial assets financial assets not

Notes Not The Company retains substantially allEndorsement receivable 85332514.94 derecognized of the risks and rewards including therisk of default associated with its

Endorsement Accounts

/discount receivable 491724648.34 Derecognized

The Company transfers almost all the

financing risks and rewards

Total 577057163.28

(2) Financial Assets Derecognized due to Transfer

√Applicable ?Not applicable

Unit: RMB

Item Transfer method of Amount of derecognized Gains or losses related tofinancial assets financial assets derecognition

Accounts

receivable Endorsement 461724648.34

financing

Accounts

receivable Discount 30000000.00 -1389349.23

financing

Total 491724648.34 -1389349.23

1552025 Semi-Annual Report of Changchai Company Limited

(3) Continued Involvement in the Transfer of Assets Financial Assets

√Applicable ?Not applicable

Unit: RMB

Item Transfer method of Amount of assets resulting from Amount of liabilities resultingassets continued involvement from continued involvement

Notes receivable Endorsement 85332514.94 85332514.94

Total 85332514.94 85332514.94

XIII. The Disclosure of Fair Value

1. Ending Fair Value of Assets and Liabilities at Fair Value

Unit: RMB

Ending fair value

Item Fair value Fair value Fair value

measurement items measurement items measurement items Total

at level 1 at level 2 at level 3

I. Consistent fair

value measurement -- -- -- --

(I) Trading financial

assets

1. Financial assets

at fair value through

profit or loss

(1) Debt instrument

investment

(2) Equity

instrument 67168729.00 67168729.00

investment

(3) Derivative

financial assets

(4) Wealth

management 353065840.30 353065840.30

investments

2. Financial assets

designated to be

measured at fair

value and the

changes included

into the current

profit or loss

(1) Debt instrument

investment

(2) Equity

instrument

investment

(II) Other

1562025 Semi-Annual Report of Changchai Company Limited

investments in debt

obligations

(III)Other equity

instrument 670991000.00 348637058.72 1019628058.72

investment

(IV) Investment

property

1. Land use right

for lease

2. Buildings leased

out

3. Land use right

held and planned to

be transferred once

appreciating

(V) Living assets

1. Consumptive

living assets

2. Productive living

assets

Accounts receivable

financing 39513968.25 39513968.25

Other non-current

financial assets 377869217.49 377869217.49

Total assets

consistently

measured by fair 738159729.00 353065840.30 766020244.46 1857245813.76

value

(VI) Trading

financial liabilities

Of which: Issued

trading bonds

Derivative financial

liabilities

Other

(VII) Financial

liabilities

designated to be

measured at fair

value and the

changes recorded

into the current

profit or loss

Total liabilities

consistently

measured by fair

value

II. Inconsistent fair

value measurement

1572025 Semi-Annual Report of Changchai Company Limited

(1) Assets held for

sale

Total assets

inconsistently

measured by fair

value

Total liabilities

inconsistently

measured by fair

value

2. Market Price Recognition Basis for Consistent and Inconsistent Fair Value Measurement Items at Level

For the listed company stocks held by the company in the held-for-trading financial assets measured at fair value

the closing market price on the balance sheet date was the basis for the measurement of fair value.

3. Valuation Technique Adopted and Nature and Amount Determination of Important Parameters for

Consistent and Inconsistent Fair Value Measurement Items at Level 2

Wealth management and investment: The underlying assets of investment in wealth management products include

bond assets deposit assets fund assets etc. The portfolio of investment assets should be dynamically managed.The fair value of wealth management products should be adjusted according to the yield of similar products

provided by the counterparty.

4. Valuation Technique Adopted and Nature and Amount Determination of Important Parameters for

Consistent and Inconsistent Fair Value Measurement Items at Level 3

(1) Accounts receivable financing: Accounts receivable financing is a bank acceptance with high credit rating

short maturity and low risk. The par amount is close to the fair value and is used as the fair value.

