2026 Semi-Annual Report of Changchai Company Limited
CHANGCHAI COMPANY LIMITED
2026 Semi-Annual Report
August 2026
12026 Semi-Annual Report of Changchai Company Limited
Part I Important Notes Table of Contents and Definitions
The Board of Directors all directors 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.
22026 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 and Analysis ......... 9
Part IV Corporate Governance Environment and Socia...28
Part V Significant Events ...........................33
Part VI Share Changes and Shareholder Information ...39
Part VII Preference Shares ..........................44
Part VIII Financial Statements ......................45
32026 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.
42026 Semi-Annual Report of Changchai Company Limited
Definitions
Term Refer to Definition
“Company” the “Company” or
“Changchai” Refer to Changchai Company Limited
Changniu Refer to Changzhou Changniu Machinery Co. Ltd.Changwan Refer to Changchai Wanzhou Diesel Engine Co. Ltd.Horizon Investment Refer to Changzhou Horizon Investment Co. Ltd.Changchai Robin Refer to Changzhou Fuji Changchai Robin Gasoline EngineCo. Ltd.Changchai Machinery Refer to Jiangsu Changchai Machinery Co. Ltd.Real Estate Management Refer to Changzhou Xingsheng Real Estate ManagementCo. Ltd.Zhenjiang Siyang Refer to Zhenjiang Siyang Diesel Engine Manufacturing Co.Ltd.Yuanzhi Changtou Xingyu Refer to Yuanzhi Changtou Xingyu (Changzhou) EquityInvestment Partnership (Limited Partnership)
RMB RMB’0000 Refer to The Chinese currency of Renminbi expressed intens of thousands of Renminbi
Reporting Period Refer to The period from 1 January 2026 to 30 June 2026
52026 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
Address 123 Huaide Middle RoadChangzhou 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 2025 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
please refer to the 2025 Annual Report.
3. Other relevant materials
Whether there were changes to other relevant materials during the reporting period
□Applicable √Not Applicable
62026 Semi-Annual Report of Changchai Company Limited
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) 1669786673.48 1561186625.83 6.96%
Net profit attributable to the listed
company’s shareholders (RMB) 105059653.98 73422814.69 43.09%
Net profit attributable to the listed
company’s shareholders before 85247927.47 56297500.59 51.42%
exceptional gains and losses (RMB)
Net cash generated from/used in
operating activities (RMB) -134705252.86 -74306110.63 ——
Basic earnings per share (RMB/share) 0.1489 0.1040 43.17%
Diluted earnings per share (RMB/share) 0.1489 0.1040 43.17%
Weighted average return on equity (%) 3.00% 2.14% 0.86%
Change of 30 June
30 June 2026 31 December 2025 2026 over 31
December 2025
Total assets (RMB) 5790325894.78 5578281300.02 3.80%
Equity attributable to the listed
company’s shareholders (RMB) 3541139529.02 3443190677.55 2.84%
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.
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) 278408.23
72026 Semi-Annual Report of Changchai Company Limited
The government subsidies included in
the current period's profit and loss for
this reporting period amounted to
Government grants recognized in current profit or RMB 1746173.35. After deducting
loss (exclusive of those that are closely related to the government subsidies related to
the Company's normal business operations and assets transferred from deferred
given in accordance with defined criteria and in 36000.00 income of RMB 1704864.73 and job
compliance with government policies and have a stabilization subsidies of RMB
continuing impact on the Company's profit or loss) 5308.62 the government subsidies
included in the non recurring profit
and loss for this period amounted to
RMB 36000.00.Gains or losses from changes in fair value of
financial assets and liabilities held by non-financial During the reporting period the
enterprises as well as gains or losses from disposal company's wholly-owned subsidiary
of financial assets and liabilities excluding 21188928.79 Changzhou Horizon Investment Co.effective hedging activities related to the company's Ltd. sold part of the company's
normal business operations. shares held by it.Gains or losses on entrusted investments and asset
management 176622.04
Reversal of impairment allowances on receivables
individually assessed for impairment 91000.00
Other non-operating income and expenses not listed
above 14438.71
Less: Income tax effects 1910775.89
Non-controlling interests effects (net of tax) 62895.37
Total 19811726.51
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.
82026 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 are an important support for ensuring the safety of China's manufacturing industry
energy security and national defense security. They are also an important cornerstone for the sustainable
development of the national economy and the modernization of national defense construction. As the leading
thermal efficiency outstanding power density and most widely used thermal power device the internal
combustion engine has an irreplaceable core position in the power equipment system. In response to the strategic
goals of carbon peak and carbon neutrality as well as the overall requirements for high-quality development of
the manufacturing industry the internal combustion engine and agricultural machinery equipment industry is
accelerating the implementation of an innovation driven development strategy focusing on enhancing
independent innovation capabilities continuously promoting the construction of common key technology
platforms and strengthening the resilience and safety level of the industrial chain and supply chain. At the same
time the industry actively promotes intelligent manufacturing and green manufacturing accelerates the
transformation and upgrading towards high efficiency intelligence cleanliness and low-carbon and
comprehensively supports the construction of a modern industrial system.
(2) Industry Development Landscape and Trends
The 15th Five-Year Plan period is a crucial stage for China to achieve its carbon peaking target and the internal
combustion engine industry is entering a strategic window period of transformation and reshaping. The "Two
New" policies in 2026 provide clear guidance for the promotion of green intelligent products and the low-carbon
upgrading of industries and energy conservation and carbon reduction have become the core tasks for the high-
quality development of the industry. Driven by policy guidance and market demand the industry is accelerating
the layout of a diversified fuel power technology system and the application of low-carbon and zero carbon fuels
has become an important direction. Hybrid power (including extended range) plays an irreplaceable role in the
transition from internal combustion engine to new energy in commercial vehicles and off-road sectors. Through
the collaborative efforts of combustion optimization emission control and intelligent monitoring internal
combustion engines are accelerating towards high efficiency intelligence cleanliness and low-carbon. The deep
integration of digital technology and manufacturing processes has continuously enhanced the collaborative
efficiency of the industrial chain infusing new momentum into the high-end leap of the industry. Relying on
technological breakthroughs and systematic innovation the internal combustion engine industry will continue to
build a solid foundation for the national economy and defense security.In recent years the government has introduced a series of policies to support the development of the agricultural
machinery market including agricultural machinery purchase subsidies scrap and renewal subsidies and support
policies for the agricultural machinery circulation industry. In 2026 the No. 1 central document will focus on
agricultural and rural modernization and overall rural revitalization. Focusing on improving comprehensive
92026 Semi-Annual Report of Changchai Company Limited
agricultural production capacity and stabilizing food security it will propose three upgrading directions for
agricultural machinery namely high-end intelligence green low-carbon and hilly adaptation. It will release
industrial dividends through subsidy optimization and scenario expansion and promote the transformation of
agricultural machinery and equipment to new quality productivity forces.In the first half of 2026 driven by multiple factors such as the continuous implementation of policies to strengthen
agriculture and benefit agriculture and the upgrading of the demand structure for agricultural machinery the
overall agricultural machinery market in China will show a moderate recovery and deep adjustment trend and the
industry will shift from accelerated scale expansion to a leap in quality. From the perspective of product
categories there is a strong demand for high horsepower intelligent and multifunctional models in the tractor
market while medium-sized tractors maintain a slight growth but their growth momentum continues to weaken.Small traditional tractors are facing pressure from demand contraction. In the field of harvesting machinery
tracked harvesters have maintained stable overall sales due to their adaptability to paddy fields and the support of
overseas export growth; Wheeled grain and corn harvesters are facing significant downward pressure on overall
production and sales due to factors such as stock saturation and planting structure adjustments. The rice
transplanter market is showing a differentiated trend with high-speed passenger rice transplanters accelerating
their popularity among large-scale planting cooperatives and business entities in the plains. Hand-held
transplanters benefit from the national agricultural mechanization special support policies in hilly and
mountainous areas and the overall demand for scattered land in hilly areas is stable. Domestic local rice
transplanter brand technology and service advantages continue to be released and market competitiveness is
gradually increasing.From the perspective of competitive landscape top enterprises dominate with technological upgrades and
brand advantages and market concentration continues to increase; Cross border forces from fields such as
construction machinery have entered the market injecting new technological concepts and competitive vitality
into the industry; Small and medium-sized manufacturing enterprises are facing increased pressure for survival
and development due to factors such as homogenized competition in the low-end market and compressed profit
margins. The phase-out of inefficient and backward production capacity is accelerating and the industry reshuffle
process is deepening. The current market structure of the agricultural machinery industry is clearly differentiated
with intelligent agricultural machinery new energy hybrid equipment large and efficient high-efficiency
implements and specialized supporting agricultural machinery for hilly areas experiencing rapid growth
becoming the core driving force for industry development; However the demand for traditional small and
medium-sized conventional agricultural machinery continues to shrink the market sentiment is declining and the
trend of product structure iteration and upgrading is significant. Technological innovation is the core engine of
this process. Technologies such as Beidou precision operation unmanned autonomous farming and artificial
intelligence regulation have been implemented on a large scale and the penetration rate of intelligent agricultural
machinery has steadily increased; At the same time the industrialization of new energy and hybrid technologies is
accelerating and various energy-saving and efficient new equipment is accelerating scale verification and market
introduction effectively promoting the green and low-carbon development of the industry. Overall the
agricultural machinery industry is currently in a critical period of transformation from large-scale development to
high-quality high-end and refined development. With policy empowerment and technological innovation the
industry has ample room for upgrading and development.
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
102026 Semi-Annual Report of Changchai Company Limited
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
produc Graphic display Product description Product Application
ts features fields
Our diesel engine products include
single-cylinder diesel engines and High power low Agricultural
multi-cylinder engines covering oil consumption machinery
Diesel power range from 3kW to 180kW low noise construction
engine and cylinder diameters from 70mm compact machineryto 140mm. 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
engines covering the power range Agricultural
Gasolin from 1.5kW to 9.0kW. Besides sale Simple structure machinery
e in domestic market our gasoline good reliability small
engine engines are sold to Southeast Asia easy
the Middle East Europe and maintenance
construction
machinery
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
112026 Semi-Annual Report of Changchai Company Limited
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) we have maintained a high market share of
single-cylinder engines and our market share of single-cylinder diesel engines in certain power ranges has ranked
among the top in China. For many years in the process of achieving steady economic development of the
enterprise we cultivated and developed the "Changchai" brand a well-known national brand in China's small
diesel engine industry renowned both domestically and internationally with independent intellectual property
rights.
6. Key Performance Drivers
(1) National policy driver
In recent years the state has issued a series of policies supporting the development of the agricultural machinery
market including subsidy policies for agricultural machinery purchases and scrapping and renewal as well as
support policies for the agricultural machinery circulation industry. The No. 1 Central Document of the CPC
Central Committee for 2026 focuses on agricultural and rural modernization and comprehensive rural
revitalization with the core objectives of enhancing comprehensive agricultural production capacity and ensuring
food security. It proposes three major upgrading directions for agricultural machinery: high-end intelligence
green and low-carbon development and adaptability to hilly and mountainous areas. By optimizing subsidies and
expanding application scenarios the policy releases industrial dividends and promotes the transformation of
agricultural machinery equipment toward new quality productive forces.The Work Plan for Stable Growth of the Machinery Industry (2025–2026) proposes to leverage policies such as
agricultural machinery purchase and application subsidies and scrapping and renewal subsidies promote the
"superior machinery with superior subsidies" and "dynamic adjustment" of subsidized equipment and facilitate
the application and promotion of advanced and applicable agricultural machinery.The Guiding Opinions of the Ministry of Agriculture and Rural Affairs on Vigorously Developing Smart
Agriculture and the National Smart Agriculture Action Plan (2024–2028) emphasize strengthening the R&D
innovation promotion and application of advanced and applicable smart agricultural machinery deepening the
integration of technological innovation and industrial innovation and providing strong scientific and
technological equipment support for the development of modern agriculture.The 15th Five-Year Plan for Accelerating Agricultural and Rural Modernization proposes to promote the R&D
and application of high-end intelligent and hilly and mountainous area-adapted agricultural machinery equipment
systematically advance the R&D of new energy agricultural machinery technologies and industrial synergy and
cultivate leading agricultural machinery enterprises and specialized and sophisticated SMEs in a classified manner.Meanwhile it calls for orderly advancing the development of the low-altitude economy in agricultural and rural
areas and expanding the application scenarios of agricultural drones. The introduction and implementation of a
series of agriculture-favoring and agriculture-supporting policies are conducive to the high-quality development of
the agricultural machinery industry and have created a favorable policy environment for the industry's
transformation toward high-end intelligent and green development.
(2) Industrial chain synergy empowers the Company's sustainable development
The Company has established its own foundry and processing plants to meet part of its demand for diesel engine
122026 Semi-Annual Report of Changchai Company Limited
components. In terms of production and quality these facilities form a significant synergistic effect with the
Company's internal combustion engine assembly operations. The foundry and assembly segments reinforce each
other creating a positive feedback loop that helps the Company integrate the internal combustion engine industrial
chain and build differentiated industry barriers. In terms of production synergy reducing external procurement is
of great significance for the Company in reducing process flows lowering intermediate losses improving
production efficiency shortening delivery lead times and enhancing procurement bargaining power. In terms of
quality synergy the in-house foundry enhances the Company's quality control over components thereby
improving the yield rate and reliability of internal combustion engine products.
(3) Stable and efficient R&D team
The Company boasts an experienced technical management team and a well-established technical support team.Its core technical personnel and R&D management staff have long been engaged in the R&D design
manufacturing and production of internal combustion engines possessing profound professional knowledge and
extensive practical experience as well as strong foresight and scientific judgment in market direction and
technology roadmaps. At the same time the Company has developed an effective talent cultivation mechanism
providing a strong talent guarantee for subsequent R&D efforts.
(4) Well-known brand with numerous renowned customers
The Company formerly known as Changzhou Diesel Engine Factory is a century-old national industrial
enterprise and one of China's earliest specialized manufacturers of internal combustion engines. The Company's
diesel and gasoline engine products serving as power sources for agricultural machinery construction machinery
and other equipment demonstrate excellent performance in terms of power range reliability specific power
noise control and emission standards and have gained recognition from customers. The Company has maintained
long-term cooperative relationships 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 among the forefront of their respective markets.
7. Overview of the Company's principal business operations during the reporting period
In the first half of 2026 affected by multiple factors such as frequent geopolitical conflicts and energy price
shocks the global economic recovery slowed down overall. China's domestic economy showed a generally stable
development trend with improvements in both quality and structure while the potential for domestic demand
requires further release. Currently the agricultural machinery industry as a whole is in a phase of deep adjustment
and parallel transformation and upgrading. Affected by grain price fluctuations and pressure on user returns
demand in the traditional agricultural machinery market remains relatively weak. However industry sentiment has
shown signs of recovery and market confidence is gradually being restored. Emerging sectors are performing
actively with demand for smart agricultural machinery high-horsepower and high-end equipment continuing to
grow and the product structure accelerating its optimization. Leveraging the policy support for agricultural
modernization and new quality productive forces the agricultural machinery industry is advancing toward a new
stage of high-quality development featuring the coordinated advancement of intelligence greenization and high-
end development. The Company closely follows its strategic deployment with all employees working together
with dedication and resilience. Facing the pressure of intensifying industry competition the Company has
deepened management efficiency and optimized its product structure achieving an overall operating performance
that is steadily progressing with an improving structure. During the reporting period the Company sold a total of
395000 units of various diesel engines gasoline engines and power units achieving sales revenue of RMB 1.670
billion representing a year-on-year increase of 6.96%.In terms of product R&D and matching the Company remains committed to market demand-driven technological
R&D advancing the optimization of existing models development of power platforms and forward-looking
132026 Semi-Annual Report of Changchai Company Limited
technology deployment continuously consolidating its core technology and product reserves. The Company has
conducted special campaigns in response to market feedback optimizing the terminal operation and after-
treatment systems of core multi-cylinder engine models and completing the systematic iteration and upgrade of
models for harvester matching applications with the supporting technical solutions fully finalized after field
validation. For single-cylinder engines the Company has completed adaptations for special operating conditions
and iterative upgrades for overseas models continuously refining the details of its flagship products with steady
improvements in terminal adaptability and market adaptability. In terms of power platform development the
Company is advancing dual-track R&D for high-horsepower and light-duty power implementing dual after-
treatment technology routes for high-horsepower models with multiple products having completed new model
trial production reliability testing and OEM supporting cooperation. Meanwhile the Company has launched a
six-cylinder high-horsepower power project to expand into the commercial power sector and is steadily
complementing its light-duty power product matrix. In terms of forward-looking technology the hybrid
agricultural power project has achieved phased breakthroughs and pre-research on China V emission standards is
underway continuously strengthening product competitiveness and technological reserves.In terms of sales and services in the domestic market the single-cylinder engine business has effectively boosted
channel confidence and efficiency through channel optimization and regional market cultivation while
customizing adapted solutions for niche markets to cultivate stable incremental growth. The multi-cylinder engine
business has consolidated its core supporting position in traditional agricultural machinery and expanded into
supporting areas such as light construction machinery hilly and mountainous agricultural machinery and plant
protection machinery increasing the proportion of high-value-added models and facilitating product
transformation and upgrading. In the export market the Company has established a multi-regional coordinated
foreign trade framework developing customized models for different regional market demands and steadily
expanding market share. The Company continues to optimize its overseas sales network and localized after-sales
service system leveraging OEMs' vehicle export channels to expand its overseas installed base achieving
simultaneous improvement in foreign trade scale and export quality.In terms of quality management the Company has advanced lean supply chain management and quality system
consolidation with a dual-track approach supporting stable production and operations. In the supply chain the
Company has anticipated raw material prices coordinated parts planning and scheduling and stabilized
production and supply rhythm to cope with peak-season delivery pressure. Multiple approaches have been
adopted to drive procurement cost reduction with remarkable results. The Company has introduced a number of
high-quality suppliers comprehensively identified and reviewed the list of sole-supply high-risk parts and
implemented the management principle of "quality supply priority" effectively strengthening the supply chain's
risk resilience and overall operational efficiency. The Company continues to deepen the construction of its full-
process quality control system establishing a rapid response mechanism implementing the "3+1" fortress project
and applying standardized methods to tackle key quality projects. The Company actively carries out mass quality
management activities with mass quality improvement initiatives achieving municipal-level professional awards.In terms of internal management the Company has scientifically allocated production capacity advanced lean
production to ensure efficient order delivery and completed the reorganization of production base resources to
revitalize existing assets. Regular safety hazard inspections and rectifications have been carried out with robust
network and data security defenses established ensuring smooth and orderly operations. The operating quality of
its subsidiaries has continued to improve with enhanced profit contribution capabilities. The Company adheres to
the guidance of Party building deepening ideological education and work style development standardizing
organizational construction and supervision promoting the deep integration of Party building into core business
operations and cultivating a robust corporate culture and compliance risk control system. In talent management
142026 Semi-Annual Report of Changchai Company Limited
the Company has optimized its workforce structure improved performance appraisal and innovation incentive
mechanisms strengthened the cultivation of digital capabilities among management personnel achieving a win-
win situation in terms of both enterprise efficiency enhancement and employee income growth thereby laying a
solid foundation for the Company's high-quality development.During the reporting period the Company's wholly-owned subsidiary Horizon Investment together with its
controlling shareholder Changzhou Investment Group Co. Ltd. and its wholly-owned subsidiary Changzhou
Xinhui Private Equity Fund Management Co. Ltd. jointly signed the Partnership Agreement of Yuanzhi
Changtou Xingyu (Changzhou) Equity Investment Partnership (Limited Partnership). Yuanzhi Changtou Xingyu
completed the industrial and commercial registration procedures in April 2026 and went through the industrial
and commercial registration procedures for the change of general partner in August 2026. The houses within the
expropriation scope of the old city renovation project on the land plot of the Company's Sanjing Branch are to be
expropriated by the government. To improve the efficiency of the expropriation work the Company reached an
agreement with the Housing and Urban-Rural Development Bureau of Changzhou National High-Tech Industrial
Development Zone (Xinbei District) and the Housing Expropriation and Compensation Service Center of Sanjing
Subdistrict Xinbei District Changzhou City based on professional reports issued by qualified professional firms
on land consolidation and upgrading of the Sanjing Branch and subsequent compensation payments and intends
to sign a Supplementary Agreement. This matter has been deliberated and approved by the first extraordinary
general meeting of shareholders in 2026.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 IATF16949 automotive product quality 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 honored as a "National Enterprise with Quality and Service Integrity
Commitment" and was also awarded the "Outstanding Supplier Award" by multiple supporting partners. Over the
years in the course of achieving steady economic growth Changchai has cultivated and developed the
"Changchai" brand into a well-known national brand in China's small diesel engine industry renowned both
domestically and internationally and with independent intellectual property rights.
