Stock abbreviation: Wazhou B Stock code: 200706 No.: 2026-21

Wafangdian Bearing Co. LTD

Announcement of uncovered losses exceeding one third of

paid-in capital stock

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

meeting of the 10th Board of Directors on April 24 2026 to consider and pass the

"Proposal on uncovered losses exceeding one third of paid-in capital stock" which

needs to be submitted to the 2025 annual general meeting of shareholders for

deliberation. The details are hereby announced as follows:

I. Basic information

According to the audit by Zhongtian Zhonghuan Certified Public Accountants (Special

General Partnership) as of December 31 2025 the company's consolidated financial

statements for 2025 had an undistributed profit of -824475798.9 yuan accounting for

-204.79% of the total share capital of 402600000.00 yuan. The undistributed profit of

the parent company's financial statements for 2025 was -551829520.9 yuan

accounting for -137.07% of the total share capital of 402600000.00 yuan. The

company's unremedied losses have exceeded one-third of the total share capital.According to the relevant provisions of the "Company Law of the People's Republic of

China" and the "Company Charter" this matter needs to be submitted to the company's

shareholders' meeting for deliberation.II. Reasons for loss

1. In 2025 the company's total credit impairment loss and asset impairment loss

resulting from the provision of various impairment provisions amounted to 59.2 million

yuan an increase of 9.32 million yuan compared to the previous year.

2. Other income decreased by 14.72 million yuan mainly due to the decline in VAT

carry-forward and deduction income.

3. Affected by the dual factors of rising product sales prices and decreasing raw material

purchase costs the product profit margin has increased and the operating profit

increased by 74.73 million yuan compared to the previous year.III. Countermeasures

1Stock abbreviation: Wazhou B Stock code: 200706 No.: 2026-21

The company continues to set its main business goals as increasing product profits and

enhancing profitability. The main measures are as follows:

1. Increase revenue and improve product profit margins.

(1) Seize market orders to increase revenue focus on major clients for addition deeply

cultivate high-value major clients develop mid-to-high-end products narrow down

product varieties divest non-core products and enhance profitability.

(2) Focus on sales prices for value-added further strengthen price control and increase

product profit margins. Establish a multi-dimensional price management system and

standardize the sales prices of service providers.

2. Implement meticulous cost control to increase profit levels through cost reduction.

(1) Continuously deepen technological research optimize design and manufacturing

processes. Increase the proportion of R&D for mid-to-high-end products and A-class

products optimize design templates increase the number of standard parts achieve

simplified and serialized design reduce manufacturing costs and increase added value.

(2) Deepen the transformation of integrated supply chains enhance procurement

efficiency through centralized purchasing direct purchasing and bidding and achieve

cost reduction.

(3) Deepen the transformation of lean production to improve production efficiency quality

and reduce costs.

(4) Control labor costs strictly control the total number of employees and improve

personnel efficiency.

(5) Deepen the management of warehousing and logistics to reduce inventory and

shipping costs.IV. Documents for reference

1. Resolution of the fifth meeting of the 10th Board of Directors of Wafangdian Bearing

Co. LTD.;

Hereby notify

Board of directors of

Wafangdian bearing Company limited

April 27 2026

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