WEIFU HIGH-TECHNOLOGY GROUP CO. LTD.SEMI-ANNUAL REPORT 2023

August 2023

1Section I. Important Notice Contents and Interpretation

Board of Directors Board of Supervisory all directors supervisors and senior

executives of Weifu High-Technology Group Co. Ltd. (hereinafter referred to as the

Company) hereby confirm that there are no any fictitious statements misleading

statements or important omissions carried in this report and shall take all

responsibilities individual and/or joint for the reality accuracy and completion of

the whole contents.Wang Xiaodong Principal of the Company and Rong Bin person in charge of

accounting works as well as Wu Junfei person in charge of accounting organ

(accounting principal) hereby confirm that the Financial Report of this Semi-Annual

Report is authentic accurate and complete.All directors have attended the Meeting for the Report deliberation.The forward-looking statements with future plans involved in the Report do not

constitute a substantial commitment for investors. Investors and related parties should

maintain sufficient risk awareness and investors are advised to exercise caution of

investment risks.The Company may face main risks in future operation and countermeasures are

describes in the “Management Discussion and Analysis” and the investors are

advised to check them out.The Company has no plan of cash dividend distributed no cash bonus and

capitalizing of common reserves either carried out.The Report is prepared in Chinese and English respectively. In the event of any

discrepancy between the two versions the Chinese version shall prevail.

2Content

Section I. Important Notice Contents and Interpret... 2

Section II. Company Profile and Main Financial Ind... 6

Section III. Management Discussion and Analysis ..... 9

Section IV. Corporate Governance ................... 22

Section V. Environmental and Social Responsibility.. 24

Section VI. Important Matters ...................... 29

Section VII. Changes in Shares and Particulars abo.. 39

Section VIII. Preferred Stock ...................... 45

Section IX. Corporate Bonds ........................ 46

Section X. Financial Report ........................ 47

3Documents Available for Reference

I. Financial statement carrying the signatures and seals of person in charge of the company principal of the

accounting works and person in charge of accounting organ (accounting Supervisor);

II. Original documents of the Company and manuscripts of public notices that disclosed in the website designated

by CSRC during the reporting period;

III. The Semi-Annual report summary is published on China Securities Journal and Securities Times during the

Period;

IV. Place for preparation: Office of the BOD of the Company.

4Interpretation

Items Refers to Contents

Company The Company WFHT Refers to WEIFU HIGH-TECHNOLOGY GROUP CO. LTD.Weifu Group Refers to Wuxi Weifu Group Co. Ltd.Wuxi Industry Group Refers to Wuxi Industry Development Group Co. Ltd.Robert Bosch Robert Bosch Company Refers to Robert Bosch Co. Ltd ROBERT BOSCH GMBH

RBCD Refers to Robert Bosch Powertrain Ltd.WFLD Refers to WUXI WEIFU LIDA CATALYTIC CONVERTER CO. LTD.WFJN Refers to NANJING WEIFU JINNING CO. LTD.WFTT Refers to NINGBO WFTT TURBOCHARGING TECHNOLOGY CO.LTD.WFCA Refers to WUXI WEIFU CHANG AN CO.LTD.WUXI WEIFU MASHAN FUEL INJECTION EQUIPMENT CO.WFMA Refers to

LTD.WFTR Refers to WUXI WEIFU INTERNATIONAL TRADE CO.LTD.WUXI WEIFU SCHMITTER POWERTRAIN COMPONENTS

WFSC Refers to

CO.LTD.WFAM Refers to WUXI WEIFU AUTOCAM PRECISION MACHINERY CO.LTD.WFDT Refers to WUXI WEIFU E-DRIVE TECHNOLOGIES CO. LTD.WFAS Refers to WUXI WEIFU AUTOSMART SEATING SYSTEM CO. LTD.SPV Refers to Weifu Holding ApS

IRD Refers to IRD Fuel Cells A/S

Borit Refers to Borit NV

WFQL Refers to Wuxi Weifu Qinglong Power Technology Co. Ltd.VHIO Refers to VHIT S.p.A. Società Unipersonale

VHWX Refers to VHIT Automotive Systems(Wuxi) Co.Ltd

Lezhuo Bowei Refers to Lezhuo Bowei Hydraulic Technology (Shanghai) Co. Ltd

WFEC Refers to Wuxi WFEC Catalysts. Co. Ltd.WFPM Refers to Wuxi Weifu Precision Machinery Manufacturing Co. Ltd.Zhonglian Electronics Refers to Zhonglian Automobile Electronics Co. Ltd.Guokai Metal Refers to Wuxi Guokai Metal Resources Co. Ltd.CSRC Refers to China Securities Regulatory Commission

SZSE Refers to Shenzhen Stock Exchange

The reporting period Refers to From January 1 2023 to June 30 2023WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Section II. Company Profile and Main Financial Indexes

I. Company information

Short form of the stock WFHT Su Weifu-B Stock code 000581.200581

Stock exchange for listing Shenzhen Stock Exchange

Name of the Company (in Chinese) 无锡威孚高科技集团股份有限公司

Short form of the Company (in Chinese) 威孚高科

Foreign name of the Company (if applicable) WEIFU HIGH-TECHNOLOGY GROUP CO.LTD.Short form of foreign name of the Company (if

WFHT

applicable)

Legal representative Wang Xiaodong

II. Person/Way to contact

Secretary of the Board Rep. of security affairs

Name Liu Jinjun Xu Kan

Contact add. No.5 Huashan Road Xinwu District Wuxi No.5 Huashan Road Xinwu District Wuxi

Tel. 0510-80505999 0510-80505999

Fax. 0510-80505199 0510-80505199

E-mail Web@weifu.com.cn Web@weifu.com.cn

III. Other information

1. Company contact information

Whether registrations address offices address and codes as well as website and email of the Company changed in reporting period

or not

□ Applicable □Not applicable

The registered address office address postal code website and email address of the company remain unchanged during the

reporting period. Please refer to the 2022 Annual Report for details.

2. Information disclosure and location

Whether information disclosure and preparation place changed in reporting period or not

□Applicable□Not applicable

The website and media name and website of the stock exchange where the company disclosed its semi-annual report and the place

of placement of the company’s semi-annual report remain unchanged during the reporting period. Please refer to the 2022 Annual

Report for details.

6WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

3. Other relevant information

Whether other relevant information has changed in the reporting period or not

□Applicable □Not applicable

IV. Main accounting data and financial indexes

Whether it has retroactive adjustment or re-statement on previous accounting data or not

□ Yes □ No

Year-on-year

Current period Last period

increase(+)/decrease(-)

Operation income (RMB) 6129649047.40 7137172857.97 -14.12%

Net profit attributable to shareholders of

948760859.551091126480.08-13.05%

the listed company(RMB)

Net profit attributable to shareholders of

the listed company after deducting 830878251.37 1127408939.53 -26.30%

extraordinary gains and losses(RMB)

Net cash flows arising from operating

1089961237.42-2493982044.89143.70%

activities (RMB)

Basic earnings per share (RMB/Share) 0.98 1.10 -10.91%

Diluted earnings per share (RMB/Share) 0.98 1.10 -10.91%

Weighted average ROE 5.24% 5.55% -0.31%

Ending balance of current Ending balance of last Year-on-year

period period increase(+)/decrease(-)

Total assets (RMB) 28352668665.53 28528913065.01 -0.62%

Net assets attributable to shareholders of

18544382977.5617696679170.724.79%

listed company (RMB)

V. Difference of the accounting data under accounting rules in and out of China

1. Difference of the net profit and net assets disclosed in financial report under both IAS (International

Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)

□ Applicable □ Not applicable

The Company had no difference of the net profit or net assets disclosed in financial report under either IAS (International

Accounting Standards) or Chinese GAAP (Generally Accepted Accounting Principles) in the reporting period.

2. Difference of the net profit and net assets disclosed in financial report under both foreign accounting

rules and Chinese GAAP (Generally Accepted Accounting Principles)

□ Applicable □Not applicable

The Company had no difference of the net profit or net assets disclosed in financial report under either foreign accounting rules or

Chinese GAAP (Generally Accepted Accounting Principles) in the reporting period.VI. Items and amounts of extraordinary gains and losses

□Applicable □Not applicable

7WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

In RMB

Item Amount Note

Gains/losses from the disposal of non-current asset (including the write-off that accrued for WFJN demolition

124868984.10

impairment of assets) compensation

Governmental grants reckoned into current gains/losses (except for those with normal

operation business concerned and conform to the national policies & regulations and are 40157408.73

continuously enjoyed at a fixed or quantitative basis according to certain standards)

Except for the effective hedging operations related to normal business operation of the

Company the gains/losses of fair value changes from holding the trading financial assets

-14788631.85

and trading financial liabilities and the investment earnings obtained from disposing the

trading financial asset trading financial liability and financial assets available for sale

Reversal of provision for depreciation of account receivable which was singly taken

3127091.67

depreciation test

Other non-operating income and expenditure except for the aforementioned items 3433420.03

Less: Impact on income tax 18140350.17

Impact on minority shareholders’ equity (post-tax) 20775314.33

Total 117882608.18 --

Specific information on other items of gains and losses qualified the definition of extraordinary gains and losses

□Applicable □Not applicable

The Company does not have other items of gains and losses qualified the definition of extraordinary gains and losses

Information on the definition of extraordinary gains and losses that listed in the Q&A Announcement No.1 on Information

Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Gains and Losses as the recurring gains/losses

□Applicable □Not applicable

The Company does not have any extraordinary gains and losses listed under the Q&A Announcement No.1 on Information

Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Gains and Losses defined as recurring

gains/losses

8WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Section III. Management Discussion and Analysis

I. Major business of the company within the reporting period

(I) Main business engaged by the Company

The Company is engaged in R&D production and sales of core automotive parts and components. During the reporting period the

main products are diesel fuel injection system products exhaust gas post-processing system products and air intake system

products. Meanwhile the core components of the fuel cell products of the company have been produced and marketed in small

batches.

1. The diesel fuel injection system products are widely applied to diesel engines of all grades of power to support various types of

trucks buses construction machinery marine agricultural machinery generator sets etc. The products can satisfy the National VI

and Off-road Stage IV emission regulations for vehicles and are in the leading position within the industry in terms of product

variety production scale market share etc. While making efforts to match with domestic main engines some products have been

exported to America Southeast Asia the Middle East and other regions.

2. Exhaust gas post-processing system products can satisfy the National VI and Off-road Stage IV emission regulations for

vehicles. The products are in the leading position domestically in terms of technology level market scale and production capacity

and are widely used in the fields of passenger cars commercial vehicles off-road machinery etc. which can provide strong

support for the product upgrading of main engine manufacturers.

3. Intake system products (superchargers) can satisfy the National VI and Off-road Stage IV emission regulations for vehicles the

application range covers multiple fields such as commercial vehicles passenger cars construction machinery agricultural

machinery and generator sets providing support for major domestic OEMs and vehicle manufacturers.

4. The core components of fuel cells including membrane electrode graphite bipolar plate metal bipolar plate and key BOP

components are used for supporting domestic and overseas fuel cell reactor and system manufacturers.(II) Business model of the CompanyThe Company follows the business philosophy of “Making Fine Products Creating Famous Brands and Achieving Common Growthin Values” and implements the business model of unified management by the parent company and decentralized production by the

subsidiaries. The parent company is responsible for formulating strategic development plans and business objectives and providing

unified management guidance and assessment to the subsidiaries in terms of finance major personnel management core raw

materials quality control technology development etc. Subsidiaries arrange production based on the order management model of

the market which not only enables the subsidiaries to maintain uniform product quality but also facilitates timely understanding of

customer demands and saving logistics costs so as to improve the economic efficiency of the Company by maintaining the

timeliness of product production and supply.(III) Development of the industry

The industry of the Company is auto parts manufacturing industry which is closely related to the development of the auto industry.In the first half of 2023 Chinese economy maintained a sustained recovery trend the accumulation of positive factors increased and

the long-term trend to a good prospect was still stable. In this context the overall development of auto industry maintained steady in

the first half of the year the domestic market continued to recover and the main economic indicators continued to improve. From

January to June 2023 automobile production and sales were 13.248 million and 13.239 million respectively with the year-on-year

increase of 9.3% and 9.8%.

9WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

1. Market of commercial vehicles

From January to June 2023 the production and sales of commercial vehicles were 1.967 million and 1.971 million respectively with

the year-on-year increase of 16.9% and 15.8%. The output and sales of freight cars were 1.74 million and 1.748 million respectively

with the year-on-year increase of 15.5% and 14.8%; the output and sales of passenger cars were 227000 and 223000 respectively

with the year-on-year increase of 28.9% and 24.3%.In the first half of 2023 along with gradual recovery of consumption continuous investment in infrastructure and increasing demand

for logistics and transportation sales of commercial vehicles such as engineering heavy trucks transportation heavy trucks and

urban logistics vehicles continued to grow and the commercial vehicle market went up from bottom.

2. Market of passenger vehicles

From January to June 2023 the output and sales of passenger vehicles were 11.281 million and 11.268 million respectively with the

year-on-year increase of 8.1% and 8.8%. From the perspective of the performance of passenger vehicle market in the first half of the

year the issuance of national and local sales promotion policies the momentum of auto enterprises at the end of the quarter and the

continuous growth of sales and exports of new energy vehicle have jointly promoted the growth of both the output and sales of the

passenger vehicle market in the first half of the year.

3. Market of new energy vehicles

From January to June 2023 the output and sales of new energy vehicles were 3.788 million and 3.747 million respectively with the

year-on-year increase of 42.4% and 44.1% and market share of 28.3%. Among them the sales of pure electric vehicles rose by 31.9%

YOY to 2.719 million; the sales of plug-in hybrid electric vehicles rose by 91.1% to 1.025 million; and the sales of fuel cell vehicles

rose by 73.5% YOY to 2000. With enrichment of variety of new energy passenger vehicles the marketing of a large number of new

models and the decline in prices of vehicle modes compared with sales in the same period of last year sales of A00 - grade vehicles

decreased significantly while the sales of other grade vehicles rose to varying degree.

4. Market of non-road vehicles

In the first half of 2023 the domestic economy and society fully returned to normal and the market got warm. However affected by

the weakening demand for infrastructure the real estate investment still in the deep adjustment period and insufficient

commencement construction machinery industry is still under greater pressure while the agricultural machinery industry was

significantly improved due to the recovery of agricultural demand. From January to June 2023 the sales of diesel internal

combustion engines for construction machinery was 480000 rising by 1.4% YOY; the sales of diesel internal combustion engines

for agricultural machinery was 860000 rising by 14.6% YOY.(Note: The above industry data sources are from China Association of Automobile Manufacturers and China Internal Combustion

Engine Industry Association.)

(IV) Business of the company in reporting period

Since the beginning of this year the Company has earnestly implemented the annual work objectives and plans and actively

grasped and responded to the opportunities and challenges of the industry. During the reporting period operation revenue from the

Company was 6.130 billion yuan down by 14.12% YOY; the net profit attributable to shareholder of listed company amounted to

0.949 billion yuan down by 13.05% YOY.

Main work carried out by the Company during the reporting period:

1. Strengthened collaborative marketing management and accelerated the expansion of new industry markets. Since the beginning

of this year the Company has strengthened the collaborative marketing of existing business and emerging business and

accelerated the expansion of key customer markets at home and abroad. Existing business: The market shares of post-processing

10WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

system purifier products kept rising of which the year-on-year sales increase of gasoline purifier has exceeded 20%; batch

production of diesel purifier T4 has been achieved in multiple key customer projects in non-road vehicle market. Batch production

of gasoline supercharger has been achieved or PPAP has been completed in some customer projects; a number of new customer

projects have been obtained for six cylinder diesel supercharger products and small batch supply of methanol supercharger to key

customers has been realized. The non-road vehicle market of distribution pump T4 was vigorously developed and the installation

in 51 major agricultural machinery customers have been completed. The generator and loader markets were actively expanded; the

overseas export market of products such as in-line pumps grew rapidly. Emerging business: The sales of electric drive parts

maintained high growth among which sales of motor shaft products rose by 2.6 times YOY; the first announced model of wheel

hub motor was released and a number of new model customer projects were carried out simultaneously; the construction of

domestic production line debugging or trial production of a number of hydrogen fuel cell products such as membrane electrode

metal bipolar plate alloy catalyst electronic water pump thermostat hydrogen circulation pump and exhaust vent valve have been

completed and domestic and foreign customer projects are successfully expanded. The OTS engineering recognition documents

for electronic oil pump products have been submitted to the head customers and the products have been designated for a number

of customer projects. The tripartite strategic cooperation has been reached with KargoBot and Arbe for 4D imaging radar products

and the first round of sample delivery and road testing have been completed; strategic cooperation has been reached with Shanxi

Anshu Intelligent Technology to jointly promote the research and development and commercial application in the smart mine

industry; testing and verification are actively carried out with a number of Oems customers.

2. Strengthened technology R&D and accelerated the development of new products. Existing business: Successfully carried out

the product reliability test of electronic fuel injection system 2200bar platform; Completed the sample functional verification and

batch production manufacturing planning of dual-fuel direct injection product; Smoothly proceeded the development of low-

carbon alternative fuel injection system. Completed the development and mass production of post-processing system platforms for

light diesel vehicles heavy diesel vehicles and non-road mobile machinery; Completed the development of post-processing

systems for several plug-in hybrid vehicle models; Carried out the technical pre-research on products that meet national VII

emission standard and alternative fuel post-processing products. The development of diesel and natural gas supercharger projects

that meet national VI emission standard was stably in progress. Completed the small batch verification of several key customer

projects; Completed the development and small batch supply of gasoline supercharger in the hybrid models of head new energy

vehicle customers which was in the ramp stage of mass production; Actively promoted the use of 48V electric supercharger in

customer pre-research projects. Emerging business: Completed the production consistency verification of the pile core materials

such as platinum-carbon catalyst and alloy catalyst production lines as well as the commissioning and trial production of 1.1

million pieces/year membrane electrode domestic production line; Achieved stable production of hydrogen ejector hydrogen

isolation valve and hydrogen safety valve; Completed production preparation for hydrogen exhaust valve electronic water pump

and proportional three-way valve for batch production; Completed partial reliability tests for key BoP components such as 35/70

Mpa pressure relief valve and bottle valve hydrogen circulating pump and air bearing. Achieved the demonstration operation for

electrolytic water hydrogen production system and launched the development of platform product. Completed sample review and

trial production of scatter radar and in-cabin radar C; Continuously promoted the customer project development and

industrialization capacity building for 4D imaging radar products.

3. Improved the operation quality of the strategic system and promoted the investment layout of new business. Completed the

review and evaluation of business strategic planning and strengthened the thermal management business and VH business

capability planning completed the strategic resource audit of hydraulic business launched and promoted the strategic thematic

studies on catalysts coating technology and chassis; Acquired the land of hydrogen energy industrial park and completed the

preliminary design scheme and land application. Implemented the construction and investment of three global bases for hydrogen

energy business completed R&D and capacity expansion investment to graphite bipolar plate in IRD Europe and North America

base and the metal bipolar plate in Borit Europe base and accelerated the localization capacity building of Asia-Pacific base Weifu

Qinglong joint venture; Finished the integration and collaboration after VH business acquisition; Carried out the research and

exchanges on millimeter-wave radar enterprises actively explored innovative cooperation models and deepened cooperation in

11WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

wheel hub motor business. Jointly carried out market research with strategic partners and actively promoted the research on

technical path of PEM water-electrolytic hydrogen production business. Established post-investment management system and

regulated the post-investment governance of subsidiaries.

4. Strengthened intelligent quality management and steadily promoted engineering construction. Launched FMS tooling

management system and pilot implemented the phase I of WMS warehouse management system; Developed and tested MOM

phase I manufacturing operation system; Completed the preliminary research on the iteration of TMS tool management system

EMS energy management system and PMS equipment management system; Deployed IoT platform in the pilot units to achieve

full connectivity of equipment interconnection. Completed the process planning of new platform products of the technology center

promoted the standardization of process modules and launched phase II PLM development. Implemented Q11 quality criteria and

continuously improve the development quality management capability; Deepened the quality improvement review mechanism

audited core products and estimated the hierarchical evaluation of all elements of the process on a regular basis. Constructed R&D

building according to the milestone finished the project planning and foundation construction of plant and station building on the

lot 103 and proceeded the construction of the hydrogen energy industrial park as planned.

5. Strengthened operation quality and improved operation efficiency. Improved the standardized management of tax-related terms

of contracts is improved promoted the tax early warning analysis in an orderly manner and optimized accounting process to

improve operation efficiency; Strengthened business risk prevention refine business data analysis optimized product and

improved profitability. Improved and optimized the existing systems and processes invited external risk control experts for

evaluation and training continuously improved the risk control and management ability and strengthened the risk detection and

control at all levels of the Company. Improved business monitoring and analysis of lines and divisions intensified deviation

management and corrective action tracking; Set up overseas project offices and investigated on overseas subsidiary management

and control mode; Developed and applied the phase II process operation analysis platform and document control platform.Evaluated status of procurement business identified core problems and formulated optimization measures; Completed the basic

development of warehouse standardization system of the Group. Optimized the talent structure implement internal transfer and

improved and the suitability of talents; Promoted the establishment of talent sharing mechanism with high-skilled positions as a

pilot; Explored the international talent work exchange mechanism and business ability training program to build a sound

international talent teams.II. Analysis on core competitiveness

1. Industry and brand advantages. Established in 1958 with more than sixty years of development the Company has become a

renowned manufacturer of auto parts in China and has established long-term and stable cooperation with major domestic OEMs

and vehicle manufacturers. The existing core auto parts products such as automotive fuel injection system exhaust gas post-

processing system air intake system and core parts of hydrogen fuel cell have strong market competitiveness and high market

shares. The Company is a leading enterprise in the internal combustion engine industry in China as well as a Top 30 Enterprise in

the auto parts industry in China.

2. Technology and product advantages. The Company is a national high-tech enterprise with scientific research platforms such as

National Enterprise Technology Center National High Technology Research and Development Program Achievement

Industrialization Base Postdoctoral Research Station Jiangsu Provincial Postgraduate Workstation as well as several provincial

engineering technology research centers provincial engineering laboratories and other R&D institutions which mainly focus on

fuel injection system for vehicles exhaust gas post-processing system air intake system hydrogen fuel cell intelligent network

thermal management system and other businesses for technological innovation and product development. The Company has

acquired a number of key core technologies with the technical indicators of its main products at the leading level in the industry.In recent years the Company has made key strategic layout in the fields of green hydrogen energy and intelligent electric power

established the Institute of New Energy and Netlink Technology and formed product technology R&D capabilities in core parts of

hydrogen fuel cell intelligent netlink new energy thermal management system components etc.

12WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

3. Management and manufacturing advantages. The Company features a perfect organizational structure management system and

process as well as a financial sharing platform which can realize the effective migration and stable operation of organization and

personnel business and accounting; The Company has built a human resource information system platform so as to guarantee the

timely and accurate standardization of basic data of organization personnel salary and attendance; The Company has established

a procurement sharing system which enables the interconnection of information between enterprises and suppliers that enables

closed-loop management of the procurement process; The Company has implemented the Weifu Production System (WPS) with

lean concept and established an overall process quality management system with relatively strong manufacturing quality

assurance cost control and product delivery capabilities. With the focus on smart manufacturing the Company has continued to

build a smart factory with Weifu characteristics and promote the application of cloud computing and 5G network which can

strongly support the future business development of the Company.

4. Marketing and service advantages. The Company features a stable professional and experienced marketing team which can

provide targeted support and services based on customer demands as well as cordial customer relationships. With regard to long-

term strategic customers the Company has established a four-in-one marketing coordination group consisting of responsible

leaders key account managers marketing departments and business divisions and regular visits among the management of the

companies to promote communication and cooperation. The Company has a relatively complete after-sales service system and has

built an after-sales service network intelligent service platform and set up special maintenance technical service stations

nationwide to regularly train end-users in the use of maintenance and fault analysis and judgment so as to provide customers with

fast timely and professional all-round after-sales services.

5. Talent team advantages. The management team of the Company has extensive experience in the auto parts industry with

excellent industry reputation. The Company attaches importance to the growth of employees as well as the development of core

talents. With years of accumulation the Company has deposited a group of professional and high-quality management and

technical talents and established a reasonable talent echelon which provides a strong guarantee of human resources for the long-

term and stable development of the Company. The human resource management system of the Company is relatively

comprehensive and the continuously optimized human resource management system has provided a fair platform for career

development of employees to realize their values. The Company attaches importance to the service and care for employees and

aims to enhance the service experience of employees through the construction of employee self-help platform to create a working

environment with warmth and a sense of belonging.

6. International cooperation advantages. The Company is committed to the core automotive parts industry and has long been

cooperating with strategic partners at home and abroad in depth. The Company has been cooperating with industry giant Robert

Bosch Company since 1984 and has established a long-term and stable cooperation relationship with Bosch and continuously

expanded cooperation in new business areas and the cooperation model between the two sides has become an industry model.Meanwhile the Company has built joint ventures with Autocam in the United States and Schmidt in Germany and cooperates

closely in the field of high-end precision manufacturing. By long-term cooperation with renowned enterprises in Europe and the

United States the Company has cultivated a group of middle and senior management and technical personnel with international

communication abilities international visions and familiarity with international standards and has mastered R&D process design

quality control and production management capabilities with international advanced levels which has promoted favorable

development of the business of the Company as well as international business and market development.

7. Excellent corporate culture with the mission of “Better Life Powered by Quality and Intelligence” and the vision of “CentennialWeifu Expert in Core Auto Parts Industry” the Company has practiced the core values of “Focus Innovation Commitment andIntegration” while adopting the enterprise spirit of “Being Practical Being Courageous Being Cooperative and Being Pioneering”.The Company has been building a culture system of “Quality and Intelligence” with “Quality” and “Intelligence” as the twin

engines of the corporate culture which reflect the adherence to the original intention and the pursuit of the future. The excellent

corporate culture has provided strong support for the continued operational excellence of the Company and its growth into a

trustworthy and respected industrial expert thereby playing an active role in the achievement of the strategic goals of the

Company.

13WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

III. Analysis of the main businesses

Summary

Please refer to the relevant content of “I. Major business of the company within the reporting period”.Year-on-year changes in major financial data

In RMB

Amount in current Amount in last Year-on-year

Reason

period period increase(+)/decrease(-)

Operation income 6129649047.40 7137172857.97 -14.12%

Operation cost 5163871731.26 6026454182.03 -14.31%

Mainly due to the inclusion of

Sales expense 103031481.40 79020592.43 30.39% newly acquired companies VHIO

and VHWX in the consolidated

Administration expense 299195729.59 277212254.79 7.93%

Mainly due to increase in loan

Financial expense 38462182.45 29774064.57 29.18%

interest

Mainly due to decrease in taxable

Income tax expense 29332279.74 55645075.75 -47.29%

income

R&D expense 351887038.12 289631376.50 21.49%

Mainly due to cash outflow of

Net cash flows arising -

1089961237.42 143.70% platform trade during the same

from operating activities 2493982044.89

period last year

Mainly due to decrease in the

Net cash flows arising scale of financial management

244240067.481556579998.88-84.31%

from investing activities and a year-on-year decrease in the

maturing amount

Mainly due to decrease in

borrowing inflows and increase in

Net cash flows arising

-1253388210.29 1338690663.84 -193.63% repayment expenses;

from financing activities

Simultaneously sharing dividends

reduced expenses

Net increase of cash and

110347069.15396766366.07-72.19%

cash equivalents

Significant changes in the composition or source of profits of the company during the reporting period

□ Applicable □Not applicable

There have been no significant changes in the composition or source of profits of the company during the reporting period.Composition of operation revenue

In RMB

Amount in current period Amount in last period Year-on-

year

Ratio in operation Ratio in operation increase(+

Amount Amount

revenue revenue )/decrease

(-)

Total operation

6129649047.40100%7137172857.97100%-14.12%

revenue

By industry

14WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Automotive

6052163689.7698.74%6928141770.1397.07%-12.64%

components

Other business 77485357.64 1.26% 209031087.84 2.93% -62.93%

By product

Automotive fuel

3071891040.1750.12%3439477050.5748.19%-10.69%

management system

Automotive post-

2088560385.0234.07%3228708237.8545.24%-35.31%

processing system

Air intake system 281223149.82 4.59% 259956481.71 3.64% 8.18%

Other automotive

610489114.759.96%

components

Other business 77485357.64 1.26% 209031087.84 2.93% -62.93%

By region

Domestic 5232339300.50 85.36% 6871657539.46 96.28% -23.86%

Abroad 897309746.90 14.64% 265515318.51 3.72% 237.95%

The industries products regions or sales model accounting for over 10% of the Company’s operation revenue or operation profit

□Applicable □ Not applicable

In RMB

Year-on-year Year-on-year Year-on-year

Gross

increase(+)/decrea increase(+)/de increase(+)/decre

Operation revenue Operation cost profit

se(-) of operation crease(-) of ase(-) of gross

ratio

revenue operation cost profit ratio

By industry

Automotive

6052163689.765137115309.6615.12%-12.64%-12.34%-0.29%

components

By product

Automotive fuel

management 3071891040.17 2492332782.36 18.87% -10.69% -8.28% -2.13%

system

Automotive post-

processing 2088560385.02 1898695007.05 9.09% -35.31% -35.43% 0.16%

system

Air intake system 281223149.82 211787842.02 24.69% 8.18% 4.44% 2.70%

Other automotive

610489114.75534299678.2312.48%

components

By region

Domestic sales 5154853942.86 4318504557.61 16.22% -22.63% -23.01% 0.40%

Foreign sales 897309746.90 818610752.05 8.77% 237.95% 225.42% 3.51%

If the statistical caliber of the Company's main business data is adjusted during the reporting period the Company's main business

data for the most recent period will be adjusted based on the caliber at the end of the reporting period

□Applicable □Not Applicable

IV. Analysis of the non-main business

□Applicable □Not applicable

In RMB

15WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Ratio in

Amount Cause description Whether be sustainable

total profit

Yes (The joint ventures

Investment earnings mainly RBCD and Zhonglian

form the two joint ventures Electronics have stable

Investment earnings 811406633.49 80.21% (RBCD and Zhonglian production and operation

Electronics) with stock so the investment returns

participated by the Company can be sustained and

stable)

Mainly from changes in fair

Gain/loss of fair value changes -18069553.29 -1.79% value of stocks of Guolian

Securities held by the company

Asset impairment -90263537.00 -8.92%

Non-operating income 2707696.00 0.27%

Non-operating expense 758381.69 0.07%

V. Assets and liability analysis

1. Major changes of assets composition

In RMB

End of current period End of last period

Ratio in Ratio in Ratio changes Note of major

Amount total Amount total (+/-) changes

assets assets

Monetary funds 2487786142.04 8.77% 2389551930.76 8.38% 0.39%

Account receivable 3317387077.56 11.70% 3127490177.25 10.96% 0.74%

Inventory 1921084065.82 6.78% 2283119656.27 8.00% -1.22%

Investment real

56185135.360.20%49296869.730.17%0.03%

estate

Long-term equity

5187995234.4318.30%6282818108.9622.02%-3.72%

investment

Fixed assets 3745590665.96 13.21% 3769984185.94 13.21% 0.00%

Construction in

639963756.992.26%509105587.491.78%0.48%

progress

Right-of-use assets 39364840.80 0.14% 41865100.38 0.15% -0.01%

Short-term

2256900925.45 7.96% 3604376527.82 12.63% -4.67% Repay of borrowings

borrowings

Contract liabilities 104491724.54 0.37% 94850083.23 0.33% 0.04%

Long-term Adjustment of

600000000.002.12%238000000.000.83%1.29%

borrowings financing structure

Lease liability 30799799.49 0.11% 31589277.20 0.11% 0.00%

Dividends from

Other receivables 2874547071.97 10.14% 1264507456.47 4.43% 5.71%

participating company

Including: dividends

1955605474.716.90%147000000.000.52%6.38%

receivable

2. Major foreign assets

□Applicable □Not applicable

16WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

The Is there

proportion a

Specific

Cause of Operation Control measures to of overseas significa

content of Asset scale Location Revenue

formation model ensure asset security assets to the nt

assets

company’s impairm

net assets ent risk

The company will

fully pay attention to

A wholly-

changes in the

owned

industry and market

Business subsidiary of

strengthen corporate

combinatio the company

RMB governance

ns not Denmark engaged in

IRD 349515400. personnel Nil 1.88% NO

under R&D

00 management

common production

financial

control and sales of

management audit

fuel cell

supervision and

components

performance

evaluation

The company will

fully pay attention to

A wholly-

changes in the

owned

industry and market

Business subsidiary of

strengthen corporate

combinatio the company

RMB governance

ns not engaged in

Borit 224288000. Belgium personnel Nil 1.21% NO

under R&D

00 management

common production

financial

control and sales of

management audit

fuel cell

supervision and

components

performance

evaluation

The company will

fully pay attention to

A wholly-

changes in the

owned

industry and market

Business subsidiary of

strengthen corporate

combinatio the company

RMB governance RMB

ns not engaged in

VHIO 735591400. Italy personnel 5082200 3.97% NO

under R&D

00 management .00

common production

financial

control and sales of

management audit

fuel cell

supervision and

components

performance

evaluation

3. Assets and liability measured by fair value

□Applicable □ Not applicable

In RMB

Accumulat

Changes of Devaluati Amou

ive

Amount at the fair value on of Amount of nt of

changes of Other changes Amount at

Items beginning gains/losse withdrawi purchase in sale in

fair value (+-) period-end

period s in current ng in the the period the

reckoned

period period period

into equity

17WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Financial assets

1.Trading

financial

assets(exclud - -

404542956811717000003416540851

ing 18069553. 1782519164

derivative .87 .00 .28 29 .30

financial

assets)

2.Other

equity 677790690.0 677790690.0

instrument 0 0

investment

3.Receivable 1918368845 1920348206

1979360.83

financing .21 .04

Subtotal of - -

664158910411717000006014679747

financial 18069553. 1780539803

assets .08 .00 .32 29 .47

--

664158910411717000006014679747

Above total 18069553. 1780539803.08.00.32

29.47

Financial

747115.75-9691.25737424.50

liabilities

Other changes: Maturity redemption

Whether there have major changes on measurement attributes for main assets of the Company in reporting period or not

□ Yes □No

4. The assets rights restricted till end of the period

In RMB

Item Book value at period- Restriction reason

end

Monetary funds 18840000.00 USD margin for foreign exchange contract

Monetary funds 12066812.90 Cash deposit paid for bank acceptance

Monetary funds 7935750.00 IRD performance bond

Monetary funds 211620.00 Cash deposit for Mastercard

Monetary funds 5000.00 ETC freezing

Note receivable 37607161.90 Notes pledge for bank acceptance

Receivable financing 825831044.39 Notes pledge for bank acceptance

Total 902497389.19

VI. Investment analysis

1. Overall situation

□Applicable □Not applicable

2. Major equity investment obtained in the reporting period

□ Applicable □ Not applicable

3. Major non-equity investment in progress in the reporting period

□ Applicable □ Not applicable

18WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

4. Financial assets investment

(1) Securities investment

□ Applicable □Not applicable

In RMB

Cumul

Book Curre

Account Current ative Curr Profit

Variet Code Short value at nt Book Capi

Initial ing gain/loss fair ent and loss Accou

y of of form of the purch value at tal

investme measure of fair value sales in the nting

securi securi securiti beginning ase the end of Sour

nt cost ment value change amo Reportin subject

ties ties es of the amou the period ce

model changes s in unt g Period

period nt

equity

Dome

stic Tradin

Measure Ow

and 600 1992080 7883473 389628. 389628. 7922436 g

SNAT d by fair n

foreig 841 00.00 2.00 00 00 0.00 financi

value fund

n al asset

stocks

Dome

stic Tradin

Miracle Measure Ow

and 002 6933150 6669360 433320 433320 7102680 g

Autom d by fair n

foreig 009 0.00 0.00 0.00 0.00 0.00 financi

ation value fund

n al asset

stocks

Dome

stic Guolia TradinMeasure - - Ow

and 601 n 1200000 1866089 1613423 g

d by fair 252665 252665 n

foreig 456 Securiti 0.00 14.00 87.00 financi

es value 27.00 27.00 fund

n al asset

stocks

Dome

stic Tradin

Lifan Measure Ow

and 601 - - g

Techno 62845.00 d by fair 48516.34 44871.33 n

foreig 777 logy 3645.01 3645.01 financi

value fund

n al asset

stocks

Dome

stic Tradin

Measure - - Ow

and 000 Zoyte 613265.4 462414.4 267028.0 g

d by fair 195386. 195386. n

foreig 980 Auto 8 8 8 financi

value 40 40 fund

n al asset

stocks

--

281215633264813119054

Total -- 207427 0.00 0.00 0.00 207427 -- --

10.4876.8246.41

30.4130.41

Disclosure date of 2012-03-24

securities investment

approval of the Board 2013-06-04

(2) Derivative investment

□ Applicable □ Not applicable

There were no derivative investments during the reporting period.

19WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

5. Application of raised proceeds

□ Applicable □ Not applicable

There was no application of raised proceeds during the reporting period.VII. Sales of major assets and equity

1. Sales of major assets

□ Applicable □ Not applicable

No major assets were sold during the reporting period.

2. Sales of major equity

□ Applicable □ Not applicable

VIII. Analysis of the main controlling and participating companies

□ Applicable □ Not applicable

Main subsidiary and participating enterprises with over 10% influence on net profit of the Company

In RMB

Company Main Register Operating Operating

Type Total assets Net assets Net profit

name business capital revenue profit

Exhaust gas

post-

WFLD Subsidiary 502596300.00 5740344182.31 2628361794.20 2175323269.69 54134159.64 71083391.94

processing

system

Automotive

fuel

WFJN Subsidiary 346286825.80 1610946075.29 1196325195.21 362347975.32 161276390.84 140705646.86

injection

system

Automotive

Equity

fuel USD

RBCD participation 20107970902.96 6533322410.35 6130896971.82 1565470094.53 1418441731.89

injection

enterprise 382500000.00

system

Equity Gasoline

Zhonglian

participation system 600620000.00 8691000364.21 7276758681.38 12971075.74 898156995.21 896728440.91

Electronics

enterprise products

Subsidiary acquired and disposed in the Period

□Applicable □Not applicable

Description of major equity participation enterprises

During the reporting period the operation income and net profit of WFLD dropped significantly mainly due to the fluctuation of

precious metal prices; the net profit of WFJN rose greatly YOY as it received government demolition compensation of 119 million

yuan.IX. Structured subject controlled by the company

□ Applicable □ Not applicable

20WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

X. Risks faced by the company and corresponding measures

1. Macroeconomic and market risks

The current macroeconomic and market environment is still complex and severe and the auto industry will still face greater pressure.If the demand of the auto industry declines it will have a certain impact on the production and operation and profitability of the

Company.Countermeasures: The company will always pay attention to the macroeconomic and industry development trends consolidate the

existing business market position actively expand new business and strive to improve the core competitiveness and overall anti-risk

capability of the Company.

2. Operation management and control risks

With the acceleration of international layout the scope of new strategic business continues to expand especially in the field of new

energy the management span is large and there are potential management and investment risks.Countermeasures: The Company will continue to improve and optimize internal management improve the process further regulate

management and control business risks; strengthen international business control accelerate the construction of international talent

team and meet the needs of strategic development of the enterprise.

3. Risk of raw material price fluctuations

The main raw materials of the Company include various grades of steel aluminum precious metals etc. the Company’s cost will rise

in case of continuous price rise.Countermeasures: The Company will actively improve market forecasting capability plan production capacity in advance

reasonably control raw material inventory to reduce the risk of raw material price fluctuations. Besides the Company will optimize

supply chain management strengthen the vertical integration capability of the industrial chain and transfer part of risks through cost

control measures and product price adjustment to reduce the impact of raw material price fluctuations on performance.

4. Risks associated with financial instruments

The main financial instruments of the Company include monetary capitals structural deposits receivables investments in equity

instruments financial products borrowings and accounts payable. During the operation the risks associated with financial

instruments mainly include credit risk market risk and liquidity risk.Countermeasures: The Company will identify and analyze various risks establish an appropriate risk tolerance bottom line and

conduct risk management supervise various risks in a timely manner ensure that risks are controlled within a limited range

minimize the negative impact of risks on the business performance and maximize the interests of shareholders and other investors.

21WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Section IV. Corporate Governance

I. Annual shareholders’ general meeting and extraordinary shareholders’ general meeting

held during the reporting period

1. Annual shareholders’ general meeting during the reporting period

Ratio of investor

Ordinal number of meeting Type Date Date of disclosure Resolution of meeting

participation

Annual general meeting of (Notice No.: 2023-026) published on

AGM 40.58% 2023-05-26 2022-05-27

2022 CNINFO website(www.cninfo.com.cn)

1st extraordinary general Extraordinary (Notice No.: 2023-036) published on

39.77%2023-06-192023-06-20

meeting of 2023 general meeting CNINFO website(www.cninfo.com.cn)

2. Request for extraordinary shareholders’ general meeting by preferred stockholders whose voting

rights restore

□ Applicable □Not applicable

II. Changes in directors supervisors and senior officers of the company

□Applicable □ Not applicable

Name Title Type Date Reason

The company’s shareholders proposed to

Ou Jianbin Director Leave office 2023-06-19

dismiss his title of director

Miao Yuming Vice GM Dismissed 2023-05-26 Retire

Feng Zhiming Vice GM Employed 2023-06-01

Feng Zhiming Director Elected 2023-06-19

III. Profit distribution plan and transfer of capital reserve into share capital

□ Applicable □Not applicable

There are no cash dividend bonus and capitalizing of common reserves carried out in the semi-annual

IV. Implementation of the company’s stock incentive scheme employee stock ownership

plan or other employee incentives

□Applicable □Not applicable

1. Stock incentive

On October 12 2020 the Company held the 17th meeting of the 9th session of BOD to deliberate and approve relevant proposal as the

“Restricted Stock Incentive Plan 2020 (Draft)”.

22WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

On November 3 2020 the Company held the second extraordinary shareholders’ general meeting of 2020 to deliberate and approve

relevant proposals as the “Restricted Stock Incentive Plan 2020 (Draft) and its summary” “Proposal on Assessment ManagementMeasures for Restricted Stock Incentive Plan Implementation” and “Proposal to Request the Shareholders’ General Meeting toAuthorized BOD to Fully Handle Matters Regarding Stock Incentive”.On November 12 2020 the Company held the 21st meeting of 9th session of the BOD as authorized by the second extraordinaryshareholders’ general meeting of 2020 deliberated and approved the “Proposal on Adjusting the List of Incentive Objects of theRestricted Stock Incentive Plan 2020 and the Number of Rights Granted” and the “Proposal on the First Grant of Restricted Stocks toIncentive Objects of the Restricted Stock Incentive Plan 2020”. The BOD considers that conditions for the initial grant of restricted

stock incentive plan 2020 have been met and November 12 2020 is determine as the initial grant date 19540000 restricted shares

are granted to 601 incentive recipients at a grant price of 15.48 yuan/Share.The Notice on Completion of the First Grant of Restricted Stock Incentive Plan 2020 was released by the Company dated December

82020.