(2) Among other non-current financial assets:

The equity instrument investment in Jiangsu Horizon New Energy Technology Co. Ltd. (a manufacturer of

lithium battery separators whose main products include coated products and base films primarily used in new

energy vehicle power batteries 3C consumer batteries and energy storage batteries) is characterized by high

technical complexity lengthy R&D cycles and substantial capital investment. The company is in a rapid

development phase with numerous investment projects still under construction that have not yet generated stable

revenue or profits. However financing activities have been frequent with five equity financings conducted in the

past three years. Accordingly the Company has determined the fair value of this equity investment using the most

recent financing price adjustment method and engaged an appraisal firm to validate the valuation.

(3) Among other equity instrument investments:

The investments in Chengdu Changwan Diesel Engine Sales Co. Ltd. Chongqing Wanzhou Changwan Diesel

Engine Parts Co. Ltd. Changzhou Economic and Technological Development Company Changzhou Tractor

Company Changzhou Industrial Capital Mutual Aid Association of the Economic Commission and Beijing

Engineering Machinery Agricultural Machinery Company totaling RMB 1.21 million are measured at a fair

value of RMB 0.00 due to the recoverability of the invested amounts.

1582025 Semi-Annual Report of Changchai Company Limited

For Changzhou Collaborative Innovation Equity Investment Partnership (Limited Partnership) established in

October 2017 the year-end partners' equity has increased due to fair value changes in its equity holdings. No

material changes have occurred in its operating environment business conditions or financial position. Thus the

Company has determined its fair value based on the partnership’s net asset value at the period-end.

5. Transfers Between Fair Value Hierarchy Levels for Recurring Fair Value Measurements: Reasons for

Transfers and Policies for Determining Transfer Timing

During the current year no transfers occurred between Level 1 and Level 2 of the fair value hierarchy for the

Company’s financial assets and liabilities nor were there any transfers into or out of Level 3.

6. Changes in Valuation Techniques and Reasons for Such Changes During the Period

No changes were made to valuation techniques during the reporting period.

7. Fair Value Information of Financial Assets and Liabilities Not Measured at Fair Value

The financial assets and liabilities measured at amortization cost mainly include notes receivable accounts

receivable other receivables short-term borrowings accounts payable other payables etc. The difference

between the carrying value and fair value for financial assets and liabilities not measured at fair value is small.XIV. Related Party and Related-party Transactions

1. Information Related to the Company as the Parent of the Company

Proportion of Proportion of

share held by voting rights

Regist

Registered the Company as owned by the

Name ration Nature of business

capital the parent Company as the

place

against the parent against

Company the Company

Investment and operations of

state-owned assets assets

Changzhou

management (excluding

Investment Chang RMB1.2

financial business) investment 32.26% 32.26%

Group Co. zhou billion

consulting (excluding

Ltd.consulting on investment in

securities and options) etc.Information about the parent company of the enterprise:

The parent company of the enterprise is Changzhou Investment Group Co. Ltd. According to the

"Implementation Plan for Transferring Part of State-owned Capital to Enrich Social Security Funds in Jiangsu

Province" (Su Zhengfa [2020] No. 27) issued by the provincial government the "Notice on Transferring Part of

State-owned Capital in Cities and Counties to Enrich Social Security Funds" (Su Caigongmao [2020] No. 139)

issued by Jiangsu Provincial Department of Finance and five other departments and the "Notice on Transferring

1592025 Semi-Annual Report of Changchai Company Limited

Part of Municipal (District) State-owned Capital to Enrich Social Security Funds" (Chang Caigongmao [2020] No.