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's internal combustion engines were
152026 Semi-Annual Report of Changchai Company Limited
honored as "National Quality Inspection Stable and Qualified Products." In the first half of 2026 the Company
was granted 5 patent authorizationsAs of June 30 2026 Changchai held 192 valid patents globally including 42
domestic invention patents and 2 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 752 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
"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 Reasons for
Period Previous Year YoY Change Fluctuations
Operating revenue 1669786673.48 1561186625.83 6.96%
Cost of sales 1421532002.59 1361474105.33 4.41%
Selling expense 30586975.39 29894284.08 2.32%
Administrative
expense 47819242.08 50718409.56 -5.72%
This was primarily
attributable to an
Finance costs 6742399.18 -5618946.80 increase in—— exchange losses
during the reporting
period.Income tax expense 14846902.91 13529676.07 9.74%
R&D expense 47024675.62 38891905.33 20.91%
This was mainly
due to the fact that
most of the
Company's multi-
cylinder engine
Net cash generated customers are OEM
from/used in -134705252.86 -74306110.63 supporting——
operating activities manufacturers withrelatively longer
credit terms and
the Company has
stepped up its
market expansion
efforts with
162026 Semi-Annual Report of Changchai Company Limited
moderate credit
sales resulting in
relatively lower
cash collections.This was primarily
attributable to an
Net cash generated increase in the scale
from/used in -144202387.70 -97167644.92 —— of wealth
investing activities management
products during the
reporting period.This was mainly
due to an increase
Net cash generated in cash dividends
from/used in -15525235.15 -7056925.07 —— distributed by the
financing activities Company during
the reporting
period.This was primarily
attributable to the
Company's stepped-
up market
expansion efforts
with moderate
Net increase in cash credit sales which
and cash -305100864.34 -178530680.62 —— led to relatively
equivalents lower cash
collections coupled
with an increase in
the scale of wealth
management
products during the
reporting period.This was mainly
due to the
optimization of the
Company's sales
structure and the
year-on-year
increase in sales
revenue the
Net profit improvement in
attributable to gross profit margin
shareholders of the 105059653.98 73422814.69 43.09% in the first half of
parent company the year comparedwith the same
period last year as
well as the
investment income
generated from
Horizon
Investment's
disposal of part of
its held shares
172026 Semi-Annual Report of Changchai Company Limited
dividends from
Bank of Jiangsu
and cash
management
activities.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
Operating revenue operating Operating revenue total YoY Change
revenue (%) operatingrevenue (%)
Total 1669786673.48 100% 1561186625.83 100% 6.96%
By operating division
Internal
combustion 1645957037.35 98.57% 1537977952.94 98.51% 7.02%
engines
Other 23829636.13 1.43% 23208672.89 1.49% 2.68%
By product category
Diesel engines 1579087777.68 94.57% 1464198188.86 93.79% 7.85%
Gasoline
engines 64115320.04 3.84% 71014743.76 4.55% -9.72%
Other 26583575.76 1.59% 25973693.21 1.66% 2.35%
By operating segment
Domestic 1423615294.39 85.26% 1327242298.54 85.01% 7.26%
Overseas 246171379.09 14.74% 233944327.29 14.99% 5.23%
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 in
Operating revenue Cost of sales profit operating change in gross
margin revenue cost of profit
(%) sales (%) margin(%)
By operating division
Internal
combustion 1645957037.35 1400183437.95 14.93% 7.02% 4.29% 2.23%
engines
By product category
Diesel
engines 1579087777.68 1345082069.33 14.82% 7.85% 5.10% 2.22%
Gasoline
engines 64115320.04 54362165.74 15.21% -9.72% -9.64% -0.07%
182026 Semi-Annual Report of Changchai Company Limited
By operating segment
Domestic 1423615294.39 1187654627.41 16.57% 7.26% 4.65% 2.07%
Overseas 246171379.09 233877375.18 4.99% 5.23% 3.19% 1.87%
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 % ofgross profit Source Recurrent or not
Dividend income from
The increase was mainly due to equity investments
dividend income from stocks and returns on cash
and returns on cash management management products
products together with are of a sustainable
Return on investment income realized nature whereas
investment 31090323.25 24.92% from the disposal of certain investment income
shares of the Company held by arising from the
its wholly-owned subsidiary disposal of shares is
Changzhou Horizon Investment non-recurring and
Co. Ltd. therefore not
sustainable.During the reporting period this
was mainly attributable to the
Gains/losses on increase in fair value of shares
changes in fair 3474167.46 2.78% held by the Company's wholly-
value owned subsidiary Horizon
No
Investment in Kailong High-
Tech Co. Ltd. compared to the
beginning of the period.This was primarily attributable
Asset impairment to the impairment provision
loss -910849.44 -0.73% recognized on inventories No
during the current period.Non-operating
income 35210.65 0.03%
This was primarily attributable
to penalty income. No
Non-operating This was primarily caused by
expense 20771.94 0.02% 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
30 June 2026 31 December 2025 Change
As % of As % in Reason for any
Amount total Amount of total percent significant change
assets assets age (%)
Cash and Cash
Equivalents 1099136545.77 18.98% 1338231792.64 23.99% -5.01%
192026 Semi-Annual Report of Changchai Company Limited
This was primarily
due to the fact that
most of the
Company's multi-
cylinder engine
customers are OEM
supporting
manufacturers with
Accounts 1282205435.24 22.14% 451748532.34 8.10% 14.04% relatively long creditreceivable terms. During the
reporting period the
Company stepped up
its market expansion
efforts and moderately
extended credit sales
which resulted in a
significant increase in
accounts receivable.Inventories 566845803.44 9.79% 757083436.15 13.57% -3.78%
Investment
property 34595774.21 0.60% 35644130.99 0.64% -0.04%
Fixed assets 517154616.58 8.93% 550316120.80 9.87% -0.94%
The primary cause
was the Company's
Construction investment in
in progress 4067335.75 0.07% 2801650.98 0.05% 0.02% technologicaltransformation
projects during the
reporting period.This was primarily
attributable to the
maturity of bank
Short-term acceptance bills with
borrowings 7521472.93 0.13% 88926344.09 1.59% -1.46% lower credit ratingswhich had been
discounted by the
Company during the
reporting period.Contract
liabilities 40356723.37 0.70% 40040496.36 0.72% -0.02%
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 Cumulati Impairme
on fair- ve fair- nt Purchase Sold in
Item Beginnin d in the the Other Endingg amount value value allowancechanges changes for the Reporting Reporting change amount
in the charged Reporting Period Period
202026 Semi-Annual Report of Changchai Company Limited
Reporting to equity Period
Period
Financial
assets
Held-for-
trading
financial
assets
(derivativ 3721846 3474167
e 89.98 .46 0.00 0.00 7530587 5861929 0.00 5425246
financial 46.43 52.22 51.65
assets
exclusive
)
Investme
nt in
other 9813612 0.00 8044550 9888082equity 95.81 45.81 0.00 0.00 0.00 0.00 95.81
instrumen
ts
Subtotal
of 1353545 3474167 8044550
financial 985.79 .46 45.81 0.00
753058758619291531332
46.4352.220.00947.46
assets
Other 3371187 0.00 0.00 0.00 100000057.03 .00 0.00 0.00
3381187
57.03
Total of 1690664 3474167 8044550 0.00 7540587 5861929 1869451above 742.82 .46 45.81 46.43 52.22 0.00 704.49
Financial
liabilities 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
4. Restricted Asset Rights as at the Period-End
Unit: RMB
Items At the period-end Reason for restriction
Monetary assets 156169488.67 Bank acceptance bill guarantee deposits Letter of guarantee deposits Performance bond deposits Term deposits and accrued interest
Notes receivable 7521472.93 Payment obligations for discounted notes not yet due
Notes receivable 86875410.49 Payment obligations for transferred notes not yet due
VI Investment Status Analysis
1. Overview
□ Applicable √ Not applicable
212026 Semi-Annual Report of Changchai Company Limited
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 Gain/
Initia untin nnin fair fair hase Sold loss EndiVarie Code Nam l g value value d in in thety of of e of meas g chan chan the Repo in the
ng Acco Fund
inves carry Repo carry untin ingsecur secur secur tmen urem ing ges ges Repo rting rting ing g sourcity ity ity t cost ent in the recor rting Perio amou title emeth amount Repo ded Perio d
Perio nt
od rting in d d
Perio equit
d y
Inves
tmen
Dom t in
estic/ Foto Fair6001 n 4178 value 4219 3787 4204 other Self-forei 66 Moto 4000 meth 4000 0.00 1100 0.00 0.00 0.00 9500 equit fundgn .00 0.00 0.00 0.00 y ed
stock r od instr
umen
ts
Inves
tmen
Dom
estic/ Bank 4278 Fair
t in
forei 6009 of 6000 value
2433 2094 131 2522 other Self-
19 Jiang 6000 0.00 6600 0.00 0.00 9994 5200 equit fundgn su .00
meth 0.00 0.00 0.00 0.00 y ed
stock od instr
umen
ts
Held
Dom Kailo -for-
estic/ ng 2000 Fair tradi
forei 3009 High 1268 value
1660 547 2030 1570 1266 Self-
12 Tech meth 065 223 0.00 0.00 438 295 398
ng fund
gn nolo .00 od 0.00 0.00 4.00 1.55 0.00
finan
stock cial
ed
gy asset
s
Dom 6881 Lian 7200 Fair 5692 -354 0.00 0.00 2996 125 2808 Held Self-
222026 Semi-Annual Report of Changchai Company Limited
estic/ 13 ce 000. value 320 400 917 211 000 -for- fund
forei Tech 00 meth 0.00 0.00 6.73 0.18 0.00 tradi ed
gn nolo od ng
stock gy finan
cial
asset
s
Held
Dom -for-
estic/ 6053 Lanti
Fair tradi
forei an 1607 value 2161 -453
Self-
68 44.76 meth 60.00 60.00 0.00 0.00 0.00
-453 1708 ng
60.00 00.00 finan fundgn Gas ed
stock od cialasset
s
111973901885881502730107136
Total 3201 -- 4001 287 7700 0.00 356 964 6178 -- --
2.760.000.000.000.731.730.00
(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.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
Name Relation Principal Registere Total Net assets Operating Operating Net profit
232026 Semi-Annual Report of Changchai Company Limited
ship with activity d capital assets revenue profit
the
Compan
y
Production
of diesel
Changniu Subsidia engine 5506300 160927 676868 126482 -52390 -50385ry accessorie 0.00 193.50 65.80 888.32 6.54 0.05
s
Changwa Subsidia Dieselengine 8500000 806653 553104 407391 135254 137316n ry assembly 0.00 93.14 48.16 50.64 2.28 6.99
Horizon External
Investme Subsidia investment 4000000 104635 972359ry and 0.00 969.78 57.22 0.00
166118120218
nt 78.80 45.51consulting
Changcha Subsidia Gasolineengines 3725000 112025 101887 641153 325893 303129i Robin ry assembly 0.00 259.61 208.17 20.04 8.02 1.74
Internal
Changcha combustio
i Subsidia n engineand 3000000 995698 548084 634217 153521 153571Machiner ry related 00.00 409.36 536.95 973.85 43.05 43.03y accessorie
s
Xingshen
g Real Real estate
Estate Subsidia manageme 1000000 327279 216614 135625 39211.0 31914.7
Managem ry nt service .00 3.91 6.34 0.21 5 0
ent
Manufactu
ring and
Zhenjiang Subsidia marketing 2000000 149056 128947 485856 105888 899897
Siyang ry of diesel .00 448.96 729.88 17.48 79.75 2.78
engines
for ships
Subsidiaries obtained or disposed of in the Reporting Period:
□ Applicable √ Not applicable
Other information about principal subsidiaries and joint stock companies:None
IX Structured Bodies Controlled by the Company
□ Applicable √ Not applicable
X Risks and Countermeasures
(1) Market Risks
The agricultural machinery industry is currently in a phase where deep adjustment and transformation and
upgrading are progressing in parallel. Under the compounded influence of multiple policies—including the phase-
out and adjustment of agricultural machinery purchase subsidies the implementation of green and low-carbon
industrial policies and the increasingly stringent emission control regulations for non-road mobile machinery—
242026 Semi-Annual Report of Changchai Company Limited
the market for traditional mid-to-low-end product categories has continued to experience downward pressure
while segmented sectors such as high-end intelligent machinery large-horsepower equipment and new-energy
agricultural machinery have maintained growth momentum. As agricultural operations continue to intensify in
terms of scale and concentration the pace of high-quality transformation in the industry has further accelerated.Market players are closely aligning with end-user agricultural needs to continuously deepen product innovation
and upgrading while expanding both domestic and export sales channels. At the same time the cross-border entry
of construction machinery enterprises has intensified competition in the sector.Countermeasures: first deepening user value orientation by shifting from a traditional product-centric mindset to
a full life-cycle business philosophy; second expanding global market presence through tiered precision strategies
in the domestic market and breakthrough initiatives in overseas markets striving to achieve overall production
and sales volume targets; third reinforcing technological moats by increasing R&D investment to ensure that
innovation translates into marketable outcomes and builds core competitive advantages; fourth strengthening
quality foundation by implementing end-to-end quality loss reduction initiatives across the entire process; and
fifth enhancing organizational effectiveness by exercising strict control over administrative expenses regulating
subsidiary governance and broadening the pathways for transformation.
(2) Industrial Risks
Driven by the continued promotion of new-energy agricultural machinery policies and increasingly stringent
emission standards enterprises have accelerated their R&D and market deployment of new-energy power systems.As a result the market share of diesel engine products and related supporting sectors has been affected to a certain
extent while the stock demand for traditional small-to-medium horsepower diesel engines continues to contract.Although new-energy agricultural machinery still faces challenges such as high costs difficulties in field
recharging and inadequate adaptation to complex operating conditions the pace of technological iteration is
accelerating and substitution trends have already emerged in small-to-medium horsepower agricultural machinery
segments. Meanwhile original equipment manufacturers (OEMs) are developing their own electric powertrains
and hybrid solutions which has significantly raised the requirements for integrated and intelligent powertrain
systems. Traditional internal combustion engine enterprises that rely solely on conventional mechanical pumps or
simple electronic control technologies without the capability for hybrid electric control integration are at risk of
being marginalized in the supply chain. Coupled with the continuous tightening of new emission regulations
enterprise R&D compliance costs have further increased.Countermeasures:First develop products that comply with national energy conservation and emission reduction
policies optimize and upgrade product lines in response to market demand and strengthen the application of
intelligent technologies and new materials to enhance product added value and competitiveness thereby
consolidating market advantages.Second accelerate R&D in new-energy power systems and continue to advance
the development and deployment of hybrid products.Third closely follow the pace of the non-road China V
emission policy and proactively develop technical solutions for future compliance.Fourth adhere to a coordinated
development strategy that balances product operations with capital operations with a strategic focus on
electrification intelligence new-energy power and motor supporting sectors while leveraging the capital market
to accelerate external growth.
(3) Foreign Trade Risks
The current international landscape has become increasingly complex and severe with frequent occurrences of
geopolitical conflicts international trade frictions and other issues that have impacted regional political stability
and security global economic recovery food and energy security and the ecological environment. The uncertainty
surrounding the global trade environment has risen significantly. Many countries around the world continue to
adjust their foreign trade control policies with trade protection measures becoming increasingly diverse. At the
252026 Semi-Annual Report of Changchai Company Limited
same time monetary policy divergence among major global economies has intensified and the factors causing
volatility in broad two-way exchange rate fluctuations have continued to multiply. Should there be significant
changes in the political stability or foreign trade policies of foreign markets or should exchange rates continue to
fluctuate substantially it would have a material impact on the export sales of agricultural machinery products and
the Company's profitability.Countermeasures:First enhance independent market development capabilities and improve overall foreign trade
efficiency through the complementarity and sharing of internal and external resources information and
products.Second develop differentiated products in response to the diverse demands of various overseas regional
markets and promote more high-performance and new-sector products to overseas markets. At the same time
leverage the export channels of domestic OEMs to increase the installed base of equipment overseas.Third
consolidate the core advantages in traditional major markets accelerate channel development expand market
share in mid-tier markets cultivate growth drivers in emerging potential markets and continue to expand the
global market presence.Fourth strengthen the training of overseas service personnel enhance service capabilities
and establish overseas entrusted service stations to accelerate the development of a global after-sales service
network.Fifth closely monitor exchange rate fluctuations select appropriate currencies for quotation and
settlement and promptly adopt measures such as adjusting product prices and modifying payment terms to
mitigate risks.
(4) Raw Material Price Volatility Risks
Raw material market prices are influenced by multiple factors including the macroeconomic environment
geopolitical conflicts and changes in industry supply and demand dynamics leading to volatile market
adjustments. Prices of core raw materials such as steel pig iron and coking coal have shown divergent trends in
phased fluctuations. The volatility of upstream raw material costs has exerted certain pressure on the Company's
production costs thereby having a corresponding impact on its operating profits.Countermeasures:First track market dynamics assess raw material price trends coordinate the planning and
scheduling of key components and strengthen inventory management to hedge against the negative impact of raw
material price fluctuations on the Company.Second enhance internal management through technical
improvements cost management and other measures optimize work processes and improve production and
operational efficiency.Third uphold the principle of high-quality procurement at reasonable costs continue to
implement supply assurance initiatives enhance the resilience of the supply chain against risks and strive to build
a stable efficient and reliable supply system.
(5) Talent Risks
Talent is the core strategic resource driving high-quality corporate development. To achieve long-term stable
operations and industrial transformation and upgrading an enterprise must rely on a well-structured and highly
capable talent pool as its fundamental support. The Company's efforts to improve operational quality and
efficiency expand emerging business sectors and achieve technological breakthroughs require multi-level
professional talent to deliver tangible results. Should the compensation system and talent incentive and restraint
mechanisms be insufficiently sound it could lead to insufficient attraction and development of senior
management leaders and core technical talents as well as a weak reserve pipeline of successor talents thereby
constraining the Company's sustained capability for scientific and technological innovation and core
competitiveness.Countermeasures: First in line with the Company's strategy and operational realities improve the talent pipeline
through tiered and categorized development approaches broaden talent acquisition channels revitalize internal
workforce resources optimize job allocation and team structure and comprehensively enhance the overall
competence of all employees. Second focus on the development needs of each business segment by establishing a
262026 Semi-Annual Report of Changchai Company Limited
systematic and professional training framework organizing regular leadership development programs facilitating
career progression pathways for skilled personnel and continuously strengthening employees' professional
expertise and on-the-job performance capabilities. Third improve the performance appraisal and talent incentive
mechanisms vigorously promote the rejuvenation and professionalization of the management team and
comprehensively enhance the contribution of human resources to the Company's development. Fourth strengthen
the institutional framework of employee representative congresses and trade union services and safeguards
actively foster harmonious labor relations continuously enhance employees' sense of belonging well-being and
cohesion and provide a solid organizational foundation for the achievement of annual targets.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
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
272026 Semi-Annual Report of Changchai Company Limited
Part IV Corporate Governance Environment and Social
Responsibility
I Changes in Company Directors and Senior Management
□ Applicable √ Not applicable
There were no changes to the Company's directors or senior management during the reporting period. For details
please refer to the 2025 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 Jiangsu Provincial Department of Ecology and
Changchai Company Limited Environment - Enterprise Environmental Information2 Changjiang branch Disclosure System (Jiangsu)
3 Jiangsu Changchai Machinery Co. Ltd. http://ywxt.sthjt.jiangsu.gov.cn:18181/spsarchive-webapp/web/viewRunner.htmlviewId=http://ywxt.sthjt.ji
4 Changzhou Changniu Machinery Co. angsu.gov.cn:18181/spsarchive-webapp/web/sps/viewLtd. s/yfpl/views/yfplHomeNew/index.js
V Social Responsibility
During the reporting period the Company attached great importance to and actively fulfilled its social
282026 Semi-Annual Report of Changchai Company Limited
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 has effectively fulfilled its primary responsibility for Party building
consolidating the Company's development foundation across multiple dimensions including political construction
organizational development and disciplinary oversight. The Company has continuously advanced the integration
of Party leadership into corporate governance effectively implemented the "three major and one large" decision-
making system (i.e. major decisions major personnel changes major project arrangements and large-sum fund
allocations) and strictly adhered to various decision-making procedures and deliberation protocols. During the
reporting period 23 major operational matters were reviewed and deliberated embedding Party building
requirements into the core decision-making processes of business operations. Through activities such as
educational programs on fostering a correct approach to governance special Party lectures and dissemination
sessions on the spirit of Party plenary sessions the Company has strengthened political guidance and regularly
conducted anti-corruption awareness and integrity education. The Party Committee has promptly coordinated and
resolved key challenges and difficulties in production and operations providing strong safeguards for the effective
execution of the Company's priority tasks and projects and has continuously empowered the improvement of
corporate governance effectiveness.The Company in accordance with the relevant provisions of 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 Stock Listing Rules and other applicable laws and regulations as well as the
Articles of Association of the Company has continuously standardized its corporate governance structure
established and improved internal management and control systems fulfilled its information disclosure
obligations and further enhanced the overall level of corporate governance. The Company maintains a modern
corporate governance framework comprising the Shareholders' Meeting as the authority and decision-making
body the Board of Directors as the operational decision-making body the Audit Committee as the specialized
supervisory body and the Senior Management as the executive body ensuring that the Company's operations are
conducted in a standardized and prudent manner. On this basis the Company strictly adheres to the requirements
of its internal control system clearly defining the responsibilities and authority boundaries of each level and
department. Through continuous optimization of management processes and strengthened implementation of
policies the Company has steadily enhanced the institutionalized and refined level of its standardized operations.
