Lu Thai Textile Co. Ltd. Interim Report 2026
LU THAI TEXTILE CO. LTD.INTERIM REPORT 2026
August 2026
1Lu Thai Textile Co. Ltd. Interim Report 2026
Part I Important Notes Table of Contents and Definitions
The Board of Directors (or the “Board”) and the directors as well as senior executives of Lu
Thai Textile Co. Ltd. (hereinafter referred to as the “Company”) hereby guarantee the
factuality accuracy and completeness of the contents of this Report and its summary and
shall be jointly and severally liable for any misrepresentations misleading statements or
material omissions therein.Liu Zibin the Company’s legal representative and Zhang Keming head of accounting
affairs and head of the accounting department (equivalent to accounting manager) hereby
guarantee that the Financial Statements carried in this Report are factual accurate and
complete.All the Company’s directors have attended the Board meeting for the review of this Report
and its summary.The Company has described in detail in this Report the possible risks. Please refer to the
contents of “XI Risks Facing the Company and Countermeasures” in Part III
“Management Discussion and Analysis” of this Report. Securities Times Shanghai Securities
News China Securities Journal Ta Kung Pao and www.cninfo.com.cn have been designated
by the Company for its information disclosure in 2026. And all information about the
Company shall be subject to what’s disclosed by the Company on the aforesaid media.Investors are kindly reminded to exercise caution when making investment decisions.The Company is subject to the disclosure requirements for listed companies engaging in
textile and apparel as stated in Self-Regulatory Guidelines of Shenzhen Stock Exchange for
Listed Companies No.3 - Industry Information Disclosure.In H1 2026 the international environment was complex and volatile and the spillover risks
of geopolitical conflicts increased. Facing the complex situation China implemented more
proactive and effective macroeconomic policies keeping economic operation within a
reasonable range and continuously demonstrating development resilience. According to
data released by the National Bureau of Statistics China's gross domestic product (GDP)
grew by 4.7% year-on-year in the first half of this year and total retail sales of consumer
goods reached RMB24.87 trillion up 1.3% year-on-year. Against the backdrop of
continuous fluctuations in the global economic and trade environment China's economy has
shown strong development resilience and vitality. Looking ahead to the full year the global
economic and trade environment will become more complex and volatile and the
foundation for economic recovery still needs to be consolidated. The textile and apparel
industry needs to continuously deepen transformation and upgrading accelerate the
construction of a modern industrial system and continuously build a solid foundation for
high-quality development characterized by stabilizing growth preventing risks and
promoting transformation. For details please refer to Part III Management Discussion and
Analysis.The Board has approved an interim dividend plan as follows: based on the share capital of
817525607 shares a cash dividend of RMB1.00 (tax inclusive) per 10 shares is to be
distributed to the shareholders with no bonus issue from either profit or capital reserves.This Report and its summary have been prepared in both Chinese and English. Should
there be any discrepancies or misunderstandings between the two versions the Chinese
versions shall prevail.
2Lu Thai Textile Co. Ltd. Interim Report 2026
Table of Contents
Part I Important Notes Table of Contents and Defin... 2
Part II Corporate Information and Key Financial In....6
Part III Management Discussion and Analysis .........10
Part IV Corporate Governance Environmental and Soc...33
Part V Significant Events .......................... 35
Part VI Share Changes and Shareholder Information ...45
Part VII Bonds ......................................54
Part VIII Financial Statements ..................... 59
3Lu Thai Textile Co. Ltd. Interim Report 2026
Documents Available for Reference
I. The financial statements signed and stamped by the Company’s legal representative and head of
accounting affairs and head of the accounting department; and
II. The originals of all the Company’s announcements and documents disclosed to the public
during the Reporting Period on Securities Times Shanghai Securities News China Securities
Journal and Ta Kung Pao.
4Lu Thai Textile Co. Ltd. Interim Report 2026
Definitions
Term Refers to Definition
The “Company” “LTTC” “Issuer” or
“we” Refers to Lu Thai Textile Co. Ltd.The Board of Directors Refers to The Board of Directors of Lu Thai TextileCo. Ltd.CSRC Refers to The China Securities RegulatoryCommission
Expressed in the Chinese currency of
RMB RMB’0000 Refers to Renminbi expressed in ten thousand
Renminbi
The Company Law Refers to The Company Law of the People’sRepublic of China
The Securities Law Refers to The Securities Law of the People’sRepublic of China
The “Reporting Period” or “Current Refers to The period from January 1 2026 to JunePeriod” 30 2026
5Lu Thai Textile Co. Ltd. Interim Report 2026
Part II Corporate Information and Key Financial Information
I Corporate Information
Stock name LTTC LTTC-B Stock code 000726 200726
Previous stock name (if
any) None
Stock exchange for stock
listing Shenzhen Stock Exchange
Company name in
Chinese 鲁泰纺织股份有限公司
Abbr. (if any) 鲁泰纺织
Company name in
English (if any) LU THAI TEXTILE CO. LTD
Abbr. (if any) LTTC
Legal representative Liu Zibin
II Contact Information
Board Secretary Securities Representative
Name Li Kun Li Kun
No. 81 Songling East Road No. 81 Songling East Road
Address Zichuan District Zibo Zichuan District Zibo
Shandong P.R.China Shandong P.R.China
Tel. 0533-5285166 0533-5285166
Fax 0533-5418805 0533-5418805
Email address likun@lttc.com.cn likun@lttc.com.cn
III Other Information
1. Contact Information of the Company
Indicate by tick mark whether any change occurred to the registered address office address and
their zip codes website address email address and other contact information of the Company in
the Reporting Period.□ Applicable□ Not applicable
6Lu Thai Textile Co. Ltd. Interim Report 2026
No change occurred to the said information in the Reporting Period which can be found in the
2025 Annual Report.
2. Media for Information Disclosure and Place where this Report is Lodged
Indicate by tick mark whether any change occurred to the information disclosure media and the
place for lodging the Company’s periodic reports in the Reporting Period.□ Applicable□ Not applicable
The website of the Shenzhen Stock Exchange media and website where the Company’s periodic
reports are disclosed as well as the place for lodging such reports did not change in the Reporting
Period. The said information can be found in the 2025 Annual Report.
3. Other Information
Indicate by tick mark whether any change occurred to other information in the Reporting Period.□ Applicable□ Not applicable
IV Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.□ Yes□ No
H1 2026 H1 2025 Change (%)
Operating revenue (RMB) 2686067577.19 2827110139.70 -4.99%
Net profit attributable to the listed
company’s shareholders (RMB) 253929756.96 360215726.72 -29.51%
Net profit attributable to the listed
company’s shareholders before
exceptional gains and losses 117587435.64 225615338.79 -47.88%
(RMB)
Net cash flow from operating
activities (RMB) 262376552.48 263993640.96 -0.61%
EPS-basic (RMB/share) 0.31 0.44 -29.55%
EPS-diluted (RMB/share) 0.29 0.40 -27.50%
Weighted average ROE (%) 2.55% 3.75% -1.20%
June 30 2026 December 31 2025 Change (%)
Total assets (RMB) 12359748980.40 14106762900.07 -12.38%
Equity attributable to the listed
company’s shareholders (RMB) 9878274311.96 9811054187.05 0.69%
7Lu Thai Textile Co. Ltd. Interim Report 2026
V Accounting Data Differences under China’s Accounting Standards for Business
Enterprises (CAS) and International Financial Reporting Standards (IFRS) and Foreign
Accounting Standards
1. Net Profit and Net Assets Differences under CAS and IFRS
□ Applicable□ Not applicable
No such differences for the Reporting Period.
2. Net Profit and Net Assets Differences under CAS and Foreign Accounting Standards
□ Applicable□ Not applicable
No such differences for the Reporting Period.VI Exceptional Gains and Losses
□ Applicable □ Not applicable
Unit: RMB
Item Amount Note
Gain or loss on disposal of non-current assets (inclusive of impairment
allowance write-offs) 86960374.41
Government grants recognized in profit or loss for the Current Period
(exclusive of those that are closely related to the Company’s normal
business operations and given in accordance with defined criteria and 16253060.02
in compliance with government policies and have a continuing impact
on the Company’s profit or loss)
Gain/loss on changes in fair value in financial assets and liabilities
held by a non-financial enterprise as well as on disposal of financial
assets and financial liabilities (exclusive of the effective portion of 41178906.33
hedges that is related to the Company’s normal business operations)
Non-operating income and expense other than the above 10598160.74
Less: Income tax effects 17543514.96
Non-controlling interests effects (after tax) 1104665.22
Total 136342321.32
Particulars about other items that meet the definition of exceptional gain/loss:
□ Applicable□ Not applicable
No such cases for the Reporting Period.Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item listed in
the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their
Securities to the Public—Non-recurring Gains and Losses:
8Lu Thai Textile Co. Ltd. Interim Report 2026
□ Applicable□ Not applicable
No such cases for the Reporting Period.
9Lu Thai Textile Co. Ltd. Interim Report 2026
Part III Management Discussion and Analysis
I Principal Activity of the Company in the Reporting Period
In H1 2026 facing the impact of multiple factors such as the escalation of geopolitical conflicts
and weak market demand China’s textile industry continued to leverage the structural resilience
of its industrial system and textile enterprises actively responded to changes in the external
situation. During the Reporting Period combining industry development trends and market
changes and relying on its own competitive advantages the Company steadily advanced
“Improve Quality and Efficiency” and “Overall Internationalization”. With the goal of
diversifying fabric products and integrating fabrics and apparel the Company implemented
various initiatives such as customer focus product leadership efficiency-driven operations and
global operations and its overall production and operations ran smoothly.During the Reporting Period the Company achieved total operating revenue of RMB2.686
billion operating profit of RMB281 million net profit attributable to the parent company of
RMB254 million and net profit attributable to the parent company before exceptional gains and
losses of RMB118 million representing year-on-year decreases of 4.99% 32.83% 29.51% and
47.88% respectively. No changes occurred to the Company’s principal operations primary
products business models or the primary factors driving the Company’s growth in the Reporting
Period.During the Reporting Period the Company was rated an “AAA Credit Enterprise” by the China
Enterprise Confederation and the China Enterprise Directors Association and was awarded the
Shandong Province Private Economy High-Quality Development Outstanding Contribution
Award by the Shandong Development and Reform Commission and the Department of Industry
and Information Technology of Shandong Province.i. Adhering to the “customer first” philosophy the Company carried out customized product
research and development around strategic customers and value customers actively aligned with
the cutting-edge needs of the market and customers and strove to improve the order conversion
rate of customized development projects. The Company continuously expanded customer
resources and tracked product information and market feedback. Through the professional service
team for the integration of fabrics and apparel the Company promoted efficient collaboration
among multiple departments such as marketing design R&D and production tailored solutions
for customers and steadily increased the business scale of the integration of fabrics and apparel
and customer satisfaction.ii. Focus on product and technology leadership to maintain product competitive advantages.The Company continued to promote the Lu Thai Production System (LTPS) and “ImproveQuality and Efficiency” striving to improve the production efficiency product quality and
delivery capabilities of its domestic and overseas production bases. Relying on the analysis and
judgment of cutting-edge market demands to formulate product development directions the
Company continued to strengthen its R&D capabilities. During the Reporting Period the
Company was granted a total of 18 patents including 14 invention patents and 4 utility model
patents. By consolidating its core competitive advantages through stable product quality and R&D
investment the Company promoted a diversified product layout maintained its advantageous
position in the global shirting fabric industry and strove to build itself into a global green and
fashion textile and apparel industry group with leading fabrics at its core.iii. Adhere to internal and external collaborative management to continuously improve the
international layout.