On October 22 2021 the Company held the 5th meeting of 10th session of the BOD to deliberate and approve relevant proposals as

Adjustment of the Buy-back Price on Restricted Stock Incentive Plan 2020 and Buy-back and Cancellation of the Restricted Stocks

Partially Granted without Circulation for year of 2020 and decided to buy-back and cancel 291000 restricted shares held by 11

incentive recipients that had been granted but not yet unlocked. As of December 20 2021 cancellation of the above mentioned buy-

back shares are completed at the Shenzhen Branch of CSDC. After cancellation number of the incentive recipients for the first grant

of restricted stock incentive plan 2020 was adjusted from 601 to 590 restricted stock of 19249000 shares are being held in total.On December 7 2022 the Company held the 14th meeting of 10th session of the BOD and deliberated and passed the Proposal on the

Achievement of the Conditions for the Release of Restricted Shares in the First Restricted Period of the Restricted Stock Incentive

Plan 2020 the Proposal on Adjustment of the Buy-back Price on Restricted Stock Incentive Plan 2020 and the Proposal on Buy-back

and Cancellation of the Restricted Stocks Partially Granted without Circulation for year of 2020. It agreed to apply for the release of

7632000 restricted stocks granted to 581 incentive recipients and decided to buy-back and cancel 430000 restricted shares held by

23 incentive recipients that had been granted but not yet unlocked. On December 16 2022 the shares released from this restricted

sale were formally available for circulation. As of February 16 2023 the Company completed the buy-back and cancellation

procedures for the aforementioned 430000 shares at Shenzhen branch of China Securities Depository and Clearing Co. Ltd. After

this cancellation the number of incentive recipients granted for the first time by the Company's restricted stock incentive plan 2020

was adjusted from 590 to 568 holding 11187000 restricted stock in total.On April 26 2023 the Company held the 16th meeting of the 10th session of the BOD deliberated and adopted the “Proposal onRepurchase Cancellation of Part of Restricted Shares of Restricted Stock Incentive Plan 2020” and decided to conduct repurchase

cancellation of a total of 5593500 restricted shares of 568 incentive objects that had been granted but did not meet the conditions for

lifting the restriction. As of June 16 2023 the Company has completed the repurchase cancellation procedures of the above-

mentioned shares at China Securities Depository and Clearing Corporation Limited Shenzhen Branch. After the cancellation there

are 568 incentive objects granted for the restricted stock incentive plan 2020 holding a total of 5593500 restricted stocks.

2. Implementation of employee stock ownership plan

□Applicable □Not applicable

3. Other employee incentives

□Applicable □Not applicable

23WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Section V. Environmental and Social

Responsibility

I. Major environmental issues

The listed Company and its subsidiary whether belongs to the key sewage units released from environmental protection

department

□Yes □ No

Administrative punishment for environmental problems during the reporting period

Policies and industry standards related to environmental protection

Wuxi Weifu High-Tech Group Co. Ltd. and its subsidiaries diligently fulfill environmental protection policies and guidelines at all

levels during production and operation strictly comply with related national environmental protection laws and regulations such as

Environmental Protection Law of the People's Republic of China Environmental Impact Assessment Law of the People's Republic of

China Air Pollution Prevention and Control Law of the People's Republic of China Water Pollution Prevention and Control Law of

the People's Republic of China Solid Waste Pollution Prevention and Control Law of the People's Republic of China Noise

Pollution Prevention and Control Law of the People's Republic of China Energy Conservation Law of the People's Republic of

China Cleaner Production Promotion Law of the People's Republic of China Environmental Protection Tax Law of the People's

Republic of China Measures for the Management of Hazardous Waste Transfer Regulations on Environmental Protection of

Construction Projects Regulations on the Administration of Emission Permits as well as related local environmental protection

management rules and regulations regularly collect newly promulgated laws and regulations on ecological and environmental

protection at all levels and perform compliance evaluation transformation by combining with production reality to ensure

compliance with the law at all times in the production and operation of the Company.In the process of production the Company has constructed comprehensive waste gas and waste water treatment facilities and solid

waste storage facilities in strict accordance with the requirements of related standards such as Standards for Comprehensive Sewage

Discharge Water Quality Standards for Sewage Discharge into Urban Sewers Comprehensive Emission Standards for Air

Pollutants and Pollution Control Standards for Hazardous Waste Storage and guaranteed stable operation in an effort to minimize

the negative impact of production and operation on the ecological environment.Administrative licenses for environmental protection

All the construction projects of Wuxi Weifu High-Tech Group Co. Ltd. and its subsidiaries have been prepared with environmental

impact reports (forms) and have been approved by the local ecological and environmental authorities and all have obtained emission

permits (registrations) in accordance with the requirements of laws and regulations and the emission permits (registrations) to expire

in 2022 have been changed or renewed in a timely manner thereby effectively achieving licensed emission and legal and compliant

emission.Discharge Permit of WFHT valid period: from March 27 2020 to March 26 2023;

Discharge Permit of WFJN valid period: From September 24 2022 to September 23 2027;

Discharge Permit of WFCA valid period: from December 31 2020 to December 30 2023.Industry emission standards and the epecific situation of pollutant emissions involved in production and business activities

Name of Numbe

Main Distributi Standard for Excessi

main r of Emission Total

Company/Subs pollutants Emission on of emission of Total ve

pollutants emissio concentration/stren emissions

idiary and specific mode emission pollutants emissions emissio

and specific n gth approved

pollutants outlets implemented n

pollutants outlets

24WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Chemical

Chemical

oxygen

oxygen

Discharge demand

demand

Chemical d through 18.13

Chemical oxygen 78 tons

oxygen municipal Wastewater tons

demand 158mg/L ammonia

demand sewage quality ammonia

ammonia nitrogen nitrogen

ammonia network standards for nitrogen

WFMS 25.7mg/L total 7.8 tons

Water nitrogen after being discharge to 2.95 tons

WFHT 1 sewage phosphorus total Nil

pollutant total treated by municipal total

outfall 0.311mg/L total phosphor

nitrogen the sewage sewers phosphor

nitrogen 28.3mg/L us 0.52

total treatment (GB/T31962- us 0.036

petroleum tons total

phosphorus station of 2015) tons total

1.75mg/L nitrogen

petroleum the nitrogen

10.4 tons

Company 3.25 tons

petroleum

petroleum

1.95 tons

0.2 tons

Chemical

Chemical

oxygen

oxygen

demand

demand

0.0654

Discharge ≤8.924

tons

d through tons

Chemical Chemical oxygen ammonia

municipal Wastewater ammonia

oxygen demand 56mg/L nitrogen

sewage quality nitrogen

demand ammonia nitrogen 0.001

network standards for ≤0.682

ammonia WFAC 0.899mg/L total tons total

Water after being discharge to tons total

WFHT nitrogen 1 sewage nitrogen 21.4mg/L nitrogen Nil

pollutant treated by municipal nitrogen

petroleum outfall total phosphorus 0.025

the sewage sewers ≤1.017

total 2.22mg/L tons total

treatment (GB/T31962- tons total

nitrogen petroleum phosphor

station of 2015) phosphor

petroleum 7.39mg/L us

the us ≤0.094

0.00259

Company tons

tons

petroleum

petroleum

≤0.410

0.0086

tons

tons

2.11mg/m3；

2.02 mg/m3；

2.99 mg/m3；

2.1 mg/m3；

5 in the 2.39 mg/m3；

Organized machining 4.47 mg/m3；

emission workshop 1.43 mg/m3； Comprehensi

Total non- after being 10 in the ve emission

1.63 mg/m3；

Air methane absorbed thermal standard of

WFHT 17 2.63 mg/m3； 1.35 t 2.523 t Nil

pollutant hydrocarbo by oil mist treatment air pollutants

ns processor workshop 3.32 mg/m3； (GB16297-

+ activated 2 in the 2.67 mg/m3； 1996)

carbon assembly 1.96 mg/m3；

workshop 1.53 mg/m3；

4.42 mg/m3；

2.07 mg/m3；

4.7 mg/m3；

3.55 mg/m3

Organized

emission 4.73mg/m3；5.24 Comprehensi

Total non- after being 4 in 101 ve emission

mg/m3；5.53

Air methane absorbed workshop standard of

WFHT 5 mg/m3； 0.704 t 1.5529 t Nil

pollutant hydrocarbo by oil mist 1 in 104 air pollutants

ns processor workshop 5.7mg/m3；3.26 (GB16297-

+ activated mg/m3 1996)

carbon

Organized

emission

Emission of

after being

1 in the standards for

absorbed

Air Ammonia thermal odor

WFHT by 1 0.92 mg/m3 0.0326 t 0.071 t Nil

pollutant gas treatment pollutants

ammonia

workshop (GB14554-

gas spray

93)

tower

Organized

Comprehensi

emission

2 in the ve emission

after being

Air Particulate thermal 2.6mg/m3； 2.13 standard of

WFHT treated by 2 0.0032 t 0.048 t Nil

pollutant matter treatment mg/m3 air pollutants

bag dust

workshop (GB16297-

collector

1996)

25WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Waste oil

waste

emulsion

washing

waste

liquid

Disposed

grinding

by

wheel ash

institutions

WFHT Solid waste sewage NA NA NA NA 438.3 t 1757.5 t Nil

with legal

pretreatmen

qualificati

t sludge

on

oil-

containing

filter and

other

hazardous

wastes

Chemical

Chemical

oxygen

oxygen

demand

demand

35.018

Discharge 3.339

Chemical tons

d through tons

oxygen Chemical oxygen suspende

municipal Wastewater suspende

demand demand d matter

sewage quality d matter

ammonia 68mg/L suspended 26.263

network standards for 0.6329

nitrogen matter 16mg/L tons

Water after being Sewage discharge to tons

WFCA total 1 ammonia nitrogen ammonia Nil

pollutant treated by outfall municipal ammonia

phosphorus 1.57mg/L total nitrogen

the sewage sewers nitrogen

total phosphorus 2.626

treatment (GB/T31962- 0.2122

nitrogen 0.07mg/L total tons total

station of 2015) tons total

suspended nitrogen 6.04mg/L phosphor

the phosphor

matter us 0.438

Company us 0.0026

tons total

tons total

nitrogen

nitrogen

3.502

0.32 tons

tons

Chemical

Discharge oxygen

d through demand 3

Chemical municipal Wastewater tons

Chemical oxygen

oxygen sewage quality ammonia

demand 94mg/L

demand network standards for nitrogen

ammonia nitrogen

Water ammonia after being Sewage discharge to 0.5 tons

WFJN 1 16mg/L total NA Nil

pollutant nitrogen treated by outfall municipal total

phosphorus 0.46mg

total the sewage sewers phosphor

/L petroleum

phosphorus treatment (GB/T31962- us 0.01

0.09mg /L

petroleum station of 2015) tons

the petroleum

Company 0.003

tons

Waste oil

oily sludge

grinding

wheel ash

Disposed

empty

by

drum

institutions

WFJN Solid waste activated NA NA NA NA 170 t NA Nil

with legal

carbon

qualificati

filter

on

element

and other

hazardous

wastes

Treatment of pollutants

The Company mainly focuses on mechanical processing. Metal processing mainly produces oil mist exhaust gas (non-methane

total hydrocarbon) among which the oil mist exhaust gas generated in workshop 101 is discharged through four 15m-high exhaust

funnels after being treated by high-efficiency oil mist purifier; the oil mist exhaust gas generated by MS machining workshop is

discharged through four 15m-high exhaust funnels after being treated by high-efficiency oil mist purifier; the washing exhaust gas

(non-methane total hydrocarbon) is discharged through two 15m-high exhaust funnels after being treated by the high-efficiency oil

mist purifier + activated carbon adsorption device; the quenching exhaust gas (non-methane total hydrocarbon) is discharged

through three 15m-high exhaust funnels after being treated by the high-efficiency oil mist purifier; the test exhaust gas (non-

methane total hydrocarbon) is discharged through one 15m-high exhaust funnel after being treated by the high-efficiency oil mist

purifier; the shot blasting exhaust gas (particulate matter) is discharged through two 15m-high exhaust funnels after being treated

26WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

by the bag dust collector; the exhaust gas (ammonia methanol non-methane total hydrocarbon) generated in carbonitriding

process is discharged through one 15m-high exhaust funnel after being treated by the acid spray tower; the carbonitriding exhaust

gas (non-methane total hydrocarbon) is discharged through six 15m-high exhaust funnels after being treated by flame screen

combustion + activated carbon adsorption device; the rest exhaust gas is discharged to the standard in the workshop through

fugitive emission.The Company has built two sewage treatment stations with the designed treatment capacity of 1600m3/d and 150 m3/d in WFMS

factories. After being adjusted in the air flotation tank the production wastewater then will be discharged into the biochemical

system of the sewage station together with the domestic sewage treated by septic tanks and grease traps for treatment and the treated

sewage will be discharged via the municipal pipe network according to the standard.WFCA has built a sewage treatment station with a designed treatment capacity of about 300m3/d in the factory. After being adjusted

by the air flotation tank the production wastewater is discharged into the biochemical system of the sewage station for treatment

together with the domestic sewage treated by septic tanks and grease traps and the treated sewage is discharged via the municipal

pipe network according to the standard.WFNJ has built a set of industrial sewage treatment station with a designed treatment capacity of about 150m3/d and a domestic

sewage treatment station with a treatment capacity of about 450m3/d in the factory area. After being adjusted by the air flotation tank

the industrial wastewater will be discharged into the biochemical system of the sewage station together with the domestic sewage

treated by septic tanks and grease traps for treatment and the treated sewage will be discharged via the municipal pipe network

according to the standard.Emergency plan for environmental emergencies

The Company and its subsidiaries have compiled the Emergency Plan for Sudden Environmental Events in accordance with the

standards and specifications combined with the actual production situation of the Company and have filed it after the review

organized by relevant local departments and revised it on schedule. During the reporting period the Company carried out

comprehensive emergency plan drills and special emergency plan drills according to the annual emergency drill plan and

summarized and evaluated the drills and improved the corresponding emergency measures.The investment in environmental governance and protection and the relevant situation of paying environmental protection

tax

The Company and its subsidiaries have set up complete environmental protection treatment facilities in accordance with the

requirements of the EIA reply and the current environmental management requirements and reached the discharge standard of all

air pollutants and water pollutants. The Company has built compliant storage facilities to store solid wastes and entrusted qualified

units for disposal running at the leading level in the industry in terms of investment in environmental protection. During the

reporting period the Company and its subsidiaries have paid environmental protection taxes on a quarterly basis in accordance

with the requirements of laws and regulations.Environmental self-monitoring program

During the reporting period the Company and its subsidiaries have compiled the Environmental Self-monitoring Plan for 2023 in

accordance with relevant management requirements and norms and passed the review and filing by local ecological and

environmental authorities. According to the requirements of the scheme a qualified third party agency has been entrusted to

monitor the company’s waste gas waste water and noise on a regular basis. All monitoring data have been disclosed on national

and local self-monitoring platforms in accordance with the Measures for Self-monitoring and Information Disclosure of State Key

Monitoring Enterprises (Trial) and supervised by the public. The monitoring data are in line with national and local standards and

there is no excessive discharge found.Administrative penalties for environmental problems during the reporting period

Nil

Other information about the environment that shall be disclosed

During the reporting period the Company and its subsidiaries have regularly filled in the implementation reports (quarterly reports

and annual reports) of pollutant discharge permits in accordance with national and local laws and regulations. All air pollutants

27WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

and water pollutants have been released in accordance with the standards and hazardous wastes have been disposed of by

qualified units and the transfer slip system has been strictly implemented.Measures taken to reduce carbon emissions during the reporting period and their effects

□Applicable □Not applicable

As an important part of the company’s core value saving resources and reducing consumption on the one hand are conducive to the

improvement of enterprise efficiency and at the same time are also conducive to the improvement of resource utilization rate of the

whole society. Therefore the company continuously improves resource utilization rate through technological innovation vigorously

promotes energy conservation and emission reduction and strives to achieve green production.The company’s existing main business is based on the energy saving and emission reduction of automobiles. At present the

company’s main products have all met the requirements of national emission regulations and we are actively stocking products that

meet more stringent emission regulations. In recent years the company has accelerated the layout and development of new energy

businesses such as green hydrogen energy and intelligent electric power which helps achieve the goals of peak carbon dioxide

emissions and carbon neutrality.Other environmental information

Nil

II. Social responsibility

During the reporting period the Company continued to advocate the volunteer spirit of “humanity philanthropism and dedication”.Through various channels such as Wuxi Federation of Trade Unions Wuxi Red Cross Society Wuxi Industry Development Group

and Weifu Group Public Welfare Mutual Aid Fund the Company solved problems and difficulties for employees and carried out

in-depth assistance work in disease relief education assistance difficulty relief and other public welfare. A total of 191 employees

have been helped with a total amount of more than 480000 yuan. The Company organized employees to donate 75000 yuan to

Wuxi Red Cross Society and won “Wuxi Red Cross Fundraising Organization Award” for years. The Company timely gave a hand

to the families of employees who were impoverished due to accidents organized donations of more than 110000 yuan and sent

the donations to the families of employees at the first time. The Company attached great importance to the health and safety of

employees carried out free clinic public service activities and organized employees to learn the knowledge of cardiopulmonary

resuscitation Heimlich manoeuvre hypertension prevention and treatment.; the Company organized employees to carry out public

welfare activities of “I’m responsible for beautifying the environment” and “protect the city start from me” in the spare time; In

the hot weather the Company donated drinking water to the police station. Over the years the Company has actively fulfilled its

corporate social responsibility paid attention to environmental protection employee well-being and social welfare established a

good corporate image and contributed positive forces to promoting environmental sustainable development and creating a better

society.

28WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Section VI. Important Matters

I. Undertakings that the actual controller shareholders related party buyers and the Company have

fulfilled during the reporting period and have not yet fulfilled by the end of reporting period

□ Applicable □ Not applicable

No undertakings that the actual controller shareholders related party buyers and the Company have fulfilled during the reporting

period and have not yet fulfilled by the end of the period

II. Occupation of the non-operational funds of the listed company by controlling

shareholders and its related party

□ Applicable □ Not applicable

No non-operational funds of the listed company have been occupied by the controlling shareholders and its related party in period.III. External guarantee out of the regulations

□ Applicable □ Not applicable

No external guarantee out of the regulations occurred in the period.IV. Appointment and non-reappointment (dismissal) of CPA

Whether the semi-annual financial statements been audited or not

□ Applicable □ Not applicable

The semi-annual report of the company hasn’t been audited.V. Statement on the latest “modified audit report” by BOD

□ Applicable □ Not applicable

VI. Explanation from Board of Directors for “Qualified Opinion” that issued by CPA for

last period

□ Applicable □ Not applicable

On April 26 2023 Gongzheng Tianye Certified Public Accountants (Special General Partnership) issued an audit report with a

clean opinion and emphasis of matter paragraph on the 2022 financial report of the Company.

1. Emphasis of matter paragraph

As mentioned in Note XVI “7. Major transaction and events influencing investor’s decision” the public security organ has

launched a criminal investigation on the contract fraud in which WFTR a wholly-owned subsidiary of WFHT was cheated in the

process of carrying out “platform trade” business. At present the case is being under investigation and the outcome of the case is

uncertain in the future.

2. Description of the changes and handling of the matters involved

From January 1 2023 to the date of disclosure of this report the related other accounts receivable collected was is 199235800

29WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

yuan. In addition the Company is also fully cooperating with the public security organs to recover stolen goods and damage.However since it is still in the investigation stage the Company will fulfill the disclosure obligation in a timely manner according

to the progress of investigation.VII. Bankruptcy reorganization

□ Applicable □Not applicable

No bankruptcy reorganization for the Company in reporting period

VIII. Litigation and arbitration

Major litigation and arbitration

□Applicable □Not applicable

There were no major litigation and arbitration in the reporting period.Other litigation and arbitration

□Applicable □Not applicable

IX. Penalty and rectification

□ Applicable □ Not applicable

X. Integrity of the Company its controlling shareholders and actual controllers

□ Applicable □ Not applicable

XI. Major related party transaction

1. Related party transaction involved with daily operation

□Applicable □ Not applicable

Wheth

Related Tradin er

Content party g limit over Clearin

Related Proporti Availa

Type of of Pricin transact appro the g form Index

party on in ble Date of

Related Relation related related g ion ved appro for of

transact similar similar disclos

party ship transacti party princi amount (in 10 ved related disclos

ion transacti market ure

on transacti ple (in 10 thousa limite transact ure

price ons price

on thousan nd d or ion

d yuan) yuan) not

(Y/N)

Procure Procure Fair

Associat Accordi

ment of ment of marke Apr. Notice

ed Market 1981.5 ng to Marke

WFPM goods goods t

enterpris price 0.42% 5600

N 28 No.:20

the t price

and and pricin 5 2023 23-017

e contract

services services g

Associat

ed

enterpris

e Procure Procure Fair

Accordi

controlli ment of ment of marke Apr. Notice

Market 13103. 3800 ng to Marke

RBCD ng goods goods t

price 2.75%

N 28 No.:20

subsidiar and and pricin 94 0

the t price

contract

y of services services g

Robert

Bosch

30WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Fair

Joint Accordi

Procure Procure marke Apr. Notice

venture Market 37981. 6010 ng to Marke

WFEC ment of ment of t 7.96% N 28 No.:20of price 67 0 the t price goods goods pricin 2023 23-017

WFLD contract

g

Second

largest Procure Procure Fair

Robert Accordi

sharehol ment of ment of marke Apr. Notice

Bosch Market 11169. 3000 ng to Marke

der of goods goods t N 28 No.:20

Compa price 2.34%

the and and pricin 23 0

the t price

ny contract

Compan services services g

y

Fair

Joint Accordi

Changc Procure Procure marke Apr. Notice

venture Market ng to Marke

hun ment of ment of t N 28 No.:20

of price 0 0.00% 150 the t price

Xuyang goods goods pricin 2023 23-017

WFLD contract

g

Holding Procure Procure Fair

Accordi

company ment of ment of marke Apr.Guokai Market 1586.7 ng to Marke

of Wuxi goods goods t Y 28

Metal price 0.33% 0 0 the t price Industry and and pricin 2023

contract

Group services services g

Fair

Associat Sales of Sales of Accordi

marke Apr. Notice

Lezhuo ed goods goods Market ng to Marke

t 0 0.00% 100 N 28 No.:20Bowei enterpris and and price the t price

pricin 2023 23-017

e services services contract

g

Fair

Associat Sales of Sales of Accordi

marke Apr. Notice

ed goods goods Market ng to Marke

WFPM t

enterpris and and price 50.60 0.01% 500

N 28 No.:20

the t price

pricin 2023 23-017

e services services contract

g

Associat

ed

enterpris

Fair

e Sales of Sales of Accordi

marke Apr. Notice

controlli goods goods Market 109078 3000 ng to Marke

RBCD t N 28 No.:20

ng and and price 17.80% .97 00 the t price pricin 2023 23-017

subsidiar services services contract

g

y of

Robert

Bosch

Fair

JOINT Sales of Sales of Accordi

marke Apr. Notice

VENTU goods goods Market ng to Marke

WFEC t

RE OF and and price 467.77 0.08% 900

N 28 No.:20

the t price

pricin 2023 23-017

WFLD services services contract

g

Second

largest Fair

Robert Sales of Sales of Accordi

sharehol marke Apr. Notice

Bosch goods goods Market 84627. 2193 ng to Marke

der of t N 28 No.:20

Compa and and price 13.81% 37 05 the t price the pricin 2023 23-017

ny services services contract

Compan g

y

Fair

Joint Accordi

Changc marke Apr. Notice

venture Sales of Sales of Market ng to Marke

hun t

of goods goods price 67.82 0.01% 500

N 28 No.:20

the t price

Xuyang pricin 2023 23-017

WFLD contract

g

Procure Procure Fair

Associat Accordi

ment of ment of marke Apr. Notice

Lezhuo ed Market ng to Marke

goods goods t N 28 No.:20

Bowei enterpris price 22.24 0.00% 2000 the t price

and and pricin 2023 23-017

e contract

services services g

Procure Fair

Associat Accordi

ment of marke Apr. Notice

ed Market ng to Marke

WFPM Others goods t 10.60 200 N 28 No.:20enterpris price the t price

and pricin 2023 23-017

e contract

services g

Associat

ed

enterpris

Fair

e Payable Accordi

marke Apr. Notice

controlli technical Market ng to Marke

RBCD Other t 0 50 N 28 No.:20

ng service price the t price

pricin 2023 23-017

subsidiar fees contract

g

y of

Robert

Bosch

31WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Associat

ed

enterpris Payment

Fair

e of Accordi

marke Apr. Notice

controlli technical Market ng to Marke

RBCD Other t N 28 No.:20

ng commiss price 0 150 the t price

pricin 2023 23-017

subsidiar ion fee contract

g

y of etc.Robert

Bosch

Associat

ed

enterpris

Fair

e Procure Accordi

marke Apr. Notice

controlli ment of Market ng to Marke

RBCD Other t N 28 No.:20

ng fixed price 0 450 the t price

pricin 2023 23-017

subsidiar assets contract

g

y of

Robert

Bosch

Associat

ed

enterpris

Fair

e Provide Accordi

marke Apr. Notice

controlli technical Market ng to Marke

RBCD Other t

ng service price 0 250

N 28 No.:20

the t price

pricin 2023 23-017

subsidiar etc. contract

g

y of

Robert

Bosch

Second

Payment

largest Fair

Robert of Accordi

sharehol marke Apr. Notice

Bosch technical Market ng to Marke

der of Other t

Compa commiss price 0 300

N 28 No.:20

the t price

the pricin 2023 23-017

ny ion fee contract

Compan g

etc.y

Second

largest Fair

Robert Procure Accordi

sharehol marke Apr. Notice

Bosch ment of Market ng to Marke

der of Other t 105.30 1000 N 28 No.:20Compa fixed price the t price

the pricin 2023 23-017

ny assets contract

Compan g

y

Second

largest Fair

Robert Accordi

sharehol Rent fees marke Apr. Notice

Bosch Market ng to Marke

der of Other receivabl t N 28 No.:20

Compa price 11.02 250 the t price

the e pricin 2023 23-017

ny contract

Compan g

y

Second

Utilities

largest Fair

Robert payable- Accordi

sharehol marke Apr. Notice

Bosch water Market ng to Marke

der of Other t N 28 No.:20

Compa electricit price 39.36 80 the t price

the pricin 2023 23-017

ny y power contract

Compan g

and gas

y

Second

largest Fair

Robert Provide Accordi

sharehol marke Apr. Notice

Bosch technical Market ng to Marke

der of Other t N 28 No.:20

Compa service price 199.09 400 the t price

the pricin 2023 23-017

ny etc. contract

Compan g

y

Technica Fair

JOINT Accordi

l service marke Apr. Notice

VENTU Market ng to Marke

WFEC Other fees t

RE OF price 0 20

N 28 No.:20

the t price

payable pricin 2023 23-017

WFLD contract

etc. g

Fair

JOINT Provide Accordi

marke Apr. Notice

VENTU technical Market ng to Marke

WFEC Other t N 28 No.:20

RE OF services price 0 30 the t price

pricin 2023 23-017

WFLD etc. contract

g

Fair

JOINT Rental Accordi

marke Apr. Notice

VENTU fees Market ng to Marke

WFEC Other t N 28 No.:20

RE OF receivabl price 100.33 250 the t price

pricin 2023 23-017

WFLD e contract

g

32WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Utilities

Fair

Joint payable- Accordi

marke Apr. Notice

venture water Market ng to Marke

WFEC Other t N 28 No.:20

of electricit price 52.81 150 the t price

pricin 2023 23-017

WFLD y power contract

g

and gas

Fair

Associat Rental Accordi

marke Apr. Notice

Lezhuo ed fees Market ng to Marke

t

enterpris receivabl price 105.72 250

N 28 No.:20

Bowei the t price pricin 2023 23-017

e e contract

g

Utilities

Fair

Associat payable- Accordi

marke Apr. Notice

Lezhuo ed water Market ng to Marke

t N 28 No.:20

Bowei enterpris electricit price

30.47 80 the t price

pricin 2023 23-017

e y power contract

g

and gas

Urban Holding Fair

Accordi

company marke Apr. Notice

Public Market ng to Marke

of Wuxi t 70.92 0 Y 28 No.:20

Deliver price the t price Industry pricin 2023 23-017

contract

y Group g

2608636610

Total -- -- -- -- -- -- -- --.4865

Detail of sales return with major amount

Not applicable

involved

Being deliberated and approved by AGM of 2022 total related party transaction involved with daily

operation for year of 2023 was predicted as 6610.65 million yuan and actually 2608634800.00 yuan

Report the actual implementation of the day- occurred in the Period. The related transactions classified according to types are as: 1.it estimated that

to-day related transactions which were procurement of goods and labor service from related party in 2023 will be up to 1339500000.00 yuan

projected about their total amount by types while 658230900.00 yuan occurred actually in the Period; 2. it estimated that sales of goods and labor

during the reporting period (if applicable) service to related party in 2023 will be up to 5232050000.00 yuan while 1943147700.00 yuan actually

occurred. 3. it estimated that other related transactions with related party for year of 2023 will up to

39100000.00 yuan while 7256200.00 yuan actually occurred.

Reasons for major differences between trading

Not applicable

price and market reference price (if applicable)

2. Related party transactions of assets or acquisition and sold

□ Applicable □ Not applicable

No related party transactions of assets or equity acquisition and sold occurred during the reporting period

3. Related party transactions of mutual investment outside

□ Applicable □Not applicable

No related party transactions of mutual investment outside occurred during the reporting period.

4. Contact of related party credit and debt

□Applicable □ Not applicable

Whehter the company have contact of related party credit and debt in the reporting period or not

□Yes □ No

Credit of related party receivable

Recovery

Reason Occupy Increase in Interest in

Opening amount in Inter Ending

for operating current current

Related party Relationship balance(’0 current est balance(’0000

formatio fund or period(’0000 period(’0

000 yuan) period(’00 rate yuan)

n not yuan) 000 yuan)

00 yuan)

33WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Company

controlled

by relatedparties of “platfor

241515.1Company A company m trade” Nil 5675.38 235839.81

9

directors/se business

nior

managemen

t personnel

The impact of related debt on

The details of the impact on the Company’s operating costs and financial condition can be found in the Note

the Company's operating

XVI. 7. “Major transaction and events influencing investor’s decision”.results and financial condition

Note: Based on the principle of caution the Company combines the balance of 4 companies that may be controlled by Company A

into the following list. The balance is the difference between the "purchase fund" paid by WFTR based on the "platform trade"

business and the "sales fund" received by WFTR. In accordance with the principle of substance over form the company does not

treat the "platform trade" business of WFTR as normal trade business but as fund collection and payment business for accounting

treatment so it is listed as other receivables.

5. Contact with the related finance companies

□ Applicable □ Not applicable

There were no deposits loans credits or other financial business between the finance companies with associated relationship and

related parties

6. Transactions between the finance company controlled by the Company and related parties

□ Applicable □ Not applicable

There were no deposits loans credits or other financial business between the finance companies controlled by the Company and

related parties

7. Other material related party transactions

□Applicable □ Not applicable

There was no other material related party transactions in the reporting period.XII. Significant contract and implementations

1. Trusteeship contract and leasing

(1) Trusteeship

□ Applicable □ Not applicable

No trusteeship occurred during the reporting period

(2) Contracting

□ Applicable □ Not applicable

No contract occurred during the reporting period

34WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

(3) Leasing

□ Applicable □ Not applicable

No leasing occurred during the reporting period

2. Material guarantees

□ Applicable □ Not applicable

In ten thousand yuan

The Company’ guarantee towards subsidiaries

Disclosure

date of Guarante

Actual

Name of announceme Guarante Actual Counter Fulfille ed by

guarante Guarant Collater guarantee

guarantee nt related to ed occurrin guarant d or related

ed ee type al period

d object the amount g date ee not parties or

amount

guaranteed not

amount

From the

date of

execution

of the main

contract up

to and

including

two years

from the

VHIT date of

Automoti Joint expiry of

Decemb

ve December 9 liability the

1000 er 12 1000 Nil Nil Nil Nil

Systems 2022 guarante performanc

2022

(Wuxi) e e period of

Co. Ltd. the

obligations

under the

main

contract or

December

302026

(whichever

is the

earlier)

Total actual amount occurred

Approved total guaranteed amount towards the

84000 towards subsidiaries within the 0

subsidiaries within the reporting period

reporting period

Total actual guarantee balance

Approved total guaranteed amount towards the

85000 towards subsidiaries at the year 1000

subsidiaries at the year end

end

Total amount of the company’s guarantee (total amount of the aforesaid three items)

Total actual guaranteed amount

Approved total amount guaranteed within the

84000 occurred within the reporting 0

reporting period

period

Approved total amount guaranteed at the end of Actual total guarantee balance at

850001000

reporting period the end of reporting period

35WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Proportion of actual total guaranteed amount to net

0.05%

assets

Wherein:

Total guaranteed amount towards shareholders actual controllers and related parties 0

Guaranteed amount provided for guaranteed objects with a liability rate of assets of over 70% directly or

0

indirectly

Excess of total guaranteed amount over 50% of net assets 0

The aforementioned total amount guaranteed of three items 0

Specific description for using the guarantee by complex method: Nil

3. Trusted cash asset management

(1) Trust financing

□ Applicable □ Not applicable

In ten thousand yuan

Amount with

impairment

Amount Outstanding Overdue accrual for the

Type Capital sources

occurred balance amount overdue financial

products which has

not been recovered

Financing products of banks Own funds 20050 11850 0 0

Financial products of securities firms Own funds 77000 52000 0 0

Trust financial products Own funds 126550 84400 0 0

Other types Own funds 114231 100232 0 0

Total 337831 248482 0 0

Details of the single major amount or high-risk trust investment with low security poor fluidity

□ Applicable □ Not applicable

In ten thousand yuan

Trust Trust Type Am So St En Capita Crite Refe Antic Actua Actua Amou Whe Wh Summa

ee ee oun urc art d l ria renc ipate l l nt of ther ethe ry of

instit type t e da da invest for e d gains/ collec reserv appr r the

ution of te te ment fixin annu inco losses ted e for oved has items

r fun purpo g al me in gains/ deval by entr and

nam ds se rewa rate (if perio losses uation legal ust related

e rd of appli d in of proc fina query

retur cable perio withd edur nce index

n ) d rawin e plan (if

g (if (Y/ in applica

applic N) the ble)

able) futu

re

36WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Refe

renc

e Colle

Non- 20 20 annu

guara cted O 23 23 Bank al 2.20

nteed financ accor

Ban 40 wn - - rate %- 215.1

Bank floati ial 206.73 ding 0 Y Y

k

ng 170 fun 01 08

of

produ 2.85 6

d - - retur

to the

inco cts %

n by contr

me 09 08

the act

contr

act

Refe

renc

Asset

e Colle

Non- 20 20 mana annu

guara cted O 23 25 geme al 9.00

nteed nt accor

Secu Secur 25 wn - - rate %- 7219. 2882.floati Plan ding 0 Y Y

rities ities

ng 000 fun 01 02

of

incom 15.90 38 35

retur to the

inco d - - e %

n by contr

me 06 10 receip Apr.28

the act

t 2023

contr

(Annou

act

ncemen

Refe

renc t

e Colle No.:202

Non- 20 20 annu cted 3-018) guara O 23 23 Collec al 3.40

nteed accor

40 wn - - tion rate %- 2695.

Trust Trust floati 121.1 ding 0 Y Y

ng 000 fun 02 04

trust of 3.70 84

d - - plan retur

to the

inco %

n by contr

me 09 28

the act

contr

act

Refe

renc

e Colle

Other Non-

Privat annu

profes guara cted O e al

sional nteed accor

Othe wn Equit rate 1227.financ floati - - - - - ding 0 Y Y

r y of

ial ng fun 5

Produ retur to the

institu inco d

cts n by contr

tions me

the act

contr

act

105

7555.7012.

Total 17 -- -- -- -- -- -- -- 0 -- -- --

6442

0

It is expected that the principal of entrusted financial management fails to recover or there are other situations leading to

impairment in entrusted financial management

□ Applicable □ Not applicable

4. Other significant contract

□ Applicable □ Not applicable

The company had no other significant contract in the reporting period.

37WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

XIII. Explanation on other material matters

□Applicable □ Not applicable

The company has no explanation on other material matters.XIV. Material matters of subsidiary of the Company

□ Applicable □ Not applicable

38WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Section VII. Changes in Shares and Particulars

about Shareholders

I. Changes in share capital

1. Changes in share capital

In Share

Before the Change Change during the reporting period(+/-)) After the change

Public

New

Bon reserve

shareProport us transfer Proporti

Amount s Others Subtotal Amount

ion shar into on issue

es share

d

capital

I. Restricted shares 12021836 1.19% -5902106 -5902106 6119730 0.61%

1. State-owned shares

2. State-owned legal

person’s shares

3. Other domestic shares 12021836 1.19% -5902106 -5902106 6119730 0.61%

Including: Domestic legal

person’s shares

Domestic natural

120218361.19%-5902106-590210661197300.61%

person’s shares

4. Foreign shares

Including: Foreign legal

person’s shares

Foreign natural

person’s shares

II. Unrestricted shares 996581457 98.81% -121394 -121394 996460063 99.39%

1. RMB ordinary shares 824201457 81.72% -121394 -121394 824080063 82.20%

2. Domestically listed

17238000017.09%17238000017.19%

foreign shares

3. Overseas listed foreign

shares

4. Others

100860329100257979

III. Total shares 100.00% -6023500 -6023500 100.00%

33

Reasons for share changed

□Applicable □Not applicable

1. During the reporting period the company repurchased and canceled 5593500 shares of 2020 restricted stock that had been

granted but not unlocked resulting in a change in restricted shares;

2. During the reporting period titles of some directors supervisors and senior executives of the company were adjusted and the

lock-up shares held by senior executives changed resulting in changes in unrestricted shares.Approval status of share changes

□Applicable □Not applicable

1. On April 26 2023 the Company held the 16th meeting of the 10th session of BOD deliberated and adopted the “Proposal onRepurchase Cancellation of Part of Restricted Shares of the Restricted Stock Incentive Plan 2020” and decided to conduct

repurchase cancellation of a total of 5593500 restricted shares of 568 incentive objects that had been granted but did not meet the

39WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

conditions for lifting the restriction. As of June 16 2023 the Company has completed the repurchase cancellation procedures of

the above-mentioned shares at China Securities Depository and Clearing Corporation Limited Shenzhen Branch.

2. On May 27 2023 the Company disclosed the Announcement on the Retirement of Senior Management Personnel. Mr. Miao

Yuming applied to resign from the position of Deputy General Manager of the Company for reaching the statutory retirement age.According to relevant regulations Mr. Miao Yuming’s resignation report shall become effective on the date of being served to the

Board of Directors of the Company.

