Stock abbreviation: Wazhou B Stock code: 200706 No.: 2026-20

Wafangdian Bearing Co. Ltd.Announcement on the provision for credit Impairment and asset

Impairment in 2025

The Company and all members of the BOD guarantee that the information disclosed is true

accurate and completed and that there are no false records misleading statements or material

omissions.I. Overview of the provision for asset impairment

Wafangdian Bearing Co. LTD. (hereinafter referred to as the "Company") deliberated

and passed the "Motion on the Provision of Credit Impairment Reserves and Asset

Impairment Reserves in 2025" at the fifth meeting of the tenth Board of Directors on

April 24 2026. The details are hereby announced as follows:

1. Reasons for the provision of credit impairment reserve and asset impairment

reserve

In accordance with the relevant provisions of the Accounting Standards for Business

Enterprises and the Company's accounting policies in order to truly and accurately

reflect the Company's asset position and financial position as at December 31 2025

the Company conducted a comprehensive examination and impairment test of all types

of assets within the scope of the consolidated statements as at December 31 2025.Provision for credit impairment and asset impairment for related assets that may show

signs of impairment as at December 31 2025.

2. The scope and total amount of the provision for credit impairment and asset

impairment

Following a comprehensive inventory and impairment test of assets within the scope of

the Company's consolidated statements as at 31 December 2025 such as accounts

receivable notes receivable other receivables contract assets inventory and contract

performance costs fixed assets construction in progress etc. during the reporting

period The Company's total credit impairment loss and asset impairment loss resulting

from the provision of various impairment provisions amounted to 59.20 million yuan.The details are as follows:

1Stock abbreviation: Wazhou B Stock code: 200706 No.: 2026-20

Provision

Project Item Amount (ten Reason for Provisionthousand yuan)

The company estimates expected credit losses for financial assets measured at amortized cost or

fair value with changes recognized in other comprehensive income either individually or in

Loss on combination. In addition to assessing overdue credit losses based on individual assets the

impairment of -170 company also evaluates expected credit losses for amortized cost financial instruments using agingnotes portfolio analysis. Receivable notes are classified into distinct portfolios according to credit risk

receivable characteristics with expected credit losses calculated on a portfolio basis. The classification criteria

include: bank acceptance bills commercial acceptance bill portfolios from related parties and

commercial acceptance bill portfolios from non-related parties.The Company estimates expected credit losses on financial assets measured at amortized cost

Impairment loss financial assets measured at fair value with changes recognized in other comprehensive income

on receivables 104 and similar assets either individually or in combination. In addition to assessing overdue credit

financing losses on an individual asset basis the Company also evaluates expected credit losses on financial

instruments measured at amortized cost using an aging portfolio approach.Loss of The Company estimates expected credit losses for financial assets measured at amortized cost or

fair value with changes recognized in other comprehensive income either individually or in

credit combination. For receivables arising from transactions governed by Accounting Standard for

impair Business Enterprises No.14 – Revenue (2017) the Company consistently measures loss provisions

ment Loss on equivalent to the expected credit loss over the entire life cycle regardless of whether such

impairment of 1806 receivables contain significant financing components. In addition to assessing overdue credit losses

accounts on an individual basis the Company evaluates expected credit losses on accounts receivable

receivable measured at amortized cost using aging group classifications. Accounts receivable are categorizedinto distinct groups based on credit risk characteristics with expected credit losses calculated on a

group basis. The classification criteria include related-party groups and aging groups. For grouped

accounts receivable the Company develops a comparison table linking aging periods to expected

credit loss rates over the entire life cycle incorporating historical credit loss experience current

conditions and forecasts of future economic conditions to determine expected credit losses.The Company estimates expected credit losses on financial assets measured at amortized cost

Impairment loss financial assets measured at fair value with their changes recognized in other comprehensive

of other 2 income and similar assets either individually or in combinations. The Group classifies other

receivables receivables into various portfolios based on their credit risk characteristics and calculates expectedcredit losses at the portfolio level. The classification criteria include: related-party portfolios aging

portfolios and risk-free portfolios (classified according to the creditworthiness of counterparties