4) issued by Changzhou Municipal Finance Bureau and four other departments 10% of the state-owned equity of

the Investment Group held by the People's Government of Changzhou City was transferred to Jiangsu Provincial

Department of Finance without compensation. After the equity transfer the People's Government of Changzhou

City holds 90% of the state-owned equity of Changzhou Investment Group Co. Ltd. and Jiangsu Provincial

Department of Finance holds 10% of the state-owned equity of Changzhou Investment Group Co. Ltd. According

to the document of the People's Government of Changzhou City (Chang Zhengfa [2006] No. 62) Changzhou

Investment Group Co. Ltd. is an enterprise where the State-owned Assets Supervision and Administration

Commission of Changzhou City performs the investor's responsibilities as authorized by the People's Government

of Changzhou City. Therefore Changzhou Investment Group Co. Ltd. is the controlling shareholder of the

company and the State-owned Assets Supervision and Administration Commission of Changzhou City remains

the actual controller of the company. The ultimate controlling party of the enterprise is the State-owned Assets

Supervision and Administration Commission of Changzhou City.

2. Subsidiaries of the Company

Refer to Note X for details.

3. Situation of joint ventures and associated enterprises of the company

For details refer to Note VII.11 "Long-term Equity Investments" in the accompanying financial statements.

4. Information on Other Related Parties

Name Relationship with the Company

Changzhou Synergetic Innovation Private Equity Participated in establishing the industrial investment

Fund (Limited Partnership) fund

Jiangsu Horizon New Energy Technology Co. Ltd. Shareholding enterprise of the Company

5. Related Party Transactions: None

XV. Commitments and Contingency

1. Significant Commitments

Significant commitments on balance sheet date:

As of 30 June 2025 there was no significant commitment for the Company to disclose.

1602025 Semi-Annual Report of Changchai Company Limited

2. Contingency

(1) Significant Contingency on Balance Sheet Date: None

(2) Despite no Significant Contingency to Disclose the Company Shall Also Make Relevant Statements

There was no significant contingency in the Company.XVI. Events after Balance Sheet Date

1. Profit Distribution: None

2. Notes to Other Events after Balance Sheet Date

As of the date of this report the Company has no other significant post-balance-sheet events requiring disclosure.XVII. Other Significant Events

1. Segment Information

(1) Basis for Determining Reportable Segments and Accounting Policies

As the Company and its major subsidiaries operate similar business activities under unified management without

separate business units the Company operates as a single reportable segment.

2. Other Significant Transactions and Events Relevant to Investors' Decision-Making: None

XVIII. Notes of Main Items in the Financial Statements of the Company as the Parent

1. Accounts Receivable

(1) Disclosure by Aging

Unit: RMB

Aging Ending carrying amount Beginning carrying amount

Within one year (including 1 year) 1227288459.74 421962024.85

One to two years 8009829.79 6757507.16

Two to three years 2139949.67 936696.44

More than three years 98641285.62 99831716.27

Three to four years 4097432.37 4041196.12

Four to five years 4454600.04 4363228.39

Over 5 years 90089253.21 91427291.76

Total 1336079524.82 529487944.72

1612025 Semi-Annual Report of Changchai Company Limited

(2) Disclosure by Withdrawal Methods for Bad Debts

Unit: RMB

Ending balance Beginning balance

Carrying Bad debt Bad debt

Carrying amount

amount provision provision

Category Carry CarryiWithd ing Withd ng

Amou Propor Amou rawal value Amoun Propor Amou rawal value

nt tion nt propor t tion nt propo

tion rtion

Accounts

receivable

withdrawal of 1263 12637 14107

100.014107100.0

Bad debt 7872. 0.95% 872.1 0.00 2.66% 982.7 0.00

0%982.760%

provision 12 2 6

separately

accrued

Of which:

Accounts

receivable

132310694121651537904334249

withdrawal of 99.05 97.34 17.55

44164389.8.08%49729961.9295.54666

bad debt % % %

52.705563.15656.41

provision of by

group

Of which:

Accounts

receivable with

provision for 1320 10694 1213 51470 90433 4242

98.8597.2117.57

bad debts based 6507 4389. 8.10% 7063 4286.4 295.5 7099

%%%

on credit risk 39.02 55 49.47 7 5 0.92

characteristics

portfolio

Accounts

receivable with

provision for

bad debts based

27902790

on related-party 67567 6756

913.60.21%0.000.00913.60.13%0.000.00

transactions 5.49 75.49

88

portfolio within

the

consolidation

scope

1622025 Semi-Annual Report of Changchai Company Limited

133611958121652948104544249

Total 0795 —— 2261. —— 4972 7944.7 —— 1278. —— 4666

24.826763.152316.41

Provision for bad debts assessed individually: RMB 12637872.12 including significant impairment items

totaling RMB 11018413.04. The details are as follows:

Unit: RMB

Beginning balance Ending balance

Withdraw

Name ReasonCarrying Bad debt Carrying Bad debt al

for

amount provision amount provision proportio

withdraw

n

Difficult

Customer 1 2797123.26 2797123.26 2797123.26 2797123.26 100.00%

to recover

Difficult

Customer 2 2584805.83 2584805.83 2584805.83 2584805.83 100.00%

to recover

Difficult

Customer 3 1902326.58 1902326.58 1902326.58 1902326.58 100.00%

to recover

Difficult

Customer 4 1759397.30 1759397.30 1759397.30 1759397.30 100.00%

to recover

Difficult

Customer 5 1564000.07 1564000.07 1564000.07 1564000.07 100.00%

to recover

Difficult

Customer 6 1470110.64 1470110.64 0.00 0.00 ——

to recover

Difficult

Customer 7 410760.00 410760.00 410760.00 410760.00 100.00%

to recover

Total 12488523.68 12488523.68 11018413.04 11018413.04 -- --

For receivables within the portfolio the allowance for bad debts is recognized based on credit risk characteristics.Unit: RMB

Ending balance

Item

Carrying amount Bad debt provision Withdrawal proportion

Within 1 year 1224497546.06 24489950.93 2.00 %

1 to 2 years 8009829.79 400491.49 5.00 %

2 to 3 years 2139949.67 320992.45 15.00%

3 to 4 years 3555169.71 1066550.91 30.00%

4 to 5 years 4454600.04 2672760.02 60.00%

Over 5 years 77993643.75 77993643.75 100.00%

Total 1320650739.02 106944389.55

Please refer to the relevant information of disclosure of bad debt provision of other accounts receivable if

1632025 Semi-Annual Report of Changchai Company Limited

adopting the general mode of expected credit loss to withdraw bad debt provision of accounts receivable.□Applicable √Not applicable

(3) Bad Debt Provision Withdrawal Reversed or Recovered in the Current Period

Unit: RMB

Changes in the current period

Beginning

Category Ending balance

balance Reversed orWithdrawal Verification Others

recovered

Bad debt

provision

14107982.761470110.6412637872.12

accrued by

item

Withdrawal

of bad debt

90433295.5516511094.00106944389.55

provision by

group

Total 104541278.31 16511094.00 0.00 1470110.64 119582261.67

(4) Accounts Receivable Written-off in Current Period

Unit: RMB

Item Written-off amount

Accounts receivable with actual verification 1470110.64

Of which the verification of significant accounts receivable:

Unit: RMB

Name of the Nature of the Verification

Arising from

entity accounts Verified amount

Reason for procedures related-party

receivable verification performed transactions ornot

Court-Ordered

Accounts on the Minutes of the

Customer 1 receivable for 1470110.64 conclusion of Executive No

goods Bankruptcy Office

Liquidation

Total 1470110.64

(5) Top 5 of the Ending Balance of the Accounts Receivable and the Contract Assets Collected according to

Arrears Party

Unit: RMB

Name of the Ending balance Ending balance Ending balance Proportion to Ending balance

entity of accounts of contract of accounts total ending of bad debtreceivable assets receivable and balance of provision of