(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 2026 the Company held one
shareholders' meeting ensuring shareholders' rights to information and participation through standardized
procedures and safeguarding their legitimate interests.In terms of information disclosure the Company strictly complies with the provisions of the Shenzhen Stock
Exchange Stock Listing Rules the Articles of Association of the Company and the Company's Information
Disclosure Management System and fulfills its information disclosure obligations as a listed company in
accordance with applicable laws and regulations. The Company ensures that all disclosed information is truthful
292026 Semi-Annual Report of Changchai Company Limited
accurate complete and timely and guarantees that all shareholders have equal access to information. The
Company has designated the Securities Times and CNINFO (www.cninfo.com.cn) as its designated information
disclosure platforms. It continuously strengthens the management of insider information and proactively prevents
the risk of insider trading. During the reporting period no insider trading occurred and there were no
circumstances that prejudiced the interests of shareholders.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 2025 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.The Company successfully completed the 2025 annual dividend distribution totaling RMB 15525200.00. Over
the past three years the cumulative cash dividend payout ratio reached 94.06% of the average annual net profit
exceeding dividend commitments and rewarding shareholders with tangible actions.?
(2) Protection of Customer and Consumer Rights
The Company has established a nationwide sales and service network across China comprising 24 sales service
centers and 752 authorized maintenance stations with service outlets spanning both urban and rural areas to
ensure convenient and accessible service for customers. To adapt to the China Non-Road Stage IV emission
requirements and enhance service precision the Company has developed a proprietary service monitoring
platform with distinctive features improving service efficiency and customer experience. In terms of
institutionalized protection of customer rights and interests the Company has strengthened its foundational
support for customer rights through continuous improvement of policies and clear operational guidelines. The
Company has maintained sound long-term cooperative relationships with its customers. In recent years the
Company has been repeatedly honored as a National Demonstration Enterprise for Product and Service Quality
Integrity and has been recognized as a preferred supplier by multiple OEMs. The Company's high-quality
products and services have earned widespread recognition from both customers and the consumer market.
(3) Protection of Supplier Rights
The Company strengthens supplier management on the basis of the Parts Supply and Procurement Contracts and
the Supplier Quality Agreements optimizes the allocation of component production capacity enhances inventory
and planning management and makes timely payments to suppliers in accordance with contract terms to
safeguard their legitimate interests. To elevate the overall quality control level of the supply chain the Company
has introduced multiple high-quality suppliers implemented the principle of high-quality procurement at
reasonable costs and effectively strengthened the risk resilience and overall operational efficiency of the supply
chain. The Company continues to deepen the development of a comprehensive whole-process quality control
system establishes a rapid response mechanism implements the "3+1" Fortress Project and applies standardized
methodologies to tackle key quality initiatives. The Company has established a dynamic supplier evaluation
system and continuously optimizes the supply chain structure based on evaluation results and actual supply
performance. It effectively protects the legitimate rights and interests of suppliers integrates supplier rights
protection throughout the entire supply chain management process supports the technological growth and
progress of suppliers and fosters a mutually beneficial and symbiotic supply chain ecosystem.
(4) Protection of Employee Rights
The Company adheres to a people-oriented talent philosophy focusing on the comprehensive capability
enhancement and personal career development of its employees. Through a combination of theoretical training
302026 Semi-Annual Report of Changchai Company Limited
and practical application the Company enables employees to continuously improve and develop their
competencies.The Company has established human resources management departments at all levels and has set up trade union
organizations at various tiers. It has implemented a staff representative congress system in accordance with
applicable laws with multiple parties collaborating effectively to safeguard and protect the legitimate rights and
interests of employees. The Company strictly complies with national laws regulations and policies related to
labor and employment treats all employees equally and continuously standardizes labor management practices.In strict accordance with the Labor Contract Law of the People's Republic of China the Company signs written
labor contracts with all employees achieving a 100% labor contract signing rate. In full compliance with the
Social Insurance Law of the People's Republic of China and the Regulations on the Administration of Housing
Provident Funds the Company contributes to social insurance and housing provident funds for all employees
actively fostering a harmonious and stable labor relationship.The Company cultivates a fair equal and harmonious working environment for its employees continuously
improves the compensation and benefits system and effectively arranges employee holiday benefits. It organizes
various cultural and recreational activities to enrich employees' spiritual and cultural lives conducts public
welfare initiatives actively improves employees' working conditions and provides proper health monitoring
thereby effectively safeguarding employees' occupational safety and health.The Company continuously optimizes its human resources structure and through a series of initiatives builds a
solid platform for employee growth and development. It strengthens the training and development of management
cadres and accelerates the rejuvenation of the leadership team ensuring that employees' personal growth is closely
aligned with the Company's development. The Company comprehensively implements professional knowledge
and job-specific skills enhancement training programs. During the reporting period it completed 31 training
programs covering over 2475 employee participations fully supporting employees' career development
effectively safeguarding their rights to vocational skills training and helping them continuously achieve self-
improvement in their roles. In addition the Company continues to refine its performance appraisal and incentive
mechanisms closely linking employees' work results with incentive measures which has significantly stimulated
employees' enthusiasm and motivation in their work.
(5) Workplace Safety
The Company has implemented a tiered accountability system for work safety at all levels signing work safety
contracts with each manufacturing plant establishing clear annual safety management objectives and defining
departmental safety responsibilities. Based on the risk inventory the Company has completed comprehensive risk
identification and control measures and strictly regulates the approval procedures and on-site supervision for
hazardous operations. The Company maintains a routine safety and fire inspection system. During the reporting
period it conducted fire safety training covering 586 participants and organized 6 fire drills. Through practical
emergency training and routine management the Company has built a solid defense line for work safety and
security prevention and control. The Company continuously strengthens comprehensive safety education and
training for all employees actively organizes employees to identify and rectify potential safety hazards in their
workplaces and enhances their self-protection capabilities and comprehensive emergency response skills when
encountering urgent situations during operations thereby effectively safeguarding the safe and stable operation of
the Company's production and business activities.
(6) Environmental Protection and Sustainable Development
The Company actively practices the philosophy of scientific development and green development and with a
strong sense of social responsibility adheres to the environmental protection principles of efficiency improvement
consumption reduction energy conservation and pollution abatement. It proactively takes measures to reduce
312026 Semi-Annual Report of Changchai Company Limited
energy consumption and minimize pollutant emissions. Guided by the ISO 14001 environmental management
system framework the Company strictly follows the "PDCA"principle of continuous improvement and adheres to
the approach of "prevention first combining prevention and control and pursuing continuous improvement" to
constantly enhance its environmental management capabilities safeguard a better living environment and
promote the sustainable development of the enterprise.In line with its operational strategies the Company actively promotes the R&D production and supporting
application of high-quality and environmentally friendly products serving the development of agriculture rural
areas and farmers while improving energy utilization efficiency and protecting the environment. At the same time
based on its actual circumstances the Company conscientiously fulfills its corporate social responsibilities
contributing to the coordinated and sustainable development of society the economy and the environment.
322026 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's 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.
332026 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.
342026 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
1、In April 2026 the Company's wholly-owned subsidiary Horizon Investment together with the controlling
shareholder Changzhou Investment Group Co. Ltd. and its wholly-owned subsidiary Changzhou Xinhui Private
Equity Fund Management Co. Ltd. jointly signed the Partnership Agreement of Yuanzhi Changtou Xingyu
(Changzhou) Equity Investment Partnership (Limited Partnership). Yuanzhi Changtou Xingyu has completed
the industrial and commercial registration procedures and obtained its business license.
2、In August 2026 the original general partners of Yuanzhi Changtou Xingyu (Changzhou) Equity Investment
Partnership (Limited Partnership) (the "Fund") which was established with the participation of the Company's
wholly-owned subsidiary Horizon Investment namely Changzhou Xinhui Private Equity Fund Management
Co. Ltd. and Changzhou Xingyu Industry Investment Co. Ltd. withdrew from the partnership. Changzhou
Xingyu Xinhui Venture Capital Co. Ltd. (jointly established by the original general partners Changzhou
Xinhui Private Equity Fund Management Co. Ltd. and Changzhou Xingyu Industry Investment Co. Ltd.) was
introduced as the new general partner and executing partner of the Fund assuming the relevant functions of the
two former general partners. As a result the Fund was restructured into a dual-GP fund operating structure.Concurrently the Fund amended the investment scope provisions of the Partnership Agreement adding the
upstream and downstream supply chain of the new-generation information technology supporting industry to
the investable areas in addition to the existing upstream and downstream supply chain of new energy vehicles
and new energy thereby broadening the sources of projects and the investment boundaries. On August 12 2026
the Fund completed the industrial and commercial registration procedures for the changes.Inquiry on the disclosure website for interim reports on major related-party transactions
Title of Interim Report Disclosure Date of Disclosure Website of InterimInterim Report Report
Progress Announcement on Subsidiary's
Participation in Equity Investment Fund and April 21 2026
Related-Party Transactions
Announcement on Progress of General Partner CNINFO
Change and Related Party Transactions of the https://www.cninfo.com.cn/
Industry Investment Fund Established by August 14 2026
Subsidiaries
352026 Semi-Annual Report of Changchai Company Limited
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
Unit: RMB 0000
Balance of entrusted
Specific type Risk Characteristics wealth management Amount overdue andduring the reporting unrecovered
period
Bank financial
products Low risk high liquidity high safety 49000 0
Broker
financial Low risk high liquidity high safety 993 0
products
Details of high-risk entrusted wealth management investments made by the Company as the sole principal
including investments with lower safety and poorer liquidity
□Applicable √Not applicable
4. Other Major Contracts
□Applicable √Not applicable
362026 Semi-Annual Report of Changchai Company Limited
No such cases in the Reporting Period.XIII Register of Site Visits Meetings and Interviews during the Reporting Period
√ Applicable □ Not applicable
Date of Category Main Topics Reference to the Basic
Reception Venue
Method of
Reception of Visitor(s) Discussed and Information of theVisitors Materials Provided Survey
Company product
promotion CNINFOInvestors （www.cninfo.com.cn）
April 27 Online Online and the progress industry
2026 Meeting platform Others general market，000570 Changchai
opportunities and Investor Relationspublic major business Management Information
order status etc. 20260427
XIV Other Significant Events
√ Applicable □ Not applicable
1、Progress in the Acquisition and Compensation of Houses on State owned Land of Sanjing Branch
On November 29 2023 the company signed the "Changzhou Xinbei District Non Residential Housing
Expropriation Compensation Agreement" with the Housing and Urban Rural Development Bureau of
Changzhou National High tech Industrial Development Zone (hereinafter referred to as "Xinbei District
Housing and Urban Rural Development Bureau") and the Sanjing Street Housing Expropriation and
Compensation Service Center of Changzhou Xinbei District (hereinafter referred to as "Sanjing Street"). As of
the end of the reporting period the company has received a total of 30 million yuan in the first compensation
payment. In order to improve the efficiency of land acquisition work the company has reached an agreement
with the New North District Construction Bureau and Sanjing Street based on professional reports issued by
qualified companies regarding land consolidation and upgrading of Sanjing Branch as well as subsequent
compensation payments and intends to sign a Supplementary Agreement. This matter was approved by the first
extraordinary shareholders' meeting of 2026 on July 21 2026.
2、Expropriation and compensation for the company's foundry building
On March 6 2025 the company received the "Decision on the Expropriation of Houses on State-owned Land
by the People's Government of Xinbei District Changzhou" (Changxin Zheng [2025] No. 1) issued by the
People's Government of Xinbei District Changzhou. Due to the public interest of the reconstruction of the old
urban area the People's Government of Xinbei District Changzhou decided to expropriate the houses within
the scope of the old urban area reconstruction project (Phase I) of the foundry plant and surrounding plots in
Sanjing Street. On May 8 2025 the company held the second extraordinary meeting of the board of directors
and the second extraordinary meeting of the board of supervisors in 2025 and deliberated and approved the
"Proposal on Signing the Foundry Plant's 'Changzhou Xinbei District Non-Residential House Expropriation
Compensation Agreement'". This matter was deliberated and approved by the first extraordinary shareholders'
meeting in 2025 on May 26 2025 agreeing to the company signing a compensation agreement with the Xinbei
District Housing and Urban-Rural Development Bureau and Sanjing Street. The total compensation amount
agreed upon in the agreement is 346.8569 million yuan and the expropriation compensation agreement is yet to
be signed.
372026 Semi-Annual Report of Changchai Company Limited
XV Major Matters Concerning the Company's Subsidiaries
□Applicable √Not applicable
382026 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 ReportingPeriod (+/-) After
Capital
Number Percenta
New Bonu ization Othe Subt Percent
ge (%) issue s of Numbers Issue Reserv r otal age (%)
es
1. Restricted shares 0 0.00% 0 0 0 0 0 0 0.00%
1.1 Shares held by
government 0 0.00% 0 0 0 0 0 0 0.00%
1.2 Shares held by
state-owned legal 0 0.00% 0 0 0 0 0 0 0.00%
persons
1.3 Shares held by
other domestic 0 0.00% 0 0 0 0 0 0 0.00%
investors
Among which:
Shares held by 0 0.00% 0 0 0 0 0 0 0.00%
domestic legal persons
Shares held by
domestic natural 0 0.00% 0 0 0 0 0 0 0.00%
persons
1.4 Shares held by
foreign investors 0 0.00% 0 0 0 0 0 0 0.00%
Among which:
Shares held by foreign 0 0.00% 0 0 0 0 0 0 0.00%
legal persons
Shares held by
foreign natural 0 0.00% 0 0 0 0 0 0 0.00%
persons
2. Unrestricted shares 705692 100.00% 0 0 0 0 0 705692507 507 100.00%
2.1 RMB-
denominated ordinary 555692 555692
shares 507
78.74%0000050778.74%
2.2 Domestically 150000 150000
listed foreign shares 000 21.26% 0 0 0 0 0 000 21.26%
2.3 Overseas listed
foreign shares 0 0.00% 0 0 0 0 0 0 0.00%
2.4 Other 0 0.00% 0 0 0 0 0 0 0.00%
3. Total shares 705692507 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
392026 Semi-Annual Report of Changchai Company Limited
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
Total Number of
Common Total Number of Preferred
Shareholders as of the 45319 Shareholders with Restored
End of the Reporting Voting Rights as of the End of
0
Period the Reporting Period
Shareholding Status of Major Common Shareholders (Holding >5% Shares) or Top 10 Common Shareholders
(Excluding Shares Lent Through Securities Lending)
Nature of Shareh
Increase/de
Total shares crease in Restric
Shares in
Name of shareholde olding held at the the ted Unrestricted
pledge or
shareholder percent shares shares held frozenr age period-end Reporting held Statu SharePeriod s s
Changzhou
Investment State-ownedlegal person 32.26% 227663417 0 0 227663417Group Co. Ltd.Industrial and
Commercial
Bank of China
Co. Ltd. – Not
Huashang
Lexiang Hulian Others 0.54% 3810600 3305600 0 3810600
appli 0
cable
Flexible
Allocation
Hybrid Securities
Investment Fund
Chen Jian Domesticnatural 0.49% 3461800 -1527000 0 3461800
402026 Semi-Annual Report of Changchai Company Limited
person
Industrial
Securities Co.Ltd. – Bodao
Jiuhang Hybrid Others 0.44% 3114500 3114500 0 3114500
Securities
Investment Fund
KGI ASIA Foreign
LIMITED legal person 0.44% 3100195 0 0 3100195
Domestic
Zhao Jun natural 0.43% 3044400 3044400 0 3044400
person
Bank of China
Co. Ltd. –
Huashang
Zhenxuan Others 0.41% 2895200 0 0 2895200
Huibao Hybrid
Securities
Investment Fund
China Merchants
Bank Co. Ltd. –
Bodao Xinghang Others 0.37% 2584053 2584053 0 2584053
Hybrid Securities
Investment Fund
UBS AG Foreignlegal person 0.31% 2162238 1672656 0 2162238
Bank of
Communications
Co. Ltd. –
Nanhua Fenghui Others 0.29% 2053000 2053000 0 2053000
Hybrid Securities
Investment Fund
Strategic Investors or
Institutional Shareholders
Becoming Top 10 Not applicable
Shareholders Through New
Share Placement
Explanations on Connected The Company is unaware of whether any connected relationships exist among
Relationships or Concerted its top 10 tradable shareholders or top 10 unrestricted tradable shareholders or
Actions Among the Above- whether they constitute acting-in-concert parties as defined in the
mentioned Shareholders Administrative Measures for the Acquisition of Listed Companies.Disclosure of Voting Rights
Entrustment/Waiver
Arrangements Involving the Not applicable
Above-mentioned
Shareholders
Special Notes Regarding
Share Repurchase Accounts Not applicable
Among Top 10 Shareholders
Shareholding Status of Top 10 Unrestricted Common Shareholders
(Excluding shares lent through securities lending and executive lock-up shares)
Name of shareholder Number of Unrestricted Shares Held at the Share TypesEnd of the Reporting Period Share Types Number
Changzhou Investment Group
Co. Ltd. 227663417
RMB-
denominated 227663417
412026 Semi-Annual Report of Changchai Company Limited
Ordinary Shares
Industrial and Commercial
Bank of China Co. Ltd. – RMB-
Huashang Lexiang Hulian 3810600 denominated 3810600
Flexible Allocation Hybrid Ordinary Shares
Securities Investment Fund
RMB-
Chen Jian 3461800 denominated 3461800
Ordinary Shares
Industrial Securities Co. Ltd. – RMB-
Bodao Jiuhang Hybrid 3114500 denominated 3114500
Securities Investment Fund Ordinary Shares
Domestic Listed
KGI ASIA LIMITED 3100195 Foreign-Investment 3100195
Shares
Domestic Listed
Zhao Jun 3044400 Foreign-Investment 3044400
Shares
Bank of China Co. Ltd. –
Huashang Zhenxuan Huibao RMB-
Hybrid Securities Investment 2895200 denominated 2895200
Fund Ordinary Shares
China Merchants Bank Co. RMB-
Ltd. – Bodao Xinghang Hybrid 2584053 denominated 2584053
Securities Investment Fund Ordinary Shares
RMB-
UBS AG 2162238 denominated 2162238
Ordinary Shares
Bank of Communications Co. RMB-
Ltd. – Nanhua Fenghui Hybrid 2053000 denominated 2053000
Securities Investment Fund Ordinary Shares
Explanations on Connected
Relationships or Concerted
Actions Among the Top 10 The Company is unaware of whether any connected relationships exist among
Unrestricted Tradable its top 10 tradable shareholders or top 10 unrestricted tradable shareholders or
Shareholders and Between the whether they constitute acting-in-concert parties as defined in the
Top 10 Unrestricted Tradable Administrative Measures for the Acquisition of Listed Companies.Shareholders and the Top 10
Shareholders
Disclosure on Margin Trading
Activities of the Top 10 Shareholders Chen Jian held 3461800 shares through margin trading accounts.Common 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
422026 Semi-Annual Report of Changchai Company Limited
The 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 and Senior Management
□Applicable √Not applicable
There were no changes in the shareholdings of the Company's directors or senior management during the
reporting period. For details please refer to the 2025 Annual Report.V Changes in Controlling Shareholder orActual Controller
If the Company has previously disclosed that the actual controller is planning a change of control but such
change has not yet been completed please describe the progress of the change of control.□Applicable √Not applicable
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.VI. Preferred Shares Related Matters
□Applicable √Not applicable
The Company had no preferred shares outstanding during the reporting period.