2Stock abbreviation: Wazhou B Stock code: 200706 No.: 2026-20

nature of funds and transaction safeguards). For other receivables classified into portfolios the

Company determines expected credit losses by referencing historical credit loss experience

considering current conditions and forecasts of future economic conditions and applying default

risk exposure and the expected credit loss rate over the entire life cycle.The Company estimates expected credit losses on financial assets measured at amortized cost

Loss on financial assets measured at fair value with their changes recognized in other comprehensive

inventory income and similar assets either individually or in combinations. The Group classifies other

decline and receivables into various portfolios based on their credit risk characteristics and calculates expected

impairment loss 3954 credit losses at the portfolio level. The classification criteria include: related-party portfolios aging

on contract portfolios and risk-free portfolios (classified according to the creditworthiness of counterparties

performance nature of funds and transaction safeguards). For other receivables classified into portfolios the

costs Company determines expected credit losses by referencing historical credit loss experienceconsidering current conditions and forecasts of future economic conditions and applying default

risk exposure and the expected credit loss rate over the entire life cycle.Loss on For contract assets arising from transactions governed by Accounting Standard for Business

Enterprises No.14 – Revenue (2017) the Company consistently measures loss provisions

impair Impairment loss equivalent to the expected credit loss over the entire life expectancy of these assets regardless of

ment of of contract 126 whether they contain significant financing components. Based on historical credit loss experience

assets assets current conditions and forecasts of future economic conditions the Company prepares a

comparison table between the aging structure of contract assets and the expected credit loss rate

over their entire life expectancy to calculate impairment losses.When impairment indications exist on the balance sheet date an impairment test shall be

conducted. If the impairment test results indicate that the recoverable amount of an asset is lower

than its carrying amount an impairment provision shall be recognized for the difference and

Impairment loss recorded as an impairment loss. The recoverable amount is the higher of the net amount of the

of fixed assets 98 asset's fair value less disposal costs and the present value of the asset's estimated future cashflows. The asset impairment provision is calculated and recognized on an individual asset basis; if

estimating the recoverable amount of an individual asset is difficult the recoverable amount of the

asset group to which the asset belongs shall be determined. An asset group is the smallest

combination of assets capable of generating independent cash flows.Total 5920

3Stock abbreviation: Wazhou B Stock code: 200706 No.: 2026-20

II. Influence on the company’s financial condition and operating results

The impairment of the above-mentioned assets will affect the total profit of the

company's consolidated statement in 2025 to 59.20 million yuan.III. The company’s approval procedures for the provision for asset impairment

this time

The provision for credit impairment and asset impairment was approved at the Second

Meeting of the Board Review Committee held on April 222026 and at the Fifth

Meeting of the Tenth Board of Directors held on April 242026.The case will be submitted to the company's 2025 annual General meeting for

consideration.IV. Explanation by the Board of Directors on the rationality of the provision of

credit impairment reserves and asset impairment reserves

In accordance with the provisions of the Accounting Standards for Enterprises and the

relevant accounting policies of the Company the Company will provide for a total of

59.20 million yuan of credit impairment reserves and asset impairment reserves in

2025 which can more objectively and fairly reflect the company's financial position and

asset status at the end of the period.V. Opinion of the Board of Directors' Audit Committee on the Provision for Asset

Impairment

The Board of Directors 'Audit Committee concludes that the company's resolution to

recognize credit impairment provisions and asset impairment provisions follows lawful

procedures and is well-grounded. The provisions comply with the Enterprise

Accounting Standards and relevant regulations align with the company's actual

circumstances and provide a more accurate reflection of its asset status. The

Committee approves these provisions.VI. Documents for reference

1. Resolution of the fifth meeting of the tenth Board of Directors of Wafangdian Bearing

Co. LTD.;

2.The second Meeting of the Board of Directors' Audit Committee in 2026.

Hereby notify

Board of directors of

Wafangdian bearing Company limited

April 27 2026

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