1642025 Semi-Annual Report of Changchai Company Limited

contract assets accounts accounts

receivable and receivable and

contract assets impairment

provision for

contract assets

Customer 1 574387933.74 0.00 574387933.74 42.99% 11487758.68

Customer 2 245184220.00 0.00 245184220.00 18.35% 5172394.61

Customer 3 68402423.71 0.00 68402423.71 5.12% 1368048.47

Customer 4 48905454.18 0.00 48905454.18 3.66% 978109.09

Customer 5 44809044.30 0.00 44809044.30 3.35% 896180.89

Total 981689075.93 0.00 981689075.93 73.47% 19902491.74

2. Other Receivables

Unit: RMB

Item Ending balance Beginning balance

Interest receivable

Dividend receivable 5016960.00 7165080.00

Other receivables 18236989.64 17123687.65

Total 23253949.64 24288767.65

(1) Dividend receivable

Unit: RMB

Projects (or Investee Entities) Ending balance Beginning balance

Jiangsu Bank 5016960.00 7165080.00

Total 5016960.00 7165080.00

(2) Other Receivables

1) Other Receivables Classified by Accounts Nature

Unit: RMB

Nature Ending carrying value Beginning carrying value

Related-party transactions within

14568060.1631828957.95

the consolidation scope

Margin and cash pledge 1300.00 1300.00

Other entity current accounts 21584387.52 20438842.07

Petty cash and borrowings by

1127706.36763839.63

employees

1652025 Semi-Annual Report of Changchai Company Limited

Other 13782691.74 13697080.26

Total 51064145.78 66730019.91

2) Disclosure by Aging

Unit: RMB

Aging Ending carrying amount Beginning carrying amount

Within 1 year (including 1 year) 3065811.22 5982988.63

1 to 2 years 6115661.98 11494533.03

2 to 3 years 9364996.07 16754590.84

Over 3 years 32517676.51 32497907.41

3 to 4 years 291175.26 281647.36

4 to 5 years 40541.20 30300.00

Over 5 years 32185960.05 32185960.05

Total 51064145.78 66730019.91

3) Disclosure by Withdrawal Methods for Bad Debts

Provision for bad debts based on general model of expected credit losses

Unit: RMB

First stage Second stage Third stage

Expected loss in

Expected loss in

Bad debt provision Expected credit the duration the duration (credit Total

loss of the next 12 (credit

impairment

months impairment not

occurred)

occurred)

Balance of 1 January

38895.0844388.9849523048.2049606332.26

2025

Balance of 1 January

2025 in the Current —— —— —— ——

Period

--Transfer to Second

stage

-- Transfer to Third

stage

-- Reverse to Second

stage

-- Reverse to First stage

1662025 Semi-Annual Report of Changchai Company Limited

Withdrawal of the

49781.8349781.83

Current Period

Reversal of the Current

16828957.9516828957.95

Period

Write-offs of the

Current Period

Verification of the

Current Period

Other changes

Balance of 30 June

88676.9144388.9832694090.2532827156.14

2025

The basis for the division of each stage and the withdrawal proportion of bad debt provision: None

Changes of carrying amount with significant amount changed of loss provision in the current period

□Applicable √Not applicable

4) Bad Debt Provision Withdrawn Reversed or Recovered in the Current Period

Withdrawal of bad debt provision:

Unit: RMB

Changes in the current period

Beginning

Category ChargedReversed or Ending balancebalance Withdrawal -off/Writ Others

recovered

ten-off

Bad debt provision

22444827.5016828957.955615869.55

separately accrued

Withdrawal of bad

debt provision by 27161504.76 49781.83 27211286.59

group

Total 49606332.26 49781.83 16828957.95 32827156.14

5）Write-off of Other Receivables During the Reporting Period: None

6) Top 5 of the Ending Balance of Other Receivables Collected according to the Arrears Party