432026 Semi-Annual Report of Changchai Company Limited
Part VII Preference Shares
□Applicable √Not applicable
442026 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 2026
Unit: RMB
Item Closing balance Opening balance
Current assets:
Monetary assets 1099136545.77 1338231792.64
Settlement reserve
Interbank loans granted
Held-for-trading financial assets 542524651.65 372184689.98
Derivative financial assets
Notes receivable 169365705.45 386557535.74
Accounts receivable 1282205435.24 451748532.34
Accounts receivable financing 59605955.92 165125708.93
Prepayments 7080888.57 22389102.11
Premiums receivable
Reinsurance receivables
Receivable reinsurance contract
reserve
Other receivables 12805199.65 5495898.75
Including: Interest receivable
Dividends receivable 5456880.00 0.00
Financial assets purchased under
resale agreements
Inventories 566845803.44 757083436.15
Including: Data resources
Contract assets
Assets held for sale
Current portion of non-current
assets
Other current assets 15538871.26 19020727.98
Total current assets 3755109056.95 3517837424.62
452026 Semi-Annual Report of Changchai Company Limited
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 988808295.81 981361295.81
Other non-current financial
assets 338118757.03 337118757.03
Investment property 34595774.21 35644130.99
Fixed assets 517154616.58 550316120.80
Construction in progress 4067335.75 2801650.98
Productive living assets
Oil and gas assets
Right-of-use assets
Intangible assets 130452693.12 133751352.61
Including: Data resources
Development costs
Including: Data resources
Goodwill
Long-term prepaid expense 2468520.40 2597472.39
Deferred income tax assets 10001742.01 7350047.87
Other non-current assets 9549102.92 9503046.92
Total non-current assets 2035216837.83 2060443875.40
Total assets 5790325894.78 5578281300.02
Current liabilities:
Short-term borrowings 7521472.93 88926344.09
Borrowings from the central
bank
Interbank loans obtained
Held-for-trading financial
liabilities
Derivative financial liabilities
Notes payable 816214639.72 562313345.98
Accounts payable 770623751.24 793473800.05
Advances from customers 30000000.00 30112510.00
Contract liabilities 40356723.37 40040496.36
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 13492358.08 56773482.39
Taxes payable 7158096.55 5305526.88
Other payables 139436702.51 134619772.83
462026 Semi-Annual Report of Changchai Company Limited
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 99068509.16 72672756.98
Total current liabilities 1923872253.56 1784238035.56
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 60362270.57 83448865.86
Deferred income 24271572.83 25976437.56
Deferred income tax liabilities 155873494.37 159449521.13
Other non-current liabilities
Total non-current liabilities 240507337.77 268874824.55
Total liabilities 2164379591.33 2053112860.11
Shareholders’ equity:
Share capital 705692507.00 705692507.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 641070433.90 641070433.90
Less: Treasury stock
Other comprehensive income 683602551.44 677272601.44
Specific reserve 26020890.86 23936408.22
Surplus reserves 370454881.23 370454881.23
General reserve
Retained earnings 1114298264.59 1024763845.76
Total equity attributable to
Shareholders of the Company as 3541139529.02 3443190677.55
the parent
Non-controlling interests 84806774.43 81977762.36
Total shareholders’ equity 3625946303.45 3525168439.91
Total liabilities and
shareholders’ equity 5790325894.78 5578281300.02
Legal representative: Xie Guozhong General Manager: Xie Guozhong
Head of the accounting department: Jiang He
472026 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 961503802.34 1184168481.94
Held-for-trading financial assets 421628054.80 250280555.56
Derivative financial assets
Notes receivable 141639341.37 367314112.02
Accounts receivable 1232245345.62 422352840.72
Accounts receivable financing 51633030.96 158773143.84
Prepayments 4135887.49 20288875.23
Other receivables 28065314.25 20239727.26
Including: Interest receivable
Dividends receivable 5456880.00 0.00
Inventories 292775895.14 491497389.92
Including: Data resources
Contract assets
Assets held for sale
Current portion of non-current
assets
Other current assets 2174777.28 9472115.44
Total current assets 3135801449.25 2924387241.93
Non-current assets:
Investments in debt obligations
Investments in other debt
obligations
Long-term receivables
Long-term equity investments 871339449.94 871339449.94
Investments in other equity
instruments 988808295.81 981361295.81
Other non-current financial
assets 337118757.03 337118757.03
Investment property 34595774.21 35644130.99
Fixed assets 143966298.80 158326289.42
Construction in progress 3891550.21 2046605.11
Productive living assets
Oil and gas assets
Right-of-use assets
Intangible assets 48110320.67 49915087.13
Including: Data resources
Development costs
Including: Data resources
Goodwill
Long-term prepaid expense
Deferred income tax assets 8286005.35 5803319.96
Other non-current assets 4537392.83 4491336.83
Total non-current assets 2440653844.85 2446046272.22
Total assets 5576455294.10 5370433514.15
482026 Semi-Annual Report of Changchai Company Limited
Current liabilities:
Short-term borrowings 64945571.32
Held-for-trading financial
liabilities
Derivative financial liabilities
Notes payable 820145168.83 568770609.52
Accounts payable 732973678.74 728400988.92
Advances from customers 30000000.00 30112510.00
Contract liabilities 38497663.95 30984771.72
Employee benefits payable 5061370.25 40323108.47
Taxes payable 2833068.61 2104226.06
Other payables 122592341.21 130050726.29
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 88913354.88 76701145.43
Total current liabilities 1841016646.47 1672393657.73
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee benefits
payable
Provisions 53715739.20 77950061.03
Deferred income 24271572.83 25976437.56
Deferred income tax liabilities 148558141.25 147441091.25
Other non-current liabilities
Total non-current liabilities 226545453.28 251367589.84
Total liabilities 2067562099.75 1923761247.57
Shareholders’ equity:
Share capital 705692507.00 705692507.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 659418700.67 659418700.67
Less: Treasury stock
Other comprehensive income 683602551.44 677272601.44
Specific reserve 15444760.03 16632391.87
Surplus reserves 370454881.23 370454881.23
Retained earnings 1074279793.98 1017201184.37
Total shareholders’ equity 3508893194.35 3446672266.58
Total liabilities and
shareholders’ equity 5576455294.10 5370433514.15
492026 Semi-Annual Report of Changchai Company Limited
Legal representative: Xie Guozhong General Manager: Xie Guozhong
Head of the accounting department: Jiang He
502026 Semi-Annual Report of Changchai Company Limited
3. Consolidated Income Statement
Unit: RMB
Item 2026 Semi-Annual 2025 Semi-Annual
1. Revenue 1669786673.48 1561186625.83
Including: Operating revenue 1669786673.48 1561186625.83
Interest income
Insurance premium income
Handling charge and commission income
2. Costs and expenses 1565099706.53 1485288910.96
Including: Cost of sales 1421532002.59 1361474105.33
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 11394411.67 9929153.46
Selling expense 30586975.39 29894284.08
Administrative expense 47819242.08 50718409.56
R&D expense 47024675.62 38891905.33
Finance costs 6742399.18 -5618946.80
Including: Interest expense 876977.31 704087.32
Interest income 5113989.66 7108599.23
Add: Other income 3292607.06 6527952.88
Return on investment (“-” for loss) 31090323.25 7570956.48
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) 3474167.46 15685633.55
Credit impairment loss (“-” for loss) -17150731.60 -17051155.31
Asset impairment loss (“-” for loss) -910849.44 -1007978.87
Asset disposal income (“-” for loss) 278408.23 2797353.31
3. Operating profit (“-” for loss) 124760891.91 90420476.91
Add: Non-operating income 35210.65 142118.30
Less: Non-operating expense 20771.94 28702.13
4. Profit before tax (“-” for loss) 124775330.62 90533893.08
Less: Income tax expense 14846902.91 13529676.07
5. Net profit (“-” for net loss) 109928427.71 77004217.01
5.1 By operating continuity
5.1.1 Net profit from continuing operations (“-” for net
loss) 109928427.71 77004217.01
5.1.2 Net profit from discontinued operations (“-” for net
loss)
5.2 By shareholders’ equity
512026 Semi-Annual Report of Changchai Company Limited
5.2.1 Net profit attributable to shareholders of the Company
as the parent 105059653.98 73422814.69
5.2.1 Net profit attributable to non-controlling interests 4868773.73 3581402.32
6. Other comprehensive income net of tax 6329950.00 66731800.00
Attributable to shareholders of the Company as the parent 6329950.00 66731800.00
6.1 Items that will not be reclassified to profit or loss 6329950.00 66731800.00
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 other
equity instruments 6329950.00 66731800.00
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 116258377.71 143736017.01
Attributable to shareholders of the Company as the parent 111389603.98 140154614.69
Attributable to non-controlling interests 4868773.73 3581402.32
8. Earnings per share
8.1 Basic earnings per share 0.1489 0.1040
8.2 Diluted earnings per share 0.1489 0.1040
Legal representative: Xie Guozhong General Manager: Xie Guozhong
Head of the accounting department: Jiang He
522026 Semi-Annual Report of Changchai Company Limited
4. Income Statement of the Company as the Parent
Unit: RMB
Item 2026 Semi-Annual 2025 Semi-Annual
1. Operating revenue 1561274292.09 1451712384.50
Less: Cost of sales 1376709141.88 1302126081.67
Taxes and surcharges 7620713.12 6144680.41
Selling expense 18153977.35 22573818.66
Administrative expense 33695163.01 37086364.52
R&D expense 43542806.20 35215371.58
Finance costs 6475123.05 -5781927.35
Including: Interest expense 664363.79 491473.80
Interest income 4501829.69 7720759.20
Add: Other income 3284168.70 6508819.29
Return on investment (“-” for loss) 18669063.26 6826069.66
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) 1628054.80 1143750.00
Credit impairment loss (“-” for loss) -16699257.49 268082.12
Asset impairment loss (“-” for loss) -986476.38 -477875.67
Asset disposal income (“-” for loss) 278408.23 2793207.25
2. Operating profit (“-” for loss) 81251328.60 71410047.66
Add: Non-operating income 0.00 6.36
Less: Non-operating expense 15600.00 3720.00
3. Profit before tax (“-” for loss) 81235728.60 71406334.02
Less: Income tax expense 8631883.84 8072254.38
4. Net profit (“-” for net loss) 72603844.76 63334079.64
4.1 Net profit from continuing operations (“-” for net loss) 72603844.76 63334079.64
4.2 Net profit from discontinued operations (“-” for net loss)
5. Other comprehensive income net of tax 6329950.00 66731800.00
5.1 Items that will not be reclassified to profit or loss 6329950.00 66731800.00
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 6329950.00 66731800.00
5.1.4 Changes in the fair value arising from changes in
own credit risk
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
532026 Semi-Annual Report of Changchai Company Limited
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 78933794.76 130065879.64
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
542026 Semi-Annual Report of Changchai Company Limited
5. Consolidated Cash Flow Statement
Unit: RMB
Item 2026 Semi-Annual 2025 Semi-Annual
1. Cash flows from operating activities:
Proceeds from sale of commodities and rendering of services 929873685.95 882699452.94
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 21923091.01 38633075.84
Cash generated from other operating activities 11175362.36 14290624.34
Subtotal of cash generated from operating activities 962972139.32 935623153.12
Payments for commodities and services 783635268.33 683791472.53
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 178169202.70 171760589.81
Taxes paid 70699436.33 44828633.07
Cash used in other operating activities 65173484.82 109548568.34
Subtotal of cash used in operating activities 1097677392.18 1009929263.75
Net cash generated from/used in operating activities -134705252.86 -74306110.63
2. Cash flows from investing activities:
Proceeds from disinvestment 586192952.22 643428229.00
Return on investment 46091931.05 3992501.83
Net proceeds from the disposal of fixed assets intangible
assets and other long-lived assets 381879.19 3530738.93
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 632666762.46 650964069.76
Payments for the acquisition of fixed assets intangible assets
and other long-lived assets 3398695.16 3578214.68
Payments for investments 773470455.00 744553500.00
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 776869150.16 748131714.68
552026 Semi-Annual Report of Changchai Company Limited
Net cash generated from/used in investing activities -144202387.70 -97167644.92
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 15525235.15 7056925.07
Including: Dividends paid by subsidiaries to non-controlling
interests
Cash used in other financing activities
Subtotal of cash used in financing activities 15525235.15 7056925.07
Net cash generated from/used in financing activities -15525235.15 -7056925.07
4. Effect of foreign exchange rates changes on cash and cash
equivalents -10667988.63
5. Net increase in cash and cash equivalents -305100864.34 -178530680.62
Add: Cash and cash equivalents beginning of the period 1248067921.44 892681884.84
6. Cash and cash equivalents end of the period 942967057.10 714151204.22
Legal representative: Xie Guozhong General Manager: Xie Guozhong
Head of the accounting department: Jiang He
562026 Semi-Annual Report of Changchai Company Limited
6. Cash Flow Statement of the Company as the Parent
Unit: RMB
Item 2026 Semi-Annual 2025 Semi-Annual
1. Cash flows from operating activities:
Proceeds from sale of commodities and rendering of services 848256605.65 784383704.35
Tax rebates 19323841.59 34098461.67
Cash generated from other operating activities 9546831.20 9834418.79
Subtotal of cash generated from operating activities 877127278.44 828316584.81
Payments for commodities and services 739476571.96 658698461.72
Cash paid to and for employees 138422270.90 136568203.72
Taxes paid 48927713.46 34259403.60
Cash used in other operating activities 46856172.80 72493533.98
Subtotal of cash used in operating activities 973682729.12 902019603.02
Net cash generated from/used in operating activities -96555450.68 -73703018.21
2. Cash flows from investing activities:
Proceeds from disinvestment 523149678.82 550000000.00
Return on investment 10343060.00 3198458.89
Net proceeds from the disposal of fixed assets intangible
assets and other long-lived assets 281879.19 3138377.83
Net proceeds from the disposal of subsidiaries and other
business units
Cash generated from other investing activities 0.00 612159.97
Subtotal of cash generated from investing activities 533774618.01 556948996.69
Payments for the acquisition of fixed assets intangible assets
and other long-lived assets 2155503.74 1795759.49
Payments for investments 690000000.00 650000000.00
Net payments for the acquisition of subsidiaries and other
business units
Cash used in other investing activities
Subtotal of cash used in investing activities 692155503.74 651795759.49
Net cash generated from/used in investing activities -158380885.73 -94846762.80
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 15525235.15 7056925.07
Cash used in other financing activities
Subtotal of cash used in financing activities 15525235.15 7056925.07
Net cash generated from/used in financing activities -15525235.15 -7056925.07
4. Effect of foreign exchange rates changes on cash and cash
equivalents -10298436.94
5. Net increase in cash and cash equivalents -280760008.50 -175606706.08
Add: Cash and cash equivalents beginning of the period 1114948098.04 805614858.63
6. Cash and cash equivalents end of the period 834188089.54 630008152.55
Legal representative: Xie Guozhong General Manager: Xie Guozhong
Head of the accounting department: Jiang He
572026 Semi-Annual Report of Changchai Company Limited
7. Consolidated Statements of Changes in Shareholders’ Equity
Current Period
Unit: RMB
2026 Semi-Annual
Equity attributable to shareholders of the Company as the parent
Other
equity
instrument
s L
P es G
P e s: en Non- Total
Item Share re r Tr Other controllin sharehold
capital fe p Capital ea compre Specific Surplus
er
al Retained
Ot
he Subtotal g ers’rr et O reserves su hensive reserve reserves re earnings interests equitye u th ry income
r
d al st se
s b er oc rv
h o k e
ar n
es d
s
1. Balance as at the end of the prior 7056925 641070 677272601.4 239364 370454 102476 344319 819777 352516year 07.00 433.90 4 08.22 881.23 3845.76 0677.55 62.36 8439.91
Add: Adjustment for change in
accounting policy
Adjustment for correction of previous
error
Other adjustments
2. Balance as at the beginning of the 7056925 641070 677272601.4 239364 370454 102476 344319 819777 352516period 07.00 433.90 4 08.22 881.23 3845.76 0677.55 62.36 8439.91
582026 Semi-Annual Report of Changchai Company Limited
3. Increase/ decrease in the period (“- 63299 208448 895344 979488 282901 100777” for decrease) 50.00 2.64 18.83 51.47 2.07 863.54
3.1 Total comprehensive income 63299 105059 111389 486877 11625850.00 653.98 603.98 3.73 377.71
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 -155252 -15525 -240000 -17925235.15 235.15 0.00 35.15
3.3.1 Appropriation to surplus
reserves
3.3.2 Appropriation to general
reserve
3.3.3 Appropriation to shareholders -155252 -15525 -240000 -17925235.15 235.15 0.00 35.15
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
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 208448 208448 360238. 2444722.64 2.64 34 0.98
592026 Semi-Annual Report of Changchai Company Limited
3.5.1 Increase in the period 382065 382065 412654. 4233305.49 5.49 29 9.78
3.5.2 Used in the period 173617 173617 52415.9 1788582.85 2.85 5 8.80
3.6 Other
4. Balance as at the end of the period 7056925 641070
68360260208370454111429354113848067362594
07.00433.902551.4490.86881.238264.599529.0274.436303.45
Prior Period
Unit: RMB
2025 Semi-Annual
Equity attributable to shareholders of the Company as the parent
Other L
equity e
instrument s
s s:
P T G
e r en
Item Pr r e Other er Non- TotalShare
capital ef p O Capital a compreh Specific Surplus al Retained Ot Subtotal controllin
sharehold
er et t reserves s ensive reserve reserves re earnings her g interests
ers’
re u h u income se
equity
d al r rv
sh b e y e
ar o r st
es n o
d c
s k
1. Balance as at the end of the prior 705692 640509 643067 219590 367826 983627 336268 7789709 344058
year 507.00 675.84 549.91 66.35 665.27 999.95 3464.32 1.03 0555.35
Add: Adjustment for change in
accounting policy
Adjustment for correction of previous
error
Other adjustments
602026 Semi-Annual Report of Changchai Company Limited
2. Balance as at the beginning of the 705692 640509 643067 219590 367826 983627 336268 7789709 344058
period 507.00 675.84 549.91 66.35 665.27 999.95 3464.32 1.03 0555.35
3. Increase/ decrease in the period (“-” 0.00 667318 258229 663658 135679 390489 1395848for decrease) 00.00 5.74 89.62 985.36 4.90 80.26
3.1 Total comprehensive income 667318 734228 140154 358140 143736000.00 14.69 614.69 2.32 17.01
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 -705692 -70569 -7056925.07 25.07 5.07
3.3.1 Appropriation to surplus reserves
3.3.2 Appropriation to general reserve
3.3.3 Appropriation to shareholders -705692 -70569 -7056925.07 25.07 5.07
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
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 258229 258229 323492.5 2905785.74 5.74 8 8.32
612026 Semi-Annual Report of Changchai Company Limited
3.5.1 Increase in the period 600503 600503 373360.1 6378391.87 1.87 7 2.04
3.5.2 Used in the period 342273 342273 3472606.13 6.13 49867.59 3.72
3.6 Other
4. Balance as at the end of the period 705692 640509 709799 245413 367826 104999 349836 8180198 358016507.00 675.84 349.91 62.09 665.27 3889.57 3449.68 5.93 5435.61
Legal representative: Xie Guozhong General Manager: Xie Guozhong Head of the accounting department: Jiang He
622026 Semi-Annual Report of Changchai Company Limited
8. Statements of Changes in Shareholders’ Equity of the Company as the Parent
Current Period
Unit: RMB
2026 Semi-Annual
Other equity
instruments Le
Pr Pe ss:
Item efe rp Capital Tr OtherShare capital rre etu Ot eas comprehen Specific Surplus Retained Oth
Total
d al he reserves ury sive income reserve reserves earnings er
shareholders’