3. On June 1 2023 the Company held the 17th meeting of the 10th session of BOD deliberated and adopted the “Proposal on theAppointment of Deputy General Manager” and the “Proposal on the By-election of Non-independent Director” and respectively

agreed to appoint Mr. Feng Zhiming the Deputy General Manager of the Company with the term of office from the date of

deliberation and adoption by the Board of Directors to the date of expiration of the 10th Board of Directors; agreed to by-elect Mr.Feng Zhiming as a non-independent director of the 10th Board of Directors of the Company with the term of office from the date

of deliberation and adoption by the general meeting of shareholders to the date of expiration of the 10th session of BOD. On June

19 2023 the Company held the first extraordinary general meeting of shareholders in 2023 deliberated and adopted the “Proposalon the By-election of Non-Independent Director”.Ownership transfer of share changed

□Applicable □Not applicable

Progress of the implementation of repurchase share

□Applicable □ Not applicable

On April 15 2022 the Company held the 8th meeting of the 10th session of BOD deliberated and adopted the Proposal on the Plan

to Repurchase Part of A-shares of the Company. The Company decided to repurchase part of A-shares of the Company through

centralized bidding trading with the total repurchase amount no less than 362.5 million (inclusive) yuan and not more than 725

million (inclusive) yuan and the price of repurchase shares (A-shares) no more than 29 yuan per share (inclusive)【As the annual

equity distribution of the Company in 2021 has been completed according to relevant regulations from the ex-dividend date of

equity distribution (June 10 2022) the price of repurchase shares (A-shares) will be adjusted from no more than 29 yuan per share

(inclusive) to no more than 27.41 yuan per share】.On February 28 2023 the Company disclosed the “Announcement on the Completion of Repurchase of Part of A-Shares of theCompany and Share Change”. As of the announcement date the Company has bought back 25000000 shares (A-shares) in the

form of centralized bidding trading through the buyback securities account accounting for 2.48% of the total capital stock of the

Company at that time of which the highest transaction price was 20.85 yuan per share and the lowest transaction price was 17.17

yuan per share. The total consideration was 469722092.24 yuan (including transaction fees). The repurchase complied with

relevant laws and regulations and the established buyback program of the Company and has been completed.Progress of the implementation of reducing buyback shares by means of centralized bidding

□Applicable □Not applicable

Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common

shareholders of Company in latest year and period

□ Applicable □ Not applicable

Other information necessary to disclose or need to disclosed under requirement from security regulators

□ Applicable □ Not applicable

2. Changes of lock-up stocks

□Applicable □Not applicable

40WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

In Share

Restricted

Shares

shares Date

Opening released in Ending

increased for

Shareholders shares the shares Restricted reasons

in release

restricted reporting restricted

the reporting d

period

period

Wang Lock-up shares held by senior executives Jun. 16

315586120000195586

Xiaodong and Restricted Stock Incentive Plan 2020 2023

Lock-up shares held by senior executives Jun. 16

Xu Yunfeng 272250 105000 167250

and Restricted Stock Incentive Plan 2020 2023

Feng Zhiming 0 48894 48894 Lock-up shares held by senior executives

Lock-up shares held by senior executives Jun. 16

Ou Jianbin 217500 84000 133500

and Restricted Stock Incentive Plan 2020 2023

Lock-up shares held by senior executives Jun. 16

Miao Yuming 217500 84000 72500 206000

and Restricted Stock Incentive Plan 2020 2023

Lock-up shares held by senior executives Jun. 16

Rong bin 210000 84000 126000

and Restricted Stock Incentive Plan 2020 2023

Lock-up shares held by senior executives Jun. 16

Liu Jinjun 210000 84000 126000

and Restricted Stock Incentive Plan 2020 2023

Lock-up shares held by senior executives Jun. 16

Li Gang 210000 84000 126000

and Restricted Stock Incentive Plan 2020 2023

Lock-up shares held by senior executives Jun. 16

Xu Sheng 210000 84000 126000

and Restricted Stock Incentive Plan 2020 2023

Feb.Middle 16

1015900

management.e 5294500 4864500 Restricted Stock Incentive Plan 2020 2023

tc 0 Jun. 16

2023

1202183

Total 6023500 121394 6119730 -- --

6

Note: In the table above shares released in the reporting period is the number that the company repurchases and cancels the shares

it has been granted but has not yet lifted the restrictions on sale in the reporting period.II. Securities issuance and listing

□ Applicable □ Not applicable

III. Particulars about shareholders and actual controller of the Company

In Share

Total preference shareholders with voting rights

Total common stock shareholders at end

71080 recovered at end of last month before annual report 0

of the reporting period

disclosed (if applicable)(refer to Note 8)

Particulars about shares held above 5% by shareholders or top 10 shareholders

Total of Numbe Information of shares

Nature common r of pledged tagged or

Proportion Changes in Amount of

Full name of of shares held at restrict frozen

of shares reporting unrestricted

Shareholders sharehol the end of ed

held period shares held State of

der reporting shares Amount

share

period held

State-

Wuxi Industry

owned

Development 20.35% 204059398 0 0 204059398

corporat

Group Co. Ltd.e

Foreign

Robert Bosch

corporat 14.25% 142841400 0 0 142841400

Co. Ltd

e

41WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Hong Kong

Foreign

Securities

corporat 2.37% 23810734 -9817210 0 23810734

Clearing

e

Company

BBH BOS S/A

Foreign

FIDELITY FD -

corporat 1.09% 10952719 -3053596 0 10952719

CHINA FOCUS

e

FD

NSSF-413 Other 1.06% 10650000 540000 0 10650000

Basic Pension

Insurance Fund- Other 0.82% 8175559 4400000 0 8175559

1003

Ping An

Insurance Life

Insurance Co.Ltd. -

investment

Other 0.69% 6899810 6899810 0 6899810

linked -

individual

insurance

investment

linked

FIDELITY

INVMT TRT Foreign

FIDELITY corporat 0.68% 6863386 0 0 6863386

INTL SMALL e

CAP FUND

Shanghai

Chongyang

Strategic

Investment Co.Other 0.55% 5500106 0 0 5500106

Ltd. -

Chongyang

Strategic

Yingzhi Fund

Domesti

Xie Zuogang c natural 0.51% 5132967 0 0 5132967

person

Strategy investor or general

legal person becoming the

top 10 shareholders by Nil

placing new shares (if

applicable) (refer to Note 3)

Explanation on associated Among the aforesaid shareholders there has no associated relationship between Wuxi Industry

relationship concerted Development Croup Co. Ltd. the first largest shareholder of the Company and other

action among the aforesaid shareholders; and they do not belong to the persons acting in concert regulated by the Management

shareholders Measure of Information Disclosure on Change of Shareholding for Listed Company.Description of the above

shareholders in relation to

delegate/entrusted voting Nil

rights and abstention from

voting rights.Special note on the

As of June 30 2023 the repurchase special securities account of Weifu High-Technology Group

repurchase account among

Co. Ltd has 25000000 shares of ordinary A-Share hereby stated that in according withe relevant

the top 10 shareholders (if

applicable) requirement they are not included in the top 10 shareholders of the Company.Particular about top 10 shareholders with unrestricted shares held

Amount of unrestricted Shares held

Shareholders’ name

shares held at Period-end Type Amount

Wuxi Industry Development Group Co. Ltd. 204059398 RMB common shares 204059398

42WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

RMB common shares 115260600

Robert Bosch Co. Ltd 142841400

Domestically listed foreign shares 27580800

Hong Kong Securities Clearing Company 23810734 RMB common shares 23810734

BBH BOS S/A

10952719 Domestically listed foreign shares 10952719

FIDELITY FD - CHINA FOCUS FD

NSSF-413 10650000 RMB common shares 10650000

Basic Pension Insurance Fund- 1003 8175559 RMB common shares 8175559

Ping An Insurance Life Insurance Co. Ltd. -

investment linked - individual insurance 6899810 RMB common shares 6899810

investment linked

FIDELITY

INVMT TRT FIDELITY INTL SMALL CAP 6863386 Domestically listed foreign shares 6863386

FUND

Shanghai Chongyang Strategic Investment

Co. Ltd. - Chongyang Strategic Yingzhi 5500106 RMB common shares 5500106

Fund

Xie Zuogang 5132967 Domestically listed foreign shares 5132967

Among the aforesaid shareholders there has no associated relationship between

Explanation on associated relationship or

Wuxi Industry Development Croup Co. Ltd. the first largest shareholder of the

consistent actors within the top 10 restricted

Company and other shareholders; and they do not belong to the persons acting in

shareholders and between top 10 unrestricted

shareholders and top 10 shareholders concert regulated by the Management Measure of Information Disclosure on

Change of Shareholding for Listed Company.Among the top 10 shareholders Shanghai Chongyang Strategic Investment Co.Explanation on top 10 shareholders involving

Ltd. - Chongyang Strategic Yingzhi Fund holds 5500106 shares through

margin business (if applicable)

investor credit securities accounts;

Did top 10 common shareholders or top 10 unrestricted shareholders have agreed repurchase dealing in reporting period

□ Yes □ No

The top 10 common shareholders or top 10 unrestricted shareholders didn’t have agreed repurchase dealing in reporting period.□ Yes □ No

IV. Changes in shareholding of directors supervisors and senior management

□Applicable □Not applicable

Number

of

Number Number

Number Number of Number of

of shares of shares Number of restricted

of shares restricted restricted

increased decreased shares held shares

Working held at

Name Title in in at period-

shares shares

granted

status period- reporting reporting end granted at granted at

begin in

period period (Share) period- period-

(Share) reporting

(Share) (Share) begin(Share) end(Share)

period

(Share)

Wang Currently

Chairman 420781 120000 300781 400000 280000

Xiaodong in office

Xu Vice Chairman and Currently

363000105000258000350000245000

Yunfeng General Manager in office

Executive Vice

Ou General Manager Currently

29000084000206000280000196000

Jianbin and Financial in office

Director(suspension)

Miao Deputy General Leave

29000084000206000280000196000

Yuming Manager office

43WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Xu Deputy General Currently

28000084000196000280000196000

Sheng Manager in office

Deputy General

Currently

Rongbin Manager Financial 280000 84000 196000 280000 196000

Director(filling in) in office

Deputy General

Liu Manager Secretary Currently

28000084000196000280000196000

Jinjun of the Board of in office

Directors

Currently

Li Gang Chief Engineer 280000 84000 196000 280000 196000

in office

Total -- -- 2483781 729000 1754781.00 2430000 1701000

Note: the number of shares decreased in reporting period in the above table is the number of shares which were repurchased and

canceled by the company but has not yet been lifted from restrictions on sale.V. Changes of controlling shareholders or actual controller in reporting period

Changes of controlling shareholders in the reporting period

□ Applicable □ Not applicable

The Company had no changes of controlling shareholders in the reporting period

Changes of actual controller in the reporting period

□ Applicable □ Not applicable

The Company had no changes of actual controller in the reporting period

44WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Section VIII. Preferred Stock

□ Applicable □ Not applicable

The Company had no preferred stock in the reporting period.

45WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Section IX. Corporate Bonds

□ Applicable □ Not applicable

46WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Section X. Financial Report

I. Audit report

Whether the semi annual report is audited or not

□Yes □No

The company's semi annual financial report has not been audited

II. Financial Statement

Statement in Financial Notes are carried in RMB/CNY

1. Consolidated Balance Sheet

Prepared by Weifu High-Technology Group Co. Ltd.June 30 2023

In RMB

Item June 30 2023 January 1 2023

Current assets:

Monetary funds 2487786142.04 2389551930.76

Settlement provisions

Capital lent

Trading financial assets 2250198464.28 2718820654.87

Derivative financial assets

Note receivable 104980712.30 135559024.27

Account receivable 3317387077.56 3127490177.25

Receivable financing 1920348206.04 1918368845.21

Prepayments 67710664.23 94323853.87

Insurance receivable

Reinsurance receivables

Contract reserve of reinsurance receivable

Other account receivable 2874547071.97 1264507456.47

Including: Interest receivable

Dividend receivable 1955605474.71 147000000.00

Buying back the sale of financial assets

Inventory 1921084065.82 2283119656.27

Contract assets

Assets held for sale

Non-current asset due within 1 year

47WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Other current assets 240962367.80 430547201.24

Total current assets 15185004772.04 14362288800.21

Non-current assets:

Loans and payments on behalf

Debt investment

Other debt investment

Long-term account receivable

Long-term equity investment 5187995234.43 6282818108.96

Other equity instrument investment 677790690.00 677790690.00

Other non-current financial assets 1166342387.00 1326608914.00

Investment real estate 56185135.36 49296869.73

Fixed assets 3745590665.96 3769984185.94

Construction in progress 639963756.99 509105587.49

Productive biological assets

Oil and gas assets

Right-of-use assets 39364840.80 41865100.38

Intangible assets 489758310.65 487627987.92

Expense on research and development

Goodwill 251813115.66 237682375.72

Long-term expenses to be apportioned 27143337.26 28586235.84

Deferred income tax assets 273908331.15 275627772.45

Other non-current assets 611808088.23 479630436.37

Total non-current assets 13167663893.49 14166624264.80

Total assets 28352668665.53 28528913065.01

Current liabilities:

Short-term loans 2256900925.45 3604376527.82

Loans from central bank

Capital borrowed

Trading financial liabilities

Derivative financial liabilities 737424.50 747115.75

Note payable 1584124651.19 1411089606.00

Account payable 3271926231.00 3454601023.60

Advance payment 462221.88 3633878.33

Contractual liabilities 104491724.54 94850083.23

Selling financial asset of repurchase

Absorbing deposit and interbank deposit

Security trading of agency

Security sales of agency

Wage payable 225684651.78 317434386.24

Taxe payable 64158658.16 54586315.53

48WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Other account payable 156729445.68 198990948.23

Including: Interest payable

Dividend payable 10373454.00

Commission charge and commission payable

Reinsurance payable

Liabilities held for sale

Non-current liabilities due within 1 year 36959064.67 14285348.90

Other current liabilities 262650217.54 211763779.77

Total current liabilities 7964825216.39 9366359013.40

Non-current liabilities:

Insurance contract reserve

Long-term loans 600000000.00 238000000.00

Bond payable

Including: Preferred stock

Perpetual capital securities

Lease liabilities 30799799.49 31589277.20

Long-term account payable 30785082.11 30785082.11

Long-term wage payable 155985385.60 154093044.28

Accrual liabilities 9980678.92 10106268.87

Deferred income 199209771.05 223123978.78

Deferred income tax liabilities 39772528.51 40149550.99

Other non-current liabilities

Total non-current liabilities 1066533245.68 727847202.23

Total liabilities 9031358462.07 10094206215.63

Owner’s equity:

Share capital 1002579793.00 1008603293.00

Other equity instrument

Including: Preferred stock

Perpetual capital securities

Capital reserve 3335177095.84 3398368567.63

Less: Inventory shares 538410272.24 541623002.63

Other comprehensive income 60328251.06 -911310.13

Reasonable reserve 3583407.75 2119800.95

Surplus reserve 510100496.00 510100496.00

Provision of general risk

Retained profit 14171024206.15 13320021325.90

Total owner’ s equity attributable to parent company 18544382977.56 17696679170.72

Minority interests 776927225.90 738027678.66

Total owner’ s equity 19321310203.46 18434706849.38

Total liabilities and owner’ s equity 28352668665.53 28528913065.01

49WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Legal Representative: Wang Xiaodong

Person in charge of accounting works: Rong Bin

Person in charge of accounting institute: Wu Junfei

2. Balance sheet of parent company

In RMB

Item June 30 2023 January 1 2023

Current assets:

Monetary funds 658847374.34 823574329.53

Trading financial assets 2134459399.76 2693150975.20

Derivative financial assets

Note receivable 38585991.52 29575852.04

Account receivable 1106215964.34 906808283.22

Receivable financing 231837502.28 216462262.44

Prepayments 38880788.18 56037892.68

Other account receivable 3206692791.69 1472102439.27

Including: Interest receivable 32195758.91 206325.34

Dividend receivable 1881769939.06

Inventories 554131949.66 571571431.95

Contract assets

Assets held for sale

Non-current assets maturing within 1 year

Other current assets 1755265.16 107462112.82

Total current assets 7971407026.93 6876745579.15

Non-current assets:

Debt investment

Other debt investment

Long-term account receivable

Long-term equity investment 7290721357.80 8369843351.10

Other equity instrument investment 601850690.00 601850690.00

Other non-current financial assets 1166342387.00 1326608914.00

Investment real estate 35018863.59 35584279.11

Fixed assets 2232822699.74 2251495050.80

Construction in progress 344391742.48 251304655.41

Productive biological assets

Oil and natural gas assets

Right-of-use assets 4321883.64 6061693.75

Intangible assets 211423280.19 209246490.17

Research and development costs

Goodwill

Long-term deferred expenses 6417238.81 6895352.43

50WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Deferred income tax assets 88907446.28 109624761.50

Other non-current assets 222124598.31 168744695.04

Total non-current assets 12204342187.84 13337259933.31

Total assets 20175749214.77 20214005512.46

Current liabilities

Short-term loans 1461515277.78 2121354415.53

Trading financial liabilities

Derivative financial liabilities 737424.50 737424.50

Note payable 332041918.11 251867652.05

Account payable 1103757868.99 1048268519.52

Advance payment

Contract liabilities 8032872.19 6564332.93

Wage payable 106415365.78 166314985.33

Taxe payable 16561316.90 6048505.30

Other account payable 431093918.61 926276130.15

Including: Interest payable 1369121.16 835069.83

Dividend payable 10373454.00

Liabilities held for sale

Non-current liabilities due within 1 year 28238743.21 4306935.71

Other current liabilities 85179531.11 102322311.03

Total current liabilities 3573574237.18 4634061212.05

Non-current liabilities:

Long-term loans 400000000.00

Bond payable

Including: preferred stock

Perpetual capital securities

Lease liabilities 3044575.55 2690812.43

Long-term account payable

Long term employee compensation payable 121683760.89 121683760.89

Accrued liabilities 13750.00

Deferred income 169822415.83 198149511.20

Deferred income tax liabilities

Other non-current liabilities

Total non-current liabilities 694550752.27 322537834.52

Total liabilities 4268124989.45 4956599046.57

Owners’ equity:

Share capital 1002579793.00 1008603293.00

Other equity instrument

Including: preferred stock

Perpetual capital securities

51WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Capital reserve 3451969145.81 3515005861.23

Less: Inventory shares 538410272.24 541623002.63

Other comprehensive income

Special reserve

Surplus reserve 510100496.00 510100496.00

Retained profit 11481385062.75 10765319818.29

Total owner’s equity 15907624225.32 15257406465.89

Total liabilities and owner’s equity 20175749214.77 20214005512.46

3. Consolidated profit statement

In RMB

Item 2023 semi-annual 2022 semi-annual

I. Total operating income 6129649047.40 7137172857.97

Including: Operating income 6129649047.40 7137172857.97

Interest income

Insurance gained

Commission charge and commission income

II. Total operating cost 5988688585.81 6730969892.10

Including: Operating cost 5163871731.26 6026454182.03

Interest expense

Commission charge and commission expense

Cash surrender value

Net amount of expense of compensation

Net amount of withdrawal of insurance contract reserve

Bonus expense of guarantee slip

Reinsurance expense

Tax and extra 32240422.99 28877421.78

Sales expense 103031481.40 79020592.43

Administrative expense 299195729.59 277212254.79

R&D expense 351887038.12 289631376.50

Financial expense 38462182.45 29774064.57

Including: Interest expenses 65616425.64 34275262.65

Interest income 15706416.56 13927929.36

Add: other income 40979593.51 26095621.93

Investment income (Loss is listed with “-”) 811406633.49 928792343.97

Including: Investment income on affiliated company and joint

742783514.37823400731.10

venture

The termination of income recognition for financial assets

-680357.44

measured by amortized cost

Exchange income (Loss is listed with “-”)

Net exposure hedging income (Loss is listed with “-”)

Income from change of fair value (Loss is listed with “-”) -18069553.29 -74432928.14

52WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Loss of credit impairment (Loss is listed with “-”) -846725.76 2083427.81

Loss of devaluation of asset (Loss is listed with “-”) -90263537.00 -104219783.98

Income from assets disposal (Loss is listed with “-”) 125530905.04 1890279.95

III. Operating profit (Loss is listed with “-”) 1009697777.58 1186411927.41

Add: Non-operating income 2707696.00 218285.29

Less: Non-operating expense 758381.69 2196565.87

IV. Total profit (Loss is listed with “-”) 1011647091.89 1184433646.83

Less: Income tax expense 29332279.74 55645075.75

V. Net profit (Net loss is listed with “-”) 982314812.15 1128788571.08

(i) Classify by business continuity

1. Continuous operating net profit (net loss listed with “-”) 982314812.15 1128788571.08

2. Termination of net profit (net loss listed with “-”)

(ii) Classify by ownership

1. Net profit attributable to owner’s of parent company 948760859.55 1091126480.08

2. Minority shareholders’ gains and losses 33553952.60 37662091.00

VI. Net after-tax of other comprehensive income 61239561.19 -12679652.16

Net after-tax of other comprehensive income attributable to owners of

61239561.19-12679652.16

parent company

(i) Other comprehensive income items which will not be reclassified

-305484.37

subsequently to profit of loss

1. Changes of the defined benefit plans that re-measured -305484.37

2. Other comprehensive income under equity method that cannot be

transfer to gain/loss

3. Change of fair value of other equity instrument investment

4. Fair value change of enterprise's credit risk

5. Other

(ii) Other comprehensive income items which will be reclassified

61545045.56-12679652.16

subsequently to profit or loss

1. Other comprehensive income under equity method that can transfer

to gain/loss

2. Change of fair value of other debt investment

3. Amount of financial assets re-classify to other comprehensive

income

4. Credit impairment provision for other debt investment

5. Cash flow hedging reserve

6. Translation differences arising on translation of foreign currency

61545045.56-12679652.16

financial statements

7. Other

Net after-tax of other comprehensive income attributable to minority

shareholders

VII. Total comprehensive income 1043554373.34 1116108918.92

Total comprehensive income attributable to owners of parent

1010000420.741078446827.92

Company

Total comprehensive income attributable to minority shareholders 33553952.60 37662091.00

VIII. Earnings per share:

(i) Basic earnings per share 0.98 1.10

(ii) Diluted earnings per share 0.98 1.10

53WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Legal Representative: Wang Xiaodong

Person in charge of accounting works: Rong Bin

Person in charge of accounting institute: Wu Junfei

4. Profit statement of parent company

In RMB

Item 2023 semi-annual 2022 semi-annual

I. Operating income 1999983446.71 2411189208.04

Less: Operating cost 1582800180.15 1919986159.54

Taxes and surcharge 12898023.37 13501778.32

Sales expenses 14804263.68 14392542.42

Administration expenses 151432225.43 144366869.06

R&D expenses 121018486.34 115694064.37

Financial expenses -30173931.83 -8310144.29

Including: interest expenses 46417119.10 18380946.47

Interest income 71778851.32 31657392.66

Add: other income 29302719.53 15713320.73

Investment income (Loss is listed with “-”) 711673709.71 835209662.03

Including: Investment income on affiliated Company and joint

644975916.19734429287.99

venture

The termination of income recognition for financial assets

measured by amortized cost (Loss is listed with “-”)

Net exposure hedging income (Loss is listed with “-”)

Changing income of fair value (Loss is listed with “-”) -18284414.84 -74417034.85

Loss of credit impairment (Loss is listed with “-”) -782758.06 477241.11

Losses of devaluation of asset (Loss is listed with “-”) -37325504.75 -45999971.02

Income on disposal of assets (Loss is listed with “-”) 3183872.63 146113.46

II. Operating profit (Loss is listed with “-”) 834971823.79 942687270.08

Add: Non-operating income 20798.16 138467.56

Less: Non-operating expense 452082.96 613619.53

III. Total Profit (Loss is listed with “-”) 834540538.99 942212118.11

Less: Income tax 20717315.23 33033489.65

IV. Net profit (Net loss is listed with “-”) 813823223.76 909178628.46(i) continuous operating net profit (net loss listed with ‘-”) 813823223.76 909178628.46(ii) termination of net profit (net loss listed with ‘-”)

V. Net after-tax of other comprehensive income

(I) Other comprehensive income items which will not be reclassified

subsequently to profit of loss

1. Changes of the defined benefit plans that re-measured

2. Other comprehensive income under equity method that cannot be

transfer to gain/loss

3. Change of fair value of other equity instrument investment

4. Fair value change of enterprise's credit risk

54WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

5. Other

(II) Other comprehensive income items which will be reclassified

subsequently to profit or loss

1. Other comprehensive income under equity method that can

transfer to gain/loss

2. Change of fair value of other debt investment

3. Amount of financial assets re-classify to other comprehensive

income

4. Credit impairment provision for other debt investment

5. Cash flow hedging reserve

6. Translation differences arising on translation of foreign currency

financial statements

7. Other

VI. Total comprehensive income 813823223.76 909178628.46

VII. Earnings per share:

(i) Basic earnings per share

(ii) Diluted earnings per share

5. Consolidated cash flow statement

In RMB

Item 2023 semi-annual 2022 semi-annual

I. Cash flows arising from operating activities:

Cash received from selling commodities and providing labor services 7220274822.77 7278359413.36

Net increase of customer deposit and interbank deposit

Net increase of loan from central bank

Net increase of capital borrowed from other financial institution

Cash received from original insurance contract fee

Net cash received from reinsurance business

Net increase of insured savings and investment

Cash received from interest commission charge and commission

Net increase of capital borrowed

Net increase of returned business capital

Net cash received by agents in sale and purchase of securities

Write-back of tax received 290682518.69 232035625.20

Other cash received concerning operating activities 350434811.67 1276954478.94

Subtotal of cash inflow arising from operating activities 7861392153.13 8787349517.50

Cash paid for purchasing commodities and receiving labor service 5293150104.57 5605274974.42

Net increase of customer loans and advances

Net increase of deposits in central bank and interbank

Cash paid for original insurance contract compensation

Net increase of capital lent

Cash paid for interest commission charge and commission

55WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Cash paid for bonus of guarantee slip

Cash paid to/for staff and workers 845487116.19 736897874.74

Taxe paid 223362710.57 223299890.76

Other cash paid concerning operating activities 409430984.38 4715858822.47

Subtotal of cash outflow arising from operating activities 6771430915.71 11281331562.39

Net cash flows arising from operating activities 1089961237.42 -2493982044.89

II. Cash flows arising from investing activities:

Cash received from recovering investment 1792373483.22 6783202982.62

Cash received from investment income 227184527.61 510529403.51

Net cash received from disposal of fixed intangible and other long-

130808256.397007242.74

term assets

Net cash received from disposal of subsidiaries and other units

Other cash received concerning investing activities

Subtotal of cash inflow from investing activities 2150366267.22 7300739628.87

Cash paid for purchasing fixed intangible and other long-term assets 521593700.42 622264336.12

Cash paid for investment 1384532499.32 5121895293.87

Net increase of mortgaged loans

Net cash received from subsidiaries and other units obtained

Other cash paid concerning investing activities

Subtotal of cash outflow from investing activities 1906126199.74 5744159629.99

Net cash flows arising from investing activities 244240067.48 1556579998.88

III. Cash flows arising from financing activities

Cash received from absorbing investment

Including: Cash received from absorbing minority shareholders’

investment by subsidiaries

Cash received from loans 2472142881.63 4061893674.46

Other cash received concerning financing activities

Subtotal of cash inflow from financing activities 2472142881.63 4061893674.46

Cash paid for settling debts 3430505040.97 1122521453.43

Cash paid for dividend and profit distributing or interest paying 150449335.07 1499815013.36

Including: Dividend and profit of minority shareholder paid by

25671100.00

subsidiaries

Other cash paid concerning financing activities 144576715.88 100866543.83

Subtotal of cash outflow from financing activities 3725531091.92 2723203010.62

Net cash flows arising from financing activities -1253388210.29 1338690663.84

IV. Influence on cash and cash equivalents due to fluctuation in exchange

29533974.54-4522251.76

rate

V. Net increase of cash and cash equivalents 110347069.15 396766366.07

Add: Balance of cash and cash equivalents at the period -begin 2277117604.82 1094018936.73

VI. Balance of cash and cash equivalents at the period -end 2387464673.97 1490785302.80

56WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

6. Cash flow statement of parent company

In RMB

Item 2023 semi-annual 2022 semi-annual

I. Cash flows arising from operating activities:

Cash received from selling commodities and providing labor services 1931059388.32 2206683069.38

Write-back of tax received 125050063.31 186226813.27

Other cash received concerning operating activities 28151813.75 13662628.42

Subtotal of cash inflow arising from operating activities 2084261265.38 2406572511.07

Cash paid for purchasing commodities and receiving labor service 1283789999.36 1469241728.46

Cash paid to/for staff and workers 371210630.31 389448409.74

Taxes paid 76834144.17 138600504.19

Other cash paid concerning operating activities 85355061.82 94078994.56

Subtotal of cash outflow arising from operating activities 1817189835.66 2091369636.95

Net cash flows arising from operating activities 267071429.72 315202874.12

II. Cash flows arising from investing activities:

Cash received from recovering investment 1285673483.22 4401242982.62

Cash received from investment income 76692639.68 515008090.22

Net cash received from disposal of fixed intangible and other long-

5120859.042092031.77

term assets

Net cash received from disposal of subsidiaries and other units

Other cash received concerning investing activities 266890277.63 333677757.87

Subtotal of cash inflow from investing activities 1634377259.57 5252020862.48

Cash paid for purchasing fixed intangible and other long-term assets 312219496.56 427352475.87

Cash paid for investment 740630287.05 3082493337.87

Net cash received from subsidiaries and other units obtained

Other cash paid concerning investing activities 54000000.00 3408840000.00

Subtotal of cash outflow from investing activities 1106849783.61 6918685813.74

Net cash flows arising from investing activities 527527475.96 -1666664951.26

III. Cash flows arising from financing activities

Cash received from absorbing investment

Cash received from loans 1795000000.00 2618386800.00

Other cash received concerning financing activities 15000000.00 783729243.68

Subtotal of cash inflow from financing activities 1810000000.00 3402116043.68

Cash paid for settling debts 2026644800.00 326483000.00

Cash paid for dividend and profit distributing or interest paying 133911606.16 1459828775.80

Other cash paid concerning financing activities 611812390.04 100720981.37

Subtotal of cash outflow from financing activities 2772368796.20 1887032757.17

Net cash flows arising from financing activities -962368796.20 1515083286.51

IV. Influence on cash and cash equivalents due to fluctuation in exchange

3103799.68-3140478.44

rate

V. Net increase of cash and cash equivalents -164666090.84 160480730.93

Add: Balance of cash and cash equivalents at the period-begin 803410185.18 488417498.83

VI. Balance of cash and cash equivalents at the period-end 638744094.34 648898229.76

577. Consolidated statement of change in owners’ equity

Current Period

In RMB

2023 semi-annual

Owners’ equity attributable to the parent company

Other

equity instrument

Item Perp Provision

Less: Other Minority Total owners’

Share etual Capital Reasonable Surplus of Retained

Prefe Inventory comprehens Other Subtotal interests equity

capital capit Othe reserve reserve reserve general profit

rred shares ive income

al r risk

stock

secur

ities

I. Balance at

10086032339836855416232119800.9510100491332002131769667917380276718434706849.

the end of the -911310.13

last year 93.00 67.63 002.63 5 6.00 25.90 70.72 8.66 38

Add: Changes

of accounting

policy

Error correction

of the last

period

Enterprise

combine under

the same

control

Other

II. Balance at

10086032339836855416232119800.9510100491332002131769667917380276718434706849.

the beginning -911310.13

of this year 93.00 67.63 002.63 5 6.00 25.90 70.72 8.66 38

III. Increase/

Decrease in - - -

61239561.1463606.8851002880.847703806.38899547.

reporting period 6023500.0 63191471. 321273 886603354.08

(Decrease is 19 0 25 84 24

0790.39

listed with “-”)

(i) Total

61239561.948760859.10100004233553952.1043554373.3

comprehensive

income 19 55 0.74 60 4

(ii) Owners’ - - - -

devoted and 5161978.5

decreased 6023500.0 63191471. 321273 66002241.4 -60840262.83 7

capital 0 79 0.39 0

1. Common

5000000.0

shares invested 5000000.00

by shareholders 0WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

2. Capital

invested by

holders of other

equity

instruments

3. Amount

reckoned into

5361906.6

owners equity 5361906.64 160173.01 5522079.65

with share- 4

based payment

----

4. Other 6023500.0 68553378. 321273 71364148.0 1805.56 -71362342.48

0430.394

--

(III) Profit

distribution 97757979.3 97757979.3 -97757979.30

00

1. Withdrawal

of surplus

reserves

2. Withdrawal

of general risk

provisions

3. Distribution - -

for owners (or 97757979.3 97757979.3 -97757979.30

shareholders)

00

4. Other

(IV) Carrying

forward internal

owners’ equity

1. Capital

reserves

converted to

capital (share

capital)

2. Surplus

reserves

converted to

capital (share

capital)

3. Remedying

loss with

surplus reserve

59WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

4. Carry-over

retained

earnings from

the defined

benefit plans

5. Carry-over

retained

earnings from

other

comprehensive

income

6. Other

(V) Reasonable 1463606.8

reserve 1463606.80 183616.07 1647222.87 0

1. Withdrawal

14709266.14709266.91646999.8

in the reporting 16356266.75

period 91 1 4

2. Usage in the 13245660. 1463383.7

reporting period 13245660.11 14709043.88 11 7

(VI) Others

IV. Balance at

100257973335177053841060328251.3583407.7510100491417102421854438297769272219321310203.

the end of the

reporting period 93.00 95.84 272.24 06 5 6.00 06.15 77.56 5.90 46

60WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Last Period

In RMB

2022 semi-annual

Owners’ equity attributable to the parent company

Other

equity instrument

Item

Share Perp Provision Less: Other Minority Total owners’

capital etual Capital Reasonable Surplus of Retained Prefe Inventory comprehens Other Subtotal

interests equity

capit Othe reserve reserve reserve general profit

rred shares ive income

al r risk

stock

secur

ities

I. Balance at -

100865933713441270249510100491481478731939860765640940619962701755.

the end of the 36746344. 712215.31

last year 570.00 72.82 797.74 6.00 77.86 89.65 5.82 47

60

Add: Changes

of accounting

policy

Error

correction of

the last period

Enterprise

combine under

the same

control

Other

II. Balance at -

100865933713441270249510100491481478731939860765640940619962701755.

the beginning 36746344. 712215.31

of this year 570.00 72.82 797.74 6.00 77.86 89.65 5.82 47

60

III. Increase/

Decrease in - - -

reporting 34733141. 692026 1003249.9 38843918.period 12679652. 517933188. 564079107. -525235188.79 01 57.07 4 21

(Decrease is 16 72 00

listed with “-”)

(i) Total -

10911264810784468237662091.1116108918.9

comprehensive 12679652.income 0.08 7.92 00 2

16

(ii) Owners’ -

devoted and 34733141. 692026 1086139.9

decreased 34469516.0 -33383376.14 01 57.07 2

capital 6

61WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

1.Common

shares invested

by

shareholders

2. Capital

invested by

holders of

other equity

instruments

3. Amount

reckoned into

34733141.34733141.01086139.9

owners equity 35819280.93

with share- 01 1 2

based payment

-

692026

4. Other 69202657.0 -69202657.07

57.07

7

---

(III) Profit

distribution 160905966 160905966 1609059668.8

8.808.800

1. Withdrawal

of surplus

reserves

2. Withdrawal

of general risk

provisions

3. Distribution - - -

for owners (or 160905966 160905966 1609059668.8

shareholders)

8.808.800

4. Other

(IV) Carrying

forward

internal

owners’ equity

1. Capital

reserves

converted to

capital (share

capital)

2. Surplus

reserves

converted to

capital (share

capital)

3. Remedying

loss with

surplus reserve

62WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

4. Carry-over

retained

earnings from

the defined

benefit plans

5. Carry-over

retained

earnings from

other

comprehensive

income

6. Other

(V)

1003249.9

Reasonable 1003249.94 95687.29 1098937.23

reserve 4

1. Withdrawal

13239465.13239465.21346071.8

in the reporting 14585537.11

period 25 5 6

2. Usage in the

12236215.12236215.31250384.5

reporting 13486599.88

period 31 1 7

(VI)Others

IV. Balance at -

the end of the 1008659 34060773 339452 1715465.2 51010049 142968541 188345285 60293798 19437466566.reporting 49425996. 570.00 13.83 454.81 5 6.00 89.14 82.65 4.03 68

period 76

63WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

8. Statement of changes in owners’ equity of parent company

Current Period

In RMB

2023 semi-annual

Other equity

instrument

Perp

Other

Item Pref etual Share Less: Inventory compreh Reasonable

erre capit Capital reserve Surplus reserve Retained profit Other Total owners’ equity

capital Othe shares ensive reserve

d al

r income

stoc secu

k ritie

s

I. Balance at the

100860329

end of the last 3515005861.23 541623002.63 510100496.00 10765319818.29 15257406465.89

year 3.00

Add: Changes of

accounting

policy

Error correction

of the last period

Other

II. Balance at the

100860329

beginning of this 3515005861.23 541623002.63 510100496.00 10765319818.29 15257406465.89

year 3.00

III. Increase/

Decrease in

-

reporting period -63036715.42 -3212730.39 716065244.46 650217759.43

(Decrease is 6023500.00

listed with “-”)

(i) Total

comprehensive 813823223.76 813823223.76

income

(ii) Owners’

devoted and -

-63036715.42-3212730.39-65847485.03

decreased 6023500.00

capital

64WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

1.Common

shares invested

by shareholders

2. Capital

invested by

holders of other

equity

instruments

3. Amount

reckoned into

owners equity 5522079.67 5522079.67

with share-based

payment

-

4. Other -68558795.09 -3212730.39 -71369564.70

6023500.00

(III) Profit

-97757979.30-97757979.30

distribution

1. Withdrawal of

surplus reserves

2. Distribution

for owners (or -97757979.30 -97757979.30

shareholders)

3. Other

(IV) Carrying

forward internal

owners’ equity

1. Capital

reserves

converted to

capital (share

capital)

2. Surplus

reserves

converted to

capital (share

capital)

3. Remedying

loss with surplus

reserve

4. Carry-over

retained

earnings from

the defined

benefit plans

65WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

5. Carry-over

retained

earnings from

other

comprehensive

income

6. Other

(V) Reasonable

reserve

1. Withdrawal in

the reporting 3237252.50 3237252.50

period

2. Usage in the

3237252.503237252.50

reporting period

(VI)Others

IV. Balance at

100257979

the end of the 3451969145.81 538410272.24 510100496.00 11481385062.75 15907624225.32

reporting period 3.00

Last Period

In RMB

2022 semi-annual

Other equity

instrument

Perp

Other

Item Pref etual Share Less: Inventory compreh Reasonable

erre capit Capital reserve Surplus reserve Retained profit Other Total owners’ equity

capital Othe shares ensive reserve

d al

r income

stoc secu

k ritie

s

I. Balance at

100865957

the end of the 3487154855.59 270249797.74 0.00 510100496.00 12396934922.01 17132600045.86

last year 0.00

Add: Changes

of accounting

policy

Error correction

of the last

period

Other

II. Balance at

100865957

the beginning 3487154855.59 270249797.74 0.00 510100496.00 12396934922.01 17132600045.86

of this year 0.00

66WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

III. Increase/

Decrease in

reporting

35819280.9669202657.07-699881040.34-733264416.45

period

(Decrease is

listed with “-”)

(i) Total

comprehensive 909178628.46 909178628.46

income

(ii) Owners’

devoted and

35819280.9669202657.07-33383376.11

decreased

capital

1. Common

shares invested

by shareholders

2. Capital

invested by

holders of other

equity

instruments

3. Amount

reckoned into

owners equity 35819280.96 35819280.96

with share-

based payment

4. Other 69202657.07 -69202657.07

(III) Profit

-1609059668.80-1609059668.80

distribution

1. Withdrawal

of surplus

reserves

2. Distribution

for owners (or -1609059668.80 -1609059668.80

shareholders)

3. Other

(IV) Carrying

forward

internal

owners’ equity

67WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

1. Capital

reserves

converted to

capital (share

capital)

2. Surplus

reserves

converted to

capital (share

capital)

3. Remedying

loss with

surplus reserve

4. Carry-over

retained

earnings from

the defined

benefit plans

5. Carry-over

retained

earnings from

other

comprehensive

income

6. Other

(V) Reasonable

reserve

1. Withdrawal

in the reporting 3366170.40 3366170.40

period

2. Usage in the

reporting 3366170.40 3366170.40

period

(VI) Others

IV. Balance at

the end of the 100865957

3522974136.55339452454.810.00510100496.0011697053881.6716399335629.41

reporting 0.00

period

68III . Basic information of the Company

1. Historical origin of the Company

By the approval of STGS (1992) No. 130 issued by Jiangsu Economic Restructuring Committee Weifu High-

Technology Group Co. Ltd. (hereinafter referred to “the Company” or “Company”) was established as a company

of limited liability with funds raised from targeted sources and registered at Wuxi Administration for Industry &

Commerce in October 1992. The original share capital of the Company totaled 115.4355 million yuan including

state-owned share capital amounting to 92.4355 million yuan public corporate share capital amounting to 8

million yuan and inner employee share capital amounting to 15 million yuan.Between year of 1994 and 1995 the Company was restructured and became a holding subsidiary of Wuxi Weifu

Group Co. Ltd (hereinafter referred to as “Weifu Group”).By the approval of Jiangsu ERC and Shenzhen Securities Administration Office in August 1995 the Company

issued 68 million special ordinary shares (B-share) with value of 1.00 yuan for each and the total value of those

shares amounted to 68 million yuan. After the issuance the Company’s total share capital increased to 183.4355

million yuan.By the approval of CSRC in June 1998 the Company issued 120 million RMB ordinary shares (A-share) at

Shenzhen Stock Exchange through on-line pricing and issuing. After the issuance the total share capital of the

Company amounted to 303.4355 million yuan.In the middle of 1999 deliberated and approved by the Board and Shareholders’ General Meeting the Company

implemented the plan of granting 3 bonus shares for each 10 shares. After that the total share capital of the

Company amounted to 394.46615 million yuan of which state-owned shares amounted to 120.16615 million yuan

public corporate shares 10.4 million yuan foreign-funded shares (B-share) 88.40 million yuan RMB ordinary

shares (A-share) 156 million yuan and inner employee shares 19.5 million yuan.In the year 2000 by the approval of the CSRC and based upon the total share capital of 303.4355 million shares

after the issuance of A-share in June 1998 the Company allotted 3 shares for each 10 shares with a price of 10

yuan for each allotted share. Actually 41.9 million shares was allotted and the total share capital after the

allotment increased to 436.36615 million yuan of which state-owned corporate shares amounted to 121.56615

million yuan public corporate shares 10.4 million yuan foreign-funded shares (B-share) 88.4 million yuan and

RMB ordinary shares (A-share) 216 million yuan.In April 2005 Board of Directors of the Company has examined and approved 2004 Profit Pre-distribution Plan

and examined and approved by 2004 Shareholders’ General Meeting the Company distributed 3 shares for each

10 shares to the whole shareholders totaling to 130909845 shares in 2005.

According to the Share Merger Reform Scheme of the Company that passed by related shareholders’ meeting of

Share Merger Reform and SGZF [2006] No.61 Reply on Questions about State-owned Equity Management in

Share Merger Reform of Weifu High-Technology Co. Ltd. issued by State-owned Assets Supervision &

Administration Commission of Jiangsu Province the Weifu Group etc. 8 non-circulating shareholders arranged

pricing with granting 1.7 shares for each 10 shares to circulating A-share shareholders (totally granted 47736000

shares) so as to realize the originally non-circulating shares can be traded on market when satisfied certain

conditions the scheme has been implemented on April 5 2006.WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

On May 27 2009 Weifu Group satisfied the consideration arrangement by dispatching 0.5 shares for each 10

shares based on the number of circulating A share as prior to Share Merger Reform according to the aforesaid

Share Merger Reform with an aggregate of 14039979 shares dispatched. Subsequent to implementation of

dispatch of consideration shares Weifu Group then held 100021999 shares of the Company representing 17.63%

of the total share capital of the Company.Pursuant to the document (XGZQ(2009)No.46) about Approval for Merger of Wuxi Weifu Group Co. Ltd. by

Wuxi Industry Development Group Co. Ltd. issued by the State-owned Assets Supervision and Administration

Commission of Wuxi City Government Wuxi Industry Development Group Co. Ltd. (hereinafter referred to as

Wuxi Industry Group) acquired Weifu Group. After the merger Weifu Group was then revoked and its assets and

credits & debts were transferred to be under the name of Wuxi Industry Group. Accordingly Wuxi Industry

Group became the first largest shareholder of the Company since then.In accordance with the resolutions of shareholders' meeting and provisions of amended constitution and approved

by [2012] No. 109 document of China Securities Regulatory Commission in February 2012 the Company issued

RMB ordinary shares (A-share) of 112858000 shares to Wuxi Industry Groups and overseas strategic investor

privately Robert Bosch Co. Ltd. (ROBERT BOSCHGMBH) (hereinafter referred to as Robert Bosch Company)

face value was 1.00 yuan per share added registered capital of 112858000 yuan and the registered capital after

change was 680133995 yuan. Wuxi Industry Group is the first majority shareholder of the Company and Robert

Bosch Company is the second majority shareholder of the Company.In March 2013 the profit distribution pre-plan for year of 2012 was deliberated and approved by the Board and

also passed in Annual General Meeting 2012 of the Company in May 2013. On basis of total share capital

680133995 shares distribute 5-share for every 10 shares held by whole shareholders 340066997 shares in total

are distributed. Total share capital of the Company amounting 1020200992 yuan up to December 31 2013.Deliberated and approved by the company’s first extraordinary general meeting in 2015 the company has

repurchased 11250422 shares of A shares from August 26 2015 to September 8 2015 and has finished the

cancellation procedures for above repurchase shares in China Securities Depository and Clearing Corporation

Limited Shenzhen Branch on September 16 2015; after the cancellation of repurchase shares the company’s

paid-up capital (share capital) becomes 1008950570 yuan after the change.After deliberation and approved by the 5th meeting of 10th session of the BOD for year of 2021 the 291000

restricted shares are buy-back and canceled by the Company initially granted under the 2020 Restricted Share

Incentive Plan. The cancellation of the above mentioned buy-back shares are completed at the Shenzhen Branch

of CSDC on December 20 2021; the paid-in capital (equity) of the Company comes to 1008659570.00 yuan

after changed.After deliberated and approved by the 8th meeting of 10th session of the BOD for year of 2022 the 56277

restricted shares are buy-back and canceled by the Company initially granted under the 2020 Restricted Share

Incentive Plan. The cancellation of the above mentioned buy-back shares are completed at the Shenzhen Branch

of CSDC on July 8 2022; the paid-in capital (equity) of the Company came to 1008603293.00 yuan after

changed.After deliberated and approved by the 14th meeting of 10th session of the BOD in 2022 the company repurchased

70WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

and canceled 430000 restricted stock granted for the first time under Restricted Share Incentive Plan 2020 and

completed the cancellation procedures of the repurchased shares in China Securities Depository and Clearing

Corporation Co. Ltd. Shenzhen Branch on February 16 2023; The Paid-in capital (share capital) of the Company

after the change is 1008603293.00 yuan.Deliberated and approved by the 16th meeting of 10th session of the BOD in 2023 the company repurchased and

canceled 5593500 restricted stock granted for the first time under Restricted Share Incentive Plan 2020 and

completed the cancellation procedures of the repurchased shares in China Securities Depository and Clearing

Corporation Co. Ltd. Shenzhen Branch on June 16 2023; The Paid-in capital (share capital) of the Company

after the change is 1002579793.00 yuan.