Unit: RMB

Proportion to

total ending Ending balance

Name of the

Nature Ending balance Aging balance of of bad debt

entity

other provision

receivables %

1672025 Semi-Annual Report of Changchai Company Limited

Changzhou Intercompany

Changniu Transactions with

15000000.00 1-3 years 29.37%

Machinery Consolidated

Co. Ltd. Entities

Changzhou

Intercompany

Compressor 2940000.00 Over 5 years 5.76% 2940000.00

funds

Factory

Changchai

Intercompany

Group Imp. & 2853188.02 Over 5 years 5.59% 2853188.02

funds

Exp. Co. Ltd.Changchai

Group Intercompany

1626483.25 Over 5 years 3.19% 1626483.25

Settlement funds

Center

Chuangye

Intercompany

Diesel Engine 1128676.16 Over 5 years 2.21% 1128676.16

funds

Repair Factory

Total 23548347.43 46.12% 8548347.43

3. Long-term Equity Investment

Unit: RMB

Ending balance Beginning balance

Item Carrying Depreciation Carrying Carrying Depreciation Carrying

amount reserves value amount reserves value

Investment to 868279449. 868279449. 875279449. 868279449.

0.007000000.00

subsidiaries 94 94 94 94

Investment to

joint ventures

and 44182.50 44182.50 44182.50 44182.50

associated

enterprises

868323632.868279449.875323632.868279449.

Total 44182.50 7044182.50

44944494

(1) Investment to Subsidiaries

Unit: RMB

Investee Beginning Beginnin Increase/decrease for the current period Ending Ending

1682025 Semi-Annual Report of Changchai Company Limited

balance g balance Withdra balance balance

(carrying of Addition wal of (carrying of

value) depreciat Reducedal impairm value) depreciat

ion investme Othersinvestme ent ion

reserve ntnt provisio reserve

n

Changchai

Wanzhou

51000005100000

Diesel

0.000.00

Engine Co.Ltd.Changzhou

Changchai

Benniu

96466509646650

Diesel

0.000.00

Engine

Fittings Co.Ltd.Changzhou

Horizon 4000000 4000000

Investment 0.00 0.00

Co. Ltd.Changzhou

Changchai

Horizon 700000 700000 700000

0.000.000.00

Agricultural 0.00 0.00 0.00

Equipment

Co. Ltd.Changzhou

Fuji

Changchai

47286234728623

Robin

0.030.03

Gasoline

Engine Co.Ltd.Jiangsu

Changchai 5918359 5918359

Machinery 19.91 19.91

Co. Ltd.

1692025 Semi-Annual Report of Changchai Company Limited

Changzhou

Xingsheng

1000000.1000000.

Property

0000

Managemen

t Co. Ltd.Zhenjiang

Siyang

Diesel 4069080 4069080

Engine 0.00 0.00

Manufacturi

ng Co. Ltd.

86827947000007000007000008682794

Total 0.00

49.940.000.000.0049.94

(2) Investment to Joint Ventures and Associated Enterprises

Unit: RMB

Increase/decrease for the current period

Begi Begi Gains Endinnning Ad and Adjusnning Endin g

balan balan diti Red losses

tment Cash Withdr g balan

ce ce of ona uce recog

of Chan bonus awal of balan ce of

Investee (carr depre l d nized

other ges of or impair Ot ce depre

ying ciatio inv inve under

comp other profits ment her (Carr ciatio

value n est stm the

rehen equity announ provisi s ying n

) reser me ent equity

sive ced to on value) reserv

ve nt metho incom issue e

d e

I. Joint ventures

Subtotal 0.00 0.00 0.00 0.00

II. Associated enterprises

Beijing

Tsinghua

Xingye

Industrial

44184418

Investmen 0.00 0.00

2.502.50

t

Managem

ent Co.Ltd.