10Lu Thai Textile Co. Ltd. Interim Report 2026
The Company accelerated the construction of a domestic and overseas collaborative
manufacturing system promoted the supporting overseas production capacity across the entire
industry chain of yarns fabrics and garments and continuously improved its global supply chain
layout. It steadily optimized the production capacity structure of its overseas production bases
deepened multi-level international industrial cooperation continuously enhanced the global brand
influence of its products and strove to build a more resilient and efficient global industrial
system.iv. Improve the corporate culture system to build a continuous learning organization.Actively responding to changes in the international political and economic situation and marketchallenges the Company deeply cultivated the culture of a learning organization. With “hardwork as the foundation inheritance of craftsmanship and social responsibility” as the core it
further unified thoughts gathered strength and boosted employee confidence. Focusing on
business areas such as “Improve Quality and Efficiency” product innovation market expansion
brand building green and low-carbon development and work safety the Company continuously
improved its business capabilities and professional skills to proactively adapt to changes in the
internal and external environments.The Company is subject to the disclosure requirements for listed companies engaging in textile
and apparel as stated in Self-Regulatory Guidelines of Shenzhen Stock Exchange for Listed
Companies No.3 - Industry Information Disclosure.In H1 2026 China’s textile industry withstood pressures and overcame difficulties maintaining
generally stable economic operation. According to data from the General Administration of
Customs denominated in RMB China’s textile and apparel exports from January to June reached
RMB1.01 trillion a year-on-year decrease of 2.2% indicating generally stable operation. Looking
ahead to the second half of the year although weak market demand and a volatile trade
environment will put certain pressure on stabilizing the scale and optimizing the structure of
textile and apparel exports China’s textile and apparel industry chain system is complete. With
the continuous burst of innovation vitality in the industry and the expansion of a diversified layout
in the international market it still possesses solid and long-term competitive advantages in the
international market. Facing various risks and challenges textile and apparel enterprises need to
continuously optimize their product and market structures solidly promote high-end intelligent
green and integrated transformation and upgrading and continuously enhance the industry’s risk
resistance and development resilience so as to promote the stable operation and achieve high-
quality development of the textile industry.II Core Competitiveness Analysis
1. The Company has a comprehensive vertical industrial chain and internationalized layout. It
possesses the whole industrial chain integrating spinning bleaching and dyeing neatening
testing and garment making as well as excellent quality control capabilities through various links
of the production of high-end shirting fabrics. The Company has established industrial bases
design institutions and market service institutions with sound supporting facilities at home and
abroad. By integrating and allocating international resources and leveraging the advantages of its
international industrial layout the Company continuously consolidated its leading position in the
production of mid-to-high-end shirting fabrics.
2. The company has better integrated management capability and a high-level management
system architecture. Since 1995 the Company has successively passed the certification of
ISO9001 quality management system ISO14001 environmental management system ISO45001
Occupation Health and Safety Management System SA8000 Social Responsibility Management
11Lu Thai Textile Co. Ltd. Interim Report 2026
System The Worldwide Responsible Apparel Production Standard (WRAP) Sustainable Textile
Production (STeP) Global Organic Textile Standard (GOTS) Global Recycle Standard (GRS)
HIGG (FEM and FSLM) and China National Accreditation Service for Conformity Assessment
(CNAS) and realized the internationalization standardization and normalization of the corporate
management. In order to make outstanding achievements in its operating management better
improve the Company’s business performance and capabilities the Company has introduced the
GB/T 19580 Criteria for Performance Excellence step by step set up the “big quality” system
promoted the management innovation and guaranteed the management quality.
3. The Company establishes its high-level technical cooperation platform by virtue of strong
R&D capability. The Company always insists on the independent innovation by relying on
technological platforms such as the National Enterprise Technical Centre National Industrial
Design Centre National Post-doctoral Scientific Research Station and Shandong Provincial key
laboratories. It has established long-term technical cooperation and joint product development
with research institutions universities strategic customers and key suppliers. The Company
focuses on both frontier technology reserves and application technology innovation continuously
strengthening new product development driven by commercial value realization. It gradually
enhances its capabilities in technological research and product integration development
consistently contributing more green low-carbon and sustainable new technologies and high-
quality products to the industry thus achieving low-carbon green and circular development.III Core Business Analysis
Overview:
See contents under the heading “I Principal Activity of the Company in the Reporting Period”
above.Year-on-year changes in key financial data:
Unit: RMB
Year-on-
H1 2026 H1 2025 yearchange Main reason for change
(%)
Operating revenue 2686067577.19 2827110139.70 -4.99%
Cost of sales 2074860173.08 2168474896.26 -4.32%
Selling expense 67616713.85 69698089.77 -2.99%
Administrative expense 164389279.21 162947077.39 0.89%
Primarily due to the
Financial expenses 79974502.20 -7802571.11 1124.98% impact of net exchange
losses.Income tax expense 40280360.62 56505920.02 -28.71%
R&D investments 82599598.53 100446619.98 -17.77%
12Lu Thai Textile Co. Ltd. Interim Report 2026
Net cash flow from
operating activities 262376552.48 263993640.96 -0.61%
Net cash generated Primarily due to the
from/used in investing 808239160.11 3304744.78 24356.93 recovery of matured
activities % wealth managementproducts.Net cash generated - Primarily due to thefrom/used in financing -195993183.24 -842.60% repayment of matured
activities 1847423304.31 bonds payable.Net increase in cash and Primarily due to the
cash equivalents -794432986.38 98632380.99 -905.45% repayment of maturedbonds payable.Significant changes to the profit structure or sources of the Company in the Reporting Period:
□ Applicable□ Not applicable
No such changes in the Reporting Period.Breakdown of operating revenue
Unit: RMB
H1 2026 H1 2025
Year-on-
As % of total As % of total year change
Amount operating Amount operating (%)
revenue (%) revenue (%)
Total operating
revenue 2686067577.19 100% 2827110139.70 100% -4.99%
By operating division
Textile and
apparel 2495337767.74 92.90% 2622625528.96 92.77% -4.85%
Electricity and
steam 117123551.91 4.36% 138968395.26 4.92% -15.72%
Other 73606257.54 2.74% 65516215.48 2.32% 12.35%
By product category
Fabric
products 1797720702.82 66.93% 1850500289.50 65.46% 2.38%
Shirts 697617064.92 25.97% 772125239.46 27.31% -9.65%
13Lu Thai Textile Co. Ltd. Interim Report 2026
Electricity and
steam 117123551.91 4.36% 138968395.26 4.92% -15.72%
Other 73606257.54 2.74% 65516215.48 2.32% 12.35%
By operating segment
Japan and
South Korea 183646730.87 6.84% 190375773.38 6.73% -3.53%
Southeast Asia 824443506.09 30.69% 803591068.14 28.42% 2.59%
Europe and
America 443352781.73 16.51% 452786828.59 16.02% -2.08%
Other 323994602.58 12.06% 394177816.29 13.94% -17.80%
China 910629955.92 33.90% 986178653.30 34.88% -7.66%
Operating division product category or operating segment contributing over 10% of operating
revenue or operating profit:
□ Applicable□ Not applicable
The Company is subject to the disclosure requirements for listed companies engaging in textile
and apparel as stated in Self-Regulatory Guidelines of Shenzhen Stock Exchange for Listed
Companies No.3 - Industry Information Disclosure.Unit: RMB
Operating Gross YoY change YoY change YoY change
revenue Cost of sales profit in operating in cost of sales in gross profitmargin revenue (%) (%) margin (%)
By operating division
Textile and
apparel 2495337767.74 1902816873.17 23.75% -4.85% -4.49% -0.29%
By product category
Fabric
products 1797720702.82 1364998400.77 24.07% 2.38% -2.81% -0.04%
Shirts 697617064.92 537818472.40 22.91% -9.65% -8.51% -0.96%
By operating segment
Southeast
Asia 824443506.09 626859376.20 23.97% 2.59% 2.74% -0.10%
14Lu Thai Textile Co. Ltd. Interim Report 2026
Europe and
America 443352781.73 340696738.98 23.15% -2.08% -1.05% -0.81%
China 910629955.92 719707511.88 20.97% -7.66% -6.52% -0.96%
Core business data of the prior year restated according to the changed statistical caliber for the
Reporting Period:
□ Applicable□ Not applicable
Physical stores of the Company:
□ Yes□ No
New physical stores:
□ Yes□ No
Indicate by tick mark whether the Company discloses its top five franchised stores.□ Yes□ No
IV Other Information Required by Information Disclosure Guide for Companies Engaged
in Textile and Garment Services
1. Capacity
The Company’s own capacity
Industry
classification Item H1 2026 H1 2025
Total capacity (10000
meters) 13368 13926.71
Fabric
Rate of capacity
utilization 74% 72%
Total capacity (10000
standard pieces) 1186.00 1359.00
Apparel
Rate of capacity
utilization 89% 95%
Year-on-year change in the rate of capacity utilization above 10%
□ Yes √ No
Overseas capacity
√ Yes □ No
Industry
classification Item Domestic Overseas
15Lu Thai Textile Co. Ltd. Interim Report 2026
Percentage of capacity 67% 33%
Fabric Capacity layout Mainly in Shandong Province Mainly in Vietnam
Rate of capacity
utilization 69% 84%
Percentage of capacity 29% 71%
Apparel Capacity layout Mainly in Shandong Province
Mainly in Vietnam Cambodia
and Myanmar
Rate of capacity
utilization 94% 88%
The Company’s future overseas capacity expansion plans
During the Reporting Period relevant overseas subsidiaries invested in the construction of
garment processing projects which are currently in the infrastructure construction stage.