2. Registered place organization structure and head office of the Company

Registered place and head office of the Company: No.5 Huashan Road Xinwu District Wuxi

Unified social credit code: 91320200250456967N

The Company sets up Shareholders’ General Meeting the Board of Directors (BOD) and the Board of Supervisors

The Company sets up Administration Department Technology Centre organization & personnel department

Office of the Board Compliance Department IT department Strategy & New Business Department Market

Development Department Party-masses Department Finance Department Purchase DepartmentManufacturing

Quality Department MS (Mechanical System) Division AC(Automotive Components) Division and DS (Diesel

System ) Division etc. and subsidiaries such as WUXI WEIFU LIDA CATALYTIC CONVERTER CO. LTD

NANJING WEIFU JINNING CO. LTD IRD Fuel Cells A/S and Borit NV.

3. Business nature and major operation activities of the Company

Operation scope of parent company: Technology development and consulting service in the machinery industry;

manufacture of engine fuel oil system products fuel oil system testers and equipment manufacturing of auto

electronic parts automotive electrical components non-standard equipment non-standard knife tool and exhaust

post-processing system; sales of the general machinery hardware & electrical equipment chemical products &

raw materials (excluding hazardous chemicals) automotive components and vehicles (excluding nine-seat

passenger car); internal combustion engine maintenance; leasing of the own houses; import and export business in

respect of diversified commodities and technologies (other than those commodities and technologies limited or

forbidden by the State for import and export) by self-operation and works as agent for such business. Research

and test development of engineering and technical; R&D of the energy recovery system; manufacture of auto

components and accessories; general equipment manufacturing (excluding special equipment manufacturing)

(any projects that needs to be approved by laws can only be carried out after getting approval by relevant

authorities) General items: engage in investment activities with self-owned funds (except for items subject to

approval according to the law independently carry out business activities according to laws with business

licenses )

Major subsidiaries respectively activate in production and sales of engine accessories automotive components

mufflers purifiers and fuel cell components etc.

4. Authorized reporting parties and reporting dates for the financial report

71WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

The financial report of the Company was approved by the Board of Directors for reporting dated August 22 2023.

5. Scope of consolidate financial statement

Shareholding Register State

ratio (%) Proporti ed ment

Short name

on of capital Business conso

Name of subsidiary of

Direct Indire votes (in 10 scope lidate

subsidiary

ly ctly (%) thousan d

d yuan) (Y/N)

Internal-

34628. combustion

NANJING WFJN CO. LTD. WFJN 80.00 -- 80.00 Y

70 engine

accessories

WUXI WEIFU LIDA CATALYTIC 50259. Purifier and

WFLD 94.81 -- 94.81 Y

CONVERTER CO. LTD. 63 muffler

Internal-

WUXI WEIFU MASHAN FUEL 100.0 combustion

WFMA -- 100.00 16500 Y

INJECTION EQUIPMENT CO. LTD. 0 engine

accessories

Internal-

100.0 combustion

WUXI WEIFU CHANG AN CO.LTD. WFCA -- 100.00 21000 Y

0 engine

accessories

WUXI WEIFU INTERNATIONAL 100.0

WFTR -- 100.00 3000 Trade Y

TRADE CO.LTD. 0

Internal-

WUXI WEIFU SCHMITTER combustion

WFSC 66.00 -- 66.00 7600 Y

POWERTRAIN COMPONENTS CO.LTD. engine

accessories

Internal-

NINGBO WFTT TURBOCHARGING combustion

WFTT 98.83 1.17 100.00 11136 Y

TECHNOLOGY CO.LTD. engine

accessories

WUXI WFAM PRECISION MACHINERY USD33 Automotive

WFAM 51.00 -- 51.00 Y

CO.LTD. 10 components

WUXI WEIFU LIDA CATALYTIC WFLD Purifier and

-- 60.00 60.00 1000 Y

CONVERTER (WUHAN) CO. LTD. (WUHAN) muffler

WFLD

Weifu Lida (Chongqing) Automotive 100.0 Purifier and

(Chongqing -- 100.00 5000 Y

components Co. Ltd. 0 muffler

)

Nanchang Weifu Lida Automotive WFLD 100.0 Purifier and

-- 100.00 5000 Y

Components Co. Ltd. (Nanchang) 0 muffler

WUXI WEIFU AUTOSMART SEATING Smart car

WFAS -- 66.00 66.00 10000 Y

SYSTEM CO. LTD. device

WUXI WEIFU E-DRIVE USD20

WFDT 80.00 -- 80.00 Wheel motor Y

TECHNOLOGIES CO. LTD. 00

Wuxi Weifu Qinglong Power Technology Fuel cell

WFQL 45.00 30.00 75.00 50000 Y

Co. Ltd. components

Vacuum and

100.0

VHIT Automotive Systems(Wuxi) Co.Ltd VHWX -- 100.00 13400 hydraulic Y

0

pump

100.0 DKK92

Weifu Holding ApS SPV -- 100.00 Investment Y

057

100.0 DKK10 Fuel cell

IRD Fuel Cells A/S IRD -- 100.00 Y

0 579 components

IRD 100.0 USD12 Fuel cell

IRD FUEL CELLS LLC -- 100.00 Y

America 0 01.83 components

100.0 EUR11 Fuel cell

Borit NV Borit -- 100.00 Y

0 83.21 components

Borit 100.0 Fuel cell

Borit Inc. -- 100.00 USD0.1 Y

America 0 components

Vacuum and

100.0 EUR50

VHIT S.p.A. Società Unipersonale VHIO -- 100.00 hydraulic Y

00

pump

72WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

IV. Basis of preparation of financial statements

1. Preparation base

The financial statement were stated in compliance with Accounting Standard for Business Enterprises –Basic Norms issued by

Ministry of Finance the specific 42 accounting rules revised and issued dated February 15 2006 and later the Application

Instruments of Accounting Standards and interpretation on Accounting standards and other relevant regulations (together as

“Accounting Standards for Business Enterprise”) as well as the Compilation Rules for Information Disclosure by Companies

Offering Securities to the Public No.15 – General Provision of Financial Report (Amended in 2014) issued by CSRC in respect of

the actual transactions and proceedings on a basis of ongoing operation.In line with relevant regulations of Accounting Standards of Business Enterprise accounting of the Company is on accrual basis.Except for certain financial instruments the financial statement measured on historical cost. Assets have impairment been found

corresponding depreciation reserves shall accrual according to relevant rules.

2. Going concern

The Company comprehensively assessed the available information and there are no obvious factors that impact sustainable operation

ability of the Company within 12 months since end of the reporting period.V. Major accounting policies and estimation

Specific accounting policies and estimation attention:

The Company and its subsidiaries are mainly engaged in the manufacture and sales of engine fuel oil system products automotive

components mufflers purifiers and fuel cell components etc. in line with the actual operational characteristics and relevant

accounting standards many specific accounting policies and estimation have been formulated for the transactions and events with

revenue recognized concerned. As for the explanation on major accounting judgment and estimation found more in Note V- 36.Other major accounting policy and estimation

1. Statement on observation of Accounting Standard for Business Enterprises

Financial statements prepared by the Company were in accordance with requirements of Accounting Standard for Business

Enterprises which truly and completely reflected the financial information of the Company in the reporting period such as financial

status operation achievements and cash flow.

2. Accounting period

Accounting period of the Company consist of annual and mid-term mid-term refers to the reporting period shorter than one annual

accounting year. The company adopts Gregorian calendar as accounting period namely form each 1 January to 31 December.

3. Business cycles

Normal business cycle is the period from purchasing assets used for process by the Company to the cash and cash equivalent

achieved. The Company’s normal business cycle was one-year (12 months).

73WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

4. Recording currency

The Company’s reporting currency is the RMB yuan.

5. Accounting treatment method for business combinations under the same/different control

Business combination is the transaction or events that two or two above independent enterprises combined as a reporting entity.Business combination including enterprise combined under the same control and business combined under different control.

(1) The business combination under the same control

Enterprise combination under the same control is the enterprise who take part in the combination are have the same ultimate

controller or under the same controller the control is not temporary. The assets and liability acquired by combining party are

measured by book value of the combined party on combination date. Balance of net asset’s book value acquired by combining party

and combine consideration paid (or total book value of the shares issued) shall adjusted capital reserve (share premium); if the

capital reserves (share premium) is not enough for deducted adjusted for retained earnings. Vary directly expenses occurred for

enterprise combination the combining party shall reckon into current gains/losses while occurring. Combination day is the date when

combining party obtained controlling rights from the combined party.

(2) Combine not under the same control

A business combination not involving entities under common control is a business combination in which all of the combining entities

are not ultimately controlled by the same party or parties both before and after the combination.As a purchaser fair value of the

assets (equity of purchaser held before the date of purchasing included) for purchasing controlling right from the purchaser the

liability occurred or undertake on purchasing date less the fair value of identifiable net assets of the purchaser obtained in

combination recognized as goodwill if the results is positive; if the number is negative the acquirer shall firstly review the

measurement of the fair value of the identifiable assets obtained liabilities incurred and contingent liabilities incurred as well as the

combination costs.After that if the combination costs are still lower than the fair value of the identifiable net assets obtained the

acquirer shall recognize the difference as the profit or loss in the current period.Other directly expenses cost for combination shall be

reckoned into current gains/losses. Difference of the fair value of assets paid and its book values reckoned into current gains/losses.On purchasing date the identifiable assets liability or contingency of the purchaser obtained by the Company recognized by fair

value that required identification conditions; Acquisition date refers to the date on which the acquirer effectively obtains control of

the purchaser.

6. Preparation method for consolidated financial statement

(1) Recognition principle of consolidated scope

On basis of the financial statement of the parent company and owned subsidiaries prepared consolidated statement in line with

relevant information. The scope of consolidation of consolidated financial statements is ascertained on the basis of effective control.Once certain elements involved in the above definition of control change due to changes of relevant facts or circumstances the

Company will make separate assessment.

(2) Basis of control

Control is the right to govern an invested party so as to obtain variable return through participating in the invested party’s relevant

activities and the ability to affect such return by use of the aforesaid right over the invested party. Relevant activates refers to

activates have major influence on return of the invested party’s.

(3) Consolidation process

Subsidiaries are consolidated from the date on which the company obtains their actual control and are de-consolidated from the date

74WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

that such control ceases.All significant inter-group balances investment transactions and unrealized profits are eliminated in the

consolidated financial statements.For subsidiaries being disposed the operating results and cash flows prior to the date of disposal

are included in the consolidated income statement and consolidated cash flow statement; for subsidiaries disposed during the period

the opening balances of the consolidated balance sheet would not be restated. For subsidiaries acquired from a business combination

not under common control their operating results and cash flows subsequent to the acquisition date are included in the consolidated

income statement and consolidated cash flow statement and the opening balances and comparative figures of the consolidated

balance sheet would not be restated. For subsidiaries acquired from a business combination under common control their operating

results and cash flows from the date of commencement of the accounting period in which the combination occurred to the date of

combination are included in the consolidated income statement and consolidated cash flow statement and the comparative figures of

the consolidated balance sheet would be restated.In preparing the consolidated financial statements where the accounting policies or the accounting periods are inconsistent between

the company and subsidiaries the financial statements of subsidiaries are adjusted in accordance with the accounting policies and

accounting period of the company.Concerning the subsidiary obtained under combination with different control adjusted several financial statement of the subsidiary

based on the fair value of recognizable net assets on purchased day while financial statement consolidation; concerning the subsidiary

obtained under combination with same control considered current status of being control by ultimate controller for consolidation

while financial statement consolidation.The unrealized gains and losses from the internal transactions occurred in the assets the Company sold to the subsidiaries fully offset

"the net profit attributable to the owners of the parent company". The unrealized gains and losses from the internal transactions

occurred in the assets the subsidiaries sold to the Company are distributed and offset between "the net profit attributable to the

owners of the parent company" and "minority interest" according to the distribution ratio of the Company to the subsidiary. The

unrealized gains and losses from the internal transactions occurred in the assets sold among the subsidiaries are distributed and offset

between "the net profit attributable to the owners of the parent company" and "minority interest" according to the distribution ratio of

the Company to the subsidiary of the seller.The share of the subsidiary’s ownership interest not attributable to the Company is listed as “minority interest” item under the

ownership interest in the consolidated balance sheet. The share of the subsidiary’s current profit or loss attributable to the minority

interests is listed as "minority interest" item under the net profit item in the consolidated income statement. The share of thesubsidiary’s current consolidated income attributable to the minority interests is listed as the “total consolidated income attributableto the minority shareholders” item under the total consolidated income item in the consolidated income statement. If there are

minority shareholders add the "minority interests" item in the consolidated statement of change in equity to reflect the changes of the

minority interests. If the losses of the current period shared by a subsidiary’s minority shareholders exceed the share that the minority

shareholders hold in the subsidiary ownership interest in the beginning of the period the balance still charges against the minority

interests.When the control over a subsidiary is ceased due to disposal of a portion of an interest in a subsidiary the fair value of the remaining

equity interest is re-measured on the date when the control ceased. The difference between the sum of the consideration received

from disposal of equity interest and the fair value of the remaining equity interest less the net assets attributable to the company

since the acquisition date is recognized as the investment income from the loss of control. Other comprehensive income relating to

original equity investment in subsidiaries shall be treated on the same basis as if the relevant assets or liabilities were disposed of by

the purchaser directly when the control is lost namely be transferred to current investment income other than the relevant part of the

movement arising from re-measuring net liabilities or net assets under defined benefit scheme by the original subsidiary. Subsequent

measurement of the remaining equity interests shall be in accordance with relevant accounting standards such as Accounting

Standards for business Enterprises 2 – Long-term Equity Investments or Accounting Standards for business Enterprises 22 –

Financial Instruments Recognition and Measurement.The company shall determine whether loss of control arising from disposal in a series of transactions should be regarded as a bundle

75WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

of transactions. When the economic effects and terms and conditions of the disposal transactions met one or more of the following

situations the transactions shall normally be accounted for as a bundle of transactions: * The transactions are entered into after

considering the mutual consequences of each individual transaction; * The transactions need to be considered as a whole in order to

achieve a deal in commercial sense;* The occurrence of an individual transaction depends on the occurrence of one or more

individual transactions in the series; * The result of an individual transaction is not economical but it would be economical after

taking into account of other transactions in the series. When the transactions are not regarded as a bundle of transactions the

individual transactions shall be accounted as “disposal of a portion of an interest in a subsidiary which does not lead to loss of control”

and “disposal of a portion of an interest in a subsidiary which lead to loss of control”. When the transactions are regarded as a bundle

of transactions the transactions shall be accounted as a single disposal transaction; however the difference between the consideration

received from disposal and the share of net assets disposed in each individual transaction before loss of control shall be recognized as

other comprehensive income and reclassified as profit or loss arising from the loss of control when control is lost.

7. Joint arrangement classification and accounting treatment for joint operations

In accordance with the Company’s rights and obligation under a joint arrangement the Company classifies joint arrangements into:

joint ventures and joint operations.The Company confirms the following items related to the share of interests in its joint operations and in accordance with the

provisions of the relevant accounting standards for accounting treatment:

(1) Recognize the assets held solely by the Company and recognize assets held jointly by the Company in appropriation to the share

of the Company;

(2) Recognize the obligations assumed solely by the Company and recognize obligations assumed jointly by the Company in

appropriation to the share of the Company;

(3) Recognize revenue from disposal of the share of joint operations of the Company;

(4) Recognize fees solely occurred by Company;

(5) Recognize fees from joint operations in appropriation to the share of the Company.

8. Recognition standards for cash and cash equivalent

Cash refers to stock cash savings available for paid at any time; cash and cash equivalent refers to the cash held by the Company

with short terms (expired within 3 months since purchased) and liquid and easy to transfer as known amount and investment with

minor variation in risks.

9. Foreign currency business and conversion

The occurred foreign currency transactions are converted into the recording currency in accordance with the middle rate of the

market exchange rate published by the People's Bank of China on the transaction date. There into the occurred foreign currency

exchange or transactions involved in the foreign currency exchange are converted in accordance with the actual exchange rate in the

transactions.At the balance sheet date the account balance of the foreign currency monetary assets and liabilities is converted into the recording

currency amount in accordance with the middle rate of the market exchange rate published by the People's Bank of China on the

transaction date. The balance between the recording currency amount converted according to exchange rate at the balance sheet date

and the original recording currency amount is disposed as the exchange gains or losses. There into the exchange gains or losses

occurred in the foreign currency loans related to the purchase and construction of fixed assets are disposed according to the principle

of capitalization of borrowing costs; the exchange gains and losses occurred during the start-up are included in the start-up costs; the

76WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

rest is included in the current financial expenses.At the balance sheet date the foreign currency non-monetary items measured with the historical costs are converted in accordance

with the middle rate of the market exchange rate published by the People's Bank of China on the transaction date without changing

its original recording currency amount; the foreign currency non-monetary items measured with the fair value are converted in

accordance with the middle rate of the market exchange rate published by the People's Bank of China on the fair value dateand the

generated exchange gains and losses are included in the current profits and losses as the gains and losses from changes in fair value.The following displays the methods for translating financial statements involving foreign operations into the statements in RMB: The

asset and liability items in the balance sheets for overseas operations are translated at the spot exchange rates on the balance sheet

date. Among the owners’ equity items the items other than “undistributed profits” are translated at the spot exchange rates of the

transaction dates. The income and expense items in the income statements of overseas operations are translated at the average

exchange rates of the transaction dates. The exchange difference arising from the above mentioned translation are recognized in other

comprehensive income and is shown separately under owner’ equity in the balance sheet; such exchange difference will be

reclassified to profit or loss in current year when the foreign operation is disposed according to the proportion of disposal.The cash flows of overseas operations are translated at the average exchange rates on the dates of the cash flows. The effect of

exchange rate changes on cash is presented separately in the cash flow statement.

10. Financial instrument

Financial instrument is the contract that taken shape of the financial asses for an enterprise and of the financial liability or equity

instrument for other units.

(1) Recognition and termination of financial instrument

A financial asset or liability is recognized when the group becomes a party to a financial instrument contract.The recognition of a financial assets shall be terminated if it meets one of the following conditions:

* The contractual right to receive the cash flow of the financial assets terminates; and

* The financial assets are transferred and the company transfers substantially all the risks and rewards of ownership of the financial

asset to the transferring party;

* The financial asset was transferred and control although the company has neither transferred nor retained almost all the risks and

rewards of the ownership of a financial asset it relinquishes control over the financial asset.If all or part of the current obligations of a financial liability has been discharged the financial liability or part of it is terminated for

recognition. When the Company (debtor) and the creditor sign an agreement to replace the existing financial liabilities with new

financial liabilities and the new financial liabilities and the existing financial liabilities are substantially different from the contract

terms terminated the recognition of the existing financial liabilities and recognize the new financial liabilities at the same time.Financial assets are traded in the normal way and their accounting recognition and terminated the recognition of proceed on a trade

date basis.

(2) Classification and measurement of financial assets

At the initial recognition according to the business model of managing financial assets and the contractual cash flow characteristics

of financial assets the Company classifies the financial assets into the financial assets measured at amortized cost the financial

assets measured at fair value and whose changes are included in other comprehensive income and the financial assets measured at

fair value and whose changes are included in current profit or loss. Financial assets are measured at fair value at initial recognition

but if the receivables or receivables financing arising from the sale of goods or the provision of services do not include a significant

financing component or do not consider a financing component that does not exceed one year it shall be initially measured in

accordance with the transaction value. For financial assets measured at fair value and whose changes are included in the current

profit or loss related transaction costs are directly included in the current profit and loss; for other types of financial assets related

77WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

transaction costs are included in the initially recognized amount.The business model for managing financial assets refers to how the Company manages financial assets to generate cash flows. The

business model determines whether the cash flow of financial assets managed by the Company is based on contract cash flow selling

financial assets or both. The Company determines the business model for managing financial assets based on objective facts and

based on the specific business objectives of financial assets management determined by key management personnel.The Company evaluates the contractual cash flow characteristics of financial assets to determine whether the contractual cash flows

generated by the relevant financial assets on a specific date are only payments for the principal and the interest based on the

outstanding principal amount. The principal is the fair value of the financial assets at initial recognition; the interest includes the time

value of money the credit risk associated with the outstanding principal amount for a specific period and other basic borrowing risks

costs and consideration of profit. In addition the Company evaluates the contractual terms that may result in changes in the time

distribution or the amount of contractual cash flows of the financial assets to determine whether they meet the requirements of the

above contractual cash flow characteristics.Only when the Company changes its business model of managing financial assets all affected financial assets are reclassified on the

first day of the first reporting period after the business model changes otherwise the financial assets are not allowed to be reclassified

after initial recognition.* Financial assets measured at amortized cost

The Company classifies the financial assets that meet the following conditions and haven’t been designated as financial assets

measured at fair value and whose changes are included in current profit or loss as financial assets measured at amortized cost:

A. the group's business model for managing the financial assets is to collect contractual cash flows; and

B. the contractual terms of the financial assets stipulate that cash flow generated on a specific date is only paid for the principal and

interest based on the outstanding principal amount.After initial recognition such financial assets are measured at amortized cost by using the effective interest method. Gains or losses

arising from financial assets which are measured at amortized cost and are not a component of any hedging relationship are included

in current profit or loss when being terminated for recognition amortized by effective interest method or impaired.* Financial assets measured at fair value and whose changes are included in other comprehensive income

The Company classifies the financial assets that meet the following conditions and haven’t been designated as financial assets

measured at fair value and whose changes are included in current profit or loss as financial assets measured at fair value and whose

changes are included in other comprehensive income:

A. the Group's business model for managing the financial assets is targeted at both the collection of contractual cash flows and the

sale of financial assets; and

B. the contractual terms of the financial asset stipulate that the cash flow generated on a specific date is only the payment of the

principal and the interest based on the outstanding principal amount.After initial recognition such financial assets are subsequently measured at fair value. Interests impairment losses or gains and

exchange gains and losses calculated by using the effective interest method are included in profit or loss for the period and other

gains or losses are included in other comprehensive income. When being terminate for recognition the accumulated gains or losses

previously included in other comprehensive income are transferred from other comprehensive income and included in current profit

or loss.* Financial assets measured at fair value and whose changes are included in current profit or loss

Except for the above financial assets measured at amortized cost and measured at fair value and whose changes are included in other

comprehensive income the Company classifies all other financial assets as financial assets measured at fair value and whose changes

are included in current profit or loss. In the initial recognition in order to eliminate or significantly reduce accounting mismatch the

Company irreversibly designates part of the financial assets that should be measured at amortized cost or measured at fair value and

whose changes are included in the other comprehensive income as the financial assets measured at fair value and whose changes are

78WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

included in current profit or loss.After the initial recognition such financial assets are subsequently measured at fair value and the gains or losses (including interests

and dividend income) are included in the current profit and loss unless the financial assets are part of the hedging relationship.However for non-trading equity instrument investments the Company irreversibly designates them as the financial assets that are

measured at fair value and whose changes are included in other comprehensive income in the initial recognition. The designation is

made based on a single investment and the relevant investment is in line with the definition of equity instruments from the issuer's

perspective. After initial recognition such financial assets are subsequently measured at fair value. Dividend income that meets the

conditions is included in profit or loss and other gains or losses and changes in fair value are included in other comprehensive

income. When it is terminated for recognition the accumulated gains or losses previously included in other comprehensive income

are transferred from other comprehensive income and included in retained earnings.

(3) Classification and measurement of financial liabilities

The financial liabilities of the Company are classified as financial liabilities measured at fair value and whose changes are included in

current profit or loss and financial liabilities measured at amortized cost at the initial recognition. For financial liabilities that are not

classified as financial liabilities measured at fair value and whose changes are included in current profit or loss the related

transaction expenses are included in the initial recognition amount.* Financial liability measured by fair value and with variation reckoned into current gains/losses

Financial liability measured by fair value and with variation reckoned into current gains/losses including tradable financial liability

and the financial liabilities that are designated as fair value in the initial recognition and whose changes are included in current profit

or loss. For such financial liabilities the subsequent measurement is based on fair value and the gains or losses arising from changes

in fair value and the dividends and interest expenses related to these financial liabilities are included in current profit or loss.* Financial liability measured by amortized cost

Other financial liabilities are subsequently measured at amortized cost by using the effective interest method. The gain or loss arising

from recognition termination or amortization is included in current profit or loss.* Distinctions between financial liabilities and equity instruments

Financial liabilities are liabilities that meet one of the following conditions:

A. Contractual obligations to deliver cash or other financial assets to other parties.B. Contractual obligations to exchange financial assets or financial liabilities with other parties under potentially adverse conditions.C. Non-derivative contracts that must be settled or that can be settled by the company's own equity instruments in the future and the

enterprise will deliver a variable amount of its own equity instruments according to the contract.D. Derivative contracts that must be settled or that can be settled by the company's own equity instruments in the future except for

derivatives contracts that exchange a fixed amount of cash or other financial assets with a fixed amount of their own equity

instruments.An equity instrument is a contract that proves it has a residual equity in the assets of an enterprise after deducting all liabilities.If the Company cannot unconditionally avoid performing a contractual obligation by delivering cash or other financial assets the

contractual obligation is consistent with the definition of financial liability.If a financial instrument is required to be settled or can be settled by the Company's own equity instruments it is necessary to

consider whether the Company's own equity instruments used to settle the instrument are a substitute for cash or other financial

assets or to make the instrument holder enjoy the residual equity in the assets of the issuer after deducting all liabilities. In the former

case the instrument is the Company's financial liability; if it is the latter the instrument is the Company's equity instrument.

(4) Fair value of financial instruments

The company uses valuation techniques that are applicable under current circumstances and that have sufficient available data and

other information support to determine the fair value of related financial assets and financial liabilities. The company divides the

79WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

input values used by valuation techniques into the following levels and uses them in sequence:

* The first-level input value is the unadjusted quotation of the same assets or liabilities that can be obtained on the measurement

date in the active market;

* The second-level input value is the direct or indirect observable input value of the relevant assets or liabilities other than the first-

level input value including quotations of similar assets or liabilities in an active market; quotations of same or similar assets or

liabilities in an active market; other observable input value other than quotations such as interest rate and yield curves that are

observable during the normal quote interval; market-validated input value etc.;

* The third-level input value is the unobservable input value of the relevant assets or liabilities including the interest rate that

cannot be directly observed or cannot be verified by observable market data stock volatility future cash flow of the retirement

obligation assumed in the business combination and financial forecasting made by its own data etc.

(5) Impairment of financial assets

On the basis of expected credit losses the Company performs impairment treatment on financial assets measured at amortized cost

and creditors’ investment etc. measured at fair value and whose changes are included in other comprehensive income and recognize

the provisions for loss.* Measurement of expected credit losses

Expected credit loss refers to the weighted average of credit losses of financial instruments weighted by the risk of default. Credit

loss refers to the difference between all contractual cash flows that the Company discounts at the original actual interest rate and are

receivable in accordance with contract and all cash flows expected to be received that is the present value of all cash shortages.Among them for the purchase or source of financial assets that have suffered credit impairment the Company discounts the financial

assets at the actual interest rate adjusted by credit.When measuring expected credit losses the Company individually evaluates credit risk for financial assets with significantly

different credit risks such as receivables involving litigation and arbitration with the other party or receivables having obvious

indications that the debtor is likely to be unable to fulfill its repayment obligations and so on.Except for the financial assets that separately assess the credit risks the Company classified the account receivable according to their

characteristic of risks calculated the expected credit losses on basis of portfolio. Basis for determining the portfolio as follow:

A - Note receivable

Note receivable 1: bank acceptance

Note receivable 2: trade acceptance

B - Account receivable

Account receivable 1: receivable from clients

Account receivable 2: receivable from internal related party

C- Receivable financing

Receivable financing 1: bank acceptance

Receivable financing 2: trade acceptance

D - Other accounts receivable

Other accounts receivable 1: receivable from internal related party

Other accounts receivable 2: receivable from others

As for the note receivable account receivable receivable financing and other account receivable classified in portfolio by referring

to the experience of historical credit loss the expected credit loss is calculated by combining the current situation and the forecast of

future economic conditions.Except for the financial assets adopting simplified metering method the Company assesses at each balance sheet date whether its

credit risk has increased significantly since initial recognition. If credit risk has not increased significantly since initial recognition it

80WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

is in the first stage the Company measures the loss provisions based on the amount equivalent to the expected credit loss in the next

12 months; if the credit risk has increased significantly since initial recognition but no credit impairment has occurred it is in the

second stage the Company measures the loss provisions based on the amount equivalent to the expected credit loss for the entire

duration; if credit impairment occurs after initial recognition it is in the third stage the Company measures the loss provisions based

on the amount equivalent to the expected credit loss for the entire duration.For financial instruments with low credit risks at the

balance sheet date the Company assumes that their credit risks have not increased significantly since initial recognition.The Company evaluates the expected credit losses of financial instruments based on individual items and portfolios. When assessing

expected credit losses the Company considers reasonable and evidence-based information about past events current conditions and

forecasts of future economic conditions.When the Company no longer reasonably expects to be able to fully or partially recover the contractual cash flow of a financial asset

the Company directly writes down the book balance of the financial asset.* Assessment of a significant increase in credit risk:

The Company determines the relative changes in default risk of the financial instrument occurred in the expected duration and assess

whether the credit risks of financial instrument has increased significantly since the initial recognition by comparing the risk of

default of the financial instrument on the balance sheet date with the risk of default of financial instrument on the initial recognition

date. When determining whether the credit risk has increased significantly since the initial recognition the Company considers

reasonable and evidence-based information that can be obtained without unnecessary additional costs or effort including forward-

looking information. The information considered by the Company includes:

A. The debtor fails to pay the principal and interest according to the contractual maturity date;

B. Serious worsening of external or internal credit rating (if any) of the financial instruments that have occurred or are expected;

C. Serious deterioration of the debtor’s operating results that have occurred or are expected;

D. Changes in existing or anticipated technical market economic or legal circumstances that will have a material adverse effect on

the debtor's ability to repay the company.Based on the nature of financial instruments the Company assesses whether credit risk has increased significantly on the basis of a

single financial instrument or combination of financial instruments. When conducting an assessment based on a combination of

financial instruments the Company can classify financial instruments based on common credit risk characteristics such as overdue

information and credit risk ratings.The Company believes that financial assets are subject to default in the following circumstances:

The debtor is unlikely to pay the full amount to the Company and the assessment does not consider the Company to take recourse

actions such as realizing collateral (if held).* Financial assets with credit impairment

On the balance sheet date the Company assesses whether the credit of financial assets measured at amortized cost and the credit of

debt investments measured at fair value and whose changes are included in other comprehensive income has been impaired. When

one or more events that adversely affect the expected future cash flows of a financial asset occur the financial asset becomes a

financial asset that has suffered credit impairment. Evidence that credit impairment has occurred in financial assets includes the

following observable information:

A. The issuer or the debtor has significant financial difficulties;

B. The debtor breaches the contract such as default or overdue repayment of interest or principal;

C. The Company gives concessions to the debtor that will not be made in any other circumstances for economic or contractual

considerations relating to the financial difficulties of the debtor;

D. The debtor is likely to go bankrupt or carry out other financial restructurings;

E. The financial difficulties of the issuer or the debtor have caused the active market of the financial asset to disappear.

81WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

* Presentation of expected credit loss provisions

In order to reflect the changes in the credit risk of financial instruments since the initial recognition the Company re-measures the

expected credit losses on each balance sheet date and the resulting increase or reversal of the loss provisions shall be included in

current profit and loss as impairment losses or gains. For financial assets measured at amortized cost the loss provisions are written

off against the book value of the financial assets listed in the balance sheet; for debt investments measured at fair value and whose

changes are included in other comprehensive income the Company recognizes the loss provisions in other comprehensive income

and does not deduct the book value of the financial asset.* Write-off

If the Company no longer reasonably expects that the financial asset contract cash flow can be fully or partially recovered directly

write down the book balance of the financial asset. Such write-downs constitute the termination of recognition for related financial

assets. This usually occurs when the Company determines that the debtor has no assets or sources of income to generate sufficient

cash flow to repay the amount that will be written down. However according to the Company's procedures for recovering the due

amount the financial assets that have been written down may still be affected by the execution activities.If the financial assets that have been written down are recovered afterwards they shall be included in the profit or loss of the period

being recovered as the reversal of the impairment loss

(6) Transfer of financial assets

The transfer of financial assets refers to the transfer or delivery of financial assets to the other party (the transferee) other than the

issuer of the financial assets.For financial assets that the Company has transferred almost all risks and rewards of ownership of financial assets to the transferee

terminate the recognition of the financial assets; if almost all the risks and rewards of ownership of financial assets have been

retained do not terminate the recognition of the financial assets.If the Company has neither transferred nor retained almost all the risks and rewards of ownership of financial assets dispose as

following situations: If the control of the financial assets is abandoned terminate the recognition of the financial assets and determine

the resulting assets and liabilities. If the control of the financial assets is not abandoned determine the relevant financial assets

according to the extent to which they continue to be involved in the transferred financial assets and determine the related liabilities

accordingly.

(7) Balance-out between the financial assets and liabilities

As the Group has the legal right to balance out the financial liabilities by the net or liquidation of the financial assets the balance-out

sum between the financial assets and liabilities is listed in the balance sheet. In addition the financial assets and liabilities are listed

in the balance sheet without being balanced out.

11. Note receivable

Note receivable 1: bank acceptance

Note receivable 2: trade acceptance

The Company calculates expected credit losses by referring to historical credit loss experience taking into account current conditions

and forecasts of the future economic situation.

12. Account receivable

Account receivable 1: receivable from clients

Account receivable 2: receivable from internal related party

The Company calculates expected credit losses by referring to historical credit loss experience taking into account current conditions

82WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

and forecasts of the future economic situation.

13. Receivable financing

The note receivable and account receivable which are measured at fair value and whose changes are included in other comprehensive

income are classified as receivables financing within one year (including one year) from the date of acquisition. Relevant accounting

policy found more in Note V. 10. “Financial Instrument” .

14. Other accounts receivable

Determination method of expected credit loss and accounting treatment

Other accounts receivable 1: receivable from internal related party

Other accounts receivable 2: receivable from others

The Company calculates expected credit losses by referring to historical credit loss experience taking into account current conditions

and forecasts of the future economic situation.

15. Inventory

(1) Classification of inventories

The Company’s inventories are categorized into stock materials product in process and stock goods etc.

(2) Pricing for delivered inventories

The cost of inventory at the time of acquisition and delivery is calculated according to the standard cost method and the difference in

cost that it should bear is carried forward at the end of the period and the standard cost is adjusted to the actual cost.

(3) Recognition evidence for net realizable value of inventories and withdrawal method for inventory impairment provision

Inventories as at period-end are priced at the lower of costs and net realizable values; at period end on the basis of overall clearance

about inventories inventory impairment provision is withdrawn for uncollectible part of costs of inventories which result from

destroy of inventories out-of-time of all and part inventories or sales price lowering than cost. Inventory impairment provision for

stock goods and quantity of raw materials is subject to the difference between costs of single inventory item over its net realizable

value. As for other raw materials with large quantity and comparatively low unit prices inventory impairment provision is withdrawn

pursuant to categories.As for finished goods commodities and materials available for direct sales their net realizable values are determined by their

estimated selling prices less estimated sales expenses and relevant taxes. For material inventories held for purpose of production

their net realizable values are determined by the estimated selling prices of finished products less estimated costs estimated sales

expenses and relevant taxes accumulated till completion of production. As for inventories held for implementation of sales contracts

or service contracts their net realizable values are calculated on the basis of contract prices. In the event that inventories held by a

company exceed order amount as agreed in sales contracts net realizable values of the surplus part are calculated on the basis of

normal sale price.

(4) Inventory system

Perpetual Inventory System is adopted by the Company and takes a physical inventory.

(5) Amortization of low-value consumables and wrappage

* Low-value consumables

The Company adopts one-off amortization method to amortize the low-value consumables.* Wrappage

83WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

The Company adopts one-off amortization method to amortize the wrappage at the time of receipt.

16. Contract assets

The Company presents the contract assets or contract liabilities in the balance sheet based on the relationship between the

performance obligation and the customer’s payment.Recognition method and standard of contract assets: contract assets refer to the right of a company to receive consideration after

transferring goods or providing services to customers and this right depends on other factors besides the passage of time. The

company's unconditional (that is only depending on the passage of time) right to collect consideration from customers are separately

listed as receivables.Method for determining expected credit losses of contract assets: the method for determining expected credit losses of contract assets

is consistent with the method for determining expected credit losses of accounts receivable.Accounting treatment method of expected credit losses of contract assets: if the contract assets are impaired the company shall debit

the "asset impairment loss" subject and credit the "contract asset impairment provision" subject according to the amount that should

be written down. When reversing the provision for asset impairment that has already been withdrawn make opposite accounting

entries.

17. Assets held for sale

The Company classifies non-current assets or disposal groups that meet all of the following conditions as held-for-sale: according to

the practice of selling this type of assets or disposal groups in a similar transaction the non-current assets or disposal group can be

sold immediately at its current condition; The sale is likely to occur that is the Company has made resolution on the selling plan and

obtained definite purchase commitment the selling is estimated to be completed within one year. Those assets whose disposal is

subject to approval from relevant authority or supervisory department under relevant requirements are subject to that approval.Where the Company loses control over its subsidiary due to disposal of investment in subsidiary whether or not the Company retains

part equity investment after such disposal investment in subsidiary shall be classified in its entirety as held for sale in the separate

financial statement of the parent company subject to that the investment in subsidiary proposed to be disposed satisfies the conditions

for being classified as held for sale and all the assets and liabilities of the subsidiary shall be classified as held for sale in

consolidated financial statement.The purchase commitment identified refers to the legally binding purchase agreement entered into between the Company and other

parties which sets out certain major terms relating to transaction price time and adequately stringent punishment for default which

render an extremely minor possibility for material adjustment or revocation of the agreement.Assets held for sale are measured at the lower of heir carrying value and fair value less selling expense. If the carrying value is higher

than fair value less selling expense the excess shall be recognized as impairment loss and recorded in profit or loss for the period

and allowance for impairment shall be provided for in respect of the assets. In respect of impairment loss recognized for disposal

group held for sale carrying value of the goodwill in the disposal group shall be deducted first and then deduct the carrying value of

the non-current assets within the disposal group applicable to this measurement standard on a pro rata basis according to the

proportion taken by their carrying value.If the net amount of fair value of non-current assets held for sale less sales expense on subsequent balance sheet date increases the

amount previously reduced for accounting shall be recovered and reverted from the impairment loss recognized after the asset is

classified under the category of held for sale with the amount reverted recorded in profit or loss for the period. Impairment loss

recognized before the asset is classified under the category of held for sale shall not be reverted.If the net amount of fair value of the

disposal group held for sale on the subsequent balance sheet date less sales expenses increases the amount reduced for accounting in

previous periods shall be restored and shall be reverted in the impairment loss recognized in respect of the non-current assets which

84WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

are applicable to relevant measurement provisions after classification into the category of held for sale with the reverted amount

charged in profit or loss for the current period. The written-off carrying value of goodwill shall not be reverted.The non-current assets in the non-current assets or disposal group held for sale is not depreciated or amortized and the debt interests

and other fees in the disposal group held for sale continue to be recognized.If the non-current assets or disposal group are no longer classified as held for sale since they no longer meet the condition of being

classified as held for sale or the non-current assets are removed from the disposal group held for sale they will be measured at the

lower of the following:

(i)The amount after their book value before they are classified as held for sale is adjusted based on the depreciation amortization or

impairment that should have been recognized given they are not classified as held for sale;

(ii) The recoverable amount.

18. Long-term equity investment

Long-term equity investments refer to long-term equity investments in which the Company has control joint control or significant

influence over the invested party. Long-term equity investment without control or joint control or significant influence of the Group

is accounted for as available-for-sale financial assets or financial assets measured by fair value and with variation reckoned into

current gains/losses. As for other accounting policies found more in Note V.10. “Financial instrument” .

(1) Determination of initial investment cost

Investment costs of the long-term equity investment are recognized by the follow according to different way of acquirement:

* For a long-term equity investment acquired through a business combination involving enterprises under common control the

initial investment cost of the long-term equity investment shall be the absorbing party’s share of the carrying amount of the owner’s

equity under the consolidated financial statements of the ultimate controlling party on the date of combination. The difference

between the initial cost of the long-term equity investment and the cash paid non-cash assets transferred as well as the book value of

the debts borne by the absorbing party shall offset against the capital reserve. If the capital reserve is insufficient to offset the

retained earnings shall be adjusted. If the consideration of the merger is satisfied by issue of equity securities the initial investment

cost of the long-term equity investment shall be the absorbing party’s share of the carrying amount of the owner’s equity under the

consolidated financial statements of the ultimate controlling party on the date of combination. With the total face value of the shares

issued as share capital the difference between the initial cost of the long-term equity investment and total face value of the shares

issued shall be used to offset against the capital reserve. If the capital reserve is insufficient to offset the retained earnings shall be

adjusted. For business combination resulted in an enterprise under common control by acquiring equity of the absorbing party under

common control through a stage-up approach with several transactions these transactions will be judged whether they shall be treat

as “transactions in a basket”. If they belong to “transactions in a basket” these transactions will be accounted for a transaction in

obtaining control. If they do not belong to “transactions in a basket” the initial investment cost of the long-term equity investment

shall be the absorbing party’s share of the carrying amount of the owner’s equity under the consolidated financial statements of the

ultimate controlling party on the date of combination. The difference between the initial cost of the long-term equity investment and

the aggregate of the carrying amount of the long-term equity investment before merging and the carrying amount the additional

consideration paid for further share acquisition on the date of combination shall offset against the capital reserve. If the capital

reserve is insufficient to offset the retained earnings shall be adjusted. Other comprehensive income recognized as a result of the

previously held equity investment accounted for using equity method on the date of combination or recognized for available-for-sale

financial assets will not be accounted for.* For the long-term equity investment obtained by business combination not under the same control the fair value of the assets

involved the equity instruments issued and the liabilities incurred or assumed on the transaction date plus the combined cost directly

related to the acquisition is used as the initial investment cost of the long-term equity investment. The identifiable assets of the

combined party and the liabilities (including contingent liabilities) assumed by the combined party on the combining date are all

85WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

measured at fair value regardless of the amount of minority shareholders’ equity. The amount of the combined cost exceeding the

fair value of the identifiable net assets of the combined party obtained by the Company is recorded as goodwill and the amount

below the fair value of the identifiable net assets of the combining party is directly recognized in the consolidated income

statement.(For business combination resulted in an enterprise not under common control by acquiring equity of the acquire under

common control through a stage-up approach with several transactions these transactions will be judged whether they shall be treat

as “transactions in a basket”. If they belong to “transactions in a basket” these transactions will be accounted for a transaction in

obtaining control. If they do not belong to “transactions in a basket” the initial investment cost of the long-term equity investment

accounted for using cost method shall be the aggregate of the carrying amount of equity investment previously held by the acquire

and the additional investment cost. For previously held equity accounted for using equity method relevant other comprehensive

income will not be accounted for. For previously held equity investment classified as available-for-sale financial asset the difference

between its fair value and carrying amount as well as the accumulated movement in fair value previously included in the other

comprehensive income shall be transferred to profit or loss for the current period.)