equity
sh bo r sto
are nd ck
s s
1. Balance as at the end of the prior 705692507.0 65941870 67727260 16632391. 37045488 10172011 344667226
period 0 0.67 1.44 87 1.23 84.37 6.58
Add: Adjustment for change in
accounting policy
Adjustment for correction of
previous error
Other adjustments
2. Balance as at the beginning of the 705692507.0 65941870 67727260 16632391. 37045488 10172011 344667226
period 0 0.67 1.44 87 1.23 84.37 6.58
3. Increase/ decrease in the period 6329950.0 -1187631. 57078609.
(“-” for decrease) 0 84 61 62220927.77
3.1 Total comprehensive income 6329950.0 72603844.0 76 78933794.76
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
632026 Semi-Annual Report of Changchai Company Limited
3.2.4 Other
3.3 Profit distribution -1552523 -15525235.15.15 5
3.3.1 Appropriation to surplus
reserves
3.3.2 Appropriation to shareholders -1552523 -15525235.15.15 5
3.3.3 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
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 -1187631.84 -1187631.84
3.5.1 Increase in the period
3.5.2 Used in the period 1187631.84 1187631.84
3.6 Other
4. Balance as at the end of the 705692507.0 65941870 68360255 15444760. 37045488 10742797 350889319
period 0 0.67 1.44 03 1.23 93.98 4.35
Prior Period
Unit: RMB
Item 2025 Semi-Annual
642026 Semi-Annual Report of Changchai Company Limited
Other equity
instruments
Pe Le
rp ss: Other
Share capital Prefer et Ot Capital
Tre
asu comprehen Specific Surplus Retained
Ot Total
ua reserves sive reserve reserves earnings he shareholderred l he ry income r s’ equitysha bo r stores nd ck
s
1. Balance as at the end of the prior 705692507.0 65941870 64306754 19117263. 367826665. 100060416 33957268
period 0 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 beginning of the 705692507.0 65941870 64306754 19117263. 367826665. 100060416 33957268
period 0 0.67 9.91 36 27 5.79 52.00
3. Increase/ decrease in the period 6673180 12312449
(“-” for decrease) 0.00 115542.01 56277154.57 6.58
3.1 Total comprehensive income 66731800.00 63334079.64
13006587
9.64
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
652026 Semi-Annual Report of Changchai Company Limited
3.3.2 Appropriation to shareholders -7056925.07 -7056925.07
3.3.3 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
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 period 2435798.3 2435798.34 4
3.5.2 Used in the period 2320256.3 2320256.33 3
3.6 Other
4. Balance as at the end of the 705692507.0 65941870 70979934 19232805. 367826665. 105688132 35188513
period 0 0.67 9.91 37 27 0.36 48.58
Legal representative: Xie Guozhong General Manager: Xie Guozhong Head of the accounting department: Jiang He
662026 Semi-Annual Report of Changchai Company Limited
III. Company Profile
1. Registered location organization form and headquarter 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 2026 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 19 2026.IV. Basis for Preparation of the Financial Report
1. Basis for Preparation
The Company's financial statements are prepared on a going concern basis. They are based on actual transactions
672026 Semi-Annual Report of Changchai Company Limited
and events that have occurred and are prepared in accordance with the Accounting Standards for Business
Enterprises – Basic Standard and various specific accounting standards application guides interpretations and
other relevant provisions (collectively referred to as the "Accounting Standards for Business Enterprises") issued
by the Ministry of Finance as well as in accordance with the Regulation on Information Disclosure and Reporting
Standards for Companies Offering Securities to the Public No. 15 – General Provisions on Financial Reporting
(2023 Revision) issued by the China Securities Regulatory Commission.
In accordance with the relevant provisions of the Accounting Standards for Business Enterprises the Company's
accounting is based on the accrual basis. Except for certain financial instruments these financial statements are
prepared on the historical cost basis of measurement. Non-current assets held for sale are measured at the lower of
their carrying amount at the time they meet the conditions for classification as held for sale and their fair value
less costs to sell. If an asset is impaired an appropriate provision for impairment is recognized in accordance with
relevant provisions.
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 2026 and the consolidated and parent company's operating results and cash flows
for the first half of 2026.
2. Fiscal Period
The Company's accounting periods are divided into annual periods and interim periods. An interim period refers
to a reporting period that is shorter than a full accounting year. The Company's fiscal year follows the calendar
year commencing on January 1 and ending on December 31 of each year.
3. Operating Cycle
An operating cycle for the Group is 12 months which is also the classification criterion for the liquidity of its
assets and liabilities.
682026 Semi-Annual Report of Changchai Company Limited
4. Currency Used in Bookkeeping
The functional currency of the Company and its subsidiaries within the People's Republic of China is Renminbi
("RMB") being the currency of the primary economic environment in which they operate. The financial
statements are prepared and presented in RMB.
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 combing 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
692026 Semi-Annual Report of Changchai Company Limited
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
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.
702026 Semi-Annual Report of Changchai Company Limited
(2) Methods for Preparing Consolidated Financial Statements
The Company includes subsidiaries in the consolidated financial statements from the date on which it obtains
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 V.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
712026 Semi-Annual Report of Changchai Company Limited
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
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 are 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
722026 Semi-Annual Report of Changchai Company Limited
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
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
732026 Semi-Annual Report of Changchai Company Limited
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.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
742026 Semi-Annual Report of Changchai Company Limited
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
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 entirety 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 the above-mentioned amortized carrying amount 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
752026 Semi-Annual Report of Changchai Company Limited
Fair value refers to the price that a market participant can receive 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
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 available 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 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
762026 Semi-Annual Report of Changchai Company Limited
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;
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
772026 Semi-Annual Report of Changchai Company Limited
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.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
782026 Semi-Annual Report of Changchai Company Limited
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.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
792026 Semi-Annual Report of Changchai Company Limited
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:
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. Held-for-sale and Discontinued Operations
(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
802026 Semi-Annual Report of Changchai Company Limited
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
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 and Disclosures 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
812026 Semi-Annual Report of Changchai Company Limited
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
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
822026 Semi-Annual Report of Changchai Company Limited
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
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.
832026 Semi-Annual Report of Changchai Company Limited
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
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.
842026 Semi-Annual Report of Changchai Company Limited
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
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
852026 Semi-Annual Report of Changchai Company Limited
Estimated useful life
Category Depreciation method Depreciation rate (%)
(years)
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
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."
862026 Semi-Annual Report of Changchai Company Limited
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
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
872026 Semi-Annual Report of Changchai Company Limited
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.
(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
882026 Semi-Annual Report of Changchai Company Limited
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
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
（1） Accounting policies for short-term employee benefits
The Company's employee benefits mainly include short-term employee benefits post-employment benefits and
termination benefits.
892026 Semi-Annual Report of Changchai Company Limited
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.
（2） Accounting policies for post-employment benefits
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.
（3） Accounting policies for Termination benefits
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.
（4） Accounting policies for other long-term employee benefits
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
902026 Semi-Annual Report of Changchai Company Limited
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:
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
912026 Semi-Annual Report of Changchai Company Limited
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.
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 V.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
922026 Semi-Annual Report of Changchai Company Limited
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
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.
932026 Semi-Annual Report of Changchai Company Limited
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:
(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
942026 Semi-Annual Report of Changchai Company Limited
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
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.
952026 Semi-Annual Report of Changchai Company Limited
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.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
962026 Semi-Annual Report of Changchai Company Limited
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
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
972026 Semi-Annual Report of Changchai Company Limited
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.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.
982026 Semi-Annual Report of Changchai Company Limited
34. Changes in Main Accounting Policies and Estimates
(1) Change of Accounting Policies
√ Applicable □ Not applicable
Unit: RMB
Financial
Contents and reasons for accounting policy changes statement items Amount ofmaterially impact
affected
On December 5 2025 the Ministry of Finance issued the Notice on the
Issuance of Interpretation No. 19 of the Accounting Standards for Business
Enterprises (Cai Kuai [2025] No. 32) which sets forth provisions on the
following matters: "Accounting Treatment of Compensatory Assets in
Business Combinations Not Under Common Control" "Accounting
Treatment of Related Capital Reserves in the Disposal of Subsidiaries
Acquired through Business Combinations Under Common Control" None 0.00
"Derecognition of Financial Liabilities Settled through Electronic Payment
Systems" "Assessment of Contractual Cash Flow Characteristics of Financial
Assets and Related Disclosures" and "Disclosures of Equity Instruments
Designated as Measured at Fair Value through Other Comprehensive
Income." The Company shall apply the provisions of Interpretation No. 19
from January 1 2026.
(2) Changes in Accounting Estimates
□Applicable √Not applicable
(3) Adjustments to Opening Balance Sheet Items for Initial Application of New Accounting Standards
Effective 2026
□Applicable √Not applicable
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% and 5%
VAT 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 enterprise income tax rate
Name Income tax rate
Changchai Company Limited 15%
Changchai Wanzhou Diesel Engine Co. Ltd. 15%
Changzhou Horizon Investment Co. Ltd. 25%
Changzhou Fuji Changchai Robin Gasoline Engine
Co. Ltd. 15%
992026 Semi-Annual Report of Changchai Company Limited
Jiangsu Changchai Machinery Co. Ltd. 25%
Changzhou Xingsheng Real Estate Management Co.Ltd. 5%
Zhenjiang Siyang Diesel Engine Manufacturing Co.Ltd. 15%
Changzhou Changniu Machinery Co. Ltd. 25%
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.
(5) Subsidiary Zhenjiang Siyang Diesel Engine Manufacturing Co. Ltd. obtained its High-Tech Enterprise
Certification on November 18 2025 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 101773.73 164159.29
Bank deposits 970857332.81 1267225051.01
Other monetary assets 128177439.23 70842582.34
Total 1099136545.77 1338231792.64
Total amount of funds with usage
restrictions due to mortgage 156169488.67 90163871.20
pledge freezing or other reasons
Additional Notes:
As at the end of the reporting period the following monetary funds were restricted in use: bank acceptance note
deposits of RMB 127315712.80 letter of guarantee deposits and performance bond deposits of RMB
853775.87 and time deposits of RMB 28000000.
1002026 Semi-Annual Report of Changchai Company Limited
2. Trading Financial Assets
Unit: RMB
Item Ending balance Beginning balance
Financial assets at fair value
through profit or loss 542524651.65 372184689.98
Of which:
Stocks 40914780.00 73740010.00
Financial products 501609871.65 298444679.98
Of which:
Total 542524651.65 372184689.98
3. Notes Receivable
(1) Notes Receivable Listed by Category
Unit: RMB
Item Ending balance Beginning balance
Bank acceptance bill 169365705.45 386557535.74
Total 169365705.45 386557535.74
(2) Disclosure by Withdrawal Methods for Bad Debts
Unit: RMB
Ending balance Beginning balance
Carrying amount Bad debt Bad debtprovision Carrying amountCarryi provisionCategory Withdr ng Withdr
Carry
Amou Propor Amou awal value Amoun Proport Amoun awal
ing
nt tion nt proport t ion t proport value
ion 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 16936 100.00 16936 38655 100.00 3865debt 5705. % 0.00 0.00% 5705. 7535.7 0.00 0.00% 5753provision 45 45 4 % 5.74
accrued by
group
Of which:
Bank 16936 16936 38655 3865
acceptance 5705. 100.00% 0.00 0.00% 5705. 7535.7
100.00
% 0.00 0.00% 5753bills 45 45 4 5.74
Total 16936 100.005705. % 0.00 0.00%
1693638655100.003865
5705.7535.7%0.000.00%5753
1012026 Semi-Annual Report of Changchai Company Limited
454545.74
Name of the category for which allowance for doubtful debts is provided on a portfolio basis: Among the
portfolios bills receivable for which provision for impairment is made under the bank acceptance bill portfolio:
Unit: RMB
Ending balance
Category
Carrying amount Bad debt provision Withdrawal proportion
Bank acceptance bills 169365705.45 0.00 0.00%
Total 169365705.45 0.00
The allowance for doubtful accounts on notes receivable was recognized based on the general expected credit
loss model.□Applicable √Not applicable
(3) Notes Receivable Pledged by the Company at the Period-end: None
(4) Notes Receivable which Had been Endorsed by the Company or had been Discounted but had not Due
on the Balance Sheet Date at the Period-end
Unit: RMB
Item Amount of recognition termination Amount of not terminatedat the period-end recognition at the period-end
Bank acceptance bill 0.00 94396883.42
Total 0.00 94396883.42
(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) 1307107326.50 458742679.98
1 to 2 years 865066.34 986101.34
2 to 3 years 443595.20 1013726.45
Over 3 years 134566427.46 134667210.39
3 to 4 years 550815.51 895540.14
4 to 5 years 3438212.64 3687084.20
Over 5 years 130577399.31 130084586.05
Total 1442982415.50 595409718.16
(2) Disclosure by Withdrawal Methods for Bad Debts
Unit: RMB
Category Ending balance Beginning balanceCarrying amount Bad debt Carryi Carrying Bad debt Carrying
1022026 Semi-Annual Report of Changchai Company Limited
provision ng amount provision value
Withdr value Withdr
Amou Propor Amou awal Amou Propor Amou awal
nt tion nt proport nt tion nt propor
ion tion
Accounts
receivable
withdrawal 24733 24733 28329 28329
of Bad debt 157.3 1.71% 157.3 100.00% 0.00 310.0 4.76% 310.0
100.00
% 0.00provision 2 2 7 7
separately
accrued
Of which:
Accounts
receivable
withdrawal 1418 98.29 13604 1282 56708 95.24 11533
of bad debt 24925 % 3822. 9.59% 20543 0408. 1875.
20.34451748
provision of 8.18 94 5.24 09
%75%532.34
by group
Of which:
Accounts
receivable
for which
bad debt 1418
provision 24925 98.29
1360412825670811533
%3822.9.59%205430408.
95.241875.20.34451748
accrued by 8.18 94 5.24 09 % 75 % 532.34
credit risk
features
group
14421607712825954014366
Total 98241 —— 6980. —— 20543 9718. 1185. 451748—— ——
5.50265.241682532.34
Individually Assessed Bad Debt Provisions: RMB 24733157.32 including significant impairment items of
RMB 22535786.64. The details are presented below:
Unit: RMB
Beginning balance Ending balance
Name Carrying Bad debt Carrying Bad debt Withdraw Reason for
amount provision amount provision alproportion withdraw
Customer 1 5972101.90 5972101.90 5972101.90 5972101.90 100.00% Difficult torecover
Customer 2 4592679.05 4592679.05 4592679.05 4592679.05 100.00% Difficult torecover
Customer 3 2584805.83 2584805.83 2584805.83 2584805.83 100.00% Difficult torecover
Customer 4 2254860.60 2254860.60 2254860.60 2254860.60 100.00% Difficult torecover
Customer 5 2025880.18 2025880.18 2025880.18 2025880.18 100.00% Difficult torecover
Customer 6 1902326.58 1902326.58 1902326.58 1902326.58 100.00% Difficult torecover
Customer 7 1682721.03 1682721.03 1639132.43 1639132.43 100.00% Difficult torecover
1032026 Semi-Annual Report of Changchai Company Limited
Customer 8 1564000.07 1564000.07 1564000.07 1564000.07 100.00% Difficult torecover
Total 22579375.24 22579375.24 22535786.64 22535786.64
Withdrawal of bad debt provision by group: Provision for bad debts by credit risk characteristic group
Unit: RMB
Name Ending balanceCarrying amount Bad debt provision Withdrawal proportion
Within 1 year 1306904778.43 26138095.57 2.00%
1 to 2 years 865066.34 43253.32 5.00%
2 to 3 years 443595.20 66539.28 15.00%
3 to 4 years 27852.41 8355.72 30.00%
4 to 5 years 550966.88 330580.13 60.00%
Over 5 years 109456998.92 109456998.92 100.00%
Total 1418249258.18 136043822.94
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
Beginning Changes in the current periodCategory balance Reversed or Other Ending balanceWithdrawal recovered Verification s
Bad debt
provision
separately 28329310.07 -3505152.75 91000.00 24733157.32
accrued
Withdrawal
of bad debt
provision by 115331875.75 20711947.19 136043822.94
group
Total 143661185.82 17206794.44 91000.00 160776980.26
(4) Accounts Receivable Written-off in Current Period: None
(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
Ending balance total ending provision of
Name of the Ending balance Ending balance of accounts balance of accounts
entity of accounts of contractreceivable assets receivable and accounts receivable andcontract assets receivable and impairment
contract assets provision for
contract assets
Customer 1 774539761.50 0.00 774539761.50 53.68% 15490795.20
1042026 Semi-Annual Report of Changchai Company Limited
Customer 2 85701507.99 0.00 85701507.99 5.94% 1714030.16
Customer 3 47428859.37 0.00 47428859.37 3.29% 948577.19
Customer 4 44670600.00 0.00 44670600.00 3.10% 893412.00
Customer 5 35399769.65 0.00 35399769.65 2.45% 707995.39
Total 987740498.51 0.00 987740498.51 68.46% 19754809.94
5. Accounts Receivable Financing
(1) Accounts Receivable Financing Listed by Category
Unit: RMB
Item Ending balance Beginning balance
Bank acceptance bills 59605955.92 165125708.93
Total 59605955.92 165125708.93
(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
Category Amount of recognition termination Amount of not terminatedat the period-end recognition at the period-end
Bank acceptance bill 15218934.69
Total 15218934.69
(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 Fair Fair
Cost Fair ValueChanges Cost Value Cost ValueChanges Changes
Notes
Receivable 165125708.93 -105519753.01 59605955.92
6. Other Receivables
Unit: RMB
Item Ending balance Beginning balance
Dividend receivable 5456880.00 0.00
Other receivables 7348319.65 5495898.75
Total 12805199.65 5495898.75
1052026 Semi-Annual Report of Changchai Company Limited
（1）Dividend receivable
1） Classification of dividends receivable
Unit: RMB
Projects (or Investee Entities) Ending balance Beginning balance
Bank of Jiangsu 2025 Dividend
Distribution 5456880.00 0.00
Total 5456880.00 0.00
（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
Inter-entity current accounts 23978589.86 23131823.56
Compensation receivable 3348087.00 3348087.00
Petty cash and borrowings by
employees 1295302.44 797076.58
Other 14471797.00 13929431.10
Total 43095076.30 41207718.24
2) Disclosure by Aging
Unit: RMB
Aging Ending carrying amount Beginning carrying amount
Within 1 year (including 1 year) 7170444.01 5218085.95
1 to 2 years 106851.06 173751.06
2 to 3 years 112959.03 104059.03
Over 3 years 35704822.20 35711822.20
3 to 4 years 169485.76 176485.76
4 to 5 years 12802.00 12802.00
Over 5 years 35522534.44 35522534.44
Total 43095076.30 41207718.24
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
First stage Second stage Third stage
Expected credit Expected loss in Expected loss inBad debt provision
loss of the next 12 the duration (credit the duration (credit
Total
months impairment not impairmentoccurred) occurred)
Balance of 1 January
2026104361.7284923.3335522534.4435711819.49
1062026 Semi-Annual Report of Changchai Company Limited
Balance of 1 January
2026 in the Current
Period
--Transfer to Second
stage -5342.55 5342.55 0.00
-- Transfer to Third
stage
-- Reverse to Second
stage
-- Reverse to First stage
Withdrawal of the
Current Period 44389.71 -9452.55 34937.16
Reversal of the Current
Period
Write-offs of the Current
Period
Verification of the
Current Period
Other changes
Balance of 30 June 2026 143408.88 80813.33 35522534.44 35746756.65
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
Beginning Changes in the current period
Category balance Withdrawal Reversed or
Charged- Ending
recovered off/Written- Others balanceoff
Bad debt
provision
separately 5601964.53 5601964.53
accrued
Withdrawal
of bad debt
provision by 30109854.96 34937.16 30144792.12
group
Total 35711819.49 34937.16 35746756.65
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 Ending
Name of the entity Nature Endingbalance Aging
total ending
balance of other balance of bad
receivables % debt provision
1072026 Semi-Annual Report of Changchai Company Limited
Housing Expropriation and
Compensation Service Compensati
Center of Sanjing on 3348087.00 Within 1
Subdistrict Xinbei receivable year
7.77%66961.74
District Changzhou City
Changzhou Compressor Intercourse Over 5
Factory funds 2940000.00 years 6.82% 2940000.00
Changchai Group Imp. & Intercourse Over 5
Exp. Co. Ltd. funds 2853188.02 years 6.62% 2853188.02
Changzhou New District Intercourse Over 5
Accounting Center funds 1626483.25 years 3.77% 1626483.25
Changchai Group Intercourse
Settlement Center funds 1128676.16
Over 5
years 2.62% 1128676.16
Total 11896434.43 27.61% 8615309.17
7. Prepayments
(1) Prepayment Listed by Aging Analysis
Unit: RMB
Ending balance Beginning balance
Aging
Amount Proportion Amount Proportion
Within 1 year 5971162.39 84.33% 21279375.93 95.05%
1 to 2 years 1000954.68 14.14% 1063808.41 4.75%
2 to 3 years 101921.50 1.44% 39067.77 0.17%
Over 3 years 6850.00 0.10% 6850.00 0.03%
Total 7080888.57 22389102.11
(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 686364.94 9.69%
Suppliers 2 672454.04 9.50%
Suppliers 3 560105.26 7.91%
Suppliers 4 498009.00 7.03%
Suppliers 5 402153.08 5.68%
Total 2819086.32 39.81%
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
Item Carrying Depreciation Carrying Carrying Depreciation Carrying
amount reserves of value amount reserves of value
1082026 Semi-Annual Report of Changchai Company Limited
inventories or inventories or
impairment impairment
provision for provision for
contract contract
performance performance
costs costs
Raw 224240927. 14152414.2 210088512. 217633853. 14119489.7 203514363.materials 24 6 98 60 2 88
Materials
processed on 14345585.5 0.00 14345585.5 15152812.7 0.00 15152812.7
commission 6 6 0 0
Goods in 81669881.0 3190199.23 78479681.8 73699810.2process 5 2 7 3405243.63
70294566.6
4
Finished 295468662. 33103181.1 262365481. 499741040. 33057275.5 466683764.goods 33 4 19 42 9 83
Low priced
and easily 1566541.89 0.00 1566541.89 1437928.10 0.00 1437928.10
worn articles
Total 617291598. 50445794.6 566845803. 807665445. 50582008.9 757083436.07 3 44 09 4 15
(2) Falling Price Reserves of Inventory and Impairment Reserves for Contract Performance Costs
Unit: RMB
Beginning Increase Decrease
Item balance Withdrawal Others Transferred-back Ending balanceor charged-off Others
Raw
materials 14119489.72 176853.84 143929.30 14152414.26
Goods in
process 3405243.63 0.00 215044.40 3190199.23
Finished
goods 33057275.59 733995.60 688090.05 33103181.14
Total 50582008.94 910849.44 1047063.75 50445794.63
9. Other Current Assets
Unit: RMB
Item Ending balance Beginning balance
The VAT tax credits 14580916.77 16444311.47
Prepaid corporate income tax 681492.41 2492261.30
Prepaid expense 276462.08 84155.21
Total 15538871.26 19020727.98
10. Other Equity Instrument Investment
Unit: RMB
Gains Losses Accumul Accumul Dividend Reason
Beginnin recorded recorded ative ative income forItem g balance in other in other gains losses recognize
Ending
assigning
comprehe comprehe recorded recorded d in balance to
nsive nsive in other in other current measure
1092026 Semi-Annual Report of Changchai Company Limited
income in income in comprehe comprehe year in fair
the the nsive nsive value of
current current income in income in which
period period the the changes
current current included
period period other
comprehe
nsive
income
Non- Non-
trading
equity 9813612 7447000 8042382 1319994 9888082
trading
95.81 .00 95.81 0.00 95.81 equityinvestme investme
nt nt
Total 9813612 7447000 8042382 1319994 988808295.81 .00 95.81 0.00 95.81
Non-trading equity instrument investment disclosed by category
Unit: RMB
Reason for
Amount of assigning to Reason for
other measure by otherDividend fair value comprehensi
Item income Accumulated Accumulated comprehensi
recognized gains losses ve transferred
with changes ve income
to retained included in transferred to
earnings other retainedcomprehensi earnings
ve income
Changzhou
Synergetic
Innovation
Private 216061295.Non-trading
81 equityEquity Fund investment
(Limited
Partnership)
Foton Motor 378927750. Non-trading
Co. Ltd. 00 equityinvestment
Bank of
Jiangsu Co. 13199940.0 208132200.Non-trading
equity
Ltd. 0 00 investment
11. Long-term Equity Investment
Unit: RMB
Begin Increase/decrease
Begin ning Gain Adjus Endin
ning balan or Cash Withd Endin g
balan ce of loss
tment bonus rawal g balan
Invest ce depre Addit Redu recog
of
other Chan or of balan ce of
ees (carry ciatio ional ced nized comp ges in profit depre Other ce depre
ing n invest invest under
ment ment the rehen
other annou ciatio (carry ciatio
value) reserv sive equity nced n ing n
es equity
metho incom
to reserv value) reserv
e issue es esd
1102026 Semi-Annual Report of Changchai Company Limited
I. Joint venture
Subto
tal 0.00 0.00 0.00 0.00
II. Associated enterprises
Beijin
g
Tsing
hua
Indust
rial
Invest 0.00 44182.50 0.00
4418
ment 2.50
Mana
geme
nt
Co.Ltd.Subto 0.00 4418tal 2.50 0.00
4418
2.50
Total 0.00 4418 44182.50 0.00 2.50
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
Item Ending balance Beginning balance
Financial Assets at Fair Value
Through Profit or Loss 338118757.03 337118757.03
Total 338118757.03 337118757.03
Other notes: The Company's subsidiary Changzhou Horizon Investment Co. Ltd. together with Changzhou
Investment Group Co. Ltd. and other parties jointly established Yuanzhi Changtou Xingyu (Changzhou)
Equity Investment Partnership (Limited Partnership). This investment is accounted for using the fair value
measurement method. As at June 30 2026 Yuanzhi Changtou Xingyu (Changzhou) Equity Investment
Partnership (Limited Partnership) had not yet made any external investments.