2. Sales Model and Channels
Product sales channels and operation methods
a. Sales model
The Company adopted the order-based sales model. Relying on the self-owned trademark
“Luthai” for its fabric sales it provided customers with development and design plans based on
customer needs fabrics and patterns leading the market fashion and technology as well as
functions and environmental protection. Shirts were mainly made according to the orders of
customers at home and abroad and sold by brand owners.The Company actively expanded its own brand portfolio. It opened self-operated specialty stores
such as Luthai Exhibition Hall collaborated with shopping malls to set up joint-operation
counters and simultaneously made efforts in online marketing to expand its business footprint
across all channels. In addition it provides “premium customization” for shirts and custom-made
services for professional wear accurately meeting the diverse needs of the high-end service
industry.b. Sales channels:
The Company focused on its own brand with a dedicated sales department responsible for
managing the sales and after-sales services of the Company’s products. The global market was
divided into different sales regions for management with unified planning and deployment to
effectively handle fabric and apparel orders realizing product sales. Additionally to enrich its
terminal brand matrix and expand the market the Company upgraded and expanded the product
offerings of the “Luthai 1987” brand to continuously meet the diverse needs of end customers.In order to adapt to the digital consumption trend the company actively expands the constructionof online sales channels building a diversified online ecosystem of “owned platform + leading e-commerce”. On one hand by leveraging its own e-commerce platform the Company deeply
integrates core resources such as supply chain management and brand marketing to achieve direct
engagement between the brand and consumers improving user reach and service experience. On
16Lu Thai Textile Co. Ltd. Interim Report 2026
the other hand the Company has deepened cooperation with well-known e-commerce platformsto broaden brand visibility and product sales access points. The online channel took the “LuthaiJianxing” as the core brand targeting the casual consumption needs of younger consumers and
creating lightweight apparel products suited to everyday wear and travel scenarios. After
transactions were completed through the internet the goods were accurately delivered to
customers via express delivery.Unit: RMB
Sales Operating Gross YoY change YoY change YoY change
channels revenue Cost of sales profit in operating in cost of in grossmargin revenue sales profit margin
Online
sales 3679598.09 1787851.88 51.41% 390.98% 354.80% 3.86%
Direct
sales 1802063851.92 1366328107.94 24.18% -2.87% -2.82% -0.04%
OEM/OD
M 689594317.73 534700913.35 22.46% -10.04% -8.74% -1.10%
Total 2495337767.74 1902816873.17 23.75% -4.85% -4.49% -0.29%
3. Selling Expense and Breakdown Thereof
Item H1 2026 H1 2025 Amount of change Percentage ofchange Note
Salaries 31196715.19 32470002.40 -1273287.21 -3.92%
Marketing
expense 20956938.12 16455458.63 4501479.49 27.36%
Depreciation
charges 2064707.92 2417716.59 -353008.67 -14.60%
Business
travel 3153666.05 3481536.38 -327870.33 -9.42%
expenses
Office Due to the year-on-year
operating fee 6026548.51 9776313.03 -3749764.52 -38.36%decrease in repair materialconsumption expenses
Other 4218138.06 5097062.74 -878924.68 -17.24%
Total 67616713.85 69698089.77 -2081375.92 -2.99%
17Lu Thai Textile Co. Ltd. Interim Report 2026
4. Franchise and Distribution
Franchisees and distributors recorded more than 30% of sales revenue
□ Yes□ No
5. Online Sales
Online sales recorded more than 30% of sales revenue
□ Yes□ No
Self-developed sales platforms
□ Yes □ No
Start of operation March 30 2009
Number of registered users 145000
Average number of active monthly users (AMU) 2800
Return rate of main brands 2.70%
Return rate of main types 2.70%
Cooperation with third-party sales platforms
□ Yes □ No
Online sales channels opened or closed by the Company
□ Applicable□ Not applicable
6. Agency Operation Model
Agency operation model involved
□ Yes□ No
7. Inventory
Inventory
Main Days of Quantity Year-on-year change
products turnover of of Inventory age Reasoninventories inventory in inventory balance
Fabrics
(10000 80 2990.89 Within one year -4.21%
meters)
Fabrics
(10000 812.66 Over one year -4.83%
meters)
18Lu Thai Textile Co. Ltd. Interim Report 2026
Equity in subsidiaries
Shirts was sold and the
(10000 26 101.20 Within one year -27.21% relevant assets are no
pieces) longer included in the
scope of consolidation.Shirts
(10000 21.05 Over 1 year 25.98% Increase in store
pieces) inventory.Reserves for falling prices of inventory
Ending balance as of June 30 2026
Item Provision for decline in
Book balance (RMB) value/Provision for impairmentof contract fulfillment costs Carrying amount (RMB)
(RMB)
Raw materials 1049818533.16 55625153.79 994193379.37
Work-in-progress 486417876.76 6030001.01 480387875.75
Inventory goods 850291879.45 174835370.93 675456508.52
Commissioned products 17261748.05 17261748.05
Total 2403790037.42 236490525.73 2167299511.69
Inventory information of retail channels such as franchised stores or distributors:
Not applicable.
8. Brand Building
Production and sales of brand clothing apparel and home textile products
□ Yes □ No
Self-owned brands
Brand Trademark Main Target Price zone
name name product Characteristics consumer of main
Main sales City levels
types group products areas
East China Provincial
South China capital
LTGRFF LTGRFF Shirts and Classic Business RMB500- and cities andsuits business attire people 3000 Southwest other
China prefecture-level cities
Luthai Luthai Shirts and Business Business RMB500- East China Provincial
19Lu Thai Textile Co. Ltd. Interim Report 2026
1987 1987 suits classic casual elite men 3000 South China capital
and cities and
Southwest other
China prefecture-
level cities
Provincial
capital
Luthai Luthai Shirts Daily casual Young RMB300- Nationwide cities andJianxing Jianxing POLO people 800 other
prefecture-
level cities
Trademark right disputes
□ Applicable□ Not applicable
9. Other
Engaged in business related to apparel design
□ Yes□ No
Whether the Company held meetings for the placement of orders
□ Yes□ No
V Non-Core Businesses Analysis
□ Applicable □ Not applicable
Unit: RMB
Amount As % of profitbefore tax Source/Reason
Recurrent
or not
Return on Gains from disposal of equity interests
investment 127463981.67 43.74% etc. No
Gain/loss on
changes in fair 1826891.00 0.63% Gains or losses on changes in fair valueof financial assets and liabilities Novalue
Asset Provision for decline in value of
impairments -34299749.87 -11.77% inventories and impairment of fixed Noassets made in the current period
Non-operating
income 11394876.65 3.91%
Income of non-operating compensation
etc. No
Non-operating
expense 1173625.92 0.40% Donation expenses etc. No
20Lu Thai Textile Co. Ltd. Interim Report 2026
VI Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Unit: RMB
June 30 2026 December 31 2025
Change in Reason
percentage for any
As % of total As % of total (%) significantAmount assets Amount assets change
Monetary
capitals 1623050476.24 13.13% 2396851459.72 16.99% -3.86%
Accounts
receivable 779346857.77 6.31% 889743214.62 6.31% 0.00%
Inventories 2167299511.69 17.54% 2107300004.83 14.94% 2.60%
Investment
property 17321570.18 0.14% 17772891.33 0.13% 0.01%
Long-term
equity 219421484.28 1.78% 99877917.52 0.71% 1.07%
investments
Fixed assets 5382641342.07 43.55% 5705325739.27 40.44% 3.11%
Construction
in progress 152373900.56 1.23% 90157178.55 0.64% 0.59%
Right-of-use
assets 400081077.92 3.24% 437366025.27 3.10% 0.14%
Short-term
loans 490474659.40 3.97% 652836872.89 4.63% -0.66%
Contract
liabilities 161616556.99 1.31% 178735140.23 1.27% 0.04%
Long-term
borrowings 169731200.07 1.37% 247912723.61 1.76% -0.39%
Lease
liabilities 67995800.21 0.55% 74159267.26 0.53% 0.02%
2. Major Assets Overseas
□ Applicable □ Not applicable
Asset Source Asset value Operation
Control Material
(RMB) Location model measures to
Return As % of the
protect asset generated Company’s
impairment
risk
21Lu Thai Textile Co. Ltd. Interim Report 2026
safety (RMB) net assets (yes/no)
Main
Lu Thai Hong management(Hong Incorporated 255174143.52 Kong Marketing personnel sent 10920804.32 2.50% NoKong) by the parent
company
Main
Overseas management
production Incorporated 4490065457.30 SoutheastAsia Manufacturing personnel sent 168075541.09 44.04% Nobases by the parent
company
3. Assets and Liabilities at Fair Value
□ Applicable □ Not applicable
Unit: RMB
Gain/loss on
fair-value Cumulative Impairment
Item Beginning changes in
fair-value allowance
changes for the Purchased in the Sold in the Otheramount the recorded in Reporting Reporting Period Reporting Period change
Ending amount
Reporting
Period equity Period
Financial
assets
1. Held-
for-trading
financial
assets
(excluding 1093421988.15 3145467.40 6491799031.97 6898422488.08 689943999.44
derivative
financial
assets)
2.
Derivative
financial 645603.16 1144584.23 1790187.39
assets
5. Other
non-
current 88360000.00 88360000.00
financial
assets
Subtotal of
financial 1182427591.31 4290051.63 6491799031.97 6898422488.08 780094186.83
assets
Other 10335302.96 -20842.92 -5620315.18 4694144.86
Total of
the above 1192762894.27 4290051.63 -20842.92 6491799031.97 6898422488.08
-
5620315.18784788331.69
22Lu Thai Textile Co. Ltd. Interim Report 2026
Financial -
liabilities 0.00 2463160.63 2463160.63
Content of other change:
Due to the change in the amount of receivables financing.Significant changes to the measurement attributes of the major assets in the Reporting Period:
□ Yes□ No
4. Restricted Asset Rights as at the Period-EndSee “Part VIII Financial Statements VII7. Notes to Main Items of Consolidated FinancialStatements 21. Assets with Restricted Ownership or Right to Use”.
23Lu Thai Textile Co. Ltd. Interim Report 2026
VII Investments Made
1. Total Investment Amount
□ Applicable□ Not applicable
2. Major Equity Investments Made in the Reporting Period
□ Applicable□ Not applicable
3. Major Non-Equity Investments Ongoing in the Reporting Period
□ Applicable□ Not applicable
4. Financial Investments
(1) Securities Investments
□ Applicable□ Not applicable
No such cases in the Reporting Period.