44184418

Subtotal 0.00 0.00

2.502.50

44184418

Total 0.00 0.00

2.502.50

1702025 Semi-Annual Report of Changchai Company Limited

The recoverable amount is determined based on the net amount of the fair value minus disposal costs

□ Applicable √ Not applicable

The recoverable amount is determined by the present value of the forecasted future cash flow.□ Applicable √ Not applicable

The reason for the discrepancy between the foregoing information and the information used in the impairment

tests in prior years or external information: Not applicable

The reason for the discrepancy between the information used in the Company's impairment tests in prior years and

the actual situation of those years: Not applicable

4. Operating Revenue and Cost of Sales

Unit: RMB

Reporting Period Same period of last year

Item

Operating revenue Cost of sales Operating revenue Cost of sales

Main operations 1390026293.94 1240388539.57 1366413377.99 1162530395.97

Other operations 61686090.56 61737542.10 53682141.33 49682288.16

Total 1451712384.50 1302126081.67 1420095519.32 1212212684.13

Breakdown information of operating income and operating cost:

Unit: RMB

Category of Segment 1 Total

contracts Operating Revenue Operating cost Operating Revenue Operating cost

Business Type

Of which:

Single-cylinder

560494020.58516663643.98560494020.58516663643.98

diesel engines

Multi-cylinder

775603291.97675750680.27775603291.97675750680.27

diesel engines

Other products 28591316.59 25646410.98 28591316.59 25646410.98

Fittings 25337664.80 22327804.34 25337664.80 22327804.34

Classification by

operating region

Of which:

Sales in domestic

1193987469.511050466126.461193987469.511050466126.46

market

Export sales 196038824.43 189922413.11 196038824.43 189922413.11

Total 1390026293.94 1240388539.57 1390026293.94 1240388539.57

Information in relation to the transaction price apportioned to the residual contract performance obligation:

1712025 Semi-Annual Report of Changchai Company Limited

The amount of revenue corresponding to performance obligations of contracts signed but not performed or not

fully performed yet was RMB0 at the period-end.

5. Investment Income

Unit: RMB

Item Reporting Period Same period of last year

Investment income from disposal of

held-for-trading financial assets 3198458.89 3180749.07

Dividend income from holding of other equity

instrument investment 5016960.00 10998000.00

Interest income from holding of debt obligation

investments 499852.62

Accounts receivable financing-discount interest of

bank acceptance bills 74524.00

Income from refinancing operations -1389349.23 -1300004.16

Total 6826069.66 13453121.53

XIX. Supplementary Materials

1. Items and Amounts of Non-recurring Profit or Loss

√Applicable □Not applicable

Unit: RMB

Item Amount Note

Gain or loss on disposal of non-current assets 2797353.31

Government grants recognized in current profit

or loss (excluding those closely related to the Excluding government grants related to

company’s normal business operations in assets transferred from deferred income

compliance with national policies granted 64535.00 amounting to RMB 1704864.73

based on predetermined standards and having individual income tax refunds of RMB

a sustained impact on the company’s profit or 53705.85 and job stabilization subsidies

loss). of RMB 21000.00.This was mainly due to the financial

Gains or losses from changes in fair value of investment income generated from the

financial assets and financial liabilities held by company's cash management during the

non-financial enterprises as well as gains or reporting period as well as the increase

losses from the disposal of financial assets and 18884092.44 in the fair value of shares held by the

financial liabilities (excluding effective wholly-owned subsidiary Horizon

hedging activities related to the company’s Investment in Jiangsu Liance

normal business operations). Electromechanical Technology Co. Ltd.and KaiLong High-Tech Co. Ltd.compared to the beginning of the period.Other non-operating income and expenses not

listed above. 113416.17

Less: Income tax effects 4733898.62

Non-controlling interests effects (after tax) 184.20

Total 17125314.10

1722025 Semi-Annual Report of Changchai Company Limited

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

□ Applicable √ Not applicable

No such cases in the Reporting Period.Explain the reasons if the Company classifies any extraordinary gain/loss item mentioned in the Explanatory