13. Investment Property
(1) Investment Property Adopting the Cost Measurement Mode
√ Applicable □ Not applicable
Unit: RMB
1112026 Semi-Annual Report of Changchai Company Limited
Item Houses and buildings Total
I. Original carrying value
1. Beginning balance 87632571.14 87632571.14
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 87632571.14 87632571.14
II. Accumulative depreciation and
accumulative amortization
1. Beginning balance 51988440.15 51988440.15
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 53036796.93 53036796.93
III. Depreciation reserves
1. Beginning balance
2. Increased amount of the period
(1) Withdrawal
3. Decreased amount of the period
(1) Disposal
(2) Other transfer
4. Ending balance
IV. Carrying value
1. Ending carrying value 34595774.21 34595774.21
2. Beginning carrying value 35644130.99 35644130.99
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 517154616.58 550316120.80
1122026 Semi-Annual Report of Changchai Company Limited
Total 517154616.58 550316120.80
(1) List of Fixed Assets
Unit: RMB
Item Houses and Machinery Transportation Otherbuildings equipment equipment equipment Total
I. Original
carrying value
1. Beginning 635923706.34 1053739766.8 14849730.20 63813419.30 1768326622.7balance 6 0
2. Increased
amount of the 1064862.21 503595.09 503663.71 108285.19 2180406.20
period
(1) Purchase 503595.09 503663.71 108285.19 1115543.99
(2) Transfer
from
construction in 1064862.21 1064862.21
progress
(3) Enterprise
combination
increase
3. Decreased
amount of the 42413.54 1325145.33 1119765.75 1247501.59 3734826.21
period
(1) Disposal or
scrap 42413.54 1325145.33 1119765.75 1247501.59 3734826.21
4. Ending
balance 636946155.01
1052918216.6
214233628.1662674202.90
1766772202.6
9
II. Accumulated
Depreciation
1. Beginning 320282601.35 838703968.67 10435455.04 48573086.84 1217995111.9balance 0
2. Increased
amount of the 9692241.37 22041660.29 661605.29 2942932.51 35338439.46
period
(1) Withdraw 9692241.37 22041660.29 661605.29 2942932.51 35338439.46
3. Decreased
amount of the 42413.54 1324039.14 1119765.75 1245136.82 3731355.25
period
(1) Disposal or
scrap 42413.54 1324039.14 1119765.75 1245136.82 3731355.25
4. Ending
balance 329932429.18 859421589.82 9977294.58 50270882.53
1249602196.1
III. Impairment
Provision
1. Beginning
balance 15390.00 15390.00
2. Increased
amount of the
period
(1) Withdraw
3. Decreased
amount of the
period
1132026 Semi-Annual Report of Changchai Company Limited
(1) Disposal or
scrap
4. Ending
balance 15390.00 15390.00
IV. Carrying
value
1. Ending
carrying value 307013725.83 193481236.80 4256333.58 12403320.37 517154616.58
2. Beginning
carrying value 315641104.99 215020408.19 4414275.16 15240332.46 550316120.80
(2) List of Temporarily Idle Fixed Assets
Unit: RMB
Item Original Accumulative Depreciationcarrying value depreciation reserves Carrying value Note
Houses and
buildings 58513102.14 53799477.66 4713624.48
Transportation
equipment 42837700.44 41742641.14 1095059.30 Refer to note 1
Other
equipment 1059544.05 1053147.47 6396.58
Machinery
equipment 22800.00 7410.00 15390.00 0.00
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.
15. Construction in Progress
Unit: RMB
Item Ending balance Beginning balance
Construction in progress 4067335.75 2801650.98
Total 4067335.75 2801650.98
(1) List of Construction in Progress
Unit: RMB
Ending balance Beginning balance
Item Carrying Depreciation Carrying Carrying Depreciation Carrying
amount reserves value amount reserves value
Technology
Center
Innovation
Capability 597345.00 597345.00 597345.00 597345.00
Construction
Project
Equipment
Installation
Pending 2602562.74 2602562.74 1449260.11 1449260.11
Project
1142026 Semi-Annual Report of Changchai Company Limited
Miscellaneou
s Engineering 867428.01 867428.01 755045.87 755045.87
Works
Total 4067335.75 4067335.75 2801650.98 2801650.98
(2) Significant Changes in Construction-in-Progress Projects During the Current Period
Unit: RMB
Item Beginning New Transfers to
Transfers to
balance additions fixed assets intangible
Ending Sources of
assets balance Funds
Payments for
equipment
installation
and 1449260.11 2218164.84 1064862.21 2602562.74
Self-owned
funds
construction
projects
Total 1449260.11 2218164.84 1064862.21 2602562.74
（3）Impairment Test of Construction in Progress
□Applicable √Not applicable
16. Intangible Assets
(1) List of Intangible Assets
Unit: RMB
Item Land use right Software License fee Trademark useright Total
I. Original
carrying value
1. Beginning
balance 197308383.96 23252145.58 5538000.00 1650973.47 227749503.01
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 197308383.96 23252145.58 5538000.00 1650973.47 227749503.01
II. Accumulated
amortization
1. Beginning
balance 66686043.81 21559610.41 4897733.02 854763.16 93998150.40
1152026 Semi-Annual Report of Changchai Company Limited
2. Increased
amount of the 1939018.08 1002410.77 274399.98 82830.66 3298659.49
period
(1) Withdrawal 1939018.08 1002410.77 274399.98 82830.66 3298659.49
3. Decreased
amount of the
period
(1) Disposal
4. Ending
balance 68625061.89 22562021.18 5172133.00 937593.82 97296809.89
III.Depreciation
reserves
1. Beginning
balance
2. Increased
amount of the
period
(1) Withdrawal
3. Decreased
amount of the
period
(1) Disposal
4. Ending
balance
IV. Carrying
value
1. Ending
carrying value 128683322.07 690124.40 365867.00 713379.65 130452693.12
2. Beginning
carrying value 130622340.15 1692535.17 640266.98 796210.31 133751352.61
17. Long-term Prepaid Expenses
Unit: RMB
Item Beginningbalance Increase
Amortized
amount Decrease Ending balance
Trademark
renewal fee 527722.40 64554.46 34294.89 557981.97
External power
line access 2069749.99 159211.56 1910538.43
project
Total 2597472.39 64554.46 193506.45 2468520.40
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 Deductible
temporary Deferred income temporary Deferred income
difference tax assets difference tax assets
Bad debt provision 28464400.04 4404308.52 11785788.50 1762815.70
1162026 Semi-Annual Report of Changchai Company Limited
Provisions 65000.00 9750.00 65000.00 9750.00
Advance tax paid on
pre-collected
demolition 30000000.00 4500000.00 30000000.00 4500000.00
compensation
Unrealized internal
transaction losses 6677181.18 1087683.49 6609172.38 1077482.17
Total 65206581.22 10001742.01 48459960.88 7350047.87
(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 5011361.53 751704.23 5112778.94 766916.83
under the same
control
Changes of fair
value of other
equity instrument 1016563495.57 155121790.14 1029621110.21 158682604.30
investments
Total 1021574857.10 155873494.37 1034733889.15 159449521.13
(3) List of Unrecognized Deferred Income Tax Assets
Unit: RMB
Item Ending balance Beginning balance
Deductible temporary differences 219902802.55 218964615.72
Deductible tax losses 73935125.13 73431275.08
Total 293837927.68 292395890.80
(4) Deductible Losses of Unrecognized Deferred Income Tax Assets will be due in the Following Years
Unit: RMB
Years Ending balance Beginning balance
20301489106.181489106.18
20311284090.551284090.55
203211818605.7511818605.75
203350340092.0150340092.01
20348454322.698454322.69
203545057.9045057.90
2036503850.05
Total 73935125.13 73431275.08
19. Other Non-current Assets
Unit: RMB
Item Ending balance Beginning balance
1172026 Semi-Annual Report of Changchai Company Limited
Carrying Depreciation Carrying Carrying Depreciation Carrying
amount reserves value amount reserves value
Prepayments
for the
acquisition of 1987922.73 1987922.73 1941866.73 1941866.73
long-term
assets
Assets held
for disposal 3657345.68 3657345.68 3657345.68 3657345.68
Investment in
Changzhou
Changtou
Xinhui No.1
Equity 3903834.51 3903834.51 3903834.51 3903834.51
Investment
Fund
(Limited
Partnership)
Total 9549102.92 9549102.92 9503046.92 9503046.92
Other notes:
The assets to be disposed of represent the buildings and equipment demolished in connection with the urban
renewal project on the plot of the Changzhou Sanjing Branch of Changchai Company Limited (see Note XVI 2
for details). The Company has received the first installment of compensation of RMB 30000000.00 and expects
that such compensation will be sufficient to cover the related demolition losses. The Company has transferred the
carrying amount of the demolished fixed assets to other non-current assets.The investment in Changzhou Changtou Xinhui No. 1 Equity Investment Fund (Limited Partnership) was
established by the Company's subsidiary Changzhou Horizon Investment Co. Ltd. together with Changzhou
Investment Group Co. Ltd. and Changzhou Xinhui Private Equity Fund Management Co. Ltd. As the Company
has significant influence over the fund the investment is accounted for using the equity method. As at June 30
2026 Changzhou Changtou Xinhui No. 1 Equity Investment Fund (Limited Partnership) had not yet made any
external investments.
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
Monetary 1561694 1561694 Occupied e Occupied e
assets 88.67 88.67 as cash Deposits
9016387 9016387 as cash Deposits
deposit Performa 1.20 1.20 deposit Performa
nce nce
Bonds Bonds
Time Time
Deposits Deposits
and and
Accrued Accrued
Interest Interest
1182026 Semi-Annual Report of Changchai Company Limited
etc. etc.As at the As at the
end of the end of the
reporting reporting
period period
Notes bills bills
receivabl Payment discounte Payment discounte
e -- obligation d by the obligation d by the
outstandi 7521472 7521472 s for Company 7709960 7709960 s for Company
ng .93 .93 discounte that were 0.00 0.00 discounte that were
discounte d bills not outstandi d bills not outstandi
d notes yet due ng / not yet due ng / notyet due as yet due as
at the at the
balance balance
sheet sheet
date. date.At the At the
end of the end of the
reporting reporting
period period
Notes Payment theCompany Payment
the
receivabl Obligatio Company
e -- ns for had
Obligatio
ns for had
outstandi 8687541 8687541 Transferr endorsed 5915235 59152350.49 0.49 bills that 1.53 1.53 Transferr
endorsed
ng ed Bills remained ed Bills
bills that
transferre Before remained
d notes Maturity outstandi
Before
Maturity outstanding as of ng as of
the the
balance balance
sheet sheet
date. date.Total 2505663 2505663 2264158 226415872.09 72.09 22.73 22.73
21. Short-term Borrowings
(1) Category of Short-term Borrowings
Unit: RMB
Item Ending balance Beginning balance
Bank acceptance bills with
financing nature 7521472.93 88926344.09
Total 7521472.93 88926344.09
22. Notes Payable
Unit: RMB
Item Ending balance Beginning balance
Bank acceptance bill 816214639.72 562313345.98
Total 816214639.72 562313345.98
1192026 Semi-Annual Report of Changchai Company Limited
23. Accounts Payable
(1) List of Accounts Payable
Unit: RMB
Item Ending balance Beginning balance
Payment for goods 770623751.24 793473800.05
Total 770623751.24 793473800.05
(2) Significant Accounts Payable Aging over One Year or Overdue
Unit: RMB
Item Ending balance Unpaid/ Un-carry-over reason
Payables for goods and services 63983953.48 Not yet settled
Total 63983953.48
24. Other Payables
Unit: RMB
Item Ending balance Beginning balance
Dividends payable 3891433.83 3891433.83
Other payables 135545268.68 130728339.00
Total 139436702.51 134619772.83
(1) Dividends Payable
Unit: RMB
Item Ending balance Beginning balance
Ordinary share dividends 3243179.97 3243179.97
Dividends for non-controlling
shareholders 648253.86 648253.86
Total 3891433.83 3891433.83
Other notes: The important dividends payable that have been outstanding for more than one year and the
reasons for non-payment shall be disclosed: the dividends have not been collected by the shareholders.