(2) Investments in Derivative Financial Instruments
□ Applicable □ Not applicable
1) Derivative Investments for Hedging Purposes during the Reporting Period
□ Applicable □ Not applicable
Unit: RMB 10000
Gain/loss on
Initial fair-value Cumulative fair-
Proportion of
Purchased in Sold in the closing investment
Type of derivative investment Beginning changes in the value changesamount recorded in the Reporting Reporting Ending amount amount in theamount Reporting equity Period Period Company’s endingPeriod net assets
Foreign exchange
option 0 47950 -156.5 0 179735 0 227685 23.05%
24Lu Thai Textile Co. Ltd. Interim Report 2026
Forward foreign
exchange 0 0 51.29 0 20718.37 0 20718.37 2.10%
settlement
Forward foreign
exchange purchase 0 0 0 0 13508 13508 0 0.00%
Total 0 47950 -105.21 0 213961.37 13508 248403.37 25.15%
Whether
significant changes
occurred to the
Company’s
accounting policy
and specific
accounting No significant changes
principles of
derivatives in the
Reporting Period
compared to the
previous Reporting
Period
Actual gain/loss in
the Reporting From January to June 2026 the amount of the Company’s matured financial derivatives totaled the equivalent of USD20 million all of which
Period were executed according to the contracts with USD20 million delivered and a gain of RMB1254000.Effectiveness of The Company conducts foreign exchange (FX) derivative transactions with the intention of hedging. Specifically the business is carried out to
hedges fix costs avoid exchange rate risks and improve resistance against FX rate fluctuations. As a result the Company has gained better capabilitiesof avoiding and preventing the risks of FX rate fluctuations and the financial robustness of the Company has been enhanced.Capital source for
derivative Own funds.investment
Analysis on risks The Company conducted derivatives products transaction in order for hedging. And the forward settlement hedging was operated by
25Lu Thai Textile Co. Ltd. Interim Report 2026
and control installments with the relevant amount not more than the planned derivatives products transactions. And all derivatives products transaction
measures of was zero-deposit. Meanwhile the Company had a complete risk control system for sufficient analysis and prevention of possible risks such as
derivative products market risk liquidity risk and credit risk internal control risk and risk of laws and regulation.held in the
Reporting Period 1. Market risk: When domestic and international political and economic situations change corresponding market price fluctuations such as
(including but not exchange rates and interest rates may have an adverse impact on the derivative transactions of the Company.limited to market Precautions: The Company chooses financial instruments with simple structures high liquidity and controllable risk and strictly controls the
risk liquidity risk scale of derivative transactions performing them by stages and in batches. Means such as extension and balance settlement can be adopted to
credit risk ensure contract performance after the contract expires.operation risk law
risk etc.) 2. Liquidity risk and credit risk: If the Company or the counterparty fails to perform the contract as stipulated upon maturity due to liquidity or
other factors credit risk will arise which will in turn cause economic losses to the Company.Precautions: The derivative transactions can only be done with financial institutions qualified for derivative transactions as authorized by
relevant national authorities or financial or foreign exchange authorities in the country or region where the Company operates. Derivative
transactions with other institutions or individuals are not allowed so as to control related risk concerning counterparties.
3. Internal control risk: Derivative transactions are highly specialized and complex. Therefore there is a risk of loss in derivative transactions
due to the imperfect internal control system when business is performed.Precautions: The Company should strictly implement Management Policy for Investments in Securities and Derivative Transactions of Lu Thai
Textile Co. Ltd. continuously optimize the business operation process and authorization management system strengthen professional ethics
education and business training for relevant personnel clarify job responsibilities engage in derivative transaction business strictly within the
scope of authorization and establish a timely reporting system for abnormal conditions to avoid operational risks.
4. Risk of laws and regulation: Derivative transactions of the Company must be strictly in compliance with relevant national laws and
regulations. Otherwise signed contracts commitments and other legal documents may entail compliance risk and regulatory risk in terms of
effectiveness and enforceability.Precautions: The Company should strengthen the supervision and inspection of the standardization of derivative transactions the effectiveness
of internal control mechanism and the authenticity of information disclosure to avoid possible legal risks.The Company has fulfilled relevant approval procedures for its derivative transactions business which is in line with the relevant national laws
regulations the Articles of Association the Management Policy for Investments in Securities and Derivative Transactions of Lu Thai Textile
Co. Ltd. the Proposal on the Company’s Derivative Transaction Plan deliberated and adopted at the 33rd meeting of the 10th session of the
Board of Directors held on May 23 2025 and the first extraordinary shareholders’ meeting held on June 9 2025 and fulfilled the relevant
information disclosure obligations.Changes of market In accordance with the relevant provisions and guidelines of the Accounting Standards for Business Enterprises No. 22 - Recognition and
prices or fair Measurement of Financial Instruments and the Accounting Standards for Business Enterprises No. 37 - Presentation of Financial Instruments
values in the issued by the Ministry of Finance the Company took the relevant accounting measures for its business of FX derivative transactions to reflect
26Lu Thai Textile Co. Ltd. Interim Report 2026
Reporting Period the relevant items in the balance sheet and the income statement. During the Reporting Period the Company determined the fair value of
of the invested foreign exchange option based on the bank’s forward option quotations at the end of each month.derivatives. And
the analysis on the
fair value of the
derivatives should
include the specific
use methods and
the relevant
assumptions and
parameters.Lawsuit (if
applicable) None.Disclosure date of
board of directors
announcement on
approval of May 24 2025
derivative
investment (if any)
Disclosure date of
the shareholders’
meeting
announcement on
the approval of June 10 2025
derivative
investments (if
any)
2) Derivative Investments for Speculative Purposes during the Reporting Period
□ Applicable□ Not applicable
No such cases in the Reporting Period.
27Lu Thai Textile Co. Ltd. Interim Report 2026
5. Use of Funds Raised
□ Applicable□ Not applicable
No such cases in the Reporting Period.VIII Sale of Major Assets and Equity Interests
1. Sale of Major Assets
□ Applicable□ Not applicable
No such cases in the Reporting Period.
2. Sale of Major Equity Interests
□ Applicable □ Not applicable
Whether it
Net profit was
contributed implemented
by the equity Proportion of on schedule
interest to the net profit as planned; if
listed contributed Pricing Whether it is Related party Whether the not
Equity Transaction Impact of the by the sale ofCounterparty Date of sale price company sale on the equity interest principle of a related- relationship
equity interest implemented
interests sold involved has as planned
Disclosure Disclosure index
(RMB10000) from the the sale of the party with the datebeginning of Company to the total netprofit of the equity interest transaction counterparty
been fully the reasons
the current transferred and the
period to the listed measures
date of sale company taken by the
(RMB10000) Companyshall be
explained
1. The sale of Based on the For details please
partial equity actual asset refer to the
Transfer of interest in its and liability Announcement on
23.06% wholly-owned status of the Transfer of
MORROW equity interest subsidiary Tianqin Partial Equity of a
FASHION in Tianqin Tianqin International Wholly-owned
SAS and International April 30 International and with January 27 Subsidiary by a
FAST Investment 2026 10012 9649.56 by Lulian 38.43% reference to No No Yes Yes 2026 Holding Subsidiary
RETAILING Co. Ltd. to New the valuation (Announcement
CO. LTD each Materials Co. report on the No.: 2026-005) and
transferee Ltd. a net assets of the Progress
respectively controlled Tianqin Announcement on
subsidiary of International the Transfer of
the Company issued by Partial Equity of a
can further China United Wholly-owned
28Lu Thai Textile Co. Ltd. Interim Report 2026
strengthen Assets Subsidiary by a
upstream and Appraisal Holding Subsidiary
downstream Group Co. (Announcement
collaboration Ltd. the No.: 2026-023)
in the valuation of disclosed by the
industrial the net assets Company on
chain deepen of Tianqin www.cninfo.com.cn
cooperation International on January 27 2026
with strategic was and May 9 2026.customers in calculated
business based on the
marketing asset-based
and other approach and
aspects and the
achieve transaction
mutual price was
development. determined
through fair
2. Upon negotiations
completion of among the
the transaction
transaction parties.Tianqin
International
and its
subsidiaries
will no longer
be included in
the scope of
the
Company’s
consolidated
financial
statements
and the
accounting
method for
this equity
investment
will be
changed from
the cost
method to the
equity
method. This
transaction
has no
material
impact on the
main business
of the
Company.
29Lu Thai Textile Co. Ltd. Interim Report 2026
IX Major Subsidiaries
□ Applicable □ Not applicable
Major fully/majority-owned subsidiaries and those minority-owned subsidiaries with an over 10%
effect on the Company’s net profit:
Unit: RMB10000
Relationship
Name with the Principal Registeredactivity capital Total assets Net assets
Operating Operating
Company revenue profit
Net profit
LuFeng Company
Limited Subsidiary Fabric 70616 148719.63 127136.58 41708.37 -838.92 -994.65
Shandong Lulian
New Materials Co. Subsidiary Fabric 90000 75145.04 58282.22 8081.64 5133.87 4650.37
Ltd.Subsidiaries obtained or disposed in the Reporting Period:
□ Applicable□ Not applicable
Information about major majority- and minority-owned subsidiaries:
LuFeng Company Limited is a holding subsidiary of the Company. It is registered in Zibo
Shandong with a registered capital of RMB706.16 million. It is mainly engaged in the production
and sales of textile printing and dyeing products as well as apparel and accessories. During the
Reporting Period net profit decreased year-on-year mainly due to the impact of changes in order
structure and market demand.Shandong Lulian New Materials Co. Ltd. is the wholly-owned subsidiary of the Company. It is
registered in Zibo Shandong with a registered capital of RMB900 million. It is mainly engaged
in manufacturing and selling functional fabrics. During the Reporting Period net profit increased
year-on-year mainly due to the impact of its transfer of subsidiary equity and an increase in order
volume.X Structured Bodies Controlled by the Company
□ Applicable □ Not applicable
See Part VIII “Financial Statements X. Equity in Other Entities” in this Report for relevant
details.XI Risks Facing the Company and Countermeasures
1. Impact of economic environment: Amid ongoing risks such as the global economic
environment and geopolitical conflicts as well as weak economic growth the Company continues
to face challenges in terms of international trade policies and market changes. Relying on its
global industrial layout and vertical industry chain advantages the Company will coordinate
various domestic and foreign resources continuously explore domestic and overseas markets and
actively respond to the pressure brought by fluctuations in the external environment.
2. Price fluctuation of raw materials: Cotton is the major production material of the Company and
the price of cotton is impacted by market supply and demand climate policy exchange rate and
other factors. Therefore the Company coordinates domestic and overseas production deeply
30Lu Thai Textile Co. Ltd. Interim Report 2026
studies the information of global cotton market properly works out procurement strategy and
gives full play to the advantages of global procurement of high-quality raw cotton.