* Long-term investments obtained through other ways:

A. Initial investment cost of long-term equity investment obtained through cash payment is determined according to actual payment

for purchase;

B. Initial investment cost of long-term equity investment obtained through issuance of equity securities is determined at fair value of

such securities;

C. Initial investment cost of long-term equity investment (exchanged-in) obtained through exchange with non-monetary assets which

is of commercial nature is determined at fair value of the assets exchanged-out; otherwise determined at carrying value of the assets

exchanged-out if it is not of commercial nature;

D. Initial investment cost of long-term equity investment obtained through debt reorganization is determined at fair value of such

investment.

(2) Subsequent measurement on long-term equity investment

* Presented controlling ability on invested party the investment shall use cost method for measurement.* Long-term equity investments with joint control (excluding those constitute joint ventures) or significant influence on the invested

party are accounted for using equity method.Under the equity method where the initial investment cost of a long-term equity investment exceeds the investor’s interest in the fair

value of the invested party’s identifiable net assets at the acquisition date no adjustment shall be made to the initial investment cost.Where the initial investment cost is less than the investor’s interest in the fair value of the invested party’s identifiable net assets at

the acquisition date the difference shall be charged to profit or loss for the current period and the cost of the long term equity

investment shall be adjusted accordingly.Under the equity method investment gain and other comprehensive income shall be recognized based on the Group’s share of the net

profits or losses and other comprehensive income made by the invested party respectively. Meanwhile the carrying amount of long-

term equity investment shall be adjusted. The carrying amount of long-term equity investment shall be reduced based on the Group’s

share of profit or cash dividend distributed by the invested party. In respect of the other movement of net profit or loss other

comprehensive income and profit distribution of invested party the carrying value of long-term equity investment shall be adjusted

and included in the capital reserves. The Group shall recognize its share of the invested party’s net profits or losses based on the fair

values of the invested party’s individual separately identifiable assets at the time of acquisition after making appropriate adjustments

thereto. In the event of in-conformity between the accounting policies and accounting periods of the invested party and the Company

the financial statements of the invested party shall be adjusted in conformity with the accounting policies and accounting periods of

the Company. Investment gain and other comprehensive income shall be recognized accordingly. In respect of the transactions

between the Group and its associates and joint ventures in which the assets disposed of or sold are not classified as operation the

share of unrealized gain or loss arising from inter-group transactions shall be eliminated by the portion attributable to the Company.Investment gain shall be recognized accordingly. However any unrealized loss arising from inter-group transactions between the

86WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Group and an invested party is not eliminated to the extent that the loss is impairment loss of the transferred assets. In the event that

the Group disposed of an asset classified as operation to its joint ventures or associates which resulted in acquisition of long-term

equity investment by the investor without obtaining control the initial investment cost of additional long-term equity investment

shall be the fair value of disposed operation. The difference between initial investment cost and the carrying value of disposed

operation will be fully included in profit or loss for the current period. In the event that the Group sold an asset classified as operation

to its associates or joint ventures the difference between the carrying value of consideration received and operation shall be fully

included in profit or loss for the current period. In the event that the Company acquired an asset which formed an operation from itsassociates or joint ventures relevant transaction shall be accounted for in accordance with “Accounting Standards for BusinessEnterprises No. 20 “Business combination”. All profit or loss related to the transaction shall be accounted for.The Group’s share of net losses of the invested party shall be recognized to the extent that the carrying amount of the long-term

equity investment together with any long-term interests that in substance form part of the investor’s net investment in the invested

party are reduced to zero. If the Group has to assume additional obligations the estimated obligation assumed shall be provided for

and charged to the profit or loss as investment loss for the period. Where the invested party is making profits in subsequent periods

the Group shall resume recognizing its share of profits after setting off against the share of unrecognized losses.* Acquisition of minority interest

Upon the preparation of the consolidated financial statements since acquisition of minority interest increased of long-term equity

investment which was compared to fair value of identifiable net assets recognized which are measured based on the continuous

measurement since the acquisition date (or combination date) of subsidiaries attributable to the Group calculated according to the

proportion of newly acquired shares the difference of which recognized as adjusted capital surplus capital surplus insufficient to set

off impairment and adjusted retained earnings.* Disposal of long-term equity investments

In these consolidated financial statements for disposal of a portion of the long-term equity investments in a subsidiary without loss

of control the difference between disposal cost and disposal of long-term equity investments relative to the net assets of the

subsidiary is charged to the owners’ equity. If disposal of a portion of the long-term equity investments in a subsidiary by the parent

company results in a change in control it shall be accounted for in accordance with the relevant accounting policies as described in

Note V-6 “Preparation Method of the Consolidated Financial Statements”.On disposal of a long-term equity investment otherwise the difference between the carrying amount of the investment and the actual

consideration paid is recognized through profit or loss in the current period.In respect of long-term equity investment accounted for using equity method with the remaining equity interest after disposal also

accounted for using equity method other comprehensive income previously under owners’ equity shall be accounted for in

accordance with the same accounting treatment for direct disposal of relevant asset or liability by invested party on pro rata basis at

the time of disposal. The owners’ equity recognized for the movement of other owners’ equity (excluding net profit or loss other

comprehensive income and profit distribution of invested party) shall be transferred to profit or loss for the current period on pro rata

basis.In respect of long-term equity investment accounted for using cost method with the remaining equity interest after disposal also

accounted for cost equity method other comprehensive income measured and reckoned under equity method or financial instrument

before control of the invested party unit acquired shall be accounted for in accordance with the same accounting treatment for direct

disposal of relevant asset or liability by invested party on pro rata basis at the time of disposal and shall be transferred to profit or loss

for the current period on pro rata basis; among the net assets of invested party unit recognized by equity method (excluding net profit

or loss other comprehensive income and profit distribution of invested party) shall be transferred to profit or loss for the current

period on pro rata basis.In the event of loss of control over invested party due to partial disposal of equity investment by the Group in preparing separate

financial statements the remaining equity interest which can apply common control or impose significant influence over the invested

party after disposal shall be accounted for using equity method. Such remaining equity interest shall be treated as accounting for

87WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

using equity method since it is obtained and adjustment was made accordingly. For remaining equity interest which cannot apply

common control or impose significant influence over the invested party after disposal it shall be accounted for using the recognition

and measurement standard of financial instruments. The difference between its fair value and carrying amount as at the date of losing

control shall be included in profit or loss for the current period. In respect of other comprehensive income recognized using equity

method or the recognition and measurement standard of financial instruments before the Group obtained control over the invested

party it shall be accounted for in accordance with the same accounting treatment for direct disposal of relevant asset or liability by

invested party at the time when the control over invested party is lost. Movement of other owners’ equity (excluding net profit or loss

other comprehensive income and profit distribution under net asset of invested party accounted for and recognized using equity

method) shall be transferred to profit or loss for the current period at the time when the control over invested party is lost. Of which

for the remaining equity interest after disposal accounted for using equity method other comprehensive income and other owners’

equity shall be transferred on pro rata basis. For the remaining equity interest after disposal accounted for using the recognition and

measurement standard of financial instruments other comprehensive income and other owners’ equity shall be fully transferred.In the event of loss of common control or significant influence over invested party due to partial disposal of equity investment by the

Group the remaining equity interest after disposal shall be accounted for using the recognition and measurement standard of

financial instruments. The difference between its fair value and carrying amount as at the date of losing common control or

significant influence shall be included in profit or loss for the current period. In respect of other comprehensive income recognized

under previous equity investment using equity method it shall be accounted for in accordance with the same accounting treatment

for direct disposal of relevant asset or liability by invested party at the time when equity method was ceased to be used. Movement of

other owners’ equity (excluding net profit or loss other comprehensive income and profit distribution under net asset of invested

party accounted for and recognized using equity method) shall be transferred to profit or loss for the current period at the time when

equity method was ceased to be used.The Group disposes its equity investment in subsidiary by a stage-up approach with several transactions until the control over the

subsidiary is lost. If the said transactions belong to “transactions in a basket” each transaction shall be accounted for as a single

transaction of disposing equity investment of subsidiary and loss of control. The difference between the disposal consideration for

each transaction and the carrying amount of the corresponding long-term equity investment of disposed equity interest before loss of

control shall initially recognized as other comprehensive income and subsequently transferred to profit or loss arising from loss of

control for the current period upon loss of control.

(3) Impairment test method and withdrawal method for impairment provision

Found more in Note V.25. “Impairment of long-term assets”

(4) Criteria of joint control and significant influence

Joint control is the Company’s contractually agreed sharing of control over an arrangement which relevant activities of such

arrangement must be decided by unanimously agreement from parties who share control. All the participants or participant group

whether have controlling over such arrangement as a group or not shall be judge firstly than judge that whether the decision-making

for such arrangement are agreed unanimity by the participants or not.Significant influence is the power of the Company to participate in the financial and operating policy decisions of an invested party

but to fail to control or joint control the formulation of such policies together with other parties. While recognizing whether have

significant influence by invested party the potential factors of voting power as current convertible bonds and current executable

warrant of the invested party held by investors and other parties shall be thank over.

19. Investment real estate

Measurement model of investment real estate

Cost measurement

Depreciation or amortization

88WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Investment real estate is stated at cost. During which the cost of externally purchased properties held-for-investment includes

purchasing price relevant taxes and surcharges and other expenses which are directly attributable to the asset. Cost of self

construction of properties held for investment is composed of necessary expenses occurred for constructing those assets to a state

expected to be available for use. Properties held for investment by investors are stated at the value agreed in an investment contract

or agreement but those under contract or agreement without fair value are stated at fair value.The Company adopts cost methodology amid subsequent measurement of properties held for investment while depreciation and

amortization is calculated using the straight-line method according to their estimated useful lives.The basis of provision for impairment of properties held for investment is referred to Note V. 25. “Impairment of long-term assets”

20. Fixed assets

(1) Recognition conditions

Fixed assets refer to the tangible assets for production of products provision of labor lease or operation with a service life excess

one year and has more unit value.

(2) Depreciation methods

Category Depreciation method Years of depreciation Scrap value rate Yearly depreciation rate

House and Building Straight-line depreciation 20~35 5 2.71~4.75

Machinery equipment Straight-line depreciation 10 5 9.50

Transportation equipment Straight-line depreciation 4~5 5 19.00~23.75

Electronic and other equipment Straight-line depreciation 3～10 5 9.50～31.67

For the fixed assets with impairment provision the depreciation amount shall be calculated after deducting the accumulated amount

of impairment provision for fixed assets

(3) Recognition basis valuation and depreciation method for financial lease assets

The Company affirms those that conform to below one or several criteria as the finance lease fixed assets:

* Agreed in the lease contract (or made a reasonable judgment according to the correlated conditions on the lease commencement

date) the ownership of lease fixed assets can be transferred to the Company after the expiry of the lease period;

* The Company has the option to purchase or lease the fixed assets and the purchase price is estimated to be much less than the fair

value of the lease of fixed assets when exercises the options so whether the Company will exercise the option can be reasonably

determined on the lease commencement date;

* Even though the fixed asset ownership is not transferred the lease term accounts for 75% of the service life of the lease fixed

assets;

* The present value of the Company’s of minimum lease payment on the lease commencement date is equivalent to 90% or more of

the fair value of the lease fixed assets on the lease commencement date; the present value of the leaser’s of minimum lease payment

on the lease commencement date is equivalent to 90% or more of the fair value of the lease fixed assets on the lease commencement

date;

* The leased assets with special properties can only be used by the Company without major modifications. The fixed assets rented

by finance leases is calculated as the book value according to the lower one between the fair value of leased assets on the lease

89WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

commencement date and the present value of the minimum lease payments.

(4) The impairment test method and provision for impairment of fixed assetsThe impairment test method and provision for impairment of fixed assets found more in Note V. 25. “Impairment of long-termassets”.

21. Construction in progress

From the date on which the fixed assets built by the Company come into an expected usable state the construction in progress are

converted into fixed assets on the basis of the estimated value of project estimates or pricing or project actual costs etc. Depreciation

is calculated from the next month. Further adjustments are made to the difference of the original value of fixed assets after final

accounting is completed upon completion of projects.The basis of provision for impairment of properties held for construction in process is referred to Note V-“25. Impairment of long-term assets”

22. Borrowing costs

(1) Recognition of capitalization of borrowing costs

Borrowing costs comprise interest occurred amortization of discounts or premiums ancillary costs and exchange differences in

connection with foreign currency borrowings. The borrowing costs of the Company which incur from the special borrowings

occupied by the fixed assets that need more than one year (inclusive) for construction development of investment properties or

inventories or from general borrowings are capitalized and recorded in relevant assets costs; other borrowing costs are recognized as

expenses and recorded in the profit or loss in the period when they are occurred. Relevant borrowing costs start to be capitalized

when all of the following three conditions are met:

* Capital expenditure has been occurred;

* Borrowing costs have been occurred;

* Acquisition or construction necessary for the assets to come into an expected usable state has been carried out.

(2) Period of capitalization of borrowing costs

Borrowing costs arising from purchasing fixed asset investment real estate and inventory and occurred after such assets reached to

its intended use of status or sales than reckoned into assets costs while satisfy the above mentioned capitalization condition;

capitalization of borrowing costs shall be suspended and recognized as current expenditure during periods in which construction of

fixed assets investment real estate and inventory are interrupted abnormally when the interruption is for a continuous period of more

than 3 months until the acquisition construction or production of the qualifying asset is resumed; capitalization shall discontinue

when the qualifying asset is ready for its intended use or sale the borrowing costs occurred subsequently shall reckoned into

financial expenses while occurring for the current period.

(3) Measure of capitalization for borrowing cost

In respect of the special borrowings borrowed for acquisition construction or production and development of the assets qualified for

capitalization the amount of interests expenses of the special borrowings actually occurred in the period less interest income derived

from unused borrowings deposited in banks or less investment income derived from provisional investment are recognized.With respect to the general borrowings occupied for acquisition construction or production and development of the assets qualified

for capitalization the capitalized interest amount for general borrowings is calculated and recognized by multiplying a weighted

average of the accumulated expenditure on the assets in excess of the expenditure on some assets of the special borrowings by a

capitalization rate for general borrowings. The capitalization rate is determined by calculation of the weighted average interest rate of

the general borrowings.

90WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

23. Right-of-use assets

The right-of-use asset refers to the right of the Company as the lessee to use the leased asset during the lease term.On the commencement date of the lease term the Company recognizes the right-of-use assets for leases other than short-term leases

and leases of low-value assets. Right-of-use assets are initially measured at cost. The cost includes the initial measurement amount of

the lease liability; the lease payments made on or before the commencement date of the lease term deduct the relevant amount of the

lease incentive already enjoyed if there is a lease incentive; the initial direct expenses incurred by the lessee; the cost expected to be

incurred by the lessee to dismantle and remove the leased assets restore the site where the leased assets locate or restore the leased

assets to the condition agreed upon in the lease terms but this does not include the cost attributable to the production of inventory.The Company subsequently uses the straight-line method to depreciate the right-of-use assets. If it can be reasonably determined that

the ownership of the leased asset can be obtained at the expiration of the lease term the Company shall accrue depreciation over the

remaining useful life of the leased asset. If it cannot be reasonably determined that the ownership of the leased asset can be obtained

at the expiration of the lease term the Company shall accrue depreciation within the shorter of the lease term and the remaining

useful life of the leased asset. When the recoverable amount is lower than the book value of the right-of-use asset the Company shall

write down its book value to the recoverable amount.

24. Intangible assets

(1) Measurement use of life and impairment testing

* Measurement of intangible assets

The intangible assets of the Company include land use rights patented technology and non-patents technology etc.The cost of a purchased intangible asset shall be determined by the expenditure actually occurred and other related costs.The cost of an intangible asset contributed by an investor shall be determined in accordance with the value stipulated in the

investment contract or agreement except where the value stipulated in the contract or agreement is not fair.The intangible assets acquired through exchange of non-monetary assets which is commercial in substance is carried at the fair

value of the assets exchanged out; for those not commercial in substance they are carried at the carrying amount of the assets

exchanged out.The intangible assets acquired through debt reorganization are recognized at the fair value.* Amortization methods and time limit for intangible assets:

Land use right of the company had average amortization by the transfer years from the beginning date of transfer (date of getting land

use light); Patented technology non-patented technology and other intangible assets of the Company are amortized by straight-line

method with the shortest terms among expected useful life benefit years regulated in the contract and effective age regulated by the

laws. The amortization amount shall count in relevant assets costs and current gains/losses according to the benefit object.As for the intangible assets such as trademark with uncertain benefit terms amortization shall not be carried.Impairment testing methods and accrual for depreciation reserves for the intangible assets found more in Note V. 25. “Impairment oflong-term assets”.

(2) Internal accounting policies relating to research and development expenditures

Expenses incurred during the research phase are recognized as profit or loss in the current period; expenses incurred during the

development phase that satisfy the following conditions are recognized as intangible assets (patented technology and non-patents

technology):

91WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

* It is technically feasible that the intangible asset can be used or sold upon completion;

* There is intention to complete the intangible asset for use or sale;

* The products produced using the intangible asset has a market or the intangible asset itself has a market;

* There is sufficient support in terms of technology financial resources and other resources in order to complete the development of

the intangible asset and there is capability to use or sell the intangible asset;

* The expenses attributable to the development phase of the intangible asset can be measured reliably.If the expenses incurred during the development phase did not qualify the above mentioned conditions such expenses incurred are

accounted for in the profit or loss for the current period. The development expenditure reckoned in gains/losses previously shall not

be recognized as assets in later period. The capitalized expenses in development stage listed as development expenditure in balance

sheet and shall be transfer as intangible assets since such item reached its expected conditions for service.

25. Impairment of long-term assets

The Company will judge if there is any indication of impairment as at the balance sheet date in respect of non-current non-financial

assets such as fixed assets construction in progress intangible assets with a finite useful life investment properties measured at cost

and long-term equity investments in subsidiaries joint controlled entities and associates. If there is any evidence indicating that an

asset may be impaired recoverable amount shall be estimated for impairment test. Goodwill intangible assets with an indefinite

useful life and intangible assets beyond working conditions will be tested for impairment annually regardless of whether there is any

indication of impairment.If the impairment test result shows that the recoverable amount of an asset is less than its carrying amount the impairment provision

will be made according to the difference and recognized as an impairment loss. The recoverable amount of an asset is the higher of

its fair value less costs of disposal and the present value of the future cash flows expected to be derived from the asset. An asset’s fair

value is the price in a sale agreement in an arm’s length transaction. If there is no sale agreement but the asset is traded in an active

market fair value shall be determined based on the bid price. If there is neither sale agreement nor active market for an asset fair

value shall be based on the best available information. Costs of disposal are expenses attributable to disposal of the asset including

legal fee relevant tax and surcharges transportation fee and direct expenses incurred to prepare the asset for its intended sale. The

present value of the future cash flows expected to be derived from the asset over the course of continued use and final disposal is

determined as the amount discounted using an appropriately selected discount rate. Provisions for assets impairment shall be made

and recognized for the individual asset. If it is not possible to estimate the recoverable amount of the individual asset the Group shall

determine the recoverable amount of the asset group to which the asset belongs. The asset group is the smallest group of assets

capable of generating cash flows independently.For the purpose of impairment testing the carrying amount of goodwill presented separately in the financial statements shall be

allocated to the asset groups or group of assets benefiting from synergy of business combination. If the recoverable amount is less

than the carrying amount the Group shall recognize an impairment loss. The amount of impairment loss shall first reduce the

carrying amount of any goodwill allocated to the asset group or set of asset groups and then reduce the carrying amount of other

assets (other than goodwill) within the asset group or set of asset groups pro rata on the basis of the carrying amount of each asset.An impairment loss recognized on the aforesaid assets shall not be reversed in a subsequent period in respect of the part whose value

can be recovered.

26. Long-term deferred expenses

Long-term expenses to be amortized of the Company which are the expenses that are already charged and with the beneficial term of

more than one year shall be evenly amortized over the beneficial term. For the long-term deferred expense items cannot benefit the

subsequent accounting periods the amortized value of such items is all recorded in the profit or loss during recognition.

92WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

27. Contract liability

The Company lists the obligation to transfer goods or provide labor services to customers for the consideration received or receivable

from customers as contractual liabilities such as the amount that the company has received before the transfer of the promissory

goods.

28. Employee compensation

(1) Accounting treatment for short-term compensation

During the accounting period when the staff providing service to the Company the short-term remuneration actual occurred shall

recognized as liability and reckoned into current gains/losses. During the accounting period when staff providing service to the

Company the actual short-term compensation occurred shall recognized as liabilities and reckoned into current gains/losses except

for those in line with accounting standards or allow to reckoned into capital costs; the welfare occurred shall reckoned into current

gains/losses or relevant asset costs while actually occurred. The employee compensation shall recognize as liabilities and reckoned

into current gains/losses or relevant assets costs while actually occurred. The employee benefits that belong to non-monetary benefits

are measured in accordance with the fair value; the social insurances including the medical insurance work-injury insurance and

maternity insurance and the housing fund that the enterprise pays for the employees as well as the labor union expenditure and

employee education funds withdrawn by rule should be calculated and determined as the corresponding compensation amount and

determined the corresponding liabilities in accordance with the specified withdrawing basis and proportion and reckoned in the

current profits and losses or relevant asset costs in the accounting period that the employees provide services.

(2) Accounting treatment for post-employment benefit

The post-employment benefit included the defined contribution plans and defined benefit plans. Post-employment benefits plan

refers to the agreement about the post-employment benefits between the enterprise and employees or the regulations or measures the

enterprise established for providing post-employment benefits to employees. Thereinto the defined contribution plan refers to the

post-employment benefits plan that the enterprise doesn’t undertake the obligation of payment after depositing the fixed charges to

the independent fund; the defined benefit plans refers to post-employment benefits plans except the defined contribution plan.

(3) Accounting treatment for retirement benefits

When the Company terminates the employment relationship with employees before the end of the employment contracts or provides

compensation as an offer to encourage employees to accept voluntary redundancy the Company shall recognize employee

compensation liabilities arising from compensation for staff dismissal and included in profit or loss for the current period when the

Company cannot revoke unilaterally compensation for dismissal due to the cancellation of labor relationship plans and employee

redundant proposals; and the Company recognize cost and expenses related to payment of compensation for dismissal and

restructuring whichever is earlier.The early retirement plan shall be accounted for in accordance with the accounting principles for

compensation for termination of employment. The salaries or wages and the social contributions to be paid for the employees who

retire before schedule from the date on which the employees stop rendering services to the scheduled retirement date shall be

recognized (as compensation for termination of employment) in the current profit or loss by the Group if the recognition principles

for provisions are satisfied.

93WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

(4) Accounting treatment for other long-term employee benefits

Except for the compulsory insurance the Company provides the supplementary retirement benefits to the employees satisfying some

conditions the supplementary retirement benefits belong to the defined benefit plans and the defined benefitliability confirmed on

the balance sheet is the value by subtracting the fair value of plan assets from the present value of defined benefit obligation. The

defined benefit obligation is annually calculated in accordance with the expected accumulated welfare unit method by the

independent actuary by adopting the treasury bond rate with similar obligation term and currency. The service charges related to the

supplementary retirement benefits (including the service costs of the current period the previous service costs and the settlement

gains or losses) and the net interest are reckoned in the current profits and losses or other asset costs the changes generated by

recalculating the net liabilities of defined benefit plans or net assets should be reckoned in other consolidated income.

29. Lease liability

On the commencement date of the lease term the Company recognizes the present value of the unpaid lease payments as lease

liabilities. Lease payments include the following five items: fixed payments and in-substance fixed payments if there is a lease

incentive deduct the amount related to the lease incentive; variable lease payments that depend on an index or ratio which are

determined at the initial measurement according to the index or ratio determination on the commencement date of lease term;

exercise price for a purchase option provided that the lessee is reasonably certain that the option shall be exercised; payments for

exercising the option to terminate the lease provided that the lease term reflects that the lessee shall exercise the option to terminate

the lease option; estimated payments due based on guaranteed residual value provided by the lessee.When calculating the present value of lease payments the interest rate implicit in the lease is used as the discount rate. If the interest

rate implicit in the lease cannot be determined the company’s incremental borrowing rate is used as the discount rate. The Company

calculates the interest expense of the lease liability in each period of the lease term according to the fixed periodic interest rate and

includes it in the current profit and loss unless it is otherwise stipulated to be included in the cost of the relevant assets. Variable

lease payments that are not included in the measurement of lease liabilities are included in the current profit and loss when they are

actually incurred unless otherwise stipulated to be included in the cost of the relevant assets. After the commencement date of the

lease term when there is a change in the in-substance fixed payment or a change in the estimated amount payable for the guaranteed

residual value or a change in the index or ratio used to determine the lease payment or a change in the evaluation results of the

purchase option renewal option or termination option or when the actual exercise situation changes the Company shall re-measure

the lease liability according to the present value of the changed lease payments.

30. Accrual liability

(1) Recognition principle

An obligation related to a contingency such as guarantees provided to outsiders pending litigation or arbitration product warranties

redundancy plans onerous contracts reconstructing expected disposal of fixed assets etc. shall be recognized as an estimated

liability when all of the following conditions are satisfied:

* The obligation is a present obligation of the Company;

* To settle the obligation may be likely to result in an outflow of economic benefits;

* The amount of the obligation can be measured reliably.

(2) Measurement method: Measure on the basis of the best estimates of the expenses necessary for paying off the contingencies

94WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

31. Share-based payment

The Company’s share-based payment is a transaction that grants equity instruments or assumes liabilities determined on the basis of

equity instruments in order to obtain services provided by employees or other parties. The Company’s share-based payment is

classified as equity-settled share-based payment and cash-settled share-based payment.

(1) Equity-settled share-based payment and equity instruments

Equity-settled share-based payment in exchange for services provided by employees shall be measured at the fair value of the equity

instruments granted to employees. If the Company uses restricted stocks for share-based payment employees contribute capital to

subscribe for stocks and the stocks shall not be listed for circulation or transfer until the unlocking conditions are met and unlocked;

if the unlocking conditions specified in the final equity incentive plan are not met the Company shall repurchase the stocks at the

pre-agreed price. When the Company obtains the payment for the employees to subscribe for restricted stocks it shall confirm the

share capital and capital reserve (share capital premium) according to the obtained subscription money and at the same time

recognize a liability in full for the repurchase obligation and recognize treasury shares. On each balance sheet date during the waiting

period the Company makes the best estimate of the number of vesting equity instruments based on the changes in the latest obtained

number of vested employees whether they meet the specified performance conditions and other follow-up information. On this basis

the services obtained in the current period are included in related costs or expenses based on the fair value on the grant date and the

capital reserve shall be increased accordingly.For share-based payments that cannot be vested in the end costs or expenses shall not be recognized unless the vesting conditions

are market conditions or non-vesting conditions. At this time regardless of whether the market conditions or the non-vesting

conditions are met as long as all non-market conditions in the vesting conditions are met it is deemed as vesting.If the terms of equity-settled share-based payment are modified at least the services obtained should be confirmed in accordance

with the unmodified terms. In addition any modification that increases the fair value of the equity instruments granted or a change

that is beneficial to employees on the modification date is recognized as an increase in services received.If the equity-settled share payment is canceled it will be treated as an accelerated vesting on the cancellation day and the

unconfirmed amount will be confirmed immediately. If an employee or other party can choose to meet the non-vesting conditions but

fails to meet within the waiting period it shall be treated as cancellation of equity-settled share-based payment. However if a new

equity instrument is granted and it is determined on the date of grant of the new equity instrument that the new equity instrument

granted is used to replace the canceled equity instrument the granted substitute equity instruments shall be treated in the same way as

the modification of the original equity instrument terms and conditions.

(2) Cash-settled share-based payment and equity instruments

Cash-settled share-based payments are measured at the fair value of the liabilities calculated and determined on the basis of shares or

other equity instruments undertaken by the Company. If it’s vested immediately after the grant the fair value of the liabilities

assumed on the date of the grant is included in the cost or expense and the liability is increased accordingly. If the service within the

waiting period is completed or the specified performance conditions are met the service obtained in the current period shall be

included in the relevant costs or expenses based on the best estimate of the vesting situation within the waiting period and the fair

value of the liabilities assumed to increase the corresponding liabilities. On each balance sheet date and settlement date before the

settlement of the relevant liabilities the fair value of the liabilities is remeasured and the changes are included in the current profit

and loss.

32. Revenue

Accounting policies used in revenue recognition and measurement

1)Revenue recognition principle

On the starting date of the contract the company evaluates the contract identifies each individual performance obligation contained

95WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

in the contract and determines whether each individual performance obligation is performed within a certain period of time or at a

certain point in time.When one of the following conditions is met it belongs to the performance obligation within a certain period of time otherwise it

belongs to the performance obligation at a certain point in time: * The customer obtains and consumes the economic benefits

brought by the company's performance while the company performs the contract; * The customer can control the goods or services

in progress during the company’s performance; * The goods or services produced during the company’s performance have

irreplaceable uses and the company has the right to collect payment for the performance part that has been completed so far during

the entire contract period.For performance obligations performed within a certain period of time the company recognizes revenue in accordance with the

performance progress during that period. When the performance progress cannot be reasonably determined if the cost incurred is

expected to be compensated the revenue shall be recognized according to the amount of the cost incurred until the performance

progress can be reasonably determined. For performance obligations performed at a certain point in time revenue is recognized at the

point when the customer obtains control of the relevant goods or services. When judging whether the customer has obtained control

of the goods the company considers the following signs:* The company has the current right to receive payment for the goods that

is the customer has the current payment obligation for the goods; * The company has transferred the legal ownership of the goods

to the customer that is the customer has the legal ownership of the goods; * The company has transferred the goods to the customer

in kind that is the customer has physically taken possession of the goods; * The company has transferred the main risks and

rewards of the ownership of the goods to the customer that is the customer has obtained the main risks and rewards of the ownership

of the goods; * The customer has accepted the goods; * Other signs that the customer has obtained control of the goods.

2)Revenue measurement principle

* The company measures revenue based on the transaction price allocated to each individual performance obligation. The

transaction price is the amount of consideration that the company expects to be entitled to receive due to the transfer of goods or

services to customers and does not include payments collected on behalf of third parties and payments expected to be returned to

customers.* If there is variable consideration in the contract the company shall determine the best estimate of the variable consideration

according to the expected value or the most likely amount but the transaction price including the variable consideration shall not

exceed the amount of cumulatively recognized revenue that is unlikely to be significantly turned back when the relevant uncertainty

is eliminated.* If there is a significant financing component in the contract the company shall determine the transaction price based on the

amount payable that the customer is assumed to pay in cash when obtaining the control of the goods or services. The difference

between the transaction price and the contract consideration shall be amortized by the effective interest method during the contract

period. On the starting date of the contract if the company expects that the customer pays the price within one year after obtaining

control of the goods or services the significant financing components in the contract shall not be considered.* If the contract contains two or more performance obligations the company will allocate the transaction price to each individual

performance obligation based on the relative proportion of the stand-alone selling price of the goods promised by each individual

performance obligation on the starting date of the contract.

(2) The criteria for the recognition of revenue recognition from sales of goods and the specific criteria for the recognition time:

Time point for recognition of the company’s domestic sales revenue: the company delivers goods as agreed in the order checks the

goods received and inspected by the buyer during the period from the previous reconciliation date to this reconciliation date with the

buyer on the reconciliation date agreed with the buyer after which the risks and rewards are transferred to the buyer. The company

issues invoices to the buyer according to the types quantities and amounts confirmed in the reconciliation and recognizes the

realization of sales revenue on the reconciliation date.Time point for recognition of the Company’s foreign sales Revenue recognition: after the customs review is completed the Company

will recognize the realization of sales revenue according to the export date specified in the Customs declaration.Differences in accounting policies for revenue recognition due to different operating models for the same type of business

96WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

N/A

33. Government grants

(1) Types

Government grants are transfer of monetary assets or non-monetary assets from the government to the Group at no consideration.Government grants are classified into government grants related to assets and government grants related to income.As for the assistance object not well-defined in government’s documents the classification criteria for assets-related or income-

related grants are as: whether the grants turn to long-term assets due to purchasing for construction or other means.

(2) Recognition and measurement

The government grants shall be recognized while the additional conditions of the grants are satisfied and amount is actually can be

obtained.If a government grant is in the form of a transfer of monetary asset the item shall be measured at the amount received or receivable.If a government grant is in the form of a transfer of non-monetary asset the item shall be measured at fair value. If the fair value can

not be reliably acquired then measured by nominal amount.

(3) Accounting treatment

Asset-related government grant shall be recognized as deferred income and reckoned into current gains/losses according to the

depreciation process in use life of such assets.The income-related government grant which is used to make up relevant expenses and losses for later period will be recognized as

deferred income and should reckoned into current gain/loss during the period while relevant expenses are recognized; The income-

related government grant which is used to make up relevant expenses and losses that have occurred should be reckoned into current

gains/losses.The government grant related to daily operation activity of the Company should be reckoned into other income; The government

grant not related to daily operation activity should be reckoned into non-operation income and expenses.The financial discount funds received by the Company shall write down relevant borrowing costs.

34. Deferred income tax assets/Deferred income tax liabilities

(1) Deferred income tax assets or deferred income tax liabilities are realized based on the difference between the carrying values of

assets and liabilities and their taxation bases (as for the ones did not recognized as assets and liability and with taxation basis

recognized in line with tax regulations different between tax base and its book value) at the tax rates applicable in the periods when

the Company recovers such assets or settles such liabilities.

(2) Deferred income tax assets are realized to the extent that it is probable to obtain such taxable income which is used to set off the

deductible temporary difference. As at the balance sheet date if there is obvious evidence showing that it is probable to obtain

sufficient taxable income to set off the deductible temporary difference in future periods deferred income tax assets not realized in

previous accounting periods shall be realized.

(3) The carrying value of deferred income tax assets shall be reviewed on the balance sheet date. If it is impossible to obtain

sufficient taxable income to set off the benefits of deferred income tax assets in future periods the carrying value of deferred income

tax assets shall be reduced accordingly. If it is probable to obtain sufficient taxable income the amount reduced shall be switched

back.

(4) The current income tax and deferred income tax shall be reckoned into current gains/losses as income tax expenses or incomes

excluding the income tax arises from the following:

* Enterprise combination;

97WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

* Transactions or events recognized in owner’s equity directly

35. Lease

(1) Accounting for operating lease

Lease refers to a contract in which the lessor transfers the right-of-use assets to the lessee for consideration within a certain period of

time. On the commencement date of the contract the company evaluates whether the contract is a lease or includes a lease. If one

party in the contract transfers the right to control the use of one or more identified assets within a certain period in exchange for

consideration the contract is a lease or includes a lease. If the contract includes multiple separate leases at the same time the

company will split the contract and conduct accounting treatment for each separate lease. If the contract includes both the leased and

non leased parts the lessee and the lessor shall separate the leased and non leased parts.

(1) The company as lessee

For the general accounting treatment of the company as the lessee see Note V 23 “right-to-use assets” and Note V 29 “leaseliabilities”.For short-term leases with a lease term of no more than 12 months and low value asset leases with a lower value when a single asset

is new the company chooses not to recognize the right-to-use assets and lease liabilities and the relevant rental expenses are

included in the current profit and loss or the cost of relevant assets according to the straight-line method in each period of the lease

term.If the lease changes and meets the following conditions at the same time the company will treat the lease change as a separate lease

for Accounting: the lease change expands the lease scope by adding the right to use one or more leased assets; The increased

consideration is equivalent to the amount adjusted according to the conditions of the contract at the separate price for most of the

expansion of the lease scope. If the lease change is not accounted for as a separate lease on the effective date of the lease change the

company will reallocate the consideration of the contract after the change redetermine the lease term and remeasure the lease

liability according to the present value calculated in terms of the lease payment after the change and the revised discount rate.

(2) The company as lessor

On the lease commencement date the company classifies leases that have substantially transferred almost all the risks and rewards

related to the ownership of the leased assets as financial leases and all other leases are classified as operating leases.

1) Operating lease

During each period of the lease term the company recognizes the lease receipts as rental income with the straight-line method. The

initial direct expenses incurred shall be capitalized amortized on the same basis as the recognition of rental income and included in

the current profit and loss by stages. The variable lease payments obtained by the company which are related to operating leases but

not included in the lease receipts will be booked into the current profits and losses at the time of occurrence.

2) Finance lease

On the beginning date of the lease term the company recognizes the financial lease receipts in terms of the net amount of the lease

investment (the sum of the unsecured residual value and the present value of the lease receipts not received on the beginning date of

the lease term discounted according to the embedded interest rate of the lease) and terminates the recognition of financial lease

assets. During each period of the lease term the company calculates and recognizes the interest income according to the embedded

interest rate of the lease. The amount of variable lease receipts obtained by the company that are not included in the measurement of

net lease investment shall be included in the current profit and loss at the time of occurrence.

(3) Sale leaseback

The company evaluates and determines whether the asset transfer in the sale leaseback transaction is a sale in accordance with the

accounting standards for Business Enterprises No. 14 - revenue.

1) The company as lessee

If the asset transfer in the sale leaseback transaction is a sale the company measures the right-of-use assets formed by the sale

98WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

leaseback in terms of the part of the book value of the original assets related to the right of use obtained by the leaseback and only

recognizes the relevant gains or losses on the rights transferred to the lessor.If the asset transfer in the sale leaseback transaction is not a sale the company will continue to recognize the transferred asset and

meanwhile recognize a financial liability equal to the transfer income and carry out accounting treatment for such financial liability

in accordance with the Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial

Instruments.

2) The company as lessor

If the asset transfer in the sale leaseback transaction is a sale the company will conduct accounting treatment for asset purchase in

accordance with other applicable accounting standards for business enterprises and perform accounting treatment for asset lease in

accordance with Accounting Standards for Business Enterprises No. 21 - Leasing.If the asset transfer in the sale leaseback transaction does not belong to sales the company will not recognize the transferred asset

but recognizes a financial asset equal to the transfer income and carries out accounting treatment for such financial asset in

accordance with the Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments.

(2) Accounting treatment for financing lease

Not applicable

36. Other major accounting policy and estimation

In the process of applying the Company's accounting policies due to the inherent uncertainty of business activities the Company

needs to judge estimate and assume the book value of the report items which cannot be accurately measured. These judgments

estimates and assumptions are made on the basis of the historical experience of the Company’s management and in consideration of

other relevant factors which shall impact the reported amounts of income expenses assets and liabilities and the disclosure of

contingent liabilities on the balance sheet date. However the actual results caused by the estimated uncertainties may differ from the

current estimates of the company’s management and consequently the significant adjustments shall be made against the book value

of the involved assets or liabilities.The Company regularly reviews the aforementioned judgments estimates and assumptions on the basis of continuing operations. In

case changes in accounting estimates only affect the current period the impact shall be recognized in the current period; In case

changes in accounting estimates not only affect the current period but also the future periods the impacts shall be recognized in both

current and future periods.On the balance sheet date the important areas of the financial statements that the Company needs to judge estimate and assume are

as follows:

(1) Provision for bad debts

The Company has used the expected credit loss model to assess the impairment of financial instruments which requires significant

judgement and estimates and must consider all reasonable and evidence-based information including forward-looking information.In making such judgments and estimates the Company infers the expected changes in debtors’ credit risks based on historical

repayment data combined with economic policies macroeconomic indicators industry risks and other factors.

(2) inventory depreciation reserve

According to the inventory accounting policies the Company measures the inventory at the lower between the cost and the net

realizable value. For inventory whose cost is higher than net realizable value and old and unsalable inventories the Company

calculates and withdraws the inventory depreciation reserve. The inventory devalues to the net realizable value by evaluating the

inventory’s vendibility and net realizable value. To identify the inventory impairment the management needs to obtain the

unambiguous evidences and consider the purpose to hold the inventory and judge and estimate the impacts of events after the

balance sheet date. The actual results and the differences between the previously estimated results shall affect the book value of

99WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

inventory and the provision or return of the inventory impairment during the period estimated to be changed.

(3) Preparation for the impairment of non-financial and non-current assets

The Company checks whether the non-current assets except for the financial assets may decrease in value at the balance sheet date.For the intangible assets with indefinite service life in addition to the annual impairment test the impairment test is also needed

when there is a sign of impairment. For the other non-current assets except for the financial assets the impairment test is needed

when it indicates that the book amounts may not be recoverable.When the book value of the asset or group of assets exceeds its recoverable amount i.e. the higher between the net amount by

subtracting the disposal costs from the fair value and the present value of expected future cash flows it indicates the impairment.As for the net amount by subtracting the disposal costs from the fair value refer to the sales agreement price similar to the assets in

the fair trade or the observable market price and subtract the incremental costs determination directly attributable to the disposal of

the asset.When estimating the present value of the future cash flow the Company needs to make significant judgments to the output price

and related operating expenses of the asset (or asset group) and the discount rate used for calculating the present value. When

estimating the recoverable amount the Company shall adopt all the relevant information can be obtained including the prediction

related to the output price and related operating expenses based on the reasonable and supportable assumptions.The Company tests whether its business reputation decreases in value every year which requires to estimating the present value of

the asset group allocated with goodwill or the future cash flow combined by the asset group. When estimating the present value of

the future cash flow the Company needs to estimate the future cash flows generated by the asset group or the combination of asset

group and select the proper discount rate to determine the present value of the future cash flows.

(4) Depreciation and amortization

The Company depreciates and amortizes the investment property fixed assets and intangible assets according to the straight-line

method in the service life after considering the residual value. The Company regularly reviews the service life to determine the

depreciation and amortization expense amount to be reckoned in each reporting period. The service life is determined by the

Company based on the past experience of similar assets and the expected technological updating. If the previous estimates have

significant changes the depreciation and amortization expense shall be adjusted in future periods.

(5) Fair value of financial instrument

Financial instruments that do not have active markets to provide quotes need to use valuation techniques to determine fair value.Valuation techniques include the latest transaction information discounted cash flow methods and option pricing models. The

Company has established a set of work processes to ensure that qualified personnel are responsible for the calculation verification

and review of fair value.The valuation model used by the Company uses the market information as much as possible and uses the

Company-specific information as little as possible.It should be noted that part of the information used in the valuation model requires

management’s estimation (such as discount rate target exchange rate volatility etc.).The Company regularly reviews the above

estimates and assumptions and makes adjustments if necessary.

(6) Income tax

In the Company’s normal business activities there are some uncertainties in the final tax treatment and calculation of some

transactions. The tax authorities shall review and approve whether some items can be disbursed from the cost and expenses before

taxes. If the final affirmation of these tax matters differs from the initially estimated amount the difference shall have an impact on

its current and deferred income taxes during the final recognition period.

100WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

37. Changes of important accounting policies and estimation

(1) Changes of important accounting policies

□Applicable □Not applicable

Content and reasons for changes in accounting policies Approval process Note

On Nov. 30 2021 the Ministry of Finance issued Interpretation No. 16 of the

Not applicable

Accounting Standards for Business Enterprises

On November 30 2022 the Ministry of Finance issued Interpretation of Accounting Standards for Business Enterprises No. 16

(CK [2022] No.31 hereinafter referred to as “Interpretation No. 16”).