(2) Other Payables
1) Other Payables Listed by Nature of Account
Unit: RMB
Item Ending balance Beginning balance
Margin & cash pledged 2624473.46 2623449.83
Intercompany balances 15088416.19 10899458.04
Personal advances and receivables 588789.55 576193.19
Sales discounts and product
warranties 97392973.70 96890648.05
Other 19850615.78 19738589.89
1202026 Semi-Annual Report of Changchai Company Limited
Total 135545268.68 130728339.00
2) Significant Other Payables Aging over One Year
Other notes: 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 0.00 112510.00
Advance receipts for land
compensation 30000000.00 30000000.00
Total 30000000.00 30112510.00
26. Contract liabilities
Unit: RMB
Item Ending balance Beginning balance
Advance receipts from contracts 40356723.37 40040496.36
Total 40356723.37 40040496.36
27. Employee benefits payable
(1) List of employee benefits payable
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
I. Short-term salary 56773482.39 126481130.39 169762254.70 13492358.08
II. Post-
employment
benefit-defined 17321614.13 17321614.13
contribution plans
III. Termination
benefits
IV. Current portion
of other benefits
Total 56773482.39 143802744.52 187083868.83 13492358.08
(2) List of Short-term Salary
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
1. Salary bonus
allowance subsidy 49306856.68 101693280.90 144741467.87 6258669.71
1212026 Semi-Annual Report of Changchai Company Limited
2.Employee welfare 1592.74 2009593.45 2009593.45 1592.74
3. Social insurance 10354250.37 10354250.37
Of which: Medical
insurance premiums 8419990.34 8419990.34
Work-related injury
insurance 1118608.56 1118608.56
Maternity insurance 815651.47 815651.47
4. Housing fund 9776655.00 9776655.00
5.Labor union budget
and employee 7465032.97 2647350.67 2880288.01 7232095.63
education budget
Total 56773482.39 126481130.39 169762254.70 13492358.08
(3) List of Defined Contribution Plans
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
1. Basic pension
benefits 16799631.92 16799631.92
2. Unemployment
insurance 521982.21 521982.21
3. Enterprise
annuities
Total 17321614.13 17321614.13
28. Taxes Payable
Unit: RMB
Item Ending balance Beginning balance
VAT 2073676.11 1069751.94
Corporate income tax 787492.46 916971.53
Personal income tax 596645.16 76698.17
Urban maintenance and
construction tax 174476.40 77057.10
Property tax 1788689.72 1699964.72
Land use tax 1046742.25 943261.64
Stamp duty 526199.65 447535.62
Education Surcharge 124625.99 55007.72
Environmental protection tax 39548.81 19278.44
Total 7158096.55 5305526.88
29. Other Current Liabilities
Unit: RMB
Item Ending balance Beginning balance
Sale service fee 205632.35 180123.89
Electric charge 5015050.62 5274196.04
Tax to be transferred 4366396.51 4422202.18
Estimated share value added tax 840782.94 1661977.36
1222026 Semi-Annual Report of Changchai Company Limited
Obligation to pay bills transferred
before maturity 86875410.49 59152351.53
Other withholding expenses 1765236.25 1981905.98
Total 99068509.16 72672756.98
30. Provisions
Unit: RMB
Item Ending balance Beginning balance Reason for formation
Product warranty 60362270.57 83448865.86 Estimated after-salesexpenses
Total 60362270.57 83448865.86
31. Deferred Income
Unit: RMB
Item Beginning Reason forbalance Increase Decrease Ending balance formation
Government Government
grants 25976437.56 1704864.73 24271572.83 fundingappropriation
Total 25976437.56 1704864.73 24271572.83
Note:
Liability items involving government grants
Unit: RMB
Amount
recorded into
Item Beginning Amount of other income Other
Related to
balance new subsidy in the changes Ending balance assets/related
Reporting income
Period
National major project
special allocations-
Flexible processing
production line for 6963303.00 759633.00 6203670.00
Related to
assets
cylinders of diesel
engines
Remove compensation 15849869.50 332986.81 15516882.69 Related toassets
Research and
development and
industrialization
allocations of national
III/IV standard high- 3163265.06 612244.92 2551020.14
Related to
assets
powered efficient
diesel engine for
agricultural use
Total 25976437.56 1704864.73 24271572.83 ——
1232026 Semi-Annual Report of Changchai Company Limited
32. Share Capital
Unit: RMB
Beginning Increase/decrease (+/-)
balance New shares Bonus Bonus Ending
issued shares issue from Other Subtotal balanceprofit
The sum of 70569250 70569250
shares 7.00 7.00
33. Capital Reserves
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
Capital premium
(premium on stock) 620899001.27
620899001.27
Other capital reserves 20171432.63 20171432.63
Total 641070433.90 641070433.90
34. Other Comprehensive Income
Unit: RMB
Reporting Period
Less: Less:
Recorded Recorded
in other in other
comprehe comprehe
Income nsive
nsive Attributa
Beginnin before income in
income in Attributa ble to
Item prior Less: ble to theg balance taxation prior period Income Company non- Ending
in the period and tax as the controllin balance
Current and g
Period transferre
transferre expense parent
d in profit d in after tax
interests
or loss in retained
after tax
the earnings
Current in the
Period CurrentPeriod
I. Other
comprehe
nsive
income
that will 6772726 7447000 1117050 6329950 6836025
not be 01.44 .00 .00 .00 51.44
reclassifie
d to profit
or loss
Changes
in fair
value of 6772726 7447000 1117050 6329950 6836025
other 01.44 .00 .00 .00 51.44
equity
1242026 Semi-Annual Report of Changchai Company Limited
instrumen
t
investme
nt
Total of
other
comprehe 6772726 7447000 1117050 6329950 6836025
nsive 01.44 .00 .00 .00 51.44
income
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
cost 23936408.22 3820655.49 1736172.85 26020890.86
Total 23936408.22 3820655.49 1736172.85 26020890.86
36. Surplus Reserves
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
Statutory surplus
reserves 357298023.33 357298023.33
Discretional surplus
reserves 13156857.90 13156857.90
Total 370454881.23 370454881.23
37. Retained Earnings
Unit: RMB
Item Reporting Period Same period of last year
Beginning balance of retained
earnings before adjustments 1024763845.76 983627999.95
Beginning balance of retained
earnings after adjustments 1024763845.76 983627999.95
Add: Net profit attributable to
shareholders of the Company as 105059653.98 73422814.69
the parent
Less:Dividend of ordinary shares
payable 15525235.15 7056925.07
Ending retained earnings 1114298264.59 1049993889.57
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.
1252026 Semi-Annual Report of Changchai Company Limited
(4) Changes in consolidation scope due to transactions under common control: RMB 0.00 impact on opening
retained earnings.
(5) Other adjustments net impact on opening retained earnings: RMB 0.00.
38. Operating Revenue and Cost of Sales
Unit: RMB
Item Reporting Period Same period of last yearOperating revenue Cost of sales Operating revenue Cost of sales
Main operations 1645957037.35 1400183437.95 1537977952.94 1342621700.34
Other operations 23829636.13 21348564.64 23208672.89 18852404.99
Total 1669786673.48 1421532002.59 1561186625.83 1361474105.33
Disaggregated information of revenue and cost of sales：
Unit: RMB
Contract Segment revenue 1 Total
Classification Operating revenue Cost of sales Operating revenue Cost of sales
By business type
Of which:
Diesel Engines -
Single-Cylinder 700817945.11 566978669.25 700817945.11 566978669.25
Diesel Engines -
Multi-Cylinder 781602034.39 691156139.52 781602034.39 691156139.52
Other Products 86743979.89 74527035.91 86743979.89 74527035.91
Parts &
Accessories 76793077.96 67521593.27 76793077.96 67521593.27
By geographical
segment
Of which:
Domestic Sales 1399785658.26 1166306062.77 1399785658.26 1166306062.77
Export sales 246171379.09 233877375.18 246171379.09 233877375.18
Total 1645957037.35 1400183437.95 1645957037.35 1400183437.95
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
construction tax 2658613.38 1698090.57
Education surcharge 1899002.13 1333390.93
Property tax 3502515.28 3460896.66
Land use tax 1973348.06 2237252.61
Vehicle and vessel use tax 692.08 1401.76
Stamp duty 1239083.23 1146892.36
Environment tax 121157.51 51228.57
Total 11394411.67 9929153.46
1262026 Semi-Annual Report of Changchai Company Limited
40. Administrative Expense
Unit: RMB
Item Reporting Period Same period of last year
Employee benefits 28285956.27 28224056.35
Office expenses 3571794.52 4194712.11
Depreciation and amortization 8221162.28 8395187.65
Safety expenses 982406.05 3422736.13
Repair charge 247420.76 358383.99
Inventory scrap and inventory loss
(profit) -1629.50 129856.36
Consulting fees 2474321.72 1033962.25
Insurance premiums 1117235.29 842173.89
Utilities expenses 1089155.72 949597.73
Other 1831418.97 3167743.10
Total 47819242.08 50718409.56
41. Selling Expense
Unit: RMB
Item Reporting Period Same period of last year
Employee benefits 23573905.97 23101018.93
Office expenses 5785098.36 4210906.58
Advertising and exhibition
expenses 397253.03 645263.25
Depreciation and amortization 364675.17 356069.67
Other 466042.86 1581025.65
Total 30586975.39 29894284.08
42. Development Costs
Unit: RMB
Item Reporting Period Same period of last year
Direct input expense 30827778.58 21849718.28
Employee benefits 11757971.54 11604885.34
Depreciation and amortization 2701518.30 2761687.13
Other 1737407.20 2675614.58
Total 47024675.62 38891905.33
43. Finance Costs
Unit: RMB
Item Reporting Period Same period of last year
Interest expense 876977.31 704087.32
Less: Interest income 5113989.66 7108599.23
Net foreign exchange gains or
losses 10667988.63 773408.70
1272026 Semi-Annual Report of Changchai Company Limited
Other 311422.90 12156.41
Total 6742399.18 -5618946.80
44. Other Income
Unit: RMB
Amount included in
Sources Reporting Period Same period of last non-recurring profit oryear loss for the current
period
VAT additional deduction 1488002.11 4683847.30
Withholding individual income
tax handling fee refund 58431.60 53705.85
Government grants recognized
directly in current period profit 41308.62 85535.00 36000.00
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 grants
National Major Special Fund Allocation - Flexible Machining
Production Line for Diesel Engine Cylinder Blocks 759633.00 Asset-related grants
National III/IV Standard High-Power Efficient Agricultural Diesel
Engine R&D and Industrialization Fund 612244.92 Asset-related grants
Demolition Compensation - Hehai Road Base Main Workshop 199320.06 Asset-related grants
Demolition Compensation - Hehai Road Land 133666.75 Asset-related grants
Job Stabilization Subsidy 5308.62 Income-relatedgrants
Employment expansion subsidies 36000.00 Income-relatedgrants
Total 1746173.35 ——
45. Gain on Changes in Fair Value
Unit: RMB
Sources Reporting Period Same period of last year
Held-for-trading financial assets 3474167.46 15685633.55
Total 3474167.46 15685633.55
46. Investment Income
Unit: RMB
Item Reporting Period Same period of last year
Investment income from holding of trading
financial assets 3013123.26 270311.71
Investment income from disposal of trading
financial assets 14700637.95 3198458.89
1282026 Semi-Annual Report of Changchai Company Limited
Dividend income from holding of other equity
instrument investment 13199940.00 5016960.00
Investment Income from Wealth Management
Products 176622.04 474575.11
Accounts Receivable Financing - Discount
Interest on Bank Acceptance Bills 0.00 -1389349.23
Total 31090323.25 7570956.48
47. Credit Impairment Loss
Unit: RMB
Item Reporting Period Same period of last year
Bad debt loss of accounts
receivable -17115794.44 -17010411.59
Bad debt loss of other receivables -34937.16 -40743.72
Total -17150731.60 -17051155.31
48. Asset Impairment Loss
Unit: RMB
Item Reporting Period Same period of last year
Loss on inventory valuation and
contract performance cost -910849.44 -1007978.87
Total -910849.44 -1007978.87
49. Asset Disposal Income
Unit: RMB
Amount included in
Sources Reporting Period Same period of last non-recurring profit oryear loss for the current
period
Disposal income of fixed assets
and intangible assets 278408.23 2797353.31 278408.23
50. Non-operating Income
Unit: RMB
Amount included in non-
Item Reporting Period Same period of last year recurring profit or loss for
the current period
Income from penalty 5000.00 20162.47 5000.00
Other 30210.65 121955.83 30210.65
Total 35210.65 142118.30 35210.65
51. Non-operating Expense
Unit: RMB
Item Reporting Period Same period of last year Amount included in non-recurring profit or loss for
1292026 Semi-Annual Report of Changchai Company Limited
the current period
Losses on damage and
scrapping of non-current 3273.70 3273.70
assets
Of which: Fixed assets 3273.70 3273.70
Late payment penalties 45.27 45.27
Other 17452.97 28702.13 17452.97
Total 20771.94 28702.13 20771.94
52. Income Tax Expense
(1) List of Income Tax Expense
Unit: RMB
Item Reporting Period Same period of last year
Current income tax expense 22191603.81 12376782.62
Deferred income tax expense -7344700.90 1152893.45
Total 14846902.91 13529676.07
(2) Adjustment Process of Accounting Profit and Income Tax Expense
Unit: RMB
Item Reporting Period
Profit before taxation 124775330.62
Current income tax expense accounted at statutory/applicable tax rate 18716299.59
Influence of applying different tax rates by subsidiaries 3064331.97
Influence of income tax before adjustment
Influence of non-taxable income -1999391.00
Impact of non-deductible costs expenses and losses 562352.63
Impact of utilizing previously unrecognized deductible tax losses
Impact of unrecognized deductible temporary differences and tax losses in
current period -2933163.65
Impact of additional deductions on income tax -2563526.63
Income tax expense 14846902.91
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 41308.62 55752.64
Other intercourses in cash 6600971.73 6861841.50
1302026 Semi-Annual Report of Changchai Company Limited
Interest income 4501829.69 7108599.23
Other 31252.32 264430.97
Total 11175362.36 14290624.34
Cash Used in Other Operating Activities
Unit: RMB
Item Reporting Period Same period of last year
Expense-type Expenditures 63823255.65 108145899.71
Other transactions 645263.65 704087.32
Other 704965.52 698581.31
Total 65173484.82 109548568.34
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 109928427.71 77004217.01
Add: Provision for impairment of assets 910849.44 1007978.87
Credit impairment loss 17150731.60 17051155.31
Depreciation of fixed assets of investment properties 36386796.24 39306228.83
Depreciation of right-of-use assets
Amortization of intangible assets 3298659.49 3103559.60
Amortization of long-term deferred expenses 193506.45 209193.81
Losses on disposal of fixed assets intangible assets and
other long-term assets (gains by “-”) -278408.23 -2797353.31
Losses on the scrapping of fixed assets (gains by “-”)
Losses on the changes in fair value (gains by “-”) -3474167.46 -15685633.55
Financial expenses (gains by “-”) 11544965.94 1477496.02
Investment losses (gains by “-”) -31090323.25 -8960305.71
Decrease in deferred income tax assets (increase by “-”) -2651694.14 -2471328.60Increase in deferred income tax liabilities (decrease by “-”)-4693076.763624222.05
Decrease in inventory (increase by “-”) 183852073.38 252488273.43
Decrease in accounts receivable from operating activities
(increase by “-”) -606575450.47 -585436816.45
Increase in payables from operating activities (decrease
by “-”) 150791857.20 145773002.06
Other
Net cash flows generated from operating activities -134705252.86 -74306110.63
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
1312026 Semi-Annual Report of Changchai Company Limited
Ending balance of cash 942967057.10 714151204.22
Less: Beginning balance of cash 1248067921.44 892681884.84
Add: Ending balance of cash equivalents
Less: Beginning balance of cash equivalents
Net increase in cash and cash equivalents -305100864.34 -178530680.62
(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 586192952.22
Investments
Cash paid for significant investing activities
Including: Cash paid for purchase of wealth management
products and structured deposits 773470455.00
(3) Cash and Cash Equivalent
Unit: RMB
Item Ending balance Beginning balance
I. Cash 942967057.10 1248067921.44
Including: Cash on hand 101773.73 164159.29
Bank deposit on demand 942186572.23 1247225051.01
Other monetary assets on demand 678711.14 678711.14
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
equivalents 942967057.10 1248067921.44
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
Opening
Item Increase Decrease
balance Cash Non-cash Non-cash Closing
Cash changes balance
changes changes changes
Short-term
borrowing 88926344.09 81404871.16 7521472.93
s
Other 3891433.83 3891433.83
1322026 Semi-Annual Report of Changchai Company Limited
payables-
dividends
payable
Total 92817777.92 81404871.16 11412906.76
Note: The Company's short-term borrowings are all arising from discounted bills that are not yet due. The
increase during the current period was attributable to cash obtained from discounting bills and changes in
discount interest while the decrease was due to the maturity of bills.
56. Foreign Currency Monetary Items
(1) Foreign Currency Monetary Items
Unit: RMB
Item Ending foreign currencybalance Exchange rate
Ending balance converted
to RMB
Monetary assets 170855314.72
Of which: USD 25030343.51 6.8109 170479166.62
HKD 433051.00 0.8686 376148.10
Accounts receivable 101436182.01
Of which: USD 14893212.64 6.8109 101436182.01
Accounts payable 2060.98
Of which: USD 302.60 6.8109 2060.98
(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
(3) Circumstances in which the functional currency of a foreign operation is not freely convertible into
the entity's presentation currency.□Applicable √Not applicable
57. Lease
(1) The Company as 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 869237.61
Total 869237.61
Finance leases with the Company as lessor
1332026 Semi-Annual Report of Changchai Company Limited
□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
Item Amount for the current period Amount for the previous period
Direct input 30827778.58 21849718.28
Employee remuneration 11757971.54 11604885.34
Depreciation and amortization 2701518.30 2761687.13
Others 1737407.20 2675614.58
Total 47024675.62 38891905.33
Of which：Research and
development expenditure 47024675.62 38891905.33
recognised as expense
Capitalised research and
development expenditure 0.00 0.00
IX. Equity in Other Entities
1. Equity in Subsidiary
(1) Subsidiaries
Unit: RMB
Natur Holding
Main Registra e of percentage (%)
Name Registered operati busin Way ofcapital ng tionplace ess Directly Indirec gainingplace tly
Changchai Wanzhou 85000000.00 Chongq Chongq IndustDiesel Engine Co. Ltd. ing ing ry 60.00% Set-up
Changzhou Changchai
Benniu Diesel Engine 55063000.00 Changz Changz Indust 99.00% 1.00% Set-up
Fittings Co. Ltd. hou hou ry
Changzhou Horizon Changz Changz Servic
Investment Co. Ltd. 40000000.00 hou hou e 100.00% Set-up
Combinat
Changzhou Fuji Changchai ion not
Robin Gasoline Engine 37250000.00 Changz Changz Indust 100.00% under the
Co. Ltd. hou hou ry same
control
Jiangsu Changchai 300000000.00 Changz Changz IndustMachinery Co. Ltd. hou hou ry 100.00% Set-up
Changzhou Xingsheng
Property Management Co. 1000000.00 Changz Changz Servic
Ltd. hou hou e
100.00% Set-up
1342026 Semi-Annual Report of Changchai Company Limited
Combinat
Zhenjiang Siyang Diesel ion not
Engine Manufacturing Co. 2000000.00 Zhenjia Zhenjia Industng ng ry 52.00% under theLtd. same
control
(2) Significant Non-wholly-owned Subsidiary
Unit: RMB
Shareholding The profit or lossattributable to the Declaring dividends Balance of non-Name proportion of non- non-controlling distributed to non- controlling interestscontrolling interests interests controlling interests at the period-end
Changchai
Wanzhou Diesel 40.00% 549266.80 22124179.27
Engine Co. Ltd.Zhenjiang Siyang
Diesel Engine
Manufacturing Co. 48.00% 4319506.93 2400000.00 62682595.16
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
Name Curre Non- Curre
Non- Non- Curre Non-
curre Total nt curre Total Curre curre Total nt curre Totalnt
assets nt assets liabili
nt liabili nt
liabili ties assets nt assets liabili
nt liabili
assets ties ty assets ties
liabili ties
ty
Chan
gchai
Wanz
hou 6051 2015 8066 2344 1907 2535 5713 2063 7776 2228 1907 2419
Diese 1203. 4190. 5393. 7144. 800.0 4944. 1342. 2914. 4257. 4304. 800.0 2104.l 13 01 14 98 0 98 54 84 38 57 0 57
Engin
e Co.Ltd.Zhenj
iang
Siyan
g
Diese
l 1285 2046 1490 2002 8467 2010 1244 2104 1454 2090 2099Engin 8956 6887. 5644 4042. 7.08 8719. 4983 3876. 9371 6504.
84671181.
e 1.55 41 8.96 00 08 9.06 66 5.72 43 7.08 51
Manu
factur
ing
Co.Ltd.Unit: RMB
1352026 Semi-Annual Report of Changchai Company Limited
Reporting Period Same period of last year
Total Cashflows Total
Cash
Name Operating comprehe Operating comprehe flows
revenue Net profit nsive from Net profit from
income operating
revenue nsive operating
activities income activities
Changcha
i
Wanzhou 4073915 137316 137316 246158 2500485 1126451 1126451 638950.0
Diesel 0.64 6.99 6.99 2.73 8.48 .83 .83 1
Engine
Co. Ltd.Zhenjiang
Siyang
Diesel
Engine 4858561 899897 899897 -713462 4206635 6199185 6199185 7429071
Manufact 7.48 2.78 2.78 7.33 1.38 .17 .17 .74
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:
1、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.
2、The Company's subsidiary Changzhou Horizon Investment Co. Ltd. together with Changzhou Investment
Group Co. Ltd. and Changzhou Xinhui Private Equity Fund Management Co. Ltd. jointly established
Changzhou Changtou Xinhui No. 1 Equity Investment Fund (Limited Partnership). In accordance with the
Partnership Agreement as the Company has significant influence over Changzhou Changtou Xinhui No. 1 Equity
Investment Fund (Limited Partnership) the investment is accounted for using the equity method and is included in
other non-current assets.