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

Public—Non-recurring Gains and Losses as a recurrent gain/loss item

□ Applicable √ Not applicable

2. Return on Equity and Earnings Per Share

Weighted average ROE EPS (Yuan/share)

Profit as of Reporting Period

(%) EPS-basic EPS-diluted

Net profit attributable to ordinary

2.14%0.10400.1040

shareholders of the Company

Net profit attributable to ordinary

shareholders of the Company after

1.67%0.08110.0811

deduction of non-recurring profit

or loss

3. Differences between Accounting Data under Domestic and Overseas Accounting Standards

(1) Differences between Disclosed Net Profits and Net Assets in Financial Report in accordance with

International Accounting Standards and Chinese Accounting Standards

□ Applicable √ Not applicable

(2) Differences between Disclosed Net Profits and Net Assets in Financial Report in accordance with

Overseas Accounting Standards and Chinese Accounting Standards

□ Applicable √ Not applicable

(3) Explain Reasons for the Differences between Accounting Data Under Domestic and Overseas

Accounting Standards; for Any Adjustment Made to the Difference Existing in the Data Audited by the

Foreign Auditing Agent Such Foreign Auditing Agent's Name Shall Be Clearly Stated

□ Applicable √ Not applicable

173CSG Semi-annual Report 2025

Part IX Other Reported Information

I Other major social security issues

Indicate whether the listed company and its subsidiaries have other major social security issues.□ Yes √ No □ Not applicable

Indicate whether any administrative penalty was imposed during the report period.□ Yes √ No □ Not applicable

II Research communication interviews and other activities received during the Report Period

√ Applicable □ Not applicable

Date of Place of Way of Type of

visit visit visit visitor Visitor

Contents and materials Index to main inquiry

provided information

Investor The Company’s operating Information on 000570 C29 Online Online s and performance profitability hangchai’s Results PresenApril meeting exchan Other the development and tation and Roadshow on2025 ge public construction equity www.cninfo.com.cn datedinvestment etc. 29 April 2025

III Financial transactions between the listed company and its controlling shareholder and other related

parties

√ Applicable □ Not applicable

Unit: RMB 0000

Amount Amount

Name of Nature of incurred repaid

transaction Opening during the during the Ending Interest Interest

party transaction balance report report balance income expense

period period

Horizon

Agricultural non-operating transactions 1682.90 2.54 1685.44 0.00

Equipment

Changniu non-operatin

g transactions 1500.00 145.05 163.72 1500.00 18.67Company

Changchai non-operatin

Wanzhou g transactions

0.0040.4540.450.00

Changchai non-operatin

g transactions 0.00 35.24 35.24 0.00Robin

Changchai

0.000.003852.820.000.00

Machinery

157CSG Semi-annual Report 2025

Zhenjiang

0.000.0098.190.000.00

Siyang

Xingsheng

Real Estate 0.00 0.00 38.85 0.00 0.00

Management

Total -- 3182.90 4213.14 5914.71 1500.00 18.67 0.00

Related All the above-mentioned counterparties are the company's subsidiaries and sub-subsidiaries.decision-mak The non-operating fund transactions between the company and its subsidiaries as well as

ing sub-subsidiaries are normal intercompany payments and the company has gone through the

corresponding approval procedures in accordance with its internal control system.procedures

The above-mentioned fund transactions of the company occur in accordance with the needs of

Fund security daily operations and the fund risks are controllable. The company has established a sound

measures fund management system and performs necessary approval procedures in accordance with the

requirements of the internal control system. The company's internal audit department conducts

regular audits on the transactions between the company and its subsidiaries and

grand-subsidiaries and supervises inspects and evaluates the implementation of internal

controls to ensure the safety of funds and the normal operation of business activities. The

company and its subsidiaries strictly control fund transactions strengthen management ensure

the safety of funds and avoid and reduce the occurrence of bad debt losses.The Board of Directors

Changchai Company Limited

22 August 2025

157