The deferred income tax related to assets and liabilities from individual transaction is inapplicable to the accounting treatment

exempted from initial recognition (effective from January 1 2023)

According to the Interpretation No.16 an individual transaction other than an enterprise merger not affecting accounting profits or

affecting the taxable income amount (or deductible loss) at the occurrence of transaction with equivalent taxable temporary

difference and deductible temporary difference caused by initially recognized assets and liabilities (including a lease transaction in

which the lessee initially recognizes the lease liability on the commencement date of the lease term and includes into the use right

assets as well as individual transactions recognized as estimated liabilities and included into relevant asset costs due to the

presence of disposal obligations for fixed assets) is inapplicable to the provisions of exempting deferred income tax liabilities and

deferred income tax assets from initial recognition and the enterprise shall respectively recognize the corresponding deferred

income tax liabilities and deferred income tax assets in accordance with the Accounting Standards for Business Enterprises No. 18

- Income Tax at the occurrence of the transaction.For individual transactions that occurred between the beginning of the earliest period for which the provision is first applied and

the date of implementation of the provision to which the provision applies as well as the lease liabilities and use right assets

recognized as a result of the individual transactions to which the provision applies at the beginning of the earliest period for which

the provision is presented in the financial statements and the recognized estimated liabilities related to the disposal obligation and

corresponding assets where there is a taxable temporary difference or a deductible temporary difference the enterprise shall make

adjustments in accordance with this provision. The implementation of this provision has not had a material impact on the financial

position and operating results of the Company.

(2) Changes of important accounting estimations

□Applicable □Not applicable

(3) Related items of financial statements at the beginning of the first year to implement the new

accounting standards adjustment for the first time starting from 2023

□Applicable □Not applicable

38. Others

Nil

VI. Taxation

1. Major taxes and tax rates

101WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Tax Basis Tax rate

The output tax is calculated based on the taxable income and 25%(IRDDenmark) 22%(VHIO，VAT VAT is calculated based on the difference after deducting the Italy)21%(BoritBelgium) 13% 9%

input tax available for deduction for the current period 6% Collection rate 5%

City maintaining &

Turnover tax payable 7%5%

construction tax

15% 20%21% (IRD America Borit

America) 22% (IRDDenmark)

Corporation income tax Taxable income

24%(VHIO，Italy)

25%(BoritBelgium)

Educational surtax Turnover tax payable 5%

Disclose reasons for different taxpaying body

Taxpaying body Income tax rate

WFCA WFTR WFAS WFDT Borit VHWX 25%

The Company WFJN WFLD WFTT WFLD(Chongqing) WFAMWFMAWFSC 15%

WFLD(Wuhan) WFLD(Nanchang) 20%

IRD America Borit America 21%

SPV IRD 22%

VHIO 24%

2. Tax incentives

The Company WFJN WFLD WFTT and WFMA were accredited as high-tech enterprises in 2020 and enjoy a preferential income

tax rate of 15% in the period from January 1 2020 to December 31 2022. WFAM was accredited as high-tech enterprise in 2021

and enjoy a preferential income tax rate of 15% in the period from January 1 2021 to December 31 2023. WFSC was accredited as

high-tech enterprise in 2022 and enjoy a preferential income tax rate of 15% in the period from January 1 2022 to December 31

2024.

According to the “Continuation of the Enterprise Income Tax Policies for Western Development” No.23 (Year of 2020) issued

together by Ministry of Finance SAT and NDRC from January 1 2011 to December 31 2030 the enterprises located in the west

region and mainly engaged in the industrial projects stipulated in the Catalogue of Encouragement Industries in Western China and

whose main business income accounting for more than 60% of the total income of the enterprise in the current year can pay the

corporate income tax at the tax rate of 15%. In the first half year of 2023 WFLD (Chongqing) paid its corporate income tax at the tax

rate of 15%.In the first half year of 2023 WFLD (Wuhan) and WFLD(Nanchang) were qualified small and low-profit enterprises and the part of

taxable income that did not exceed 3 million yuan was included in the taxable income at a reduced rate of 25% and the corporate

income tax was paid at the tax rate of 20%.

3. Other

Nil

VII. Notes to major items in consolidated financial statements

1. Monetary funds

In RMB

102WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Item Ending balance Opening balance

Cash on hand 76329.51 51818.51

Cash in bank 2447388349.63 2304848889.90

Other monetary funds 40321462.90 84651222.35

Total 2487786142.04 2389551930.76

Including: total amount of funds deposited overseas 228685960.81 324409336.06

The total amount of funds restricted on use due to mortgage pledge or freezing 39059182.90 51080295.65

Other explanation

The ending balance of other monetary funds includes bank acceptance bill deposit 12066812.90 yuan cash deposit for Mastercard

211620.00 yuan in-transit dividends 1262280.00 IRD performance bond 7935750.00 yuan the foreign exchange contract margin

188400000.00 yuan and ETC freezing 5000.00 yuan. The in-transit dividends 1262280.00 yuan was a portion of the dividend

distributed by Miracle Automation (002009) a trading financial asset held by the company from 2017 to 2022 which was not

transferred to the company’s current account due to account issues.

2. Trading financial asset

In RMB

Item Ending balance Opening balance

Financial assets measured at fair value and whose changes are

2250198464.282718820654.87

included in current profit or loss

Including:

SNAT 79224360.00 78834732.00

Miracle Automation 71026800.00 66693600.00

Lifan Technology 44871.33 48516.34

Toyze Auto 267028.08 462414.48

Other debt and equity instrument investments 2099635404.87 2572781392.05

Including：

Total 2250198464.28 2718820654.87

3. Note receivable

(1) Classification of notes receivable

In RMB

Item Ending balance Opening balance

Trade acceptance bill 104980712.30 135559024.27

Total 104980712.30 135559024.27

In RMB

Ending balance Opening balance

Provision for bad Provision for bad

Book balance Book value

Category debts debts

Book value Book value

Amou Accru Amou Accru

Amount Ratio Amount Ratio

nt al ratio nt al ratio

Including:

103WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Note

receivable

with

provision 104980 104980712. 13555902 135559024.

100.00%100.00%

for bad 712.30 30 4.27 27

debts

accrual on

portfolio

Including:

Portfolio 1:

bank

acceptance

bill

Portfolio 2:

trade 104980 104980712. 13555902 135559024.

100.00%100.00%

acceptance 712.30 30 4.27 27

bill

104980104980712.13555902135559024.

Total 100.00% 100.00%

712.30304.2727

If the provision for bad debts of note receivable is made in accordance with the general model of expected credit losses please

refer to the disclosure of other receivables to disclose related information about bad-debt provisions:

□Applicable □Not applicable

(2) Provision for bad debts accrual collected or reversal

Provision for bad debts in the current period:

□ Applicable □ Not applicable

(3) Notes receivable already pledged by the Company at the end of the period

In RMB

Item Amount pledge at period-end

Trade acceptance bill 37607161.90

Total 37607161.90

(4) Notes endorsement or discount and undue on balance sheet date

Nil

(5) Notes transfer to account receivable due for failure implementation by drawer at period-end

In RMB

Item Amount transfer to account receivable at period-end

Trade acceptance bill 7006453.02

Total 7006453.02

Other explanation

The trade acceptance bill that the company transferred to the accounts receivable due to in 2018 the failure of the drawer to perform

the agreement at the end of the period were the bills of the subsidiaries controlled by Baota Petrochemical Group Co. Ltd. and the

bills accepted by Baota Petrochemical Group Finance Co. Ltd. (hereinafter referred to as “BD bills”); In 2018 the amount

transferred to account receivable was 7 million yuan and 1.7 million yuan was recovered in 2019 the amount transferred to account

104WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

receivable rose by 2.00 million yuan in 2022 and enforced money 98309 yuan and 195237.98 yuan were received respectively in

the year of 2022 and 2023.

(6) Note receivable actually written-off in the period

Nil

4. Account receivable

(1) Classification of account receivable

In RMB

Ending balance Opening balance

Provision for bad Provision for bad

Category Book balance Book balance debts Book debts Book

Accrual value Accrual value

Amount Ratio Amount Amount Ratio Amount

ratio ratio

Account

receivable with

provision for 545338 545338 578067 578067

1.61%100.00%1.80%100.00%

bad debts 29.30 29.30 05.14 05.14

accrual on a

single basis

Including:

Account

receivable with

provision for 334227 98.39 248913 331738 314915 98.20 216675 3127490

0.74%0.69%

bad debts 8424.11 % 46.55 7077.56 7700.73 % 23.48 177.25

accrual on

portfolio

Including:

339681100.00794251331738320696100.007947423127490

Total 2.34% 2.48%

2253.41%75.857077.564405.87%28.62177.25

Provision for bad debts accrual on single basis: 54533829.30 yuan

In RMB

Ending balance

Name Provisions for Accrual

Book balance Accrual causes

bad debts ratio

Have difficulty in

Hubei Meiyang Auto Industry Co. Ltd. 17610371.91 17610371.91 100.00%

collection

Have difficulty in

Hunan Leopaard Auto Co. Ltd. 8077361.13 8077361.13 100.00%

collection

Have difficulty in

BD bills 7006453.02 7006453.02 100.00%

collection

Linyi Zotye Automobile Components Have difficulty in

6193466.776193466.77100.00%

Manufacturing Co. Ltd. collection

Have difficulty in

Tongling Ruineng Purchasing Co. Ltd. 4320454.34 4320454.34 100.00%

collection

Have difficulty in

Brilliance Automotive Group Holdings Co. Ltd. 3469091.33 3469091.33 100.00%

collection

Have difficulty in

Jiangsu Kawei Auto Industrial Group Co. Ltd. 1932476.26 1932476.26 100.00%

collection

105WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Have difficulty in

Dongfeng Chaoyang Diesel Co. Ltd. 1823262.64 1823262.64 100.00%

collection

Have difficulty in

Jiangsu Jintan Automobile Industry Co. Ltd. 1059798.43 1059798.43 100.00%

collection

Have difficulty in

Tianjin Levol Engine Co. Ltd. 1018054.89 1018054.89 100.00%

collection

Have difficulty in

Other clients 2023038.58 2023038.58 100.00%

collection

Total 54533829.30 54533829.30

Provisions for bad debts accrual on portfolio: 24891346.55 yuan

In RMB

Ending balance

Name

Book balance Provision for bad debts Accrual ratio

Within 6 months 3206178893.81

6 months to 1 year 97331858.14 9733185.83 10.00%

1-2 years 21212969.31 4242593.82 20.00%

2-3 years 11065226.59 4426090.64 40.00%

Over 3 years 6489476.26 6489476.26 100.00%

Total 3342278424.11 24891346.55

Explanation on determining the basis for this combination:

If the provision for bad debts of accounts receivable is made in accordance with the general model of expected credit losses please

refer to the disclosure of other receivables to disclose related information about bad-debt provisions:

□ Applicable □ Not applicable

By account age

In RMB

Account age Book balance

Within 1 year (1 year included) 3304455538.89

Including: within 6 months 3206178894.62

6 months to 1 year 98276644.27

1-2 years 21457907.25

2-3 years 14031287.79

Over 3 years 56867519.48

3-4 years 56867519.48

Total 3396812253.41

(2) Provisions for bad debts accrual collected or reversal

Provisions for bad debts accrual in the period:

In RMB

Amount changed in the period

Opening

Category Collected or Ending balance

balance Accrual Charged off Other

reversal

106WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Provision for

79474228.625996407.946142952.1520150.61117642.0579425175.85

bad debts

Total 79474228.62 5996407.94 6142952.15 20150.61 117642.05 79425175.85

Important provision for bad debts collected or reversal: Nil

(3) Account receivable actually charged off in the Period

In RMB

Item Amount charged off

Jiangdong Zhizao Technology Co. Ltd 20150.61

Total 20150.61

Important accounts receivable charged off: Nil

Explanation of accounts receivable charged off: Nil

(4) Top 5 receivables at ending balance by arrears party

In RMB

Ending balance of account Ratio in total ending balance of Ending balance of

Name

receivable accounts receivable provision for bad debts

RBCD 511897553.12 15.07% 619942.02

Robert Bosch Company 423176007.79 12.46% 754342.26

Client 1 176089133.91 5.18% 189464.96

Client 2 167531932.86 4.93% 1488908.66

Client 3 143584376.04 4.23%

Total 1422279003.72 41.87% 3052657.90

(5) Account receivable derecognition due to financial assets transfer

Nil

(6) Assets and liabilities resulted by account receivable transfer and continues involvement

Nil

5. Receivable financing

In RMB

Item Ending balance Opening balance

Bill receivable- bank acceptance bill 1920348206.04 1918368845.21

Total 1920348206.04 1918368845.21

Increase and decrease in current period and changes in fair value of receivables financing

□ Applicable □ Not applicable

If the provision for bad debts of account receivable is calculated and withdrawn according to the general model of expected credit

loss please refer to the disclosure method of other accounts receivable in aspect of impairment provision:

107WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

□ Applicable □ Not applicable

Other explanation:

During the management of liquidity the company will discount some bills or endorse some bills for transference before the maturity

of such bills the business model for managing bills receivable is to collect contractual cash flows and sell the financial asset so it is

classified as financial assets measured at fair value and whose changes are included in other comprehensive income which is listed

in receivables financing.At the end of the period the company has pledged notes receivable of 825831044.39 yuan and notes receivable that have been

endorsed or discounted and have not yet matured on the balance sheet date are 178018855.56 yuan.

6. Prepayments

(1) Account age of Prepayments

In RMB

Ending balance Opening balance

Account age

Amount Ratio Amount Ratio

Within 1 year 59364895.05 87.67% 88207782.70 93.51%

1-2 years 6674170.61 9.86% 5066837.28 5.37%

2-3 years 1489110.74 2.20% 778819.68 0.83%

Over 3 years 182487.83 0.27% 270414.21 0.29%

Total 67710664.23 94323853.87

Explanation of the reasons why prepayments with an aging of over 1 year and significant amounts were not settled in a timely

manner: Nil

(2) Top 5 prepayments at ending balance by prepayment object

Total ending balance of top 5 prepayments by prepayment object amounted to 23271002.96 yuan 34.37% of the total prepayments

at the period-end.Other explanation: Nil

7. Other accounts receivable

In RMB

Item Ending balance Opening balance

Dividend receivable 1955605474.71 147000000.00

Other accounts receivable 918941597.26 1117507456.47

Total 2874547071.97 1264507456.47

(1) Interest receivable

1) Category of interest receivable

Nil

108WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

2) Significant overdue interest

Nil

3) Accrual of provision for bad debts

□ Applicable □Not applicable

(2) Dividend receivable

1) Category of dividend receivable

In RMB

Item (or invested enterprise) Ending balance Opening balance

Wuxi WFEC Catalyst Co. Ltd. 147000000.00

RBCD 1673605474.71

Zhonglian Automobile Electronics Co. Ltd. 282000000.00

Total 1955605474.71 147000000.00

2) Important dividend receivable with account age over one year

Nil

3) Accrual of provision for bad debts

□Applicable □Not applicable

(3) Other accounts receivable

1) By nature

In RMB

Nature Ending book balance Opening book balance

Intercourse funds from units 1407955.77 1894818.08

Cash deposit 8978638.40 9087881.41

Staff loans and petty cash 2020922.82 1823842.27

Social security and provident fund paid 10521493.38 11341820.83

WFTR “platform trade” business

2542263370.702741499131.95

portfolio

Other 3031937.89 66663.56

Total 2568224318.96 2765714158.10

2) Accrual of provision for bad debts

In RMB

109WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Phase I Phase II Phase III

Expected credit losses

Expected credit losses for

Provision of bad debts Expected credit losses for the entire duration Total

the entire duration (without

over next 12 months (with credit

credit impairment occurred)

impairment occurred)

Balance on Jan. 1 2023 4106646.90 1644100054.73 1648206701.63

Balance of Jan. 1 2023 in

the period

Current accrual 1175781.30 1175781.30

Current reversal 182511.33 182511.33

Other changes 82750.10 82750.10

Balance on June 30 2023 5182666.97 1644100054.73 1649282721.70

Change of book balance of loss provision with amount has major changes in the period

□ Applicable □ Not applicable

By account age

In RMB

Account age Book balance

Within 1 year (1 year included) 2560675182.39

Including: within 6 months 1919640482.87

6 months to 1 year 641034699.52

1-2 years 1010751.05

2-3 years 2804594.75

Over 3 years 3733790.77

3-4 years 3733790.77

Total 2568224318.96

3) Provision for bad debts accrual collected or reversal

Provision for bad debts accrual in the period:

In RMB

Change in current period

Category Opening balance Ending balance

Accrual Collected or reversal Charge off Other

Provision for

1648206701.631175781.30182511.3382750.101649282721.70

bad debts

Total 1648206701.63 1175781.30 182511.33 82750.10 1649282721.70

Including the important provision for bad debts reversal or collected in the period: Nil

4) Other accounts actually charged off during the reporting period

Nil

5) Top 5 other accounts receivable at ending balance by arrears party

In RMB

110WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Ratio in total ending Ending balance of

Account

Enterprise Nature Ending balance balance of other provision for bad

age

accounts receivables debts

WFTR “platform trade” business Refer to Within 1

2542263370.7098.99%1644068327.93

portfolio other notes year

Wuxi China Resources Gas Co. Deposit Within 3

1364750.000.05%749150.00

Ltd. margin years

Zhenkunxing Industrial Deposit 2-3

1000000.000.04%400000.00

Supermarket (Shanghai) Co. Ltd. margin years

Wuxi Xingzhou Energy Deposit Within 2

882319.650.03%89031.78

Development Co. Ltd margin years

Wuxi Youlian Thermal Power Co. Deposit Over 3

750000.000.03%750000.00

Ltd margin years

Total 2546260440.35 99.14% 1646056509.71

Other explanations: For details on the “platform trade” business portfolio of WFTR please refer to the descriptions in Note XVI. 7.“Major transaction and events influencing investor’s decision”.

6) Other accounts receivable related to government grants

Nil

7) Other accounts receivable derecognized due to the transfer of financial assets

Nil

8) The amount of assets and liabilities formed by transferring other receivables and continuing to be

involved

Nil

8. Inventory

Whether the Company need to comply with disclosure requirements in the real estate industry or not

Nil

(1) Category of inventory

In RMB

Ending balance Opening balance

Inventory Inventory

depreciation depreciation

Item reserve or reserve or

Book balance provision for Book value Book balance provision for Book value

impairment of impairment of

contract contract

performance costs performance costs

Stock

674113552.27169224572.51504888979.76796941337.63160326360.21636614977.42

materials

Goods in

421261059.4734297563.35386963496.12437653321.2331641606.69406011714.54

process

Finished

1149136067.70119904477.761029231589.941382835104.89142342140.581240492964.31

goods

Total 2244510679.44 323426613.62 1921084065.82 2617429763.75 334310107.48 2283119656.27

111WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

(2) Inventory depreciation reserve or provision for impairment of contract performance costs

In RMB

Current increased Current decreased

Item Opening balance Reversal or Ending balance

Accrual Other Other

write-off

Stock materials 160326360.21 43364778.05 846631.35 35313197.10 169224572.51

Goods in process 31641606.69 9893111.73 626433.36 7863588.43 34297563.35

Finished goods 142342140.58 36730651.32 280633.75 59448947.89 119904477.76

Total 334310107.48 89988541.10 1753698.46 102625733.42 323426613.62

* Net realizable value of inventory is equal to during the day-to-day activities the estimated sale price of inventory minus

estimated cost to be incurred till works completed estimated sales expense and relevant taxes.* Accrual basis for inventory depreciation reserve:

Item Accrual basis for inventory impairment provision Specific basis for recognition

The materials sold to manufacture finished The estimated sale price of finished products minus

Materials in stock goods its net realizable value is lower than its estimated cost to be incurred till works completed

book value estimated sales expense and relevant taxes

The goods in process sold to manufacture The estimated sale price of finished products minus

Goods in process finished goods its net realizable value is lower estimated cost to be incurred till works completed

than the book value estimated sales expense and relevant taxes

Its net realizable value is lower than the book The estimated sale price minus relevant taxes and

Finished goods

value expenses

* Reasons of inventory depreciation reserve written off in current period:

Item Reasons of written off

Materials in stock Used for production in reporting period and the finished goods have been sold

Goods in process completed in the reporting period and corresponding finished goods have been sold in the

Goods in process

reporting period

Finished goods Have been sold in current period

(3) Explanation on capitalization of borrowing costs at ending balance of inventory

Nil

(4) Explanation on the current amortization amount of contract performance cost

Nil

9. Other current assets

In RMB

Item Ending balance Opening balance

Export tax rebates receivable 7479670.43 14325020.52

VAT refund receivable 55946713.17 25444657.63

Prepaid taxes and VAT retained 165724432.78 364556192.43

Input tax to be deducted and certification 11806.79 1192752.68

Other 11799744.63 25028577.98

Total 240962367.80 430547201.24

Other explanation:

112WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

10. Long-term equity investment

In RMB

Current changes (+/ -)

Ending

Other Cash

Opening Investmen Ending balance

The Additi Capi compreh Other dividend

balance t gain/loss Impairm balance of

invested onal tal ensive equity or profit

(book recognize ent Other (book depreci

entity invest redu income chang announc

value) d under accrual value) ation

ment ction adjustm e ed to

equity reserves

ent issued

I. Joint venture

II. Associated enterprise

8245288082219484906748

WFEC

9.89.77294.66

3659761348732796167360247348

RBCD

10.972.115474.713798.37

Zhonglian 15594133 17934568 282000 145675

Electronic 14.05 8.18 000.00 9002.23

54829812.2157950.569877

WFPM

514162.92

Changchu 9621734.8 - 931949

n Xuyang 3 302244.09 0.74

Precors 5517924.5 27917 - 49131 860085

GmbH 6 25.00 200110.59 2.08 1.05

Chelian 16914520 169575

430317.51

Tianxia 2.15 519.66

11000-

Lezhuo 106520

0000.03479485.

Bowei 514.80

020

11279

628281817474995619556049131518799

Subtotal 1725.0

08.963.105474.712.085234.43

0

11279

628281817474995619556049131518799

Total 1725.0

08.963.105474.712.085234.43

0

Other explanation

Explanation on those holding less than 20% of the voting rights but with significant influence:

The Company holds 9.6372% equity of Chelian Tianxia and appointed a director to Chelian Tianxia. Though such representative

the Company can participate in the operation policies formulation of Chelian Tianxi and thus exercise a significant influence over

Chelian Tianxi.

11. Other equity instrument investment

In RMB

Item Ending balance Opening balance

Wuxi Xidong Science & Technology Industrial Park 5000000.00 5000000.00

Beijing Zhike Industry Investment Holding Group Co. Ltd. 75940000.00 75940000.00

Rare earth Catalysis Innovation Research Institute

4108000.004108000.00

(Dongying) Co. Ltd.

Wuxi Xichan Microchip Semi-Conductor 592742690.00 592742690.00

Total 677790690.00 677790690.00

113WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

12. Other non-current financial assets

In RMB

Item Ending balance Opening balance

Guolian Securities 161342387.00 186608914.00

Investments in other debt instruments and equity

1005000000.001140000000.00

instruments held for more than one year

Total 1166342387.00 1326608914.00

13. Investment real estate

(1) Investment real estate measured by cost

□ Applicable □ Not applicable

In RMB

House and Construction

Item Land use right Total

Building in progress

I. Original book value

1.Opening balance 97691776.27 97691776.27

2.Current increased 15143746.66 15143746.66

(1) Outsourcing

(2) Inventory\fixed assets\construction in process

15143746.6615143746.66

transfer-in

(3) Increased by combination

3.Current decreased 2364090.24 2364090.24

(1) Disposal 2364090.24 2364090.24

(2) Other transfer-out

4.Ending balance 110471432.69 110471432.69

II. Accumulated depreciation and accumulated

amortization

1.Opening balance 48394906.54 48394906.54

2.Current increased 8184558.32 8184558.32

(1) Accrual or amortization 1578413.90 1578413.90

(2)Transferred from inventory fixed assets and

6606144.426606144.42

construction in progress

3.Current decreased 2293167.53 2293167.53

(1) Disposal 2293167.53 2293167.53

(2) Other transfer-out

4.Ending balance 54286297.33 54286297.33

III. Depreciation reserves

1.Opening balance

2.Current increased

(1) Accrual

3. Current decreased

(1) Disposal

(2) Other transfer-out

4.Ending balance

IV. Book value

1.Ending Book value 56185135.36 56185135.36

2.Opening Book value 49296869.73 49296869.73

114WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

(2) Investment real estate measured at fair value

□ Applicable □ Not applicable

(3) Investment real estate without property certification held

Nil

14. Fixed assets

In RMB

Item Ending balance Opening balance

Fixed assets 3745590665.96 3769984185.94

Total 3745590665.96 3769984185.94

(1) Fixed assets

In RMB

House and Machinery Transportation Electronic and other

Item Land Total

Building equipment equipment equipment

I. Original book

value:

1.Opening balance 1934526060.96 4613504836.29 38612263.18 1046301287.16 30483292.05 7663427739.64

2.Current increased 6008444.26 113360889.00 16401981.30 106730315.10 242501629.66

(1) Purchase 92603.75 4642398.44 5122002.64 1476883.90 11333888.73

(2) Construction in

progress transfer-in 5915840.51 108718490.56 11279978.66 105253431.20 231167740.93

(3)Investment real

estate transfer-in

3.Current decreased 20711919.83 25929597.53 1726864.06 18507266.49 66875647.91

(1) Disposal or

scrapping 20711919.83 25929597.53 1726864.06 18507266.49 66875647.91

4.Conversion of

foreign currency 7786172.25 26874425.09 726445.15 18660373.17 1865547.08 55912962.74

financial statement

5.Ending balance 1927608757.64 4727810552.85 54013825.57 1153184708.94 32348839.13 7894966684.13

II. Accumulated

depreciation

1.Opening balance 536810138.49 2470972225.66 21621368.25 664099659.92 3693503392.32

2.Current increased 32496132.87 113728096.55 1235792.50 110584663.57 258044685.49

(1) Accrual 32496132.87 113728096.55 1235792.50 110584663.57 258044685.49

3.Current decreased 7633458.71 22066910.45 1194186.78 14707800.49 45602356.43

(1) Disposal or

scrapping 7633458.71 22066910.45 1194186.78 14707800.49 45602356.43

4.Conversion of

foreign currency 3458756.64 18928181.63 661.56 14682619.54 37070219.37

financial statement

5.Ending balance 565131569.29 2581561593.39 21663635.53 774659142.54 3943015940.75

III. Depreciation

reserves

1.Opening balance 14097320.49 148903639.01 73319.90 21710795.11 15155086.87 199940161.38

2.Current increased 274995.90 274995.90

(1) Accrual 274995.90 274995.90

3.Current decreased 124646.67 98219.18 222865.85

115WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

(1) Disposal or

scrapping 124646.67 98219.18 222865.85

4.Conversion of

foreign currency 862515.42 3805736.91 772057.45 927476.21 6367785.99

financial statement

5.Ending balance 14959835.91 152859725.15 73319.90 22384633.38 16082563.08 206360077.42

IV. Book value

1.Ending book value 1347517352.44 1993389234.31 32276870.14 356140933.02 16266276.05 3745590665.96

2.Opening book

value 1383618601.98 1993628971.62 16917575.03 360490832.13 15328205.18 3769984185.94

(2) Temporarily idle fixed assets

Nil

(3) Fixed assets acquired by operating lease

Nil

(4) Fixed assets without property certification held

Nil

In RMB

Item Book value Reasons for without the property certification

Plant and office building of WFCA 31301783.70 The relevant property rights procedures are still being processed

(5) Disposal of fixed assets

Nil

15. Construction in progress

In RMB

Item Ending balance Opening balance

Construction in progress 639963756.99 509105587.49

Total 639963756.99 509105587.49

(1) Construction in progress

In RMB

Ending balance Opening balance

Item Depreciation Depreciation

Book balance Book value Book balance Book value

reserves reserves

Technical transformation of parent

company 111929396.69 111929396.69 132814463.95 132814463.95

WFMS rebuilding of the parent

company 23300153.61 23300153.61 20562758.75 20562758.75

Renovation of Xinan Branch No. 6

Huashan Road of Parent Company 62697798.04 62697798.04 41493029.41 41493029.41

Technical transformation of WFAM 89518742.76 89518742.76 69450019.06 69450019.06

Technical transformation of WFLD 11955259.21 11955259.21 16739199.84 16739199.84

Technical transformation of

Denmark RID 130799625.17 130799625.17 82081060.63 82081060.63

Technical transformation of Italy

VHIO 41376242.80 41376242.80 47822275.01 47822275.01

Other projects 168386538.71 168386538.71 98142780.84 98142780.84

Total 639963756.99 639963756.99 509105587.49 509105587.49

116WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

(2) Changes of major construction in progress

In RMB

Includi

Accum

Fixed Proporti ng:

Other ulated Interest

assets on of interest

Openin Current decreas amount capitali

Bud transfer Ending project Progres capitali Source of

Item g increase ed in of zation

get -in in balance investm s zed funds

balance d the interest rate of

the ent in amount

Period capitali the year

Period budget of the

zation

year

Technical Accumulate

transformat

132814 90155 109634 14065 111929 d funds by

ion of

parent 463.95 496.59 054.55 09.30 396.69 the

company Company

WFMS

Accumulate

rebuilding

20562 27373 23300 d funds by

of the

758.75 94.86 153.61 the

parent

Company

company

Renovation

of Xinan

Branch Accumulate

No. 6 41493 21204 62697 d funds by

Huashan 029.41 768.63 798.04 the

Road of Company

Parent

Company

Technical Accumulate

transformat 69450 30011 99431 89518 d funds by

ion of 019.06 849.10 25.40 742.76 the

WFAM

Company

Technical Accumulate

transformat 16739 33141 37925 11955 d funds by

ion of 199.84 808.42 749.05 259.21 the

WFLD

Company

Technical Accumulate

transformat

82081 48718 130799 d funds by

ion of

Denmark 060.63 564.54 625.17 the

IRD Company

Technical Accumulate

transformat 47822 25413 89874 41376 d funds by

ion of Italy 275.01 89.03 21.24 242.80 the

VHIO Company

41096222851116649014065471577

Total

806.65271.17350.2409.30218.28

(3) The provision for impairment of construction in progress

Nil

(4) Engineering materials

Nil

117WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

16. Right-of-use assets

In RMB

Item Building Mechanical equipment Total

I. Original book value:

1.Opening balance 34416049.86 25021445.63 59437495.49

2.Current increased 2362331.76 2362331.76

(1)Increased lease 2362331.76 2362331.76

3.Current decreased

4. Conversion of foreign currency financial statement 1315146.09 884504.09 2199650.18

5.Ending balance 38093527.71 25905949.72 63999477.43

II. Accumulated depreciation

1.Opening balance 11035938.99 6536456.12 17572395.11

2.Current increased 3113424.70 3267093.16 6380517.86

(1) Accrual 3113424.70 3267093.16 6380517.86

3.Current decreased

(1) Disposal

4. Conversion of foreign currency financial statement 427621.05 254102.61 681723.66

5.Ending balance 14576984.74 10057651.89 24634636.63

III. Depreciation reserves

1.Opening balance

2.Current increased

(1) Accrual

3.Current decreased

(1) Disposal

4.Ending balance

IV. Book value

1.Ending book value 23516542.97 15848297.83 39364840.80

2.Opening book value 23380110.87 18484989.51 41865100.38

17. Intangible assets

(1) Intangible assets

In RMB

Non-patent Computer Trademark and

Item Land use right Patent Total

technology software trademark license

I. Original book value

1. Opening balance 381867130.62 247735742.07 156331661.37 41597126.47 827531660.53

2. Current increased 5000000.00 22416196.26 27416196.26

(1) Purchase 3801880.28 3801880.28

(2) Internal R&D

(3) Increased by combination

(4) Transfer from construction in

5000000.0018614315.9823614315.98

progress

3. Current decreased 8922112.00 8922112.00

(1) Disposal 8922112.00 8922112.00

4. Conversion of foreign currency

financial statement 13186892.90 1064798.27 14251691.17

118WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

5. Ending balance 372945018.62 265922634.97 179812655.90 41597126.47 860277435.96

II. Accumulated amortization

1. Opening balance 112319506.81 82143152.44 118642946.06 9709000.00 322814605.31

2. Current increased 1798082.72 12400528.93 4075392.72 14152357.93 32426362.30

(1) Amortization 1798082.72 12400528.93 4075392.72 14152357.93 32426362.30

3. Current decreased 7410097.90 7410097.90

(1) Disposal 7410097.90 7410097.90

4. Conversion of foreign currency

financial statement 5068852.73 503275.39 5572128.12

5. Ending balance 106707491.63 99612534.10 123221614.17 23861357.93 353402997.83

III. Depreciation reserves

1. Opening balance 442167.30 16646900.00 17089067.30

2. Current increased

(1) Accrual

3. Current decreased

(1) Disposal

4. Conversion of foreign currency

27060.1827060.18

financial statement

5. Ending balance 469227.48 16646900.00 17116127.48

IV. Book value

1. Ending book value 266237526.99 166310100.87 56121814.25 1088868.54 489758310.65

2. Opening book value 269547623.81 165592589.63 37246548.01 15241226.47 487627987.92

(2) Land use right without property certification held

Nil

18. Goodwill

(1) Original book value of goodwill

In RMB

Current increased Current decreased

The invested entity

Opening Formed by

or matters forming Translation of Ending balance

balance

goodwill business foreign currency Disposal

combination statements

Merged with WFTT 1784086.79 1784086.79

Merged with Borit 235898288.93 14130739.94 250029028.87

Total 237682375.72 14130739.94 251813115.66

(2) Goodwill depreciation reserves

Other explanation:

1) Goodwill formed by the merger of WFTT:

In 2010 the Company merged WFTT and became its controlling shareholders by increasing cash capital and goodwill was the part

of merge cost greater than the fair value of identifiable net assets of WFTT.

2) Goodwill formed by the merger of Borit:

In 2020 the Company acquired 100.00% equity of Borit in the form of cash purchase the goodwill was the part of the merge cost

119WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

greater than the fair value share of the identifiable net assets of Borit.

19. Long-term deferred expense

In RMB

Item Opening balance Current increased Amortized in the Period Other decrease Ending balance

Remodeling costs etc. 28586235.84 648309.32 2091207.90 27143337.26

Total 28586235.84 648309.32 2091207.90 27143337.26

20. Deferred income tax assets/Deferred income tax liabilities

(1) Deferred income tax assets that are not offset

In RMB

Ending balance Opening balance

Item Deductible temporary Deferred income Deductible temporary Deferred income

difference tax assets difference tax assets

Unrealized profit from insider

45296516.408088715.4343939348.598056161.37

transactions

Deductible loss 933763077.77 140064461.66 942706826.57 142138790.82

Provision for bad debts 79963291.96 12080980.69 79078766.93 11972961.27

Inventory depreciation reserve 289774907.65 44812137.50 299752548.93 46412618.47

Depreciation reserves of fixed

69791042.3712669293.8870008612.2112701929.36

assets

Depreciation reserves of intangible

16646900.002497035.0016646900.002497035.00

assets

Deferred income 192321983.67 29071265.00 222850907.79 33668167.75

Payable salary accrued expenses

815381382.95145505140.26849436667.00139593056.66

etc.Differences in asset depreciation

22846772.823716162.2525570352.824153581.52

and amortization

Equity incentive 36048963.14 5527217.76 3066582.11 459987.32

Fiscal and tax differences for

1634506.39284789.341345462.74234721.68

leasing business

Total 2503469345.12 404317198.77 2554402975.69 401889011.22

(2) Deferred income tax liabilities that are not offset

In RMB

Ending balance Opening balance

Item

Taxable temporary Deferred income Taxable temporary Deferred income

differences tax liabilities differences tax liabilities

The difference between the fair value and taxation basis of

WFTT assets in merger not under the same control 9958382.35 1493757.33 10192264.15 1528839.60

The difference between the fair value and taxation basis of

IRD assets in merger not under the same control 59677693.03 13129092.46 61131061.24 13448833.47

The difference between the fair value and taxation basis of

Borit assets in merger not under the same control 18072610.25 4518152.58 21378918.49 5344729.59

The difference between the fair value and taxation basis of

57938669.6213905280.7659291649.8814229995.98

VH business in merger not under the same control

Change of fair value of transaction financial asset 136564271.14 20484640.67 161415403.78 24226534.89

Accelerated depreciation of fixed assets 760672604.44 116650472.33 700548497.31 107631856.23

Total 1042884230.83 170181396.13 1013957794.85 166410789.76

120WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

(3) Deferred income tax assets and deferred income tax liabilities listed after off-set

In RMB

Trade-off between Ending balance of Trade-off between the Opening balance of

the deferred deferred income tax deferred income tax deferred income tax

Item

income tax assets assets or liabilities after assets and liabilities at assets or liabilities after

and liabilities off-set period-begin off-set

Deferred income tax assets -130408867.62 273908331.15 -126261238.77 275627772.45

Deferred income tax

-130408867.6239772528.51-126261238.7740149550.99

liabilities

(4) Details of unrecognized deferred income tax assets

In RMB

Item Ending balance Opening balance

Provision for bad debts 1648744605.59 1648602163.32

Inventory depreciation reserve 33651705.97 34557558.55

Loss from subsidiary 650732385.24 529884134.82

Depreciation reserves of fixed assets 136569035.05 129931549.17

Depreciation reserves of intangible assets 469227.48 442167.30

Other equity instrument investment 13600000.00 13600000.00

Equity incentive 412188.43

Total 2484179147.76 2357017573.16

(5) Deductible losses of unrecognized deferred income tax assets expired in following years

In RMB

Maturity year Ending amount Opening amount Note

2023 2380501.89 2380501.89 Domestic subsidiaries have operating losses

2024 7241959.80 12087441.12 Domestic subsidiaries have operating losses

2025 12140693.54 12140693.54 Domestic subsidiaries have operating losses

2026 46263839.94 46418486.83 Domestic subsidiaries have operating losses

2027 160833781.13 160833781.13 Domestic subsidiaries have operating losses

2028 and the following years 84832478.65 Domestic subsidiaries have operating losses

No expiration period 337039130.29 296023230.31 Overseas subsidiaries have operating losses

Total 650732385.24 529884134.82

21. Other non-current assets

In RMB

Ending balance Opening balance

Item Provision for Provision for

Book balance Book value Book balance Book value

impairment impairment

Contract

17527137.4217527137.4219855422.2719855422.27

acquisition cost

Engineering

equipment paid in 284280950.81 284280950.81 239775014.10 239775014.10

advance

121WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Large deposit

certificates with a

310000000.00310000000.00220000000.00220000000.00

maturity of more

than one year

Total 611808088.23 611808088.23 479630436.37 479630436.37

22. Short-term borrowings

(1) Category of short-term borrowings

In RMB

Item Ending balance Opening balance

Guaranteed Loan 89074800.00

Credit loan 2054773697.36 3511504373.65

Pledged loan 200000000.00

Accrued interest 2127228.09 3797354.17

Total 2256900925.45 3604376527.82

Other explanation:

To obtain the pledged notes receivable of 200000000.00 yuan for the above-mentioned bank loan.

(2) Overdue short-term loans without payment

Nil

23. Derivative financial liabilities

In RMB

Item Ending balance Opening balance

Forward settlement and sales of foreign exchange 737424.50 747115.75

Total 737424.50 747115.75

24. Note payable

In RMB

Category Ending balance Opening balance

Bank acceptance bill 1584124651.19 1411089606.00

Total 1584124651.19 1411089606.00

At the end of the current period the total amount of matured but unpaid notes payable is 0.00 yuan.Other explanation:

To issue the above-mentioned bank acceptance bill a deposit of 12066812.90 yuan was paid and the pledged notes receivable

were 663438206.29 yuan.

122WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

25. Account payable

(1) Account payable

In RMB

Item Ending balance Opening balance

Within 1 year 2983935371.31 3165855712.48

1-2 years 191485742.18 207702168.86

2-3 years 39761626.79 31919163.40

Over 3 years 56743490.72 49123978.86

Total 3271926231.00 3454601023.60

(2) Important account payable with account age over one year

Nil

26. Advance payment

(1) Advance payment

In RMB

Item Ending balance Opening balance

Within 1 year 462221.88 3633878.33

Total 462221.88 3633878.33

(2) Important advance payment with account age over one year

Nil

27. Contract liabilities

In RMB

Item Ending balance Opening balance

Within 1 year 72243802.82 60916157.84

1-2 years 26134497.08 31275903.90

2-3 years 4222503.89 1518759.78

Over 3 years 1890920.75 1139261.71

Total 104491724.54 94850083.23

28. Wage payable

(1) Wage payable

In RMB

Item Opening balance Current increased Current decreased Ending balance

1. Short-term compensation 241874758.99 654939146.08 728406774.16 168407130.91

2. Post-employment welfare- defined contribution

27678116.8198215720.30110550601.4215343235.69

plans

123WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

3. Dismissed welfare 973200.33 318149.00 318149.00 973200.33

4. Incentive funds paid within a year 30740000.00 5404350.26 25335649.74

5. Other short-term welfare-Housing

subsidies employee benefits and welfare 16168310.11 542875.00 15625435.11

funds

Total 317434386.24 753473015.38 845222749.84 225684651.78

(2) Short-term compensation

In RMB

Item Opening balance Current increased Current decreased Ending balance

1. Wages bonuses allowances and

228262797.86529286322.08603220806.67154328313.27

subsidies

2. Welfare for workers and staff 36075847.78 35585722.75 490125.03

3. Social insurance 279543.63 32083598.82 31216372.33 1146770.12

Including: Medical insurance 242824.57 25901593.15 25090210.55 1054207.17

Work injury insurance 27398.20 3325804.39 3303611.91 49590.68

Maternity insurance 9320.86 2856201.28 2822549.87 42972.27

4. Housing accumulation fund 785727.00 42865346.16 42397860.00 1253213.16

5. Labor union expenditure and

9960112.997341838.527496411.829805539.69

personnel education expense

6. Other short-term compensation -

2586577.517286192.728489600.591383169.64

social security

Total 241874758.99 654939146.08 728406774.16 168407130.91

(3) Define contribution plans

In RMB

Item Opening balance Current increased Current decreased Ending balance

1. Basic endowment premium 6829377.95 77731981.00 80384478.75 4176880.20

2. Unemployment insurance 36478.41 2106036.83 2097337.90 45177.34

3. Enterprise annuity 20812260.45 18377702.47 28068784.77 11121178.15

Total 27678116.81 98215720.30 110550601.42 15343235.69

29. Tax payable

In RMB

Item Ending balance Opening balance

Value-added tax 27283192.13 27961474.84

Corporation income tax 21442470.99 7847731.79

Individual income tax 436400.85 6846289.60

City maintaining & construction tax 1910545.77 1546043.92

Educational surtax 1366061.64 1105937.33

Other (including stamp tax and local funds) 11719986.78 9278838.05

Total 64158658.16 54586315.53

30. Other account payable

In RMB

124WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Item Ending balance Opening balance

Dividends payable 10373454.00

Other accounts payable 146355991.68 198990948.23

Total 156729445.68 198990948.23

(1) Interest payable

Nil

(2) Dividends payable

In RMB

Item Ending balance Opening balance

Common stock dividends 10373454.00

Total 10373454.00

Other explanations including important dividends payable that have not been paid for more than one year disclose the reason for

not paying such dividends: Nil

(3) Other account payable

1) Classification of other accounts payable according to nature of account

In RMB

Item Ending balance Opening balance

Deposit and margin 34168117.02 15452400.65

Withholding social insurance and reserves funds 1609945.43 1967741.92

Intercourse funds of unit 25512145.98 25512145.98

Restricted stock repurchase obligations 68688180.00 138495060.00

Payable unpaid investment funds 14105360.83 13308176.65

Other 2272242.42 4255423.03

Total 146355991.68 198990948.23

2) Significant other payable with over one year

In RMB

Item Ending balance Reasons for non-repayment or carry-over

Nanjing Jidian Industrial Group Co. Ltd. 4500000.00 Intercourse funds

Restricted stock repurchase obligation 68688180.00 Restricted stock repurchase business

Total 73188180.00

31. Non-current liabilities due within one year

In RMB

Item Ending balance Opening balance

Long-term borrowings due within one year 25000000.00 2000000.00

Lease payments due within one year 11778509.11 12044793.34

Interest payable 180555.56 240555.56

Total 36959064.67 14285348.90

125WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

32. Other current liabilities

In RMB

Item Ending balance Opening balance

Rebate payable 252281512.29 201734082.52

Pending sales tax 10368705.25 8815298.56

Endorsed/discounted undue bills 1214398.69

Total 262650217.54 211763779.77

Changes in short-term bonds payable: Nil

33. Long-term borrowings

(1) Category of long-term borrowings

In RMB

Item Ending balance Opening balance

Guaranteed loan 600000000.00 238000000.00

Total 600000000.00 238000000.00

34. Lease liability

In RMB

Item Ending balance Opening balance

Lease payments 30799799.49 31589277.20

Total 30799799.49 31589277.20

35. Long-term account payable

In RMB

Item Ending balance Opening balance

Long-term account payable 12520000.00 12520000.00

Special accounts payable 18265082.11 18265082.11

Total 30785082.11 30785082.11

(1) Long-term account payable listed by nature

In RMB

Item Ending balance Opening balance

Hi-tech Branch of Nanjing Finance Bureau (note * ) Financial support funds (2008) 2750000.00 2750000.00

Hi-tech Branch of Nanjing Finance Bureau (note * ) Financial support funds (2009) 1030000.00 1030000.00

Hi-tech Branch of Nanjing Finance Bureau (note * ) Financial support funds (2010) 960000.00 960000.00

Hi-tech Branch of Nanjing Finance Bureau (note * ) Financial support funds (2011) 5040000.00 5040000.00

Hi-tech Branch of Nanjing Finance Bureau (note * ) Financial support funds (2013) 2740000.00 2740000.00

Total 12520000.00 12520000.00

Other explanation:

Note * : To encourage WFJN to enter Nanjing High-tech Technology Industry Development Zone financial supporting capital is

allotted by High-tech branch of Finance Bureau of Nanjing for supporting use the term is from November 10 2008 to November 10

2023. Provided that the operation period in the zone is less than 15 years financial supporting capital will be reimbursed.