3、The Company's subsidiary Changzhou Horizon Investment Co. Ltd. together with Changzhou Investment
Group Co. Ltd. Changzhou Xingyu Xinhui Venture Capital Co. Ltd. Shenzhen Yuanzhi Venture Capital Co.Ltd. Changzhou Xingyu Investment Management Co. Ltd. Shenzhen Capital Operation Group Co. Ltd.Shanghai Zhuiguang Julian Hard Technology Venture Capital Partnership (Limited Partnership) and Changzhou
Zhonglou Science and Innovation Investment Partnership (Limited Partnership) jointly established Yuanzhi
Changtou Xingyu (Changzhou) Equity Investment Partnership (Limited Partnership). In accordance with the
Partnership Agreement Horizon Investment as a limited partner does not execute partnership affairs. The
Company does not control nor does it have significant influence over Yuanzhi Changtou Xingyu (Changzhou)
1362026 Semi-Annual Report of Changchai Company Limited
Equity Investment Partnership (Limited Partnership). The investment is measured at fair value with changes
recognized in profit or loss and is included in non-current financial assets.X. 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
Amount
recorded Amount
into non- recorded
Accounting Beginning Amount ofnew operating
into other
income in Other Ending
Related to
items balance income in changes balance assets/relatsubsidy the the ed income
Reporting Reporting
Period Period
Deferred 25976437 1704864. 24271572 Related to
income .56 73 .83 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 1746173.35 1790399.73
XI. 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
1372026 Semi-Annual Report of Changchai Company Limited
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 2026 the Company’s
foreign currency monetary items include cash and cash equivalents accounts receivable and accounts payable
(see Note VII.56). 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
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:
The Company only transacts with approved and reputable third parties. In accordance with the Company's policies
credit reviews are required for all customers who request credit terms. In addition the Company continuously
monitors its accounts receivable balances to ensure that it is not exposed to significant bad debt risks.As the counterparties of monetary funds and bank acceptance bills receivable are banks with good reputation and
high credit ratings the credit risk associated with these financial instruments is low.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 2026 68.46% (December 31 2025: 60.63%) 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.
1382026 Semi-Annual Report of Changchai Company Limited
* 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
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
The Company has retained
Endorseme Notes
nt/discount receivable 94396883.42
Not substantially all the risks and rewards
derecognized of the asset including the credit/default
risk related thereto.Endorseme Accounts The Company transfers almost all the
nt receivable 15218934.69 Derecognizedfinancing risks and rewards
Total 109615818.11
1392026 Semi-Annual Report of Changchai Company Limited
(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 15218934.69 0.00
financing
Total 15218934.69 0.00
(3) Continued Involvement in the Transfer of Assets Financial Assets
√Applicable ?Not applicable
Unit: RMB
Item Transfer method of Amount of assets resulting Amount of liabilities resultingassets from continued involvement from continued involvement
Notes receivable Endorsement 86875410.49 86875410.49
Notes receivable Discount 7521472.93 7521472.93
Total 94396883.42 94396883.42
XII. 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 measurement measurement Total
items at level 1 items at level 2 items 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 investment 40914780.00 40914780.00
(3) Derivative financial assets
(4) Wealth management
investments 501609871.65 501609871.65
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 investments in debt
obligations
(III)Other equity instrument
investment 672747000.00 316061295.81 988808295.81
1402026 Semi-Annual Report of Changchai Company Limited
(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 59605955.92 59605955.92
Other non-current financial assets 338118757.03 338118757.03
Total assets consistently measured
by fair value 713661780.00 501609871.65 713786008.76 1929057660.41
II.Non-recurring fair value
measurement -- -- -- --
2. Market Price Recognition Basis for Consistent and Inconsistent Fair Value Measurement Items at
Level 1
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 and has been actively engaged in frequent financing activities in recent 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
1412026 Semi-Annual Report of Changchai Company Limited
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.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.XIII. Related Party and Related-party Transactions
1. Information Related to the Company as the Parent of the Company
Proportion of Proportion of
Registra share held by voting rights
Name tion Nature of business Registered the Company owned by the
place capital as the parent Company as theagainst the parent against the
Company Company
Investment and operations of
Changzhou state-owned assets assets
Investment Changz management (excluding
Group Co. hou financial business) investment
RMB1.2 32.26% 32.26%
Ltd. consulting (excluding
billion
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
Part of Municipal (District) State-owned Capital to Enrich Social Security Funds" (Chang Caigongmao [2020]
1422026 Semi-Annual Report of Changchai Company Limited
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 IX 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 Fund Participated in establishing the industrial
(Limited Partnership) investment fund
Changzhou Changtou Xinhui No. 1 Equity Investment Fund
(Limited Partnership) Industry investment fund established by the
Yuanzhi Changtou Xingyu (Changzhou) Equity Investment Company's subsidiary Changzhou Horizon
Partnership (Limited Partnership) Investment Co. Ltd.Jiangsu Horizon New Energy Technology Co. Ltd. Shareholding enterprise of the Company
XIV.Commitments and Contingency
1. Significant Commitments
Significant commitments on balance sheet date:
As of 30 June 2026 there was no significant commitment for the Company to disclose.
1432026 Semi-Annual Report of Changchai Company Limited
2. Contingency
(1) Significant Contingency on Balance Sheet Date: None
(2) In spite of no Significant Contingency to Disclose the Company Shall Also Make Relevant Statements
There was no significant contingency in the Company.XV. 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.XVI. 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
Pursuant to the Announcement of the People's Government of Xinbei District Changzhou City on the
Expropriation Decision for Houses on State-Owned Land (Chang Xin Zheng Gao [2022] No. 6) issued by the
People's Government of Xinbei District Changzhou City it was decided to expropriate the houses within the
expropriation scope of the urban renewal project on the plot of the Company's Single-Cylinder Engine Plant i.e.the Changzhou Sanjing Branch of Changchai Company Limited (hereinafter referred to as the "Company"). On
November 29 2023 the Company entered into a compensation agreement with the Housing and Urban-Rural
Development Bureau of Changzhou National High-Tech Industrial Development Zone (Xinbei District)
(hereinafter referred to as the "Xinbei District Housing and Urban-Rural Development Bureau") and the Housing
Expropriation and Compensation Service Center of Sanjing Subdistrict Xinbei District Changzhou City
(hereinafter referred to as the "Sanjing Subdistrict Service Center") with a total agreed compensation amount of
RMB 99929868. In accordance with the payment terms set out in the Compensation Agreement the Company
has received the first installment of compensation (30% of the total compensation) of RMB 30000000 (of which
RMB 1000000 was received on December 29 2023 and RMB 29000000 was received on January 3 2024). In
July 2026 the Company the Xinbei District Housing and Urban-Rural Development Bureau and the Sanjing
Subdistrict Service Center reached an agreement on the land consolidation and upgrading of the Sanjing Branch
site and the subsequent compensation payment arrangements based on professional reports issued by qualified
professional institutions. This matter was approved at the Company's first extraordinary general meeting of
shareholders for 2026 held on July 21 2026. Pursuant to the agreement the Company will allocate RMB
1442026 Semi-Annual Report of Changchai Company Limited
30000000 from the compensation receivable as a special fund for the land consolidation and upgrading of the
Sanjing Branch site which will be managed separately by the Xinbei District Housing and Urban-Rural
Development Bureau and the Sanjing Subdistrict Service Center and used exclusively for the land consolidation
and upgrading of the site. The relevant land expropriation work is currently in progress.XVII. 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) 1256529659.27 428915050.18
One to two years 690954.49 838239.49
Two to three years 443059.20 1013190.45
More than three years 94395021.81 94742934.74
Three to four years 550815.51 895540.14
Four to five years 3378987.49 3627859.05
Over 5 years 90465218.81 90219535.55
Total 1352058694.77 525509414.86
(2) Disclosure by Withdrawal Methods for Bad Debts
Unit: RMB
Ending balance Beginning balance
Carrying amount Bad debtprovision Carrying amount
Bad debt
Carryi provisionCategory Withdr Withdr Carryi
Amou Propor Amou awal ngvalue Amoun Propor Amoun awal
ng
nt tion nt proport t tion t proport value
ion ion
Accounts
receivable
withdrawal 11987 11987
of Bad debt 862.5 0.89% 862.5 100.00 0.00 15584 15584 100.00
provision 9 9 % 015.34
2.97%015.34%0.00
separately
accrued
Of which:
Accounts
receivable
withdrawal 1340 99.11 10782 1232 50992 4223
of bad debt 07083 % 5486. 8.05% 24534 5399.5
97.038757217.175284
provision of 2.18 56 5.62 2
%558.80%0.72
by group
Of which:
Accounts
receivable 1338 10782 1230 50992 4223
with 18265
98.97
%5486.8.06%357165399.5
97.038757217.17
3.53566.972%558.80%
5284
provision for 0.72
1452026 Semi-Annual Report of Changchai Company Limited
bad debts
based on
credit risk
characteristic
s portfolio
Accounts
receivable
with
provision for
bad debts
based on 1888 0.14% 0.00 0.00% 1888related-party 178.65 178.65 0.00 0.00 0.00 0.00 0.00
transactions
portfolio
within the
consolidation
scope
135211981123252550103154223
Total 05869 —— 3349. —— 24534 9414.8 —— 6574.1 —— 5284
4.77155.62640.72
Provision for bad debts assessed individually: RMB 11987862.59 including significant impairment items
totaling RMB 9945125.51. The details are as follows:
Unit: RMB
Beginning balance Ending balance
Name Carrying Bad debt Carrying Bad debt Withdrawa Reason for
amount provision amount provision lproportion withdraw
Customer 1 2584805.83 2584805.83 2584805.83 2584805.83 100.00% Difficult torecover
Customer 2 2254860.60 2254860.60 2254860.60 2254860.60 100.00% Difficult torecover
Customer 3 1902326.58 1902326.58 1902326.58 1902326.58 100.00% Difficult torecover
Customer 4 1682721.03 1682721.03 1639132.43 1639132.43 100.00% Difficult torecover
Customer 5 1564000.07 1564000.07 1564000.07 1564000.07 100.00% Difficult torecover
Total 9988714.11 9988714.11 9945125.51 9945125.51
Number of categories of bad debt provision by group: 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 1254191802.55 25083836.05 2.00 %
1 to 2 years 690954.49 34547.72 5.00 %
2 to 3 years 443059.20 66458.88 15.00%
3 to 4 years 27852.41 8355.72 30.00%
4 to 5 years 491741.73 295045.04 60.00%
Over 5 years 82337243.15 82337243.15 100.00%
Total 1338182653.53 107825486.56
If the provision for doubtful debts of accounts receivable is made in accordance with the general model of
1462026 Semi-Annual Report of Changchai Company Limited
expected credit losses:
□Applicable √Not applicable
(3) Bad Debt Provision Withdrawal Reversed or Recovered in the Current Period
Movement of allowance for doubtful debts during the current period:
Unit: RMB
Beginning Changes in the current periodCategory balance Reversed or Other Ending balanceWithdrawal recovered Verification s
Bad debt
provision
accrued by 15584015.34 -3587052.75 9100.00 11987862.59
item
Withdrawal
of bad debt
provision by 87572558.80 20252927.76 107825486.56
group
Total 103156574.14 16665875.01 9100.00 119813349.15
(4) Accounts Receivable Written-off in Current Period：None
(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
Ending balance Ending balance Ending balance total ending provision ofName of the
entity of accounts of contract
of accounts balance of accounts
receivable assets receivable and accounts receivable andcontract assets receivable and impairment
contract assets provision for
contract assets
Customer 1 774539761.50 0.00 774539761.50 57.29% 15490795.20
Customer 2 85701507.99 0.00 85701507.99 6.34% 1714030.16
Customer 3 47428859.37 0.00 47428859.37 3.51% 948577.19
Customer 4 44670600.00 0.00 44670600.00 3.30% 893412.00
Customer 5 35399769.65 0.00 35399769.65 2.62% 707995.39
Total 987740498.51 0.00 987740498.51 73.06% 19754809.94
2. Other Receivables
Unit: RMB
Item Ending balance Beginning balance
Dividend receivable 5456880.00 0.00
Other receivables 22608434.25 20239727.26
Total 28065314.25 20239727.26
1472026 Semi-Annual Report of Changchai Company Limited
(1)Dividend receivable
1) Classification of dividends receivable
Unit: RMB
Projects (or Investee Entities) Ending balance Beginning balance
Bank of Jiangsu 2025 Dividend
Distribution 5456880.00 0.00
Total 5456880.00 0.00
(2) Other Receivables
1) Other Receivables Classified by Accounts Nature
Unit: RMB
Nature Ending carrying value Beginning carrying value
Related-party transactions within
the consolidation scope 15000000.00 15000000.00
Margin and cash pledge 1300.00 1300.00
Other entity current accounts 22186221.32 20326696.60
Compensation receivable 3348087.00 3348087.00
Petty cash and borrowings by
employees 1271986.19 773766.34
Other 13736523.49 13683078.59
Total 55544118.00 53132928.53
2) Disclosure by Aging
Unit: RMB
Aging Ending carrying amount Beginning carrying amount
Within 1 year (including 1 year) 7434174.92 4957985.45
1 to 2 years 105511.06 172411.06
2 to 3 years 6112959.03 6104059.03
Over 3 years 41891472.99 41898472.99
3 to 4 years 9169485.76 9176485.76
4 to 5 years 12802.00 12802.00
Over 5 years 32709185.23 32709185.23
Total 55544118.00 53132928.53
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 Total
loss of the next 12 the duration (credit the duration (credit
months impairment not impairmentoccurred) occurred)
Balance of 1 January
202699159.7184856.3332709185.2332893201.27
1482026 Semi-Annual Report of Changchai Company Limited
Balance of 1 January
2026 in the Current
Period
--Transfer to Second
stage -5275.55 5275.55
-- Transfer to Third
stage
-- Reverse to Second
stage
-- Reverse to First stage
Withdrawal of the
Current Period 51868.04 -9385.56 42482.48
Reversal of the Current
Period
Write-offs of the Current
Period
Verification of the
Current Period
Other changes
Balance of 30 June 2026 145752.20 80746.32 32709185.23 32935683.75
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
Category Beginning Reversed or Charged- Endingbalance Withdrawal recovered off/Written- Others balanceoff
Bad debt
provision
separately 5601964.53 5601964.53
accrued
Withdrawal
of bad debt
provision by 27291236.74 42482.48 27333719.22
group
Total 32893201.27 42482.48 32935683.75
5) 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
other bad debt
receivables % provision
Changzhou Changniu Intercompan
Machinery Co. Ltd. y 15000000.00
2-4 years 27.01% 0.00
1492026 Semi-Annual Report of Changchai Company Limited
Transactions
with
Consolidated
Entities
Housing Expropriation and
Compensation Service Compensatio Within 1
Center Sanjing Subdistrict n receivable 3348087.00 year 6.03% 66961.74
Xinbei District Changzhou
Changzhou Compressor Intercompan Over 5
Factory y funds 2940000.00 years 5.29% 2940000.00
Changchai Group Imp. & Intercompan Over 5
Exp. Co. Ltd. y funds 2853188.02 years 5.14% 2853188.02
Changzhou New District Intercompan Over 5
Accounting Center y funds 1626483.25 years 2.93% 1626483.25
Total 25767758.27 46.40% 7486633.01
3. Long-term Equity Investment
Unit: RMB
Item Ending balance Beginning balance
Carrying Depreciation Carrying Carrying Depreciation Carrying
amount reserves value amount reserves value
Investment to 871339449. 871339449. 871339449. 871339449.subsidiaries 94 94 94 94
Investment to
joint ventures
and 44182.50 44182.50 44182.50 44182.50
associated
enterprises
Total 871383632. 44182.50 871339449. 871383632. 44182.50 871339449.44 94 44 94
(1) Investment to Subsidiaries
Unit: RMB
Beginnin Increase/decrease for the current period
Beginnin g balance Ending
Withdraw Ending balance
Investee g balance of Additiona(carrying depreciati l Reduced al of balance of
value) on investme investme impairme Others (carrying depreciati
reserve nt nt nt value) onprovision reserve
Changcha
i
Wanzhou 5100000 5100000
Diesel 0.00 0.00
Engine
Co. Ltd.Changzho
u 9646650 9646650
Changcha 0.00 0.00
i Benniu
1502026 Semi-Annual Report of Changchai Company Limited
Diesel
Engine
Fittings
Co. Ltd.Changzho
u Horizon
Investme 4000000 4000000
nt Co. 0.00 0.00
Ltd.Changzho
u Fuji
Changcha
i Robin 4728623 4728623
Gasoline 0.03 0.03
Engine
Co. Ltd.Jiangsu
Changcha
i 5918359 5918359
Machiner 19.91 19.91
y Co.Ltd.Changzho
uXingshe
ng
Property 1000000 1000000
Managem .00 .00
ent Co.Ltd.Zhenjiang
Siyang
Diesel
Engine 4375080 4375080
Manufact 0.00 0.00
uring Co.Ltd.Total 8713394 871339449.94 49.94
(2) Investment to Joint Ventures and Associated Enterprises
Unit: RMB
Begin Increase/decrease for the current period
Begin ning Gains Endin
ning balan and
Adjus Cash
losses tment bonus Withd
Endin g
Invest balan ce of Addit Redu recog of
g balan
ce depre other Chan
or rawal
profit of balan ce ofee (carry ciatio ional ced nized ges of Other ce depre
ing n invest invest under
comp other s impairehen annou rment s (Carr ciatio
value) reserv ment ment the equity ying n
e equity
sive nced provis
metho incom to ion
value) reserv
d e issue
e
I. Joint ventures
Subto 0.00 0.00 0.00 0.00
1512026 Semi-Annual Report of Changchai Company Limited
tal
II. Associated enterprises
Beijin
g
Tsing
hua
Xingy
e
Indust
rial 0.00 4418 0.00 4418
Invest 2.50 2.50
ment
Mana
geme
nt
Co.Ltd.Subto
tal 0.00
44184418
2.500.002.50
Total 0.00 4418 44182.50 0.00 2.50
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
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 1495560862.90 1314947879.98 1390026293.94 1240388539.57
Other operations 65713429.19 63261261.90 61686090.56 61737542.10
Total 1561274292.09 1378209141.88 1451712384.50 1302126081.67
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
diesel engines 703892272.05 599093921.93 703892272.05 599093921.93
Multi-cylinder
diesel engines 735770356.54 666030170.67 735770356.54 666030170.67
1522026 Semi-Annual Report of Changchai Company Limited
Other products 25350562.29 21870544.94 25350562.29 21870544.94
Fittings 30547672.02 27953242.44 30547672.02 27953242.44
Classification by
operating region
Of which:
Sales in domestic
market 1283519613.78 1113508693.32 1283519613.78 1113508693.32
Export sales 212041249.12 201439186.66 212041249.12 201439186.66
Total 1495560862.90 1314947879.98 1495560862.90 1314947879.98
Information in relation to the transaction price apportioned to the residual contract performance obligation:
The amount of revenue corresponding to performance obligations of contracts signed but not performed or not
fully performed yet was RMB 0 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 2869123.26 3198458.89
Dividend income from holding of other equity
instrument investment 15799940.00 5016960.00
Accounts receivable financing-discount interest of
bank acceptance bills -1389349.23
Total 18669063.26 6826069.66
XVIII. 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
(including the reversal of provision for asset 278408.23
impairment)
During the current reporting period
government grants recognised in
Government grants recognized in current profit profit or loss amounted to RMB
or loss (excluding those closely related to the 1746173.35. After deducting
company’s normal business operations in government grants related to assets
compliance with national policies granted based 36000.00 transferred from deferred income of
on predetermined standards and having a RMB 1704864.73 and employment
sustained impact on the company’s profit or stabilisation subsidies of RMB
loss) 5308.62 the amount of governmentgrants included in non-recurring gains
and losses for the current period was
RMB 36000.00.
1532026 Semi-Annual Report of Changchai Company Limited
Except for effective hedging activities related to
the Company's normal operating activities gains During the reporting period the
and losses arising from changes in fair value of Company's wholly-owned subsidiary
financial assets and financial liabilities held by 21188928.79 Changzhou Horizon Investment Co.non-financial enterprises as well as gains and Ltd. sold part of the shares of the
losses arising from the disposal of financial Company held by the subsidiary.assets and financial liabilities
Gains and losses arising from entrusting others
to invest or manage assets 176622.04
Reversals of impairment provisions for
receivables that were individually tested for 91000.00
impairment
Other non-operating income and expenses not
listed above 14438.71
Less: Income tax effects 1910775.89
Non-controlling interests effects (after tax) 62895.37
Total 19811726.51
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
Profit as of Reporting Period Weighted average EPS (Yuan/share)ROE (%) EPS-basic EPS-diluted
Net profit attributable to ordinary
shareholders of the Company 3.00% 0.1489 0.1489
Net profit attributable to ordinary
shareholders of the Company after
deduction of non-recurring profit or 2.44% 0.1208 0.1208
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
1542026 Semi-Annual Report of Changchai Company Limited
(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
The Board of Directors
Changchai Company Limited
21 August 2026
155
沪公网安备31011802005267号