3. Change of exchange rate: The Company has a large ratio in import and export business which
is mostly settled in USD. In recent years the bi-directional fluctuations in RMB exchange rate
have become normal with a continuous increase in exchange rate flexibility. To lower the impact
of exchange rate fluctuations the Company stuck to the risk-neutral management philosophy.Based on actual needs arising from production and operations it incorporated exchange rate risks
into routine operations management and flexibly allocated different types and maturities of
foreign exchange derivatives for hedging purposes to minimize the influence of exchange rate
risks on its operating results. Firstly the Company appropriately conducted foreign exchange
hedging using financial derivatives such as forwards swaps and option portfolios to avoid
currency risks. Secondly the Company made reasonable arrangement on settlement day and
currency and actively promoted cross-border settlement with RMB to avoid exchange rate-related
risks. Thirdly the Company adjusted the Renminbi and foreign-currency liabilities structure to
actively prevent currency fluctuation risks.XII The Formulation and Implementation of the Market Value Management Policy and
Valuation Improvement Plan
Has the Company established a market value management system
□ Yes□ No
Has the Company disclosed a valuation improvement plan
□ Yes □ No
In accordance with the China Securities Regulatory Commission’s Guideline No. 10 for Listed
Companies - Market Value Management and other relevant regulations the Company in line with
its industry position development strategy and business plans has formulated and disclosed a
valuation enhancement plan. For specific details please refer to the Valuation Enhancement Plan
of Lu Thai Textile Co. Ltd. published by the Company on March 1 2025 on
http://www.cninfo.com.cn.During the Reporting period the Company actively responded to the severe challenges of a
complex and volatile international landscape and weak demand. Through optimizing resource
allocation asset utilization efficiency was improved. The marketing structure was streamlined and
optimized domestic and overseas markets were actively developed and the major customer
strategy and R&D reform and innovation were advanced. The Company continued to deepen
“Improve Quality and Efficiency” and “Overall Internationalization” and on the basis of
continuously promoting new formal wear products actively expanded the development and
marketing of casual and light business product categories. The Company actively promoted in-
depth cooperation with downstream brand enterprises adjusting its asset structure to enhance
customer stickiness and expand business opportunities in integrated fabric-and-apparel services.During the Reporting Period the Company implemented cash dividend distributions for the full
year 2025 providing stable investment returns to investors. The Company continuously improved
the quality of its information disclosure and published its 2025 ESG Report disclosing its annual
performance in fulfilling social responsibilities and received recognition and commendation from
customers suppliers and other stakeholders. In accordance with its existing valuation
enhancement plan the Company will continue to focus on its core business drive development
through innovation advance its comprehensive internationalization strategy continuously
increase product value-added and competitiveness place sustained emphasis on investor returns
31Lu Thai Textile Co. Ltd. Interim Report 2026
and strengthen communication and engagement with investors so as to enhance investor
recognition of the Company’s core value and rive a recovery in its market value.XIII Implementation of the Action Plan for “Dual Enhancement of Quality andProfitability”Indicate whether the Company has disclosed the action plan for “Dual Enhancement of Qualityand Profitability”.□ Yes□ No
32Lu Thai Textile Co. Ltd. Interim Report 2026
Part IV Corporate Governance Environmental and Social Matters
I Changes in Directors and Senior Executives of the Company
□ Applicable□ Not applicable
There were no changes in the directors and senior executives of the Company during the
Reporting Period. For details please refer to the 2025 Annual Report.II Interim Dividend Plan
□ Applicable □ Not applicable
Bonus shares for every 10 shares (share) 0
Dividend for every 10 shares (RMB) (tax inclusive) 1.00
Total shares as the basis for the profit distribution proposal
(share) 817525607
Cash dividends (RMB) (tax inclusive) 81752560.70
Cash dividends in other forms (such as share repurchase)
(RMB) 0.00
Total cash dividends (including those in other forms) (RMB) 81752560.70
Distributable profit (RMB) 6136500508.99
Total cash dividends (including those in other forms) as % of
total profit distribution 100%
Cash dividend policy
If the Company is in a mature development stage and has plans for any significant expenditure in profit allocation the ratio of
cash dividends in the profit allocation shall be 40% or above.Details about the proposal for profit distribution and converting capital reserve into share capital
The Company plans to distribute a cash dividend of RMB1.00(inclusive of tax) for every 10 shares based on a capital base of
817525607 shares. The total amount of proposed dividends calculated on this basis is RMB81752560.70. The personal income
tax for A Share shall be subject to related regulations under C.SH. [2015] No. 101 Notice on Certain Question about the
Differentiated Personal Income Tax Policy for Cash Dividend of Listed Companies jointly issued by the Ministry of Finance the
State Taxation Administration and the China Securities Regulatory Commission. The personal income tax for B Share shall be
conversed to HKD based on the central parity rate on interbank exchange market released by the People's Bank of China on the
first working day following the resolution of the Board of Directors (for domestic individual shareholders tax is paid pursuant to
C.SH. [2015] No. 101; for foreign shareholders tax is free pursuant to C.SH.Z. (1994) No. 020 regulations; and non-residential
corporate shareholders is entitled to a 10% reduction of enterprise income tax according to related regulations under Enterprise
Income Tax Law of the People's Republic of China). From the disclosure date of this profit distribution plan to the record date for
the implementation of the equity distribution if the total share capital of the Company changes the distribution amount per share
shall remain unchanged. The above distribution plan complies with the provisions of the Articles of Association and the
deliberation procedures.III Equity Incentive Plans Employee Stock Ownership Plans or Other Incentive Measures
for Employees
□ Applicable□ Not applicable
No such cases in the Reporting Period.IV. Environmental Information Disclosure
Whether the listed company and its major subsidiaries are included in the list of enterprises
legally required to disclose environmental information
□ Yes □ No
33Lu Thai Textile Co. Ltd. Interim Report 2026
Number of enterprises included in the
list of enterprises legally required to 4
disclose environmental information
No. Company name Environmental information disclosure report index
LU THAI TEXTILE CO. Enterprise Environmental Information Legal1 LTD. Disclosure System(http://221.214.62.226:8090/EnvironmentDisclosure/)
Enterprise Environmental Information Legal
2 LuFeng Company Limited Disclosure System
(http://221.214.62.226:8090/EnvironmentDisclosure/)
3 Shandong Lulian New
Enterprise Environmental Information Legal
Materials Co. Ltd. Disclosure System(http://221.214.62.226:8090/EnvironmentDisclosure/)
Zibo Xinsheng Thermal Enterprise Environmental Information Legal4 Power Co. Ltd. Disclosure System(http://221.214.62.226:8090/EnvironmentDisclosure/)
The Company is subject to the disclosure requirements for listed companies engaging in textile
and apparel as stated in Self-Regulatory Guidelines of Shenzhen Stock Exchange for Listed
Companies No.3 - Industry Information Disclosure.Related environmental accidents information
The Company did not experience any environmental accidents.V Social Responsibility
Not applicable.
34Lu Thai Textile Co. Ltd. Interim Report 2026
Part V Significant Events
I Commitments of the Company’s Actual Controller Shareholders Related Parties and
Acquirers as well as the Company Itself and Other Entities Fulfilled in the Reporting
Period or Ongoing at the Period-End
□ Applicable □ Not applicable
Date of
Commitment Promisor Type ofcommitment Details of commitment commitment
Term of
making commitment
Fulfillment
1. Not intervene the Company’s
operation and management beyond
the authority and not occupy the
Company’s interests;
2. From the issuance date of this
commitment to the completion of
the implementation of the
Company’s public offering of A-
share convertible corporate bonds if
the CSRC makes other new
regulatory provisions on remedial
Dilution of at measures for returns and the
sight returns on commitment and the aboveCommitments Controlling commitment fails to meet the
made in time shareholder public offeringA-share requirements of the CSRC the
May 23 2019
of IPO or actual convertible Company/I promise to issue
May 23 2019 to April 8 Completed
refinancing controller corporate supplementary commitment then in
2026
bonds accordance with the latestregulations of CSRC.
3. Commitment is made to fulfill the
Company’s relevant remedial
measures for returns and any
commitment made herein by the
Company/me. If the Company/I
violate(s) such commitment and
cause(s) losses to the Company or
investors the Company/I will bear
the compensation responsibility to
the Company or investors in
accordance with the law.
1. Commitment is made not to
transfer benefits to other units or
individuals free of charge or under
unfair conditions and no other ways
damaging the interests of the
Company will be taken;
Dilution of at
Commitments Directors and sight returns on
2. I will strictly abide by the budget
public offering management of the Company andmade in time senior May 23 2019A-share accept the strict supervision andof IPO or executives of May 23 2019 to April 8 Completedconvertible management of the Company torefinancing the Company 2026corporate avoid waste or excessive
bonds consumption. Any position-related
consumption behaviors of me will
occur within the scope necessary for
the performance of my duties;
3. Commitment is made not to use
the Company’s assets to engage in
investment and consumption
35Lu Thai Textile Co. Ltd. Interim Report 2026
activities unrelated to the
performance of duties;
4. Commitment is made that the
remuneration system developed by
the Board of Directors or the
Remuneration Committee is linked
to the implementation of the
Company’s remedial measures for
returns;
5. Commitment is made that the
conditions for exercising the Equity
Incentive Plan to be issued in the
future will be linked to the
implementation of the Company’s
remedial measures for returns;
6. From the issuance date of this
commitment to the completion of
the implementation of the
Company’s public offering of A-
share convertible corporate bonds if
the CSRC makes other new
regulatory provisions on remedial
measures for returns and the
commitment and the above
commitment fails to meet the
requirements of the CSRC I
promise to issue supplementary
commitment then in accordance with
the latest regulations of CSRC;
7. Commitment is made to fulfill the
Company’s relevant remedial
measures for returns and any
commitment made herein by me. If I
violate such commitment and causes
losses to the Company or investors I
will bear the compensation
responsibility to the Company or
investors in accordance with the law.Executed on
time or not Yes
II Occupation of the Company’s Capital by the Controlling Shareholder or any of Its
Related Parties for Non-Operating Purposes
□ Applicable□ Not applicable
No such cases in the Reporting Period.III Irregularities in the Provision of Guarantees
□ Applicable□ Not applicable
No such cases in the Reporting Period.IV Engagement and Disengagement of Independent Auditor
Are the interim financial statements audited
□ Yes□ No
36Lu Thai Textile Co. Ltd. Interim Report 2026
The interim financial statements have not been audited.V Explanation of the Board of Directors on the “Non-standard Audit Report” of the
Accounting Firm during the Reporting Period
□ Applicable□ Not applicable
VI Explanations Given by the Board of Directors Regarding the Independent Auditor’s
“Modified Opinion” on the Financial Statements of Last Year
□ Applicable□ Not applicable
VII Insolvency and Reorganization
□ Applicable□ Not applicable
No such cases in the Reporting Period.VIII Legal Matters
Significant lawsuits and arbitrations:
□ Applicable□ Not applicable
No such cases in the Reporting Period.Other legal matters:
□ Applicable □ Not applicable
Basic information Amount Whether a Progress of the Trial results and Execution of the
of the litigation involved provision is litigation impact of the judgment of the Disclosure Disclosure
(arbitration) (RMB10000) formed (arbitration) litigation litigation date index(arbitration) (arbitration)
Other litigations
of the Company
not meeting the No material
disclosure 37.73 No Under trial impact on the N/A N/A N/A
standards for Company
material litigations
IX Punishments and Rectifications
□ Applicable□ Not applicable
No such cases in the Reporting Period.X Credit Quality of the Company as well as its Controlling Shareholder and Actual
Controller
□ Applicable□ Not applicable
XI Major Related-Party Transactions
1. Continuing Related-Party Transactions
□ Applicable□ Not applicable
No such cases in the Reporting Period.
37Lu Thai Textile Co. Ltd. Interim Report 2026
2. Related-Party Transactions Regarding Purchase or Sales of Assets or Equity Interests
□ Applicable□ Not applicable
No such cases in the Reporting Period.
3. Related-Party Transactions Regarding Joint Investments in Third Parties
□ Applicable□ Not applicable
No such cases in the Reporting Period.
4. Credits and Liabilities with Related Parties
□ Applicable □ Not applicable
Whether there are non-operating related party creditor’s rights and debts
□ Yes□ No
The Company had no non-operating credits and liabilities with related parties during the
Reporting Period.
5. Transactions with Related Finance Companies
□ Applicable□ Not applicable
The Company did not make deposits in receive loans or credit from and was not involved in any
other finance business with any related finance company or any other related parties.
6. Transactions with Related Parties by Finance Companies Controlled by the Company
□ Applicable□ Not applicable
The finance company controlled by the Company did not make deposits receive loans or credit
from and was not involved in any other finance business with any related parties.
7. Other Major Related-Party Transactions
□ Applicable□ Not applicable
No such cases in the Reporting Period.
38Lu Thai Textile Co. Ltd. Interim Report 2026
XII Major Contracts and Execution thereof
1. Entrustment Contracting and Leases
(1) Entrustment
□ Applicable□ Not applicable
No such cases in the Reporting Period.
(2) Contracting
□ Applicable□ Not applicable
No such cases in the Reporting Period.
(3) Leases
□ Applicable□ Not applicable
No such cases in the Reporting Period.
2. Major Guarantees
□ Applicable □ Not applicable
Unit: RMB10000
Guarantees provided by the Company as the parent and its subsidiaries for external parties (exclusive of those for subsidiaries)
Obligor Guarantee limit Guarantee limit Actual occurrence Actual guarantee Type of guarantee Collateral (if any) Counter-guaranteedisclosure date date amount (if any) Guarantee period Fulfilled (yes/no)
Guarantee for a
related party or not
Guarantees provided by the Company for its subsidiaries
Obligor Guarantee limit Actual occurrence Actual guarantee Counter-guarantee Guarantee for adisclosure date Guarantee limit date amount Type of guarantee Collateral (if any) (if any) Guarantee period Fulfilled (yes/no) related party or not
Three years since
Wholly-owned the approval of the
subsidiary July 1 2023 6810.9 June 30 2023 0 Joint-liability N/A N/A Board of Directors Yes No
of the Company
39Lu Thai Textile Co. Ltd. Interim Report 2026
Guarantees provided between subsidiaries
Obligor Guarantee limit Guarantee limit Actual occurrence Actual guaranteedisclosure date date amount Type of guarantee Collateral (if any)
Counter-guarantee
(if any) Guarantee period Fulfilled (yes/no)
Guarantee for a
related party or not
Three years since
Wholly-owned July 9 2024 23838.15 July 6 2024 243.08 Joint-liability N/A N/A the approval of thesubsidiary Board of Directors No No
of the Company
Three years since
Wholly-owned
subsidiary August 30 2024 20432.7 August 28 2024 1843.16 Joint-liability N/A N/A
the approval of the
Board of Directors No No
of the Company
Total approved guarantee limit in the
Reporting Period (C1) 0
Total actual amount of such guarantees
in the Reporting Period (C2) 5631.11
Total approved guarantee limit at the Total guarantee balance to subsidiaries
end of the Reporting Period (C3) 44270.85 at the end of the Reporting Period (C4) 2086.24
Total guarantee amount (total of the three kinds of guarantees above)
Total approved guarantee limit in the 0 Total actual guarantee amount in theReporting Period (A1+B1+C1) Reporting Period (A2+B2+C2) 5631.11
Total approved guarantee limit at the
end of the Reporting Period 44270.85 Total guarantee balance at the end of the
(A3+B3+C3) Reporting Period (A4+B4+C4)
2086.24
Total guarantee balance (i.e. A4+B4+C4) as % of the Company’s net assets 0.21%
Of which:
Balance of guarantees provided for shareholders actual controller and their related
parties (D) 0
Balance of debt guarantees provided directly or indirectly for obligors with an over
70% asset-liability ratio (E) 0
Amount by which the total guarantee amount exceeds 50% of the Company’s net
assets (F) 0
40Lu Thai Textile Co. Ltd. Interim Report 2026
Total of the three amounts above (D+E+F) 0
Joint responsibilities possibly borne or already borne in the Reporting Period for
undue guarantees (if any) None
Explanation about external guarantee violating established procedure (if any) None
Compound guarantees:
None.The Company is subject to the disclosure requirements for listed companies engaging in textile and apparel as stated in Self-Regulatory
Guidelines of Shenzhen Stock Exchange for Listed Companies No.3 - Industry Information Disclosure.Whether the Company provides guarantees or financial assistance for dealers
□ Yes□ No
3. Cash Entrusted for Wealth Management
□ Applicable □ Not applicable
Unit: RMB10000
Balance of entrusted wealth
Product category Risk characteristics management during the Reporting Overdue amount (RMB)
Period
Bank wealth management
products Low risk capital-preserving 20250 0
Others Low risk capital-preserving 5546.8 0
Private equity fund products R5 38224.51 0
Circumstances where the Company acts as the sole entrust or and entrusts financial institutions to manage assets or where investments are
made in high-risk entrusted wealth management products with low security and poor liquidity
41Lu Thai Textile Co. Ltd. Interim Report 2026
□ Applicable □ Not applicable
Unit: RMB10000
Name of Actual
trustee Type of Investment Actual profit or recovery oftrustee Risk Product Overview of the matter andinstitution institution characteristics type Amount
Start End date direction loss amount for profit or
(or name of date of funds the Reporting loss for the
related inquiry index (if
trustee) (or trustee) Period Reporting
any)
Period
As approved by the 32nd
meeting of the Ninth Board
of Directors and the 5th
meeting of the Tenth Board
of Directors the Company
made cumulative
investments of RMB400
million in the Yuanhui
Dividend No. 2 Open-
Beijing
Yuanhui Private Privately
Ended Private Securities
Investment equity fund R5 offered 38224.51 April 11 April 10
Investment Fund
security 2022 2037 Other 2072.65 224.51 (contractual type). ForManagement manager fund details please refer to theCo. Ltd. Announcement of Lu Thai
Textile Co. Ltd. on the
Subscription of Private
Securities Investment Fund
Units disclosed on
cninfo.com.cn on April 29
2022 and February 14
2023 (announcement
numbers: 2022-025 and
2023-008).
Total 38224.51 -- -- -- 2072.65 -- --
42Lu Thai Textile Co. Ltd. Interim Report 2026
4. Other Major Contracts
□ Applicable□ Not applicable
No such cases in the Reporting Period.
43Lu Thai Textile Co. Ltd. Interim Report 2026
XIII Registration Form for Activities during the Reporting Period Including Surveys
Communication and Interviews
□ Applicable □ Not applicable
Main
Date Place Way of Type of Visitor discussions and Index to communicationcommunication visitor materials information
provided
The Investor Relations Management
April 17 2026 Company’s By phone Institution Institutional Company Information 20260417 disclosedconference investor profile on www.cninfo.com.cn by the
room Company on April 17 2026
The Investor Relations Management
April 30 2026 Company’s By phone Institution Institutional Company Information 20260430 disclosedconference investor profile on www.cninfo.com.cn by the
room Company on April 30 2026
The Investor Relations Management
May 12 2026 Company’s Onlineconference exchange Other Investor
Company Archive 20260512 disclosed on
profile www.cninfo.com.cn by the
room Company on May 12 2026
The Investor Relations Management
May 15 2026 Company’s Online Other Investor Company Archive 20260515 disclosed onconference exchange profile www.cninfo.com.cn by the
room Company on May 15 2026
XIV Other Significant Events
□□ Applicable ? Not applicable
The Company had no other significant events to be stated during the Reporting Period.XV Significant Events of Subsidiaries
□ Applicable□ Not applicable
44Lu Thai Textile Co. Ltd. Interim Report 2026
Part VI Share Changes and Shareholder Information
I Share Changes
1. Share Changes
Unit: Share
Before Increase/decrease in the Reporting Period (+/-) After
Shares as Shares as
dividend dividend
Number Percentage New converted converted Other Subtotal Number Percentage(%) issues from from (%)
profit capitalreserves
I. Restricted
shares 2110792 0.26% 2110792 0.26%
1. Shares held by
State
2. Shares held by
state-owned legal
person
3. Shares held by
other domestic 2110792 0.26% 2110792 0.26%
investors
Among which:
Shares held by
domestic legal
person
45Lu Thai Textile Co. Ltd. Interim Report 2026
Shares held by
domestic natural 2110792 0.26% 2110792 0.26%
person
4. Shares held by
other foreign
investors
Among which:
Shares held by
foreign legal
person
Shares held by
foreign natural
person
II. Unrestricted
shares 815196128 99.74% 218687 218687 815414815 99.74%
1. RMB ordinary
shares 589117788 72.08% 218687 218687 589336475 72.09%
2. Domestically
listed foreign 226078340 27.66% 226078340 27.65%
shares
3. Overseas listed
foreign shares
4. Other
III. Total shares 817306920 100.00% 218687 218687 817525607 100.00%
Reasons for share changes:
46Lu Thai Textile Co. Ltd. Interim Report 2026
□ Applicable □ Not applicable
During the convertible bond conversion period from January 1 to April 8 2026 the Company’s convertible bonds were converted into a total of
218687 shares.
Approval of share changes:
□ Applicable□ Not applicable
Transfer of share ownership:
□ Applicable□ Not applicable
Progress on any share repurchases:
□ Applicable□ Not applicable
Progress on reducing the repurchased shares by means of centralized bidding:
□ Applicable□ Not applicable
Effects of share changes on the basic and diluted earnings per share equity per share attributable to the Company’s ordinary shareholders and
other financial indicators of the prior year and the prior accounting period respectively:
□ Applicable □ Not applicable
See relevant contents of “IV Key Financial Information” under “Part II Corporate Information and Key Financial Information”.Other information that the Company considers necessary or is required by the securities regulator to be disclosed:
□ Applicable□ Not applicable
2. Changes in Restricted Shares
□ Applicable□ Not applicable
II Issuance and Listing of Securities
□ Applicable□ Not applicable
III Total Number of Shareholders and Their Shareholdings
Unit: share
47Lu Thai Textile Co. Ltd. Interim Report 2026
Total number of ordinary Total number of preferred shareholders with resumed
shareholders at the period-end 45579 voting rights at the period-end (if any) (see Note 8) 0
5% or greater shareholders or the top 10 shareholders (exclusive of shares lent in refinancing)
Quantity of Shares in pledge marked or
Name of the Nature of Shareholding holding shares Increase/decrease Number of Number of frozen
shareholders shareholder percentage at the end of during the restricted non-restricted(%) the Reporting Reporting Period shares held shares held
Period Status Number
Zibo Lucheng
Textile Domestic non-
Investment Co. state-owned legal 17.17% 140353583 0 0 140353583 N/A 0
Ltd. person
Tailun Textile Foreign legal
Co. Ltd. person 14.10% 115232400 0 0 115232400 N/A 0
Yang Sanbao Domestic naturalperson 2.33% 19071000 8051700 0 19071000 N/A 0
National Social
Security Fund Other 2.05% 16800051 930000 0 16800051 N/A 0
Portfolio 413
Wu Yijun Domestic naturalperson 0.91% 7459998 41100 0 7459998 N/A 0
China
Merchants
Prosperity
Selected Equity Other 0.85% 6959998 6959998 0 6959998 N/A 0
Investment
Fund
48Lu Thai Textile Co. Ltd. Interim Report 2026
FEDERATED
HERMES
GLOBAL
INVESTMENT
FD
(CAYMAN)
MASTER SPC Foreign legalperson 0.74% 6024131 0 0 6024131 N/A 0OBOAFTAO
FEDERATED
HERMES
EMG ASIA
EQUITY FD
MASTER S.P.Yang Hua Domestic naturalperson 0.56% 4607400 33200 0 4607400 N/A 0
Hao Jing Domestic naturalperson 0.53% 4335000 0 0 4335000 N/A 0
Wang Jun Domestic naturalperson 0.37% 3000091 3000091 0 3000091 N/A 0
Strategic investors or general
corporations becoming top-ten
shareholders due to placing of new None.shares (if any) (see Note 3)
Zibo Lucheng Textile Investment Co. Ltd. is the largest shareholder and the actual controller of the Company. Tailun
Related or acting-in-concert parties (Thailand) Textile Co. Ltd. is the second largest shareholder and the foreign sponsor of the Company. All the other
among the shareholders above shareholders are holding tradable A-shares or B-shares. And it is unknown whether there is any related party or acting-in-
concert party among them.Explain if any of the shareholders
above was involved in None.entrusting/being entrusted with voting
49Lu Thai Textile Co. Ltd. Interim Report 2026
rights or waiving voting rights
Special account for share repurchases
(if any) among the top 10 None.shareholders (see note 11)
Shareholdings of the top ten non-restricted shareholders (exclusive of shares lent in refinancing and senior management lock-up shares)
Type of shares
Name of the shareholders Number of unrestricted shares held at the period-end
Type of
shares Number
Zibo Lucheng Textile Investment Co. RMB
Ltd. 140353583 ordinary 140353583shares
Domestically
Tailun Textile Co. Ltd. 115232400 listed foreign 115232400
shares
RMB
Yang Sanbao 19071000 ordinary 19071000
shares
National Social Security Fund RMB
Portfolio 413 16800051 ordinary 16800051shares
RMB
Wu Yijun 7459998 ordinary 7459998
shares
China Merchants Prosperity Selected RMB
Equity Investment Fund 6959998 6959998ordinary
50Lu Thai Textile Co. Ltd. Interim Report 2026
shares
FEDERATED HERMES GLOBAL
INVESTMENT FD (CAYMAN) Domestically
MASTER SPC OBOAFTAO 6024131 listed foreign 6024131
FEDERATED HERMES EMG ASIA shares
EQUITY FD MASTER S.P.RMB
Yang Hua 4607400 ordinary 4462600
shares
Domestically
Yang Hua 4607400 listed foreign 144800
shares
RMB
Hao Jing 4335000 ordinary 4335000
shares
RMB
Wang Jun 3000091 ordinary 3000091
shares
Explanation on connected relationship
among the top ten shareholders of
tradable share not subject to trading Zibo Lucheng Textile Investment Co. Ltd. is the largest shareholder and the actual controller of the Company. Tailun
moratorium as well as among the top (Thailand) Textile Co. Ltd. is the second largest shareholder and the foreign sponsor of the Company. All the other
ten shareholders of tradable share not shareholders are holding tradable A-shares or B-shares. And it is unknown whether there is any related party or acting-in-
subject to trading moratorium and top concert party among them.ten shareholders or explanation on
acting-in-concert
Particular about shareholder Yang Sanbao holds 337900 shares of the Company’s stock through a regular securities account and 18733100 shares
participate in the securities lending through a securities company’s client margin trading collateral account for a total of 19071000 shares; Wu Yijun holds 0
and borrowing business (if any) (note shares of the Company’s stock through a regular securities account and 7459998 shares through a securities company’sclient margin trading collateral account for a total of 7459998 shares; Yang Hua holds 152100 shares of the Company’s
51Lu Thai Textile Co. Ltd. Interim Report 2026
4) stock through a regular securities account and 4455300 shares through a securities company’s client margin trading
collateral securities account for a total of 4607400 shares; Hao Jing holds 30000 shares of the Company’s stock through a
regular securities account and 4305000 shares through a securities company’s client margin trading collateral securities
account for a total holding of 4335000 shares.
5% or greater shareholders top 10 shareholders and Top 10 unrestricted shareholders involved in refinancing shares lending
□ Applicable□ Not applicable
Changes in top 10 shareholders and top 10 unrestricted shareholders due to refinancing shares lending/return compared with the prior period
□ Applicable□ Not applicable
Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary shareholders of the Company
conducted any promissory repo during the Reporting Period.□ Yes□ No
No such cases in the Reporting Period.
52Lu Thai Textile Co. Ltd. Interim Report 2026
IV Changes in Shareholding of Directors and Senior Executives
□ Applicable□ Not applicable
There was no change in the shareholdings of the directors and senior executives of the Company
during the Reporting Period. For details please refer to the 2025 Annual Report.V Change of the Controlling Shareholder or the Actual Controller
If the Company has previously disclosed that the actual controller is planning a change in control
but it has not yet been completed please explain the progress of the change in control.□ Applicable□ Not applicable
Change of the controlling shareholder in the Reporting Period
□ Applicable□ Not applicable
No such cases in the Reporting Period.Change of the Actual Controller in the Reporting Period
□ Applicable□ Not applicable
No such cases in the Reporting Period.VI Particulars of Preferred Shares
□ Applicable□ Not applicable
No preferred shares in the Reporting Period.
53Lu Thai Textile Co. Ltd. Interim Report 2026
Part VII Bonds
□ Applicable □ Not applicable
I Enterprise Bonds
□ Applicable□ Not applicable
No enterprise bonds in the Reporting Period.II Corporate Bonds
□ Applicable□ Not applicable
No corporate bonds in the Reporting Period.III Debt Financing Instruments of Non-financial Enterprises
□ Applicable□ Not applicable
No such cases in the Reporting Period.IV Convertible Corporate Bonds
□ Applicable □ Not applicable
1. Issuance of Convertible Bonds
Pursuant to the approval document titled the Approval of the Public Issue of Convertible
Corporate Bonds of Lu Thai Textile Co. Ltd. (ZH.J.X.K. [2020] Document No. 299) issued by
the CSRC the Company publicly issued 14 million convertible corporate bonds on April 9 2020
each with a par value of RMB100 with a total issuance amount of RMB1.4 billion.
2. Guarantors of Convertible Bonds and the Top 10 Holders in the Reporting Period
The publicly issued A-share convertible corporate bonds of Lu Thai Textile Co. Ltd. (abbreviated
as “LuThai Convertible Bonds”) were fully redeemed on April 9 2026 and delisted from the
Shenzhen Stock Exchange.
3. Changes in the Convertible Bond in the Reporting Period
□ Applicable □ Not applicable
Unit: RMB
Increase/decrease of the change
Name of convertible bonds Before After
Into shares Redeemed Resold
Public Offering of A-Share
Convertible Corporate Bonds of 1399837000.00 1835100.00 1398001900.00 0.00
Lu Thai Textile Co. Ltd. in 2020
4. Accumulative Conversion
□ Applicable □ Not applicable
Name of Total Total amount AccumulativeStart date amount Accumulative
Converted
shares as % Unconverted
Unconverted
convertible circulation (RMB) amount as %converted shares of total amount of total
54Lu Thai Textile Co. Ltd. Interim Report 2026
bonds (piece) (RMB) converted shares (RMB) amount
issued by
(share) the
Company
before the
start date of
conversion
Public
Offering of
A-Share From
Convertible October
Corporate 15 2020 14000000 1400000000.00 1995100.00 236742.00 0.03% 0.00 0.00%
Bonds of Lu to April 8
Thai Textile 2026
Co. Ltd. in
2020
5. Previous Adjustments and Correction of Conversion Price
Latest price
Name of Adjusted as at the
convertible Adjustment date of conversion Disclosure time Notes on adjustment of end of the
bonds conversion price price conversion price Reporting(RMB) Period
(RMB)
Public
Offering of
A-Share
Convertible The Company implemented
Corporate July 9 2020 8.91 July 2 2020 the 2019 Equity Distribution
Bonds of Plan on July 9 2020.Lu Thai
Textile Co.Ltd. in 2020
Public
Offering of
A-Share The Company implemented
Convertible the initial grant of the 2021
Corporate June 7 2021 8.76 June 4 2021 restricted share incentive N/A
Bonds of scheme with the listing date
Lu Thai set for June 7 2021.Textile Co.Ltd. in 2020
Public
Offering of
A-Share
Convertible The Company implemented
Corporate June 18 2021 8.71 June 10 2021 the 2020 Equity Distribution
Bonds of Plan on June 18 2021.Lu Thai
Textile Co.Ltd. in 2020
55Lu Thai Textile Co. Ltd. Interim Report 2026
Public
Offering of
A-Share The Company implemented
Convertible the grant of reserved shares
Corporate March 22 2022 8.68 March 18 2022 under the 2021 restricted stock
Bonds of incentive scheme with the
Lu Thai listing date set for March 22
Textile Co. 2022.Ltd. in 2020
Public
Offering of
A-Share
Convertible The Company implemented
Corporate June 23 2022 8.61 June 16 2022 the 2021 Equity Distribution
Bonds of Plan on June 23 2022.Lu Thai
Textile Co.Ltd. in 2020
Public
Offering of
A-Share
Convertible The Company completed the
Corporate May 26 2023 8.73 May 26 2023 formalities for cancellation of
Bonds of the 23935748 repurchased B
Lu Thai shares on May 25 2023.Textile Co.Ltd. in 2020
Public
Offering of
A-Share
Convertible The Company implemented
Corporate June 16 2023 8.63 June 9 2023 the 2022 Equity Distribution
Bonds of Plan on June 16 2023.Lu Thai
Textile Co.Ltd. in 2020
Public
Offering of
A-Share
Convertible The Company completed the
Corporate March 4 2024 8.87 March 2 2024 formalities for cancellation of
Bonds of the 46176428 repurchased B
Lu Thai shares on March 1 2024.Textile Co.Ltd. in 2020
Public
Offering of The Company implemented
A-Share June 19 2024 8.74 June 12 2024 the 2023 Equity Distribution
Convertible Plan on June 19 2024.Corporate
56Lu Thai Textile Co. Ltd. Interim Report 2026
Bonds of
Lu Thai
Textile Co.Ltd. in 2020
Public
Offering of
A-Share
Convertible The Company implemented
Corporate November 8 2024 8.64 November 1 2024 the 2024 Interim Equity
Bonds of Distribution Plan on
Lu Thai November 8 2024.Textile Co.Ltd. in 2020
Public
Offering of
A-Share
Convertible The Company implemented
Corporate December 19 2024 8.59 December 12 the 2024 Q3 Equity
Bonds of 2024 Distribution Plan on December
Lu Thai 19 2024.Textile Co.Ltd. in 2020
Public
Offering of
A-Share
Convertible The Company implemented
Corporate June 20 2025 8.49 June 13 2025 the 2024 Equity Distribution
Bonds of Plan on June 20 2025.Lu Thai
Textile Co.Ltd. in 2020
Public
Offering of
A-Share
Convertible The Company implemented
Corporate October 23 2025 8.39 October 16 2025 the 2025 Semi-annual Equity
Bonds of Distribution Plan on October
Lu Thai 23 2025.Textile Co.Ltd. in 2020
6. The Company’s Liabilities Credit Changes at the Period-end and Cash Arrangements to
Repay Debts in Future Years
For the relevant indicators please refer to the Part VII Bonds - VI The Major Accounting Data
and the Financial Indicators of the Recent 2 Years of the Company up the Period-End.The “LuThai Convertible Bonds” entered the conversion period on October 15 2020. As of April
8 2026 (the last conversion date) a cumulative total of 19951 convertible bonds had been
converted into shares of the Company with a cumulative conversion volume of 236742 shares.The number of remaining “LuThai Convertible Bond” that was not converted into shares upon
57Lu Thai Textile Co. Ltd. Interim Report 2026
maturity was 13980019 and the total redemption amount upon maturity was
RMB1551782109.00 (including tax and the last installment of interest). The redemption was
completed on April 9 2026 and the “LuThai Convertible Bond” was delisted from the Shenzhen
Stock Exchange. For details please refer to the Announcement on the Maturity Redemption
Results of LuThai Convertible Bonds and Changes in Share Capital (Announcement No.: 2026-
13) disclosed by the Company on the designated information disclosure website CNINFO
(www.cninfo.com.cn) on April 10 2026.Given that the “LuThai Convertible Bonds” no longer exist Lianhe Credit Rating Co. Ltd. has
terminated the credit rating for the “LuThai Convertible Bonds”.V Losses of Scope of Consolidated Financial Statements during the Reporting Period
Exceeding 10% of Net Assets up the Period-end of Last Year
□ Applicable□ Not applicable
VI The Major Accounting Data and the Financial Indicators of the Recent 2 Years of the
Company up the Period-End
Unit: RMB10000
Item June 30 2026 December 31 2025 Increase/Decrease
Current ratio 3.41 1.99 71.36%
Asset-liability ratio 17.52% 28.19% -10.67%
Quick ratio 2.06 1.36 51.47%
H1 2026 H1 2025 Change (%)
Net profit after deducting
non-recurring profit or 11758.74 22561.53 -47.88%
loss
Debt/EBITDA ratio 54.47% 27.07% 27.40%
Interest cover (times) 8.69 10.00 -13.10%
Cash-to-interest cover
(times) 8.34 6.78 23.01%
EBITDA interest
coverage ratio (times) 15.21 15.60 -2.50%
Rate of redemption 100.00% 100.00%
Interest coverage 100.00% 100.00%
58Lu Thai Textile Co. Ltd. Interim Report 2026
Part VIII Financial Statements
I Independent Auditor’s Report
Are these interim financial statements audited by an independent auditor
□ Yes□ No
They are unaudited by such an auditor.II Financial Statements
Currency unit for the financial statements and the notes thereto: RMB
1. Consolidated Balance Sheet
Prepared by Lu Thai Textile Co. Ltd.June 30 2026
Unit: RMB
Item Ending balance Beginning balance
Current assets:
Monetary capitals 1623050476.24 2396851459.72
Held-for-trading financial assets 691734186.83 1094067591.31
Derivative financial assets
Notes receivable 46029362.65 37500667.56
Accounts receivable 779346857.77 889743214.62
Receivables financing 4694144.86 10335302.96
Prepayments 105240860.90 70233122.96
Other receivables 38264118.46 35452183.40
Including: Interest receivable
Dividend receivable 11098176.37 1267187.27
Inventories 2167299511.69 2107300004.83
Current portion of non-current assets
Other current assets 30818797.77 17765080.24
Total current assets 5486478317.17 6659248627.60
59Lu Thai Textile Co. Ltd. Interim Report 2026
Non-current assets:
Long-term equity investments 219421484.28 99877917.52
Investments in other equity instruments
Other non-current financial assets 88360000.00 88360000.00
Investment property 17321570.18 17772891.33
Fixed assets 5382641342.07 5705325739.27
Construction in progress 152373900.56 90157178.55
Right-of-use assets 400081077.92 437366025.27
Intangible assets 317248597.31 322548576.08
Development expenditure
Goodwill 20563803.29 20563803.29
Long-term deferred expenses 2765926.73 2966740.84
Deferred income tax assets 146467598.50 147571150.02
Other non-current assets 126025362.39 515004250.30
Total non-current assets 6873270663.23 7447514272.47
Total assets 12359748980.40 14106762900.07
Current liabilities:
Short-term loans 490474659.40 652836872.89
Held-for-trading financial liabilities 2463160.63
Notes payable 14647132.88
Accounts payable 215170498.75 232348158.30
Advances from customers
Contract liabilities 161616556.99 178735140.23
Payroll payable 234787516.32 301497209.62
60Lu Thai Textile Co. Ltd. Interim Report 2026
Taxes payable 19143378.27 58873433.90
Other payables 21770172.16 17580817.40
Including: Interest payable
Dividends payable 441113.64 441113.64
Current portion of non-current liabilities 409349752.41 1870562551.70
Other current liabilities 41791580.79 33932228.19
Total current liabilities 1611214408.60 3346366412.23
Non-current liabilities:
Long-term borrowings 169731200.07 247912723.61
Bonds payable
Lease liabilities 67995800.21 74159267.26
Long-term payables
Long-term payroll payable 58241342.34 58241342.34
Provisions
Deferred income 135846736.65 139473294.93
Deferred income tax liabilities 122227839.09 110514267.42
Other non-current liabilities
Total non-current liabilities 554042918.36 630300895.56
Total liabilities 2165257326.96 3976667307.79
Owners’ equity:
Share capital 817525607.00 817306920.00
Other equity instruments 71383045.46
Including: Preferred shares
Perpetual bonds
61Lu Thai Textile Co. Ltd. Interim Report 2026
Capital reserves 252112745.91 178932155.02
Less: Treasury stock
Other comprehensive income 40764850.94 108712967.46
Specific reserve 1851093.09
Surplus reserves 1331218572.39 1331218572.39
General reserve
Retained earnings 7434801442.63 7303500526.72
Total equity attributable to owners of the Company as the parent 9878274311.96 9811054187.05
Equity of non-controlling interests 316217341.48 319041405.23
Total owners’ equity 10194491653.44 10130095592.28
Total liabilities and owners’ equity 12359748980.40 14106762900.07
Legal representative: Liu Zibin Head of accounting affairs: Zhang Keming
Head of the accounting department: Zhang Keming
2. Balance Sheet of the Parent Company
Unit: RMB
Item Ending balance Beginning balance
Current assets:
Monetary capitals 1019789471.22 1433664604.80
Held-for-trading financial assets 100036960.45 660679174.82
Derivative financial assets
Notes receivable 35897799.39 22213122.87
Accounts receivable 284991427.83 421353996.52
Receivables financing 289750.82 3531557.70
Prepayments 108876908.94 39570454.23
Other receivables 1602342122.27 1439542031.30
62Lu Thai Textile Co. Ltd. Interim Report 2026
Including: Interest receivable
Dividend receivable
Inventories 927710124.45 822593850.01
Current portion of non-current assets
Other current assets 2478239.04 201318.75
Total current assets 4082412804.41 4843350111.00
Non-current assets:
Long-term equity investments 3848219418.53 3865995861.77
Investments in other equity instruments
Other non-current financial assets 76360000.00 76360000.00
Investment property 55972254.00 57726813.60
Fixed assets 1651629519.67 1711399901.88
Construction in progress 2034520.73 4430909.18
Right-of-use assets 72030035.58 78265677.78
Intangible assets 182288316.38 185411499.73
Long-term deferred expenses
Deferred income tax assets 67367339.20 73069006.97
Other non-current assets 52679336.72 475811170.00
Total non-current assets 6008580740.81 6528470840.91
Total assets 10090993545.22 11371820951.91
Current liabilities:
Short-term loans
Held-for-trading financial liabilities 939000.00
Derivative financial liabilities
63Lu Thai Textile Co. Ltd. Interim Report 2026
Notes payable 164991802.27 28600000.00
Accounts payable 105851706.82 132387909.61
Advances from customers
Contract liabilities 256648554.18 47217878.86
Payroll payable 158170814.68 189218607.99
Taxes payable 2607685.28 27349150.84
Other payables 16784043.93 13911794.27
Including: Interest payable
Dividends payable 441113.64 441113.64
Liabilities held for sale
Current portion of non-current liabilities 408092300.60 1853750476.37
Other current liabilities 56962834.19 22774974.65
Total current liabilities 1171048741.95 2315210792.59
Non-current liabilities:
Long-term borrowings 12316983.52 113792695.83
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities 69931147.43 73634249.91
Long-term payables
Long-term payroll payable 58241342.34 58241342.34
Provisions
Deferred income 104099697.84 106580569.50
Deferred income tax liabilities 73471369.59 74503325.14
64Lu Thai Textile Co. Ltd. Interim Report 2026
Other non-current liabilities
Total non-current liabilities 318060540.72 426752182.72
Total liabilities 1489109282.67 2741962975.31
Owners’ equity:
Share capital 817525607.00 817306920.00
Other equity instruments 71383045.46
Including: Preferred shares
Perpetual bonds
Capital reserves 319649039.46 246468448.57
Less: Treasury stock
Other comprehensive income -775.04 -10900.67
Specific reserve 100049.39
Surplus reserves 1328