Note* : To encourage WFJN to enter Nanjing High-tech Technology Industry Development Zone financial supporting capital is

allotted by High-tech branch of Finance Bureau of Nanjing for supporting use the term is from October 27 2009 to October 27

126WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

2024. Provided that the operation period in the zone is less than 15 years financial supporting capital will be reimbursed.

Note* : To encourage WFJN to enter Nanjing High-tech Technology Industry Development Zone financial supporting capital is

allotted by High-tech branch of Finance Bureau of Nanjing for supporting use the term is from December 27 2010 to December 27

2025. Provided that the operation period in the zone is less than 15 years financial supporting capital will be reimbursed.

Note* : To encourage WFJN to enter Nanjing High-tech Technology Industry Development Zone financial supporting capital is

allotted by High-tech branch of Finance Bureau of Nanjing for supporting use the term is from December 28 2011 to December 28

2026. Provided that the operation period in the zone is less than 15 years financial supporting capital will be reimbursed.

Note* : To encourage WFJN to enter Nanjing High-tech Technology Industry Development Zone financial supporting capital is

allotted by High-tech branch of Finance Bureau of Nanjing for supporting use the term is from December 18 2013 to December 18

2028. Provided that the operation period in the zone is less than 15 years financial supporting capital will be reimbursed.

(2) Special accounts payable

In RMB

Cause of

Item Opening balance Current increased Current decreased Ending balance

formation

Removal

compensation of 18265082.11 18265082.11

subsidiary WFJN

Total 18265082.11 18265082.11

Other explanation

In line with regulation of the house acquisition decision of People’s government of Xuanwu District Nanjing City Ning Xuan Fu

Zheng Zi (2012) No.001 part of the lands and property of WFJN needs expropriation in order to carry out the comprehensively

improvement of Ming Great Wall. According to the house expropriation and compensation agreement in state-owned lands signed

between WFJN and House Expropriation Management Office of Xuanwu District Nanjing City 19706700.00 yuan in total are

compensate including operation losses from lessee 1441600.00 yuan in total. The above compensation was received in last

period and is making up for the losses from lessee and the above lands and property have not been collected up to June 30 2023.

36. Long-term wages payable

(1) Long-term wages payable

In RMB

Item Ending balance Opening balance

1. Post-employment benefits - Defined

21989427.1120380744.73

benefit plan net liabilities

2. Dismiss welfare 12312197.60 12028538.66

3. Other long-term welfare 121683760.89 121683760.89

Total 155985385.60 154093044.28

(2) Defined benefit plan

Present value of defined benefit plan:

In RMB

Item Amount in current period Amount in last period

1. Opening balance 20380744.73 19594011.39

2. Cost of defined benefit plan booked into current profit and loss 385952.19 38706.27

127WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

(1) Current service cost 385952.19 38706.27

3. Cost of defined benefit plan booked into other comprehensive

704649.43399165.06

income

(1) Actuarial gains (losses are represented by “-”) 704649.43 399165.06

4. Other changes 518080.76 348862.01

(1) Welfare paid -99925.69 -345481.69

(2) Translation difference of foreign currency statements 618006.45 694343.70

5. Ending balance 21989427.11 20380744.73

Other explanation:

According to relevant regulations in Italy the Trattamento di Fine Rapporto (TFR) system is established. VHIO shall withdraw

severance to employees in accordance with employees’ employment period and taxable base salary when they leave or are

dismissed. The plan predicts future cash outflows at the inflation rate and determines its present value at the discount rate. The

above-mentioned benefit plan poses actuarial risks to VHIO mainly including interest rate risk and inflation risk. In case interest

rate is cut down the present value of the defined benefit plan obligations will rise. In addition the present value of benefit plan

obligations is related to the future payment standards of the plan which are determined based on inflation rates. Therefore the

upward inflation rate will also lead to rising planned liabilities.

37. Anticipated liability

In RMB

Item Ending balance Opening balance Formation cause

Pending litigation 246653.02

Product quality assurance 9980678.92 8695322.61

Investment losses in joint ventures 13750.00

Environmental protection commitment 1150543.24

Total 9980678.92 10106268.87

Other explanations including important assumptions and estimation explanations related to significant estimated liabilities: Nil

38. Deferred income

In RMB

Item Opening balance Current increased Current decreased Ending balance Cause of formation

Government grant 223123978.78 14325532.64 38239740.37 199209771.05

Total 223123978.78 14325532.64 38239740.37 199209771.05 --

Item with government grants involved:

In RMB

Amount Cost

Amount Assets

New grants reckoned reducti Other

Opening reckoned into related/In

Items of liabilities in the in non- on in change Ending balance

balance other income come

Period operation the s

in the period related

revenue period

Industrialization project

for injection VE pump

system with Asset

electronically controlled 5536697.24 390825.70 5145871.54 related

high pressure for less-

emission diesel used

Fund of industry upgrade Income

(2013) 16399408.518710191.69 2310783.15 related

4

128WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

R&D and

industrialization of the

high-pressure variable Assets

pump of the common rail 2699860.97 506584.28 2193276.69 related

system of diesel engine

for automotive

Research institute of

motor vehicle exhaust Assets

post-processing 117789.93 44915.68 72874.25 related

technology

Fund of industry upgrade Income

(2014) 36831000.00 36831000.00 related

New-built assets

compensation after the Assets

removal of parent 63443087.73 8961973.65 54481114.08 related

company

Fund of industry upgrade Income

(2016) 40000000.00 40000000.00 related

Guiding capital for the

technical reform from Assets

State Hi-Tech Technical 3787113.97 607212.50 3179901.47 related

Commission

Implementation of the

variable cross-section Assets

turbocharger for diesel 4254433.18 774340.08 3480093.10 related

engine

Demonstration project

Assets

funds for intelligent 431887.80 90019.10 341868.70

manufacturing related

The 2nd batch of

provincial special funds

for industry Assets

transformation of 1849844.13 611563.78 1238280.35 related

industrial and

information in 2019

Municipal technological

Assets

reform fund allocation in 3527096.61 307948.54 3219148.07

2020 related

Strategic cooperation

agreement funding for

Assets

key enterprise of smart 3374618.86 416578.38 2958040.48

manufacturing in high- related

tech zone

The 3rd batch of

provincial special funds

for industry Assets

transformation of 13500000.00 13500000.00 related

industrial and

information in 2021

Assets

14121035. 20449 related/In

Other 25060356.67 9128370.14 30257519.17

85 6.79 come

related

Assets

14121035. 38239740.3 20449 related/In

Total 223123978.78 199209771.05

85 7 6.79 come

related

Other explanation:

(1) The appropriation for research and development ability of distributive high-pressure common rail system for diesel engine use

and production line technological transformation project: according to the document (XCJNo. [2010]59) the Company has received

special funds of 7.1 million yuan appropriated by Finance Bureau of Wuxi New District in 2011 and used for the Company’s

research and development ability of distributive high-pressure common rail system for diesel engine use and production line

technological transformation project; this appropriation belongs to government grants related to assets amount of 390825.70 yuan

was written off based on the depreciation schedule of the related assets during the period.

129WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

(2) Industry upgrading funds (2013): In accordance with the documents XXGJF [2013] No.379 XXGJF [2013] No.455 XXGCF

[2013] No.128 and XXGCF[2013] No.153 the Company received funds of 60.52 million yuan appropriated for industry upgrading

in 2013 and amount of 16399408.54 yuan was written off in the year.

(3) R&D and industrialization of the high pressure variable pump of the common rail system of diesel engine for automotive: the

Company received appropriated for the project in 2013 with 8.05 million yuan in line with documents XKJ[2013] No.186 XK

J[2013] No.208 XCGM[2013] No.104 XCGM [2013] No.138 XKJ [2014] No.125 XCGM[2014] No.58 XKJ[2014] No. 246 and

XCGM[2014] No.162. The company received 8.05 million yuan 3 million yuan and 0.45 million yuan respectively in 2013 2014

and 2015; such funds belong to government grant with assets concerned and shall be written off according to the depreciation

process amount of 506584.28 yuan was written off in reporting period.

(4) Automotive exhaust post-processing technology research institute project: in 2012 the subsidiary WFLD has applied for

equipment purchase assisting funds to Wuxi Huishan Science and Technology Bureau and Wuxi Science and Technology Bureau for

the automobile vehicle exhaust post-processing technology research institute project. This declaration has been approved by Wuxi

Huishan Science and Technology Bureau and Wuxi Science and Technology Bureau in 2012 and the company has received

appropriation of 2.4 million yuan in 2012 and received appropriation of 1.6 million yuan in 2013. This appropriation belongs to

government grants related to assets and will be written off according to the depreciation process amount of 44915.68 yuan was

written off in the year.

(5) Industry upgrading funds (2014): In accordance with the document XXGJF [2014] No.427 and XXGCF[2014] No.143 the

Company received funds of 36.831 million yuan appropriated for industry upgrading in 2014.

(6) New-built assets compensation after the removal of parent company: policy relocation compensation received by the Company

and will be written off according to the depreciation of new-built assets amount of 8961973.65 yuan was written off in reporting

period.

(7) Fund of industry upgrade (2016): In accordance with the document XXGJF [2016] No.585 and XXF[2016] No.70 the Company

received funds of 40.00 million yuan appropriated for industry upgrading in 2016.

(8) Guiding capital for the technical reform from State Hi-Tech Technical Commission: In accordance with the document XJXZH

[2016] No.9 and XCGM [2016] No.56 the Company received a 9.74 million yuan for the guiding capital of technical reform (1st

batch) from Wuxi for year of 2016 and belongs to government grant with assets concerned and shall be written off according to the

depreciation process amount of 607212.50 yuan was written off in reporting period.

(9) Implementation of the variable cross-section turbocharger for diesel engine: In accordance with the document YCZF[2016]

No.623 and “Strong Industrial Base Project Contract for year of 2017” subsidiary WFTT received a specific subsidy of 16.97

million yuan in 2016 and of 760000 yuan in 2018 the fund supporting strong industrial base project (made-in-China 2025) of

central industrial transformation and upgrading 2016 from Ministry of Industry and Information Technology; It belongs to

government grant with assets concerned and shall be written off according to the depreciation process. Amount of 774340.08 yuan

was written off in reporting period.

(10) Demonstration project for intelligent manufacturing: under the Notice Relating to Selection of the Intelligent Manufacturing

Model Project in Huishan District in 2016 (HJXF[2016]No.36) a fiscal subsidy of 3000000 yuan was granted by relevant

government authority in Huishan district to our subsidiary WFLD in 2017 to be utilized for transformation and upgrade of WFLD’s

intelligent manufacturing facilities. This subsidy belongs to government grant related to assets which shall be written off based on the

depreciation progress of the assets. Amount of 90019.10 yuan was written off in reporting period..

(11) The 2nd batch of provincial special funds for industry transformation of industrial and information in 2019: according to XCGM[2019] No.121 the Company received a special fund of 5.00 million yuan in 2020..This subsidy was related to the “Weifu High-Technology New Factory Internet Construction” projects and belonged to government grants related to assets. and shall be written

off according to the depreciation process amount of 611563.78 yuan was written off in the reporting period.

(12) Municipal technological reform fund allocation in 2020: according to XGXZH [2020]No.16 the Company received 4.77 million

yuan of municipal technological transformation fund project allocation in 2020 which was related to key technological

130WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

transformation projects and belonged to government grants related to assets. and shall be written off according to the depreciation

process. Amount of 307948.54 yuan was written off in reporting period.

(13) Strategic cooperation agreement funding for key enterprise of smart manufacturing in high-tech zone: according to XXGXF

[2020]No.61 the Company received a related grant of 4.06 million yuan in 2020 and 0.7 million yuan received in reporting period.This grant was related to the intelligent transformation project and belonged to the government grants related to assets. and shall be

written off according to the depreciation process amount of 416578.38 yuan was written off in reporting period.

(14) The 3rd batch of provincial special funds for industry transformation of industrial and information in 2021: according to the

SCGM[2021]No.92 the government grant 13.5 million yuan received in 2021 was for the research development and

industrialization of membrane electrodes for high-performance automotive proton exchange membrane fuel cells which was an

assets related government grants.

39. Share

In RMB

Change during the year (+/-)

Shares

Opening balance New Bonus transferred Ending balance

shares Other Subtotal

share from capital

issued

reserve

Total shares 1008603293.00 -6023500.00 -6023500.00 1002579793.00

Other explanation:

Decreased in share capital was due to the buy-back and cancellation of 430000 restricted shares initially granted under the Restricted

Shares Incentive Plan for year of 2020 and 5593500 restricted stocks that did not meet the unlocking conditions.

40. Capital reserve

In RMB

Item Opening balance Current increased Current decreased Ending balance

Capital premium (Share capital premium) 3318949527.98 5416.66 68558795.09 3250396149.55

Other Capital reserve 79419039.65 5361906.64 84780946.29

Total 3398368567.63 5367323.30 68558795.09 3335177095.84

Other explanation including changes in the period and reasons for changes;

(1) Share capital premium rose by 5416.66 yuan in the reporting period mainly due to excessive investment funds paid by IRD to

WFQL; Share capital premium reduced by 68558795.09 yuan due to the share capital premium transferred-in 68547430.00 yuan

arising from for 6023500 restricted stock which were canceled by the Company. The difference 11365.09 yuan is the handle fee

of repurchase and cancellation.

(2) Other capital reserve rose by 5361906.64 yuan in the reporting period which is a net amount after deducting 160173.01 yuan of

attributable to minority from 5522079.65 yuan of the expenses of equity-settled share-based payment.

41. Treasury stock

In RMB

Item Opening balance Current increased Current decreased Ending balance

Share repurchase 397804542.63 71917549.61 469722092.24

131WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Repurchase obligation of restricted stock

143818460.0075130280.0068688180.00

incentive plan

Total 541623002.63 71917549.61 75130280.00 538410272.24

Other explanations including changes in the current period and explanations of the reasons for the changes:

Share repurchase: rose by 71917549.61 yuan in the reporting period due to share repurchase by way of centralized bidding;

Repurchase obligation of restricted stock incentive plan: The decrease of 75130280.00 yuan in this period is composed of two parts:

* reduced by 74570930.00 yuan in the reporting period due to the treasury stock as the company repurchased and canceled

6023500.00 restricted shares; * 559350.00 yuan is the cash dividend received by the restricted stock incentive object in the

reporting period.

42. Other comprehensive income

In RMB

Current period

Less: written Less: written

in other in other

comprehensiv comprehensiv

e income in e income in Less: Belong to

Opening

Item Account before previous previous incom Belong to parent minority Ending balance

balance income tax in period and period and e tax company after sharehold

the year carried carried expen tax ers after

forward to forward to se tax

gains and retained

losses in earnings in

current period current period

1. Other

comprehensive

income that

cannot be -383156.26 -305484.37 -305484.37 -688640.63

reclassified to

profit or loss

Including:Remeas

ure changes in

defined benefit -399165.06 -305484.37 -305484.37 -704649.43

plans

Other

comprehensive

income that

cannot be

transferred to 16008.80 16008.80

profit or loss

under the equity

method

2. Other

comprehensive

income items

which will be -528153.87 61545045.56 61545045.56 61016891.69

reclassified

subsequently to

profit or loss

Conversion

difference of

foreign currency -528153.87 61545045.56 61545045.56 61016891.69

financial

statement

Total other

comprehensive -911310.13 61239561.19 61239561.19 60328251.06

income

43. Reasonable reserve

In RMB

132WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Item Opening balance Current increased Current decreased Ending balance

Work safety expense 2119800.95 14709266.91 13245660.11 3583407.75

Total 2119800.95 14709266.91 13245660.11 3583407.75

Other explanation including changes and reasons for changes:

(1) Description on withdrawing reasonable reserves (work safety expense): According to the Administrative Measures on the

Withdrawing and Use of Enterprise Work Safety Expense(CZ[2022]No.136) jointly issued by the Ministry of Finance and the State

Administration of Work Safety in the reporting period based on the actual operating income of the previous period the company

adopted excess retreat method to define the amount of reasonable reserve of the year and withdraw reasonable reserve averagely in

each month..

(2) The above work safety expenses included those withdrawn by the Company in line with regulations and the parts enjoyed by

shareholders of the Company in work safety expenses withdrawn by subsidiary in line with regulations.

44. Surplus reserve

In RMB

Item Opening balance Current increased Current decreased Ending balance

Statutory surplus

510100496.00510100496.00

reserves

Total 510100496.00 510100496.00

Other explanation including changes and reasons for changes:

Withdrawal of the statutory surplus reserves: Pursuit to the Company Law and Article of Association the Company withdraws

statutory surplus reserve in terms of 10% of the net profit. No more amounts shall be withdrawn if the accumulated statutory surplus

reserve is over 50% of the registered capital.

45. Retained profit

In RMB

Amount in current Amount in last

Item

period period

Retained profits at the end of last period before adjustment 13320021325.90 14814787377.86

Retained profits at the beginning of the period after adjustment 13320021325.90 14814787377.86

Add: The net profits belong to owners of patent company of the reporting period 948760859.55 118819836.30

Less: Cash dividends payable 97757979.30 1609059668.80

Less: Withdraw employee rewards and welfare funds 4526219.46

Retained profit at period-end 14171024206.15 13320021325.90

Details about adjusting the retained profits at the beginning of the period:

1) The retroactive adjustments due to the Accounting Standards for Business Enterprises and its relevant new regulations affect the

retained profits at the beginning of the period amounting to 0 yuan.

2) The changes in accounting policies affect the retained profits at the beginning of the period amounting to 0 yuan.

3) The major accounting error correction affects the retained profits at the beginning of the period amounting to 0 yuan

4) Merge scope changes caused by the same control affect the retained profits at the beginning of the period amounting to 0 yuan.

5) Other adjustments affect the retained profits at the beginning of the period amounting to 0 yuan

46. Operating income and cost

In RMB

Item Amount in current period Amount in last period

133WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Income Cost Income Cost

Main operating 6052163689.76 5137115309.66 6928141770.13 5860429899.49

Other business 77485357.64 26756421.60 209031087.84 166024282.54

Total 6129649047.40 5163871731.26 7137172857.97 6026454182.03

Other explanation

Top 5 revenue confirmed during the reporting period:

In RMB

Serial No. Name Revenue

1 RBCD 1090789696.99

2 Robert Bosch Company 848768368.36

3 Client 1 370384276.77

4 Client 4 252642028.88

5 Client 2 178558893.41

47. Operating tax and extra

In RMB

Item Amount in current period Amount in last period

City maintaining & construction tax 8517861.49 8634987.02

Educational surtax 6087805.08 6170777.25

Property tax 11115997.34 8897091.90

Land use tax 2013933.93 2253305.65

Vehicle use tax 19170.06 3985.52

Stamp duty 4119912.74 2394141.59

Other taxes 365742.35 523132.85

Total 32240422.99 28877421.78

48. Sales expenses

In RMB

Item Amount in current period Amount in last period

Salary and wage related expense 33589826.19 24952862.28

Consumption of office materials and

5356063.203302587.07

business travel charge

Warehouse charge 3818351.46 1044900.83

Three guarantees and quality cost 38356321.13 30734960.85

Business entertainment fee 5701496.43 9087067.46

Other 16209422.99 9898213.94

Total 103031481.40 79020592.43

49. Administration expenses

In RMB

Item Amount in current period Amount in last period

Salary and wage related expense 157699092.98 151774582.74

Depreciation charger and long-term

53460774.3237588034.10

assets amortization

Consumption of office materials and 9690794.26 6085675.94

134WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

business travel charge

Share-based payment 3351570.96 22799516.92

Other 74993497.07 58964445.09

Total 299195729.59 277212254.79

50. R&D expenses

In RMB

Item Amount in current period Amount in last period

Technological development expenses 351887038.12 289631376.50

Total 351887038.12 289631376.50

51. Financial expenses

In RMB

Item Amount in current period Amount in last period

Interest expenses 65616425.64 34275262.65

Note discount interest expenses 3052594.14

Less: Deposit interest income 15706416.56 13927929.36

Gains/losses from exchange -14651449.58 4316196.05

Handling charges 3203622.95 2057941.09

Total 38462182.45 29774064.57

52. Other income

In RMB

Sources of income generated Amount in current period Amount in last period

Government grants with routine operation activity concerned 40157408.73 25101731.50

Refund of individual income tax handling fee 822184.78 993890.43

Total 40979593.51 26095621.93

53. Investment income

In RMB

Item Amount in current period Amount in last period

Income of long-term equity investment calculated based on equity 742783514.37 823400731.10

Investment income from disposal of long-term equity investments 964645.90

Investment income from wealth management products 69978714.96 105107324.41

Other -1355595.84 -680357.44

Total 811406633.49 928792343.97

54. Income from change of fair value

In RMB

Sources Amount in current period Amount in last period

Changes in the fair value of wealth management products 2673177.12 3290951.54

Changes in the fair value of the stocks of listed companies held-

-20742730.41-77723879.68

excluding the stocks of listed companies that are included in other

135WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

equity instrument investments

Total -18069553.29 -74432928.14

55. Credit impairment loss

In RMB

Item Amount in current period Amount in last period

Bad debt loss -846725.76 2083427.81

Total -846725.76 2083427.81

56. Asset impairment loss

In RMB

Item Amount in current period Amount in last period

Loss of inventory falling price and loss of

-89988541.10-104219783.98

contract performance cost impairment

Impairment loss of fixed assets -274995.90

Total -90263537.00 -104219783.98

57. Income form assets disposal

In RMB

Sources Amount in current period Amount in last period

Income from disposal of non-current assets 126476687.75 3597231.29

Losses from disposal of non-current assets -945782.71 -1706951.34

Total 125530905.04 1890279.95

58. Non-operating income

In RMB

Amount reckoned into current

Item Amount in current period Amount in last period

extraordinary gains and losses

Other 2707696.00 218285.29 2707696.00

Total 2707696.00 218285.29 2707696.00

Government grants included in the current profit and loss: Nil

59. Non-operating expense

In RMB

Amount reckoned into current

Item Amount in current period Amount in last period

extraordinary gains and losses

Donation 20000.00 20000.00

Total of loss on scrapping of

661923.942175378.87661923.94

fixed assets

Including: loss on scrapping

661923.942175378.87661923.94

of fixed assets

Other 76457.75 21187.00 76457.75

Total 758381.69 2196565.87 758381.69

136WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

60. Income tax expense

(1) Income tax expense

In RMB

Item Amount in current period Amount in last period

Payable tax in current period 29859646.45 62009331.28

Adjusted the previous income tax -11522.40 281934.62

Increase/decrease of deferred income tax assets -3637244.56 6279057.80

Increase/decrease of deferred income tax liability 3121400.25 -12925247.95

Total 29332279.74 55645075.75

(2) Adjustment on accounting profit and income tax expenses

In RMB

Item Amount in current period

Total profit 1011647091.89

Income tax measured by statutory/applicable tax rate 151747063.78

Impact by different tax rate applied by subsidies -8162395.90

Adjusted the previous income tax -11522.40

Impact by non-taxable revenue -104839090.93

Impact by cost expenses and losses that unable to deducted -712332.26

Impact by the deductible losses of the un-recognized previous deferred income tax 31658172.36

The deductible temporary differences or deductible losses of the un-recognized deferred

-36789640.73

income tax assets in the Period

Impact on additional deduction -4057984.09

Other 500009.91

Income tax expense 29332279.74

61. Other comprehensive income

See Note VII. 42. “Other comprehensive income”

62. Items of cash flow statement

(1) Other cash received in relation to operation activities

In RMB

Item Amount in current period Amount in last period

Interest income 15706416.56 13927929.36

Government grants 16848073.14 8106249.87

Fund inflow from WFTR “platform trade” business 299235761.25 1254515797.22

Other 18644560.72 404502.49

Total 350434811.67 1276954478.94

Explanation on other cash received in relation to operation activities: Nil

(2) Other cash paid in relation to operation activities

In RMB

137WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Item Amount in current period Amount in last period

Cash cost 301149590.30 254434197.77

Fund outflow from WFTR “platform trade” business 100000000.00 4442956606.35

Other 8281394.08 18468018.35

Total 409430984.38 4715858822.47

Explanation to other cash paid in relation to operation activities:

The amount of fund outflow from WFTR “platform trade” business in current period is the final payment of the business before

the Company discovered the contract fraud.

(3) Cash received from other investment activities

Nil

(4) Cash paid related with investment activities

Nil

(5) Other cash received in relation to financing activities

Nil

(6) Cash paid related with financing activities

In RMB

Item Amount in current period Amount in last period

Lease payments 3411636.27 865486.76

Payment for stock repurchase 71917549.61 100001057.07

Payment for restricted stock repurchase 69247530.00

Total 144576715.88 100866543.83

Explanation to other cash paid related with financing activities: Nil

63. Supplementary information to statement of cash flow

(1) Supplementary information to statement of cash flow

In RMB

Amount in current Amount in last

Supplementary information

period period

1. Net profit adjusted to cash flow of operation activities:

Net profit 982314812.15 1128788571.08

Add: Assets impairment provision 91110262.76 102136356.17

Depreciation of fixed assets consumption of oil assets and depreciation of

259623099.39203750978.31

productive biology assets

Depreciation of right-of-use assets 6380517.86 2124980.42

Amortization of intangible assets 32426362.30 21643638.80

Amortization of long-term deferred expenses 2091207.90 4160293.14

Loss from disposal of fixed assets intangible assets and other long-term

-125530905.04-1890279.95

assets (gain is listed with “-”)

138WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Loss on scrapping of fixed assets (gain is listed with “-”) 661923.94 2175378.87

Gain/loss of fair value changes (gain is listed with “-”) 18069553.29 74432928.14

Financial expenses (gain is listed with “-”) -11447977.73 36972909.58

Investment loss (gain is listed with “-”) -812762229.33 -929472701.41

Decrease of deferred income tax asset ((increase is listed with “-”) 1793420.95 6279057.80

Increase of deferred income tax liability (decrease is listed with “-”) 3135839.77 -12925247.95

Decrease of inventory (increase is listed with “-”) 372883000.74 1265262274.11

Decrease of operating receivable accounts (increase is listed with “-”) 370183379.30 -3855816972.58

Increase of operating payable accounts (decrease is listed with “-”) -108140333.37 -578522427.61

Other 7169302.54 36918218.19

Net cash flows arising from operating activities 1089961237.42 -2493982044.89

2. Material investment and financing not involved in cash flow

Conversion of debt into capital

Switching Company bonds due within one year

financing lease of fixed assets

3. Net change of cash and cash equivalents:

Balance of cash at period end 2387464673.97 1490785302.80

Less: Balance of cash equivalent at year-begin 2277117604.82 1094018936.73

Add: Balance at year-end of cash equivalents

Less: Balance at year-begin of cash equivalents

Net increase of cash and cash equivalents 110347069.15 396766366.07

(2) Net cash payment for the acquisition of a subsidiary in the period

Nil

(3) Net cash received from the disposal of subsidiaries

Nil

(4) Constitution of cash and cash equivalent

In RMB

Item Ending balance Opening balance

I. Cash 2387464673.97 2277117604.82

Including: Cash on hand 76329.51 51818.51

Bank deposit available for payment at any time 2387388344.46 2277065786.31

II. Balance of cash and cash equivalents at the period-end 2387464673.97 2277117604.82

Other explanation:

The difference between bank deposits available for payment at any time and the bank deposits in Note VII. 1 “Monetary Funds” is

the company's fixed deposits in the bank.

139WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

64. Note of the changes of owners’ equity

Explain the items and amount at period-end adjusted for “Other” at end of the last year: Nil

65. Assets with ownership or use right restricted

In RMB

Item Ending book value Restriction reason

Monetary funds 18840000.00 Forex Contracts USD Margin

Monetary funds 12066812.90 Margin paid for issuing bank acceptance bills

Monetary funds 7935750.00 IRD performance bond

Monetary funds 211620.00 Cash deposit for Mastercard

Monetary funds 5000.00 ETC freezing

Receivables financing 825831044.39 Notes pledge for bank acceptance

Note receivable 37607161.90 Notes pledge for bank acceptance

Total 902497389.19

66. Item of foreign currency

(1) Item of foreign currency

In RMB

Closing balance of foreign Ending RMB balance

Item Rate of conversion

currency converted

Monetary funds

Including: USD 20252686.24 7.22580 146341845.38

EUR 31025258.27 7.8771 244389392.00

HKD 966.00 0.92198 890.63

JPY 7975654.00 0.050094 399532.41

DKK 134704837.49 1.0581 142531188.55

Account receivable

Including: USD 3492232.71 7.22580 25234175.12

EUR 32573879.77 7.8771 256587708.34

HKD

JPY 12920875.00 0.050094 647258.31

DKK 12157993.84 1.0581 12864373.28

Long-term borrowings

Including: USD

EUR

HKD

Other accounts receivable

Including: USD 100.00 7.22580 722.58

EUR 248803.02 7.8771 1959846.27

DKK 1715115.29 1.0581 1814763.49

Short-term borrowings

Including: USD

EUR

Account payable

Including: USD 709559.53 7.22580 5127135.25

140WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

EUR 29753425.46 7.8771 234370707.71

JPY 24899918.00 0.050094 1247336.49

CHF 261904.94 8.0614 2111320.48

DKK 12769122.98 1.0581 13511009.03

GBP

Other account payable

Including: USD 1087.90 7.22580 7860.95

EUR 3707.88 7.8771 29207.38

DKK 149968.60 1.0581 158681.78

Non-current liabilities due

within one year

Including: USD 156513.08 7.22580 1130932.21

EUR 490296.74 7.8771 3862116.45

DKK 645753.26 1.0581 683271.52

Leasing liabilities

Including: USD 386008.72 7.22580 2789221.81

EUR 1042742.31 7.8771 8213785.45

DKK 11015070.07 1.0581 11655045.64

(2) Explanation on foreign operational entities for the major foreign operational entity disclose main

operation place book-keeping currency and basis for selection reasons for changes of book-keeping

currency if any

□Applicable □Not applicable

Subsidiary IRD was established in Denmark in 1996. The 66% equity of IRD were acquired by the Company in cash in April 2019.In October 2020 the Company acquired the remaining 34.00% equity of IRD in cash thus the Company holds 100% equity of IRD.IRD is denominated in Danish krone and IRD is mainly engaged in R&D production and sales of fuel cell components.Subsidiary Borit was established in Belgium in 2010. The Company acquired 100% equity of Borit in cash in November 2020. Borit

is denominated in Euro and engaged in R&D production and sales of fuel cell components.Subsidiary VHIO was established in Italy in 2000. The Company acquired 100.00% equity of VHIT in cash in October 2022. The

Company is denominated in Euro and engaged in R&D production and sales of vacuum and hydraulic pumps.

67. Government grants

(1) Government grants

In RMB

Amount reckoned in current

Category Amount Item

gain/loss

VHIO tax credit 4565105.73 Other income 4565105.73

Job stabilization and expanding subsidy 135524.51 Other income 135524.51

Training subsidy 95550.00 Other income 95550.00

3R 642615.43 Other income 642615.43

Loter.CO2M 1187678.39 Other income 1187678.39

Neptune 145399.97 Other income 145399.97

AdvancePEM 1844744.94 Other income 1844744.94

Pemtastic 2994265.06 Other income 2994265.06

BORIT intellectual property tax exemption 416434.43 Other income 416434.43

141WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

CAMEDO 324791.90 Other income 324791.90

Subsidy for specialized new and small giant

200000.00 Other income 200000.00

enterprises

Talent policy subsidies 557028.00 Other income 557028.00

Third generation handling fee 822184.78 Other income 822184.78

Deferred

The second batch of technical transformation in 2023; 2000000.00

income

Other 916750.00 Other income 916750.00

Total 16848073.14

(2) Government grants rebate

□Applicable □Not applicable

68. Others

Nil

VIII. Changes of consolidation scope

1. Enterprise combinations not under the same control

(1) Enterprise combination not under the same control that occurred in the current period

Nil

(2) Consolidation cost and goodwill

Nil

(3) Identifiable assets and liabilities of the merged party on the merger date

(4) Gains or losses arising from re-measured by fair value for the equity held before purchasing date

Whether it is a business combination realized by two or more transactions of exchange and a transaction of obtained control rights

in the Period or not

□Yes □No

(5) Explanation on the merger consideration or the fair value of the merged party’s identifiable assets

and liabilities which cannot be reasonable determined on the merge date or the end of the period

Nil

(6) Other explanation

Nil

142WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

2. Enterprise combination under the same control

(1) Enterprise combinations under the same control that occurred in the current period

Nil

(2) Merge cost

Nil

(3) Book value of assets and liabilities of the merged party on the merger date

Nil

3. Reverse purchase

Basic information of transaction basis for reverse purchase of transaction whether the assets and liabilities retained by the listed

company constitute a business and its basis determination of merger costs amount and calculation of adjusting equity when

dealing with equity transactions: Nil

4. Disposal of subsidiaries

Whether there is a single disposal of an investment in a subsidiary that resulted in a loss of control

□Yes □No

Whether there is a step-by-step disposal of investment in a subsidiary through multiple transactions and loss of control during the

period

□Yes □No

5. Changes in the scope of consolidation due to other reasons

Explanation on changes in the scope of consolidation due to other reasons (e.g. new establishment of a subsidiary subsidiary

liquidation etc.) and related information: Nil

6. Others

Nil

IX. Equity in other entities

1. Equity in subsidiaries

(1) Constitute of enterprise group

Main operation Register Share-holding ratio

Subsidiary Business nature Acquired way

place ed place Directly Indirectly

Spare parts of internal- Enterprise combination

WFJN Nanjing Nanjing 80.00%

combustion engine under the same control

Automobile exhaust Enterprise combination

WFLD Wuxi Wuxi 94.81%

purifier muffler under the same control

Spare parts of internal-

WFMA Wuxi Wuxi 100.00% Investment

combustion engine

Spare parts of internal-

WFCA Wuxi Wuxi 100.00% Investment

combustion engine

143WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Enterprise combination

WFTR Wuxi Wuxi Trade 100.00%

under the same control

Spare parts of internal-

WFSC Wuxi Wuxi 66.00% Investment

combustion engine

Spare parts of internal- Enterprise combination not

WFTT Ningbo Ningbo 98.83% 1.17%

combustion engine under the same control

Spare parts of internal- Enterprise combination not

WFAM Wuxi Wuxi 51.00%

combustion engine under the same control

WFLD Automobile exhaust

Wuhan Wuhan 60.00% Investment

(Wuhan) purifier muffler

WFLD Chongqi Automobile exhaust

Chongqing 100.00% Investment

(Chongqing) ng purifier muffler

WFLD Nancha Automobile exhaust

Nanchang 100.00% Investment

(Nanchang) ng purifier muffler

WFAS Wuxi Wuxi Car seats products 66.00% Investment

Enterprise combination not

WFDT Wuxi Wuxi Hub motor 80.00%

under the same control

WFQL Wuxi Wuxi Fuel cell components 45.00% 30.00% Investment

Automobile Enterprise combination not

VHWX Wuxi Wuxi 100.00%

components under the same control

Denmar

SPV Denmark Investment 100.00% Investment

k

Denmar Enterprise combination not

IRD Denmark Fuel cell components 100.00%

k under the same control

Enterprise combination not

IRD America America America Fuel cell components 100.00%

under the same control

Enterprise combination not

Borit Belgium Belgium Fuel cell components 100.00%

under the same control

Enterprise combination not

Borit America America America Fuel cell components 100.00%

under the same control

Automobile Enterprise combination not

VHIO Italy Italy 100.00%

components under the same control

Explanation on share-holding ratio in subsidiary different from ratio of voting right

Nil

Basis for holding half or less of the voting rights but still controlling the investee and holding more than half of the voting rights

but not controlling the investee

Nil

Basis for inclusion in the scope of consolidation of significant structured entities control

Nil

Basis for determining whether a company is an agent or a principal

Nil

Other explanation

Nil

(2) Important non-wholly-owned subsidiary

In RMB

Gains/losses attributable Dividend announced to distribute Ending equity

Subsidiary Share-holding ratio of minority

to minority in the period for minority in the period of minority

WFJN 20.00% 28182096.53 239063843.11

WFSC 34.00% 1707747.13 28306333.61

WFLD 5.19% 495669.34 153206542.03

WFAM 49.00% 7567993.25 224123772.73

144WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Total 37953506.25 644700491.48

Explanation on holding ratio different from the voting right ratio for minority shareholders

Nil

(3) Main finance information of the important non-wholly-owned subsidiary

In RMB

Ending balance

Subsidiary Non-current Current Non-current

Current assets Total assets Total liabilities

assets liabilities liabilities

WFJN 1009156897.77 601789177.52 1610946075.29 379549026.48 35071853.60 414620880.08

WFSC 188303633.86 51357714.40 239661348.26 156013188.66 156013188.66

WFLD 4237251690.05 1503092492.26 5740344182.31 2895508104.73 216474283.38 3111982388.11

WFAM 402467434.49 548655242.74 951122677.23 428082203.22 67275692.56 495357895.78

Total 5837179656.17 2704894626.92 8542074283.09 3859152523.09 318821829.54 4177974352.63

In RMB

Opening balance

Subsidiary Non-current Current Non-current

Current assets Total assets Total liabilities

assets liabilities liabilities

WFJN 858419058.16 577359266.26 1435778324.42 346383138.63 35181853.60 381564992.23

WFSC 204138588.74 48627033.79 252765622.53 174162086.64 174162086.64

WFLD 4869373661.60 1412237671.12 6281611332.72 3512116686.68 218075518.79 3730192205.47

WFAM 434472654.85 554774642.02 989247296.87 449094531.03 99748081.81 548842612.84

Total 6366403963.35 2592998613.19 8959402576.54 4481756442.98 353005454.20 4834761897.18

In RMB

Amount in reporting period

Subsidiary Total comprehensive Cash flow from

Operation Income Net profit

income operation activity

WFJN 362347975.32 140705646.86 140705646.86 -860079.84

WFSC 212765150.03 5022719.78 5022719.78 12852744.75

WFLD 2175323269.69 71083391.94 71083391.94 455043631.50

WFAM 323869868.52 15360097.42 15360097.42 77957350.25

Total 3074306263.56 232171856.00 232171856.00 544993646.66

In RMB

Amount in last period

Subsidiary Total comprehensive Cash flow from operation

Operation Income Net profit

income activity

WFJN 447804363.41 65145897.60 65145897.60 -51110746.71

WFSC 226170484.98 10460851.26 10460851.26 -33350047.74

WFLD 3287233284.58 138297551.67 138297551.67 397683438.88

WFAM 330358273.12 32245277.07 32245277.07 92627392.88

Total 4291566406.09 246149577.60 246149577.60 405850037.31

(4) Significant restrictions on the use of enterprise group assets and pay off debts of the enterprise group

Nil

145WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

(5) Financial or other support offered to the structured entities included in the scope of consolidated

financial statements

Nil

2. Transaction that has owners’ equity shares changed in subsidiary but still with controlling rights

(1) Owners’ equity shares changed in subsidiary

Nil

(2) Impact on minority’s interests and owners’ equity attributable to parent company

Nil

3. Equity in joint venture and associated enterprise

(1) Important joint venture and associated enterprise

Share-holding ratio Accounting

treatment on

Main

Joint venture or associated Registered investment for

operation Business nature

enterprise place Indirectl

place Directly joint venture and y

associated

enterprise

WFEC Wuxi Wuxi Catalyst 49.00% Equity method

Internal-

RBCD Wuxi Wuxi combustion 32.50% 1.50% Equity method

engine accessories

Internal-

Zhonglian Automobile

Shanghai Shanghai combustion 20.00% Equity method

Electronics Co. Ltd.engine accessories

Internal-

Wuxi Weifu Precision Machinery

Wuxi Wuxi combustion 20.00% Equity method

Manufacturing Co. Ltd.engine accessories

Changchun Xuyang Weifu

Changchu Automobile

Automobile Components Changchun 34.00% Equity method

n components

Technology Co. Ltd.Fuel cell

Precors GmbH Germany Germany 43.39% Equity method

components

Wuxi ChelianTianxia Information Telematics 9.6372

Wuxi Wuxi Equity method

Technology Co. Ltd. services %

Lezhuo Bowei Hydraulic Automobile

Shanghai Shanghai 50.00% Equity method

Technology (Shanghai) Co. Ltd components

Holding shares ratio different from the voting right ratio: Nil

Basis for holding less than 20% of voting rights but with significant impact or holding 20% or more of voting rights but without

significant impact:

The Company holds 9.6372% equity of Chelian Tianxia and appointed a director to Chelian Tianxia. Though such representative

the Company can participate in the operation policies formulation of Chelian Tianxia and thus exercise a significant influence over

Chelian Tianxi.

146WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

(2) Main financial information of the important joint venture

Nil

(3) Main financial information of the important associated enterprise

In RMB

Ending balance/Amount in reporting period Opening balance/Amount in last period

Zhonglian Zhonglian

WFEC RBCD WFEC RBCD

Electronics Electronics

Current assets

3197806721.9416755294611.321558880363.293507976754.1615426523373.99241595079.15

Non -current assets

322109820.913352676291.647132120000.92333764427.433421035986.827557124612.32

Total assets 3519916542.85 20107970902.96 8691000364.21 3841741181.59 18847559360.81 7798719691.47

Current liabilities 1199741188.01 13574648492.61 1411754246.77 1665411123.81 8810309639.09 6171780.23

Non-current

469668631.032487436.06493618200.852517670.77

liabilities

Total liabilities 1669409819.04 13574648492.61 1414241682.83 2159029324.66 8810309639.09 8689451.00

Including: cash and

1067629913.478733327.18128530289.29813874175.2710773921.81225052854.96

cash equivalent

Minority interests

Equity attributable to

shareholders of the 1850506723.81 6533322410.35 7276758681.38 1682711856.93 10037249721.72 7790030240.47

parent company

Share of net assets

calculated by 906748294.66 2221329619.51 1455351736.27 824528809.90 3412664905.38 1558006048.09

shareholding ratio

Adjustment matters

--Goodwill 267788761.35 1407265.96 267788761.35 1407265.96

--Unrealized profit of

-15634582.21-20692355.48

internal trading

--Other -0.28 -0.28

Book value of equity

investment in 906748294.66 2473483798.37 1456759002.23 824528809.90 3659761310.97 1559413314.05

associated enterprise

Fair value of equity

investments in joint

ventures with

publicly quoted

prices

Operation income 1767599633.82 6130896971.82 12971075.74 2448287999.54 8322989203.32 9460906.82

Net profit 166314657.54 1418441731.89 896728440.91 142874508.54 1687151931.01 841207709.66

Net profit from

discontinued

operations

Other comprehensive

income

Total comprehensive

166314657.541418441731.89896728440.91142874508.541687151931.01841207709.66

income

Dividends received

from associated 382918855.12

enterprise in the year

Other explanation:

Adjustment item: "Other: -0.28" indicates that it is caused by tail difference.

147WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

(4) Financial summary for non-important joint venture and associated enterprise

In RMB

Ending balance/Amount in

Opening balance/Amount in last period

reporting period

Joint venture:

The total amount of the following items calculated

based on shareholding ratio

Associated enterprise:

Total book value of investment 351004139.17 239114674.05

The total amount of the following items calculated

based on shareholding ratio

--Net profit -1393571.96 639624.55

--Total comprehensive income -1393571.96 639624.55

(5) Major limitation on capital transfer ability to the Company from joint venture or associated

enterprise

Nil

(6) Excess loss occurred in joint venture or associated enterprise

Nil

(7) Unconfirmed commitment with joint venture investment concerned

Nil

(8) Intangible liability with joint venture or associated enterprise investment concerned

Nil

4. Major joint operation

Nil

5. Equity in structured entities not included in the scope of consolidated financial statements

Relevant explanations on structured entities not included in the scope of the consolidated financial statements: Nil

6. Other

Nil

X. Risk related with financial instruments

Main financial instruments of the Company include monetary funds structured deposits account receivable equity instrument

148WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

investment financial products loans and account payable. For more details of the financial instruments refer to relevant items of

Note VII. Risks concerned with the above-mentioned financial instruments and measures taken by the company to prevent such risks

are as follow:

The risk management by the company is targeted to balance risk and benefit minimize the adverse impact on performance of the

Company and maximize the benefits of shareholders and other investors. On such basis the basic tactics of the risk management is to

recognize and analyze risks faced by the company establish appropriate risk exposure baseline for risk management and supervise

risks timely and reliably in order to control risks in a limited range.During the operation process risks faced by the company related to financial instruments mainly include credit risk market risk and

liquidity risk. BOD of the Company takes full charge of defining risk management target and polices and takes ultimate

responsibilities for the target of risk management and policies. The compliance department and financial control department manage

and supervise risk exposures to control risks in a limited range.

1. Credit Risk

Credit risk arises in case one party of a financial instrument fails to perform its obligations resulting in the financial loss of other

party. The company’s credit risk mainly comes from monetary funds structured deposits note receivable account receivable and

other accounts receivable. The management has established appropriate credit policies and kept monitoring the exposure to these

credit risks.The monetary funds and structured deposits held by the Company are mainly deposited in financial institutions such as commercial

banks. The management believes that these commercial banks have higher credit and asset status and lower credit risks. The

Company adopts quota policies to avoid credit risks from any financial institutions.For accounts receivable other receivables and bills receivable the Company sets relevant policies to control the credit risk exposure.To prevent risks the company has formulated a new customer credit evaluation system and an existing customer credit sales balance

analysis system. For new customers the company performs background investigation according to the established process to

determine whether to offer such customer a credit line the scale of credit line as well as credit period. Accordingly the company has

set a credit limit and a credit period for each customer which is the maximum amount that does not require additional approval. For

the analysis system for credit sales balance of existing customers after receiving a purchase order from an existing customer the

company will check the order amount and the balance of the accounts owed by such customer. If the total of the two exceeds the

credit limit of the customer the company can only sell to the customer on the premise of additional approval of credit line and

otherwise the customer will be required to pay the corresponding amount in advance. In addition for the credit sales that have

occurred the company analyzes and audits the monthly statements for risk warning of accounts receivable to ensure that the

company’s overall credit risk is within a controllable range.The maximum credit risk exposure of the Company is the carrying amount of each financial asset on the balance sheet.

2. Market risk

Market risk of the financial instrument refers to the fair value of financial instrument or future cash flow fluctuates with the changing

market price mainly including interest rate risk foreign exchange risk and other price risk.

(1) Interest rate risk

Interest rate risk indicates that the company’s financial status and cash flow fluctuate with the changing market interest rate. The

interest rate risk of the Company is mainly related with the bank loans. In order to lower the impact of risks of fluctuating interest

rate the Company in consideration of the expected change orientation of interest rate chooses floating rate or fixed rate. The

company will choose fixed interest rate if the interest rate is expected to go up in the future period and alternatively choose floating

interest rate if the interest rate is expected to go up in the future period. In order to minimize the adverse impact if the change trend of

interest rate is out of expectation the company selects short-term borrowings to satisfy its demands for liquidity and there are special

149WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

provisions for early repayment.

(2) Foreign exchange risk

Foreign exchange risk refers to the losses arising from fluctuation of exchange rate. The foreign exchange risk posed to the Company

is mainly related to USD EUR CHF JPY HKD and DKK. The procurement of equipment by the parent company and WFAM the

material purchasing of the parent company the payment of technical service expense and trademark royalty of the parent company

the import and export of WFTR as well as the operation of IRD Borit and VHIO are settled in USD EUR CHF JPY HKD and

DKK. Other main businesses of the Company are priced and settled in RMB (yuan). As the foreign financial assets and liabilities

takes minor ratio in total assets the company’s management believes that the foreign exchange rate of is lower.As of June 30 2023 except for the following assets or liabilities listed with foreign currency assets and liabilities of the Company

are carried with RMB.* Details of foreign currency assets of the Company as of June 30 2022

Item Ending balance in Conversion Ending balance converted to

Ratio in assets (%)

foreign currency exchange rate RMB yuan

Monetary funds

Including: USD 20252686.24 7.22580 146341845.38 0.52

EUR 31025258.27 7.8771 244389392.00 0.86

HKD 966.00 0.92198 890.63 -

JPY 7975654.00 0.050094 399532.41 -

DKK 134704837.49 1.0581 142531188.55 0.50

Account receivable

Including: USD 3492232.71 7.22580 25234175.12 0.09

EUR 32573879.77 7.8771 256587708.34 0.90

JPY 12920875.00 0.050094 647258.31 -

DKK 12157993.84 1.0581 12864373.28 0.05

Other accounts receivable

Including: USD 100.00 7.22580 722.58 -

EUR 248803.02 7.8771 1959846.27 0.01

DKK 1715115.29 1.0581 1814763.49 0.01

Total ratio in assets 2.94

* Foreign currency liability of the Company as of the June 30 2023

Ending balance in Conversion Ending balance converted to Ratio in liabilities

Item

foreign currency exchange rate RMB yuan (%)

Account payable

Including: USD 709559.53 7.22580 5127135.25 0.06

EUR 29753425.46 7.8771 234370707.71 2.59

JPY 24899918.00 0.050094 1247336.49 0.01

CHF 261904.94 8.0614 2111320.48 0.02

DKK 12769122.98 1.0581 13511009.03 0.15

Other account payable

Including: USD 1087.90 7.22580 7860.95

EUR 3707.88 7.8771 29207.38

DKK 149968.60 1.0581 158681.78

Non-current liabilities

maturing within one year

Including: USD 156513.08 7.22580 1130932.21 0.01

EUR 490296.74 7.8771 3862116.45 0.04

DKK 645753.26 1.0581 683271.52 0.01

Leasing liabilities

150WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Ending balance in Conversion Ending balance converted to Ratio in liabilities

Item

foreign currency exchange rate RMB yuan (%)

Including USD 386008.72 7.22580 2789221.81 0.03

EUR 1042742.31 7.8771 8213785.45 0.09

DKK 11015070.07 1.0581 11655045.64 0.13

Total ratio in liabilities 3.14

* Other price risk

The equity instrument investments held by the Company with classification as transaction financial asset and other non-current

financial assets are measured at fair value on the balance sheet date. The expected price fluctuation of such these investments will

affect the gains/losses of fair value changes of the Company.Furthermore deliberated and approved in 10th meeting of 8th session of the BOD the Company exercise entrust financing with its

own idle capital; therefore the Company is subject to the risk of failing to collect the principal of entrust financial products due to

default. Aimed at such risk the Company formulated the “Management Mechanism of Capital Financing” and well-defined the

authority approval investment decision-making calculation management and risk controls for the entrust financing in order to ensure

fund security and prevent investment risk efficiently. In order to lower the adverse impact from unpredictable factors the Company

allocates investments with short term and medium term and the term of investment is up to five years in principle; The company

selects investment products such as bank wealth management products trust plans of trust company the asset management plans of

asset management company as well as products issued by securities companies fund companies and insurance companies.

3. Liquidity risk

Liquidity risk refers to the capital shortage risk occurs when enterprise implements obligations settled by delivering cash or other

financial assets. The company’s goal is to guarantee rich capital to pay the due debts. Therefore it establishes the financial control

department for centralized risk control. The financial control department keeps monitoring the cash balance the marketable securities

ready to be converted into cash at any time and the rolling forecast on cash flow in future 12 months ensuring the Company on

condition of reasonable prediction owes rich capital to pay debts; Besides the financial control department builds favorable

relationship with banks rationally design the line of credit credit products and credit terms guarantee a sufficient line of credit from

banks in order to satisfy short-term financing requirements of the company.XI. Disclosure of fair value

1. Ending fair value of the assets and liabilities measured by fair value

In RMB

Ending fair value

Item

First level Second level Third level Total

I. Sustaining measured by fair value -- -- -- --

(I)Trading financial assets 150563059.41 2469635404.87 2620198464.28

1. Financial assets measured at fair value and

whose changes are included in current profit 150563059.41 2469635404.87 2620198464.28

or loss

(1) Liability instrument investment 2469635404.87 2469635404.87

(2) Equity instrument investment 150563059.41 150563059.41

(II) Other equity instrument investment 677790690.00 677790690.00

(III) Receivable financing 1920348206.04 1920348206.04

(IV) Other non-current financial assets- 161342387.00 161342387.00

151WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

equity instrument investment

(V) Other non-current financial assets-other

liability instrument and equity instrument 635000000.00 635000000.00

investment

Total assets sustaining measured by fair value 150563059.41 161342387.00 5702774300.91 6014679747.32

(I) Financial liabilities measured at fair value

737424.50737424.50

through profit or loss

Derivative financial liabilities - foreign 737424.50 737424.50

exchange contracts

Total liabilities sustaining measured at fair 737424.50 737424.50

value

II. Non-persistent measured by fair value -- -- -- --

2. Basis for recognizing the market price of items sustaining and non-persistent measured by fair value

on first level

On June 30 2023 the financial assets available for sale equity instrument investments held by the Company include SNAT (stock

code: 600841) Miracle Automation (Stock code: 002009) ifan Technology (Stock Code: 601777) and Zoyte Auto(000980). The

fair value at the end of the period is determined at the closing price as of June 30 2022.

3. The qualitative and quantitative information for the valuation technique and critical parameter of

items sustaining and non-persistent measured by fair value on second level

On June 30 2023 other non-current financial assets equity instrument investments held by the Company include Guolian

Securities (stock code: 601456). The fair value at the end of the period is determined at the closing price and liquidity discount as

of June 30 2023.The derivative financial liabilities that continue to be measured at the second level of fair value are forward foreign exchange

settlement and sales contracts and they are measured at the fair value of the forward foreign exchange settlement and sales contracts

provided by the contracting bank.

4. The qualitative and quantitative information for the valuation technique and critical parameter of

items sustaining and non-persistent measured by fair value on third level

(1) Accounts receivable financing

The Company uses discounted cash flow valuation techniques to determine the fair value of this part of financial assets. The

important unobservable input values mainly include discount rate and contractual cash flow maturity period. The cash flow with a

contract expiration period of 12 months (inclusive) shall not be discounted and the cost shall be regarded as its fair value.

(2) Other equity instrument investment

As such financial assets are poorly circulated in market the Company adopts replacement cost method to determine their fair value.The important unobservable input values mainly include the financial data of the invested company.

(3) Other liability instrument and equity instrument investment

The company applies discounted cash flow valuation technology to determine such financial assets. The important unobtainable input

values mainly include expected annual return rate and risk coefficient.

5. For items sustaining measured by fair value on second level adjustment information between the

opening and closing book value and sensitivity analysis of unobservable parameters

Nil

152WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

6. For items sustaining measured by fair value describe the reasons for the conversion and the policy for

determining the timing of the conversion if there is a conversion between levels in the current period

Nil

7. Changes in valuation technology during the current period and reasons for such changes

Nil

8. The fair value of financial assets and financial liabilities not measured by fair value

Nil

9. Other

Nil

XII. Related party and related party transactions

1. Parent company of the company

Share-holding ratio

Voting right ratio on

Parent company Registration place Business nature Registered capital on the enterprise for

the enterprise

parent company

Operation of state-

Wuxi Industry Group Wuxi 5496785600 20.35% 20.35%

owned assets

Explanation on the parent company of the company

Wuxi Industry Group is an enterprise controlled by the State-owned Assets Management Committee of Wuxi Municipal People’s

Government. Its business scope includes foreign investment by using its own assets house leasing services self-operating and acting

as an agent for the import and export business of various commodities and technologies (Except for goods and technologies that are

restricted by the state or prohibited for import and export) domestic trade (excluding national restricted and prohibited items).(Projects that are subject to approval in accordance with the law can be operated only after being approved by relevant departments).The ultimate controller of the Company is the State-owned Assets Supervision & Administration Commission of Wuxi

Municipality of Jiangsu Province.Other explanation:

Nil

2. Subsidiary of the Company

For more details of the Company’s subsidiaries please refer to IX. 1. “Equity in subsidiary”

3. Joint venture and associated enterprise

For more details please refer to Note IX.3. “Equity in joint arrangement and associated enterprise”

153WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

4. Other related party

Other related party Relationship with the Company

Robert Bosch Company The second largest shareholder of the CompanyWuxi Guokai Metal Resources Co. Ltd.(hereinafter referred to as “GuokaiEnterprises controlled by the parent companyMetals”)

Wuxi Sunan Urban Public Delivery Co. Ltd. (hereinafter referred to as

Enterprises controlled by the parent company

“Urban Public Delivery”)

Company A (temporarily referred to as Company A due to confidentiality

Enterprises controlled by related parties of the

requirements of the case as it is still in the stage of investigation by the public

company’s directors/senior management

security organs)

Director supervisor and senior executive of the

Key executive

Company

5. Related transaction

(1) Goods purchasing labor service providing and receiving

Goods purchasing/labor service receiving

In RMB

Whether more than

Content of related Amount in current Approved

Related party the transaction limit Last Period

transaction period transaction limit

(Y/N)

WFPM Goods and labor 19815457.88 56000000.00 N 16947881.11

RBCD Goods and labor 131039396.29 380000000.00 N 174508017.89

WFEC Goods 379816654.91 601000000.00 N 246646895.23

Robert Bosch

Goods and labor 111692343.27 300000000.00 N 93906096.78

Company

Changchun

Goods 0.00 1500000.00 N 342520.00

Xuyang

Guolai Metals Goods 15867033.58 0.00 Y

Lezhuo Bowei Goods 0.00 1000000.00 N

Goods sold/labor service providing

In RMB

Related party Content of related transaction Amount in current period Amount in last period

WFPM Goods and labor 506017.52 522692.40

RBCD Goods and labor 1090789696.99 1633269280.49

WFEC Goods and labor 4677697.81 158613.70

Robert Bosch Company Goods and labor 846273667.53 724668201.55

Changchun Xuyang Goods and labor 678183.20 181484.70

Lezhuo Bowei Goods and labor 222373.51

Explanation on related transactions in the purchase and sale of goods provision and acceptance of labor services: Nil

(2) Related trusteeship management/contract & entrust management/ outsourcing

Nil

154WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

(3) Related lease

The Company is a lessor:

In RMB

Lease income recognized in Lease income recognized at

Lessee Assets type

the reporting period last period

WFEC Workshop 1003317.02 1190379.04

Explanation on related lease

WFLD entered into a house leasing contract with WFEC. WFLD rented its plant located at No.9 Linjiang Road Xinwu District

Wuxi to WFEC. It is agreed that the rent income in the period from January 1 2023 to June 30 2023 is 1003317.02 yuan.

(4) Related guarantee

Nil

(5) Borrowing and lending of related party

Nil

(6) Assets transfer and debt reorganization of related party

Nil

(7) Remuneration of key manager

In RMB

Item Amount in current period Amount in current period

Remuneration of key executives 2300000.00 4400000.00

(8) Other related transactions

Related party Contents of item Amount in current period Amount in last period

WFPM Purchase fixed assets 106000.00 --

RBCD Pay technical loyalty etc. -- 312038.48

RBCD Purchase fixed assets -- 1314941.34

Robert Bosch Company Pay technical loyalty etc. -- 130459.36

Robert Bosch Company Purchase fixed assets 1052964.60 54716.98

Robert Bosch Company Rent receivable 110200.00 --

Robert Bosch Company Utilities receivable 393590.45 --

Robert Bosch Company Provide technology serviceetc 1990910.38 --

WFEC Utilities payable 528099.08 614493.68

Lezhuo Bowei Rent receivable 1057234.32 --

Lezhuo Bowei Utilities receivable 304658.93 --

Urban Public Delivery Procurement of food ingredients 709227.44 --

155WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

6. Receivable/payable items of related parties

(1) Receivable item

In RMB

Ending balance Opening balance

Item Related party Provision for bad Provision for bad

Book balance Book balance

debts debts

Account receivable WFPM 185059.90 299389.13 10925.29

Account receivable RBCD 511897553.12 619942.02 461493652.46 174766.71

Robert Bosch

Account receivable 423176007.79 754342.26 363021724.83 882016.11

Company

Other accounts receivable WFEC 147000000.00

Other accounts receivable RBCD 1673605474.71

Zhonglian

Other accounts receivable 282000000.00

Electronics

Robert Bosch

Other non-current assets 1470000.00

Company

Wuxi Industry

Other non-current assets 5452800.00

Group

Other non-current assets RBCD 0.01

Account receivable WFEC 2302063.68 514638.29

Changchun

Account receivable 771811.93 546.49 5464.91

Xuyang

Lezhuo

Account receivable 67447.62

Bowei

Robert Bosch

Accounts paid in advance 5249715.46

Company

(2) Payable item

In RMB

Item Related party Ending book balance Opening book balance

Account payable WFPM 12262621.48 17783464.23

Other account payable WFPM 29000.00

Account payable WFEC 308141233.56 274115921.53

Account payable RBCD 41762235.95 37603958.72

Account payable Robert Bosch Company 24349831.15 49500046.68

Account payable Guokai Metals 3.12

Other current liabilities RBCD 0.05 0.05

Other current liabilities Robert Bosch Company 18094.83 63572.08

Other current liabilities WFEC 76030.18

Other account payable Robert Bosch Company 14105360.83 13308176.65

Contract liability RBCD 0.36 0.36

Contract liability Robert Bosch Company 139191.01 510212.12

Contract liability WFEC 584847.43

(3) Related creditor's rights of “platform trade”

In RMB

Item Related party Ending balance Opening balance

156WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Other receivables Company A 2358398084.78 2415151888.80

Note: Based on the principle of caution the Company combines the balance of 4 companies that may be controlled by Company A

into the following list. The balance is the difference between the "purchase fund" paid by WFTR based on the "platform trade"

business and the "sales fund" received by WFTR. In accordance with the principle of substance over form the company does not

treat the "platform trade" business of WFTR as normal trade business but as fund collection and payment business for accounting

treatment so it is listed as other receivables.

7. Undertakings of related party

Nil

8. Other

Nil

XIII. Share-based payment

1. Overall situation of share-based payment

□Applicable □Not applicable

In RMB

Total amount of equity instruments granted by the Company in reporting period 0.00

Total amount of equity instruments exercised by the Company in reporting period 0.00

Total amount of equity instruments invalidated by the company in reporting period 0.00

The grant price is 15.48 yuan per share; the

exercise time is from the first trading day

24 months after the completion of the

registration of the restricted stocks granted

The scope of the exercise price of the stock options issued by the company at the in the first tranche to the last trading day

end of the period and the remaining period of the contract within 60 months from the date of

completion of the registration of the

restricted stock granted in the first tranche

so the remaining period of the contract is

two years and five months.The scope of the exercise price of other equity instruments issued by the company

Nil

at the end of the period and the remaining period of the contract

2. Equity-settled share-based payment

□Applicable □Not applicable

In RMB

Determine the fair value based on the

Method for determining the fair value of equity instruments on the grant date closing price of the restricted stock on the

grant date

Basis for determining the number of vesting equity instruments Unlocking conditions

Reasons for the significant difference between estimate in the current period and

Not Applicable

estimate in last period

Cumulative amount of equity-settled share-based payments included in the capital

117512991.57

reserve

Total amount of expenses confirmed by equity-settled share-based payments in the

5522079.65

current period

157WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

This restricted stock incentive plan was deliberated and approved by the company’s second extraordinary general meeting of

shareholders in 2020 which is summarized as follows:

(1) Stock source: the company’s A-share common stock repurchased from the secondary market.

(2) Grant date: November 12 2020.

(3) Grant objects and number of grants: 19540000 restricted stocks were granted to 601 incentive recipients of the company and its

subsidiaries.

(4) Grant price: 15.48 yuan/share.

(5) Grant registration completion date: December 4 2020.

(6) Release the restrictions on sales:

Ratio of unlocked

Unlock period Unlock time quantity to granted

quantity

Starting from the first trading day 24 months after the completion of the

Phase I unlocked 4/10

registration of the first grant and ending on the last trading day within 36 months

Phase II Starting from the first trading day 36 months after the completion of the

unlocked registration of the first grant and ending on the last trading day within 48 months

Phase III Starting from the first trading day 48 months after the completion of the

unlocked registration of the first grant and ending on the last trading day within 60 months

(7) Performance appraisal requirements at the company level:

Unlock conditions Performance appraisal requirements

1.The weighted average ROE for year of 2021 is not less than 10%;

2. The growth rate of self-operating profit in 2021 will not be less than 6% compared with the year of 2019

The first batch of

the absolute amount will not be less than 845 million yuan;

unlock conditions

3. The cash dividends for year of 2021 shall be no less than 50% of the profit available for distribution of

the year.

1. The weighted average ROE for year of 2022 is not less than 10%;

The second batch 2. The growth rate of self-operating profit in 2022 will not be less than 12% compared with the year of

of unlocking 2019 the absolute amount will not be less than 892 million yuan;

conditions 3. The cash dividends for year of 2022 shall be no less than 50% of the profit available for distribution of

the current year.

1. The weighted average ROE for year of 2023 is not less than 10%;

The third batch of 2. The growth rate of self-operating profit in 2023 will not be less than 20% compared with the year of

unlocking 2019 the absolute amount will not be less than 958 million yuan;

conditions 3. the cash dividends for year of 2023 shall be no less than 50% of the profit available for distribution of the

current year.The self-operating profit refers to the net profit attributable to the owners of the parent company after deducting extraordinary gains

and losses and deducting the investment income from RBCD and Zhonglian Electronics.

3. Cash-settled share-based payment

□ Applicable □Not applicable

4. Modification and termination of share-based payment

Nil

5. Other

Nil

158WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

XIV. Undertakings or contingency

1. Important undertakings

Important undertakings on balance sheet date

Nil

2. Contingency

(1) Contingency on balance sheet date

Nil

(2) For the important contingency not necessary to disclosed by the Company explained reasons

The Company has no important contingency that need to disclosed

3. Other

Nil

XV. Events after balance sheet date

1. Important non-adjustment matters

Nil

2. Profit distribution

Nil

3. Return of sales

Nil

4. Other events after balance sheet date

Nil

XVI. Other important events

1. Previous accounting errors correction

Nil

2. Debt restructuring

Nil

3. Assets replacement

Nil

159WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

4. Pension plan

The Enterprise Annuity Plan under the name of WFHT has deliberated and approved by 8th meeting of 7th session of the BOD: in

order to mobilize the initiative and creativity of employees established a long-term talent incentive mechanism and enhance the

cohesive force and competitiveness the Company carried out the above mentioned annuity plan since the day when the company

receives the recording reply from labor security administration department. The annuity plan is as follows: the annuity fund are paid

by the company and employees together; the company’s contribution shall not exceed 8% of the gross salary of the employees of the

company per year the combined contribution of the enterprise and the individual employee shall not exceed 12% of the total salary

of the employees of the company. The annuity fund will be adjusted in accordance with the State’s annuity policies the company’s

economic benefits and is adaptable to the economic strength of the company. The company’s contribution at current period shall be

not higher than 8% of the total salary of last period the maximum annual allocation to employees shall not exceed five times the

average allocation to employees and the excess amount will not be available for allocation. The individual contribution is limited to 1%

of the total salary for the previous year. Specific contribution ratio shall be adjusted correspondingly in line with the operation

condition of the Company.In December 2012 the Company received the Reply on annuity plans recording under the name of WFHT from labor security

administration department and then the Company entered into the Entrusted Management Contract of the Annuity Plan of WFHT

with PICC.

5. Termination of operation

Not applicable

6. Segment

(1) Recognition basis and accounting policy for reportable segment

The company determines the operating segments in line with the internal organization structure management requirement and

internal reporting system. Operating segment of the Company refers to the followed components that have been satisfied at the same

time:

* The component is able to generate revenues and expenses in routine activities;

* Management of the Company is able to assess the operation results regularly and determine resources allocation and performance

evaluation for the component;

* The company can analyze and acquire the financial status operation results and cash flow of the components of the component.The Company is mainly engaged in the manufacture of fuel system of internal combustion engine and fuel cell components auto

components muffler and purifier. Based on product segments the Company determines four reportable segments automotive fuel

injection system and core parts of hydrogen fuel cell automotive post-process system air intake system as well as muffler and

purifier. As mentioned in item 7 of Note XVI. WFTR launched “platform trade” business in 2022. During the process of carrying out

the “platform trade” business WFTR was criminally investigated for contract fraud. The company’s management analyzed that itwas highly possible that this business was normal. To accurately present the company’s normal business situation the “platformtrade” business is listed as a separate segment. The accounting policies for each reporting segment are consistent with those stated in

Note V.Segment assets exclude transaction financial asset other accounts receivable-dividends receivable other non-current financial assets

other equity instrument investment long-term equity investment and other undistributed assets since these assets are not related to

products operation.

(2) Financial information for reportable segment

In RMB

160WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Add: Undistributed

assets and gains/losses

such as investments or

Automotive fuel Automotive gains accounted for by

Otherinjection system post- Automotive “platform the equity methodautomotiveand core parts processing air intake trade” liability instrument Inter-segment

Item air intake Total

of hydrogen system system business and equity instrument offset

system

fuel cell product segment segment investments or their

segment

segment segment holding and disposal

gains/losses from

holding and disposal

of such investments

Operation 2212439005. 287746815 610489114 120797725.8

3139771837.926129649047.40

income 16 .37 .75 0

Operation 2018142665. 210998525 534299678

2492982099.6992551236.985163871731.26

cost 23 .09 .23

-

25891569.

Total profit 241151742.15 -32902142.04 33592952. 793337080.20 -17761795.07 1011647091.89

09

58

24210488.15987031.

Net profits 171732485.03 -15033626.51 785413051.36 -5382.81 982314812.15

2422

Total of 10841712214.1 4723669537. 943676062 927165265 898195042 1227724334.

11245974877.9728352668665.53

assets 9 07 .47 .20 .77 14

Total of 3152256841. 475124396 518501561

4906947638.3821471975.999031358462.07

liabilities 76 .75 .17

(3) If the company has no reportable segments or is unable to disclose the total assets and liabilities of

each reportable segment it should state the reasons

Not applicable

(4) Other explanations

Nil

7. Major transaction and events influencing investor’s decision

(1) The public security organ has launched a criminal investigation on the contract fraud in which WFTR was cheated in the

process of carrying out “platform trade” business (see announcement No. 2023-007 disclosed by the Company on April 13 2023

on CNINFO website and other information disclosure websites). At present the case is in the investigation stage and the outcome

is uncertain in the future.

(2) Based on the background of “platform trade” business transaction chain sales and purchase contract signing transaction

process and physical circulation the Company makes a prudent analysis and comprehensive judgment that it is highly probably

that the business is not a normal trade business. In terms of accounting treatment the Company follows the principle of substance

over form and does not treat it as a normal trade business but treating according to the receipt and payment of funds. The

Company recognizes the purchases actually paid to "the supplier" and sales received from "the customer" as creditor’s rights and

liabilities respectively and lists in other receivables in net amount in the form of “platform trade” business combination in the

financial statements. In 2022 the outflow amount of the "platform trade" business was 6345751400 yuan the inflow amount was

3604252300 yuan. As of June 30 2023 the net outflow amount of 2542263400 yuan was listed in other receivables. An

expected credit loss of 1644068300 yuan has been accrued for this other receivables.

161WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

8. Other

Nil

XVII. Principal notes of financial statements of parent company

1. Account receivable

(1) Classification of account receivable

In RMB

Ending balance

Category Book balance Provision for bad debts

Accrual Book value

Amount Ratio Amount

ratio

Account receivable with provision for bad

7510398.260.67%7510398.26100.00%

debts accrual on a single basis

Including:

Account receivable with provision for bad

1110640148.8499.33%4424184.500.40%1106215964.34

debts accrual on portfolio

Including:

Receivables from customers 961471851.93 85.99% 4424184.50 0.46% 957047667.43

Receivables from internal related parties 149168296.91 13.34% 149168296.91

Total 1118150547.10 100.00% 11934582.76 1.07% 1106215964.34

In RMB

Opening balance

Category Book balance Provision for bad debts

Accrual Book value

Amount Ratio Amount

ratio

Account receivable with provision for bad debts

7705636.240.84%7705636.24100.00%

accrual on a single basis

Including:

Account receivable with provision for bad debts

910831491.6199.16%4023208.390.44%906808283.22

accrual on portfolio

Including:

Receivables from customers 768218575.70 83.63% 4023208.39 0.52% 764195367.31

Receivables from internal related parties 142612915.91 15.53% 142612915.91

Total 918537127.85 100.00% 11728844.63 1.28% 906808283.22

Provision for bad debts accrual on single basis: 7510398.26 yuan

In RMB

Ending balance

Name Provision for bad

Book balance Accrual ratio Accrual causes

debts

BD bills 7006453.02 7006453.02 100.00% Have difficulty in collection

Tianjin Lovel Engine Co. Ltd. 503945.24 503945.24 100.00% Have difficulty in collection

Total 7510398.26 7510398.26

Provision for bad debts accrual on portfolio: 4424184.50 yuan

In RMB

162WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Ending balance

Name

Book balance Provision for bad debts Accrual ratio

Within 6 months 942962791.80

6 months to 1 year 10647805.16 1064780.52 10.00%

1-2 years 4685756.00 937151.20 20.00%

2-3 years 1255410.32 502164.13 40.00%

Over 3 years 1920088.65 1920088.65 100.00%

Total 961471851.93 4424184.50

Explanation on defining the portfolio

If the provision for bad debts of accounts receivable is withdrawn in accordance with the general model of expected credit losses

please refer to the disclosure of other receivables to disclose related information about provision for bad debts:

□ Applicable □ Not applicable

By account age

In RMB

Account age Book balance

Within 1 year (inclusive) 1102778893.87

Including: within 6 months 1092131088.71

6 months to 1 year 10647805.16

1-2 years 4685756.00

2-3 years 1759355.56

Over 3 years 8926541.67

3-4 years 8926541.67

Total 1118150547.10

(2) Provision for bad debts accrual collected or reversal

Provision for bad debts accrual in the period:

In RMB

Changes in reporting period

Opening

Category

balance Collected or

Ending balance

Accrual Written-off Other

reversal

Provision for bad debts 11728844.63 1312598.71 1106860.58 11934582.76

Total 11728844.63 1312598.71 1106860.58 0.00 0.00 11934582.76

Important provision for bad debts collected or reversal in reporting period

In RMB

Name Amount collected o reversal Connection manner

BD bills 195237.98 Cash

Total 195237.98

(3) Account receivable actual charged off in the Period

Nil

(4) Top 5 receivables at ending balance by arrears party

In RMB

163WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Ending balance of Ratio in total ending balance of Ending balance of

Name

account receivable accounts receivable provision for bad debts

RBCD 511841053.12 45.78% 614292.02

Client 2 116795562.99 10.45% 1091831.41

Robert Bosch Company 129512038.81 11.58% 37896.99

WFTR 82306474.97 7.36%

WFSC 45400733.55 4.06%

Total 885855863.44 79.23%

(5) Account receivable derecognition due to financial assets transfer

Nil

(6) Assets and liabilities resulted by account receivable transfer and continues involvement

Nil

2. Other accounts receivable

In RMB

Item Ending balance Opening balance

Interest receivable 32195758.91 206325.34

Dividend receivable 1881769939.06

Other accounts receivable 1292727093.72 1471896113.93

Total 3206692791.69 1472102439.27

(1) Interest receivable

1) Category of interest receivable

In RMB

Item Ending balance Opening balance

Interest receivable of subsidiary 32195758.91 206325.34

Total 32195758.91 206325.34

2) Significant overdue interest

Nil

3) Accrual of provision for bad debts

□Applicable □Not applicable

164WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

(2) Dividends receivable

1) Category of dividends receivable

In RMB

Item (or invested enterprise) Ending balance Opening balance

Zhonglian Electronics 282000000.00

RBCD 1599769939.06

Total 1881769939.06

2) Important dividends receivable with account age over one year

Nil

3)Accrual of provision for bad debt

□Applicable □Not applicable

(3) Other accounts receivable

1)Other accounts receivable classified by nature

In RMB

Nature Ending book balance Opening book balance

Staff loans and petty cash 909837.00 1279080.00

Balance of related party in the

2928006521.723106006521.72

consolidation scope

Margin 3684799.33 3738299.33

Social security and provident fund paid 6210020.64 6429166.22

Other 66670.13 16781.83

Total 2938877848.82 3117469849.10

2) Accrual of provision for bad debts

In RMB

Phase I Phase II Phase III

Provision for bad Expected credit losses for Expected credit losses for

Expected credit losses Total

debts the entire duration (without the entire duration (with

over next 12 months

credit impairment occurred) credit impairment occurred)

Balance of Jan. 1

1505407.241644068327.931645573735.17

2023

Balance of Jan. 1

2023 in the period

Current accrual 577019.93 577019.93

Balance on June 30

2082427.171644068327.931646150755.10

2023

Change of book balance of loss provision with amount has major changes in the period

□Applicable □Not applicable

By account age

In RMB

165WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Account age Ending balance

Within 1 year (1 year included) 2935464096.41

Including: within 6 months 2934677969.49

6 months to 1 year 786126.92

1-2 years 974922.41

2-3 years 1050000.00

Over 3 years 1388830.00

3-4 years 1388830.00

Total 2938877848.82

3) Provision for bad debts accrual collected or reversal

Provisions for bad debts accrual in the period:

In RMB

Amount changed in the period

Category Opening balance Ending balance

Accrual Collected or reversal Written-off Other

Provision for bad debts 1645573735.17 577019.93 1646150755.10

Total 1645573735.17 577019.93 1646150755.10

4) Other receivables actually charged off during the reporting period

Nil

5) Top 5 other receivables at ending balance by arrears party

In RMB

Ratio in total ending

Account Ending balance of

Name of enterprise Nature Ending balance balance of other

age provision for bad debts

receivables

Balance of related

Within 1

WFTR party in the 2853260000.00 97.09% 1644068327.93

consolidate scope year

Balance of related

Within 6

WFCA party in the 54193906.00 1.84%

consolidate scope months

Balance of related

Within 6

WFMA party in the 20552615.72 0.70%

consolidate scope months

Zhenkunxing Industrial

Supermarket (Shanghai) Margin 1000000.00 2-3 years 0.03% 400000.00

Co. Ltd.Wuxi Youlian Thermal Over 3

Margin 750000.00 0.03% 750000.00

Power Co. Ltd years

Total 2929756521.72 99.69% 1645218327.93

6) Other accounts receivable related to government grants

Nil

166WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

7) Other receivables derecognized due to the transfer of financial assets

Nil

8) The amount of assets and liabilities formed by transferring other receivables and continuing to be

involved

Nil

3. Long-term equity investments

In RMB

Ending balance Opening balance

Item Depreciati Depreciati

Book balance on Book value Book balance on Book value

reserves reserves

Investment in

3128448081.683128448081.683080762302.113080762302.11

subsidiary

Investment in

associated

4162273276.124162273276.125289081048.995289081048.99

enterprise and

joint venture

Total 7290721357.80 7290721357.80 8369843351.10 8369843351.10

(1) Investment in subsidiary

In RMB

Changes in current period Ending

Opening balance Negative Provision for Ending balance balance of

Invested entity Additional

(book value) Investmen impairment Other (book value) depreciation

Investment

t loss reserves

WFJN 188389084.34 517726.08 188906810.42

WFLD 470853106.52 698452.44 471551558.96

WFMA 171807584.71 238950.48 172046535.19

WFCA 223351717.03 161291.58 223513008.61

WFTR 34067014.70 71685.24 34138699.94

WFSC 51490044.27 21903.93 51511948.20

WFTT 239283022.00 292714.44 239575736.44

WFAM 82454467.99 82454467.99

WFDT 54081519.52 5973.78 54087493.30

SPV 1195280223.97 45630287.05 1240910511.02

WFLD(Chongqi

265832.0717921.34283753.41

ng)

WFAS 878805.00 28873.21 907678.21

WFQL 225000000.00 225000000.00

VHWX 143559879.99 143559879.99

Total 3080762302.11 47685779.57 3128448081.68

(2) Investment in associated enterprise and joint venture

In RMB

167WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

Current changes (+/ -) Ending

Opening Ending balance

balance Cash balance of

Enterpris Additi Investment Other

(book Capital Other dividend or Impair (book depreciat

e onal gain/loss comprehens Othe

value) reducti equity profit ment invest recognized ive income r value) ion

on change announced accrual reserves

ment under equity adjustment

to issued

I. Joint venture

II. Associated enterprise

350574466508821.15997699237248

RBCD

6633.770639.065515.77

Zhonglia

n 155941 179345688. 28200000 145675

Automo 3314.05 18 0.00 9002.23

bile

547758569327

WFPM 2156824.64

99.0223.66

Chelian 169145 169575

Tianxia 430317.51 202.15 519.66

1100

Lezhuo 106520

Bowei 0000 -3479485.20 514.80

0.00

1100

528908644962166.18817699416227

Subtotal 0000

1048.991939.063276.12

0.00

1100

528908644962166.18817699416227

Total 0000

1048.991939.063276.12

0.00

(3) Other explanations

Nil

4. Operating income and cost

In RMB

Amount in current period Amount in last period

Item

Income Cost Income Cost

Main business 1939140764.98 1537898648.30 2262029970.36 1784089964.47

Other business 60842681.73 44901531.85 149159237.68 135896195.07

Total 1999983446.71 1582800180.15 2411189208.04 1919986159.54

5. Investment income

In RMB

Item Amount in current period Amount in last period

Investment income from holding trading financial

66697793.52100780374.04

asset

Investment income in joint ventures and associated

644975916.19734429287.99

enterprises

Total 711673709.71 835209662.03

168WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

6. Others

Nil

XVIII. Supplementary information

1. Extraordinary gains and losses in the reporting period

□Applicable □Not applicable

In RMB

Item Amount Note

Gains/losses from the disposal of non-current asset (Including the offsetting portion of WFJN demolition

124868984.10

the provision for impairment of assets that has been withdrawn) compensation

Governmental grants reckoned into current gains/losses (except for those with normal

operation business concerned and conform to the national policies & regulations and are 40157408.73

continuously enjoyed at a fixed or quantitative basis according to certain standards)

Except for effective hedging business related to the normal operation of the company

fair value gains and losses from holding trading financial assets and trading financial

-14788631.85

liabilities as well as investment income from disposing of trading financial assets

trading financial liabilities and available for sale financial assets

Reversal of impairment provision for accounts receivable subject to separate impairment

3127091.67

testing

Other non-operating income and expenditure except for the aforementioned items 3433420.03

Less: Impact on income tax 18140350.17

Impact on minority shareholders’ equity 20775314.33

Total 117882608.18 --

Specific information on other items of profits/losses qualified the definition of extraordinary gains and losses

□Applicable □Not applicable

The Company has no other items of profits/losses qualified the definition of extraordinary gains and losses

Information on the definition of extraordinary gains and losses that listed in the Q&A Announcement No.1 on Information

Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Gains and Losses as the recurring profit/loss

□Applicable □Not applicable

2. ROE and earnings per share

Earnings per share

Weighted Diluted

Profits during reporting period Basic earnings

average ROE earnings per per share

share

(RMB/Share)

(RMB/Share)

Net profit attributable to common shareholders of the company 5.24% 0.98 0.98

Net profit attributable to common shareholders of the company after

4.59%0.850.85

deducting nonrecurring gains and losses

3. Difference of the accounting data under accounting rules in and out of China

(1) Difference of the net profit and net assets disclosed in financial report under both IAS (International

Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)

□ Applicable □ Not applicable

169WEIFU HIGH-TECHNOLOGY GROUP CO. LTD. SEMI-ANNUAL REPORT 2023

(2) Difference of the net profit and net assets disclosed in financial report under both foreign accounting

rules and Chinese GAAP (Generally Accepted Accounting Principles)

□ Applicable □ Not applicable

(3) Explanation on data differences under the accounting standards in and out of China; as for the

differences adjustment audited by foreign auditing institute listed name of the institute

Nil

4. Other

Nil

BOD of WEIFU HIGH-TECHNOLOGY GROUP CO. LTD.Chairman:

Wang Xiaodong

August 22 2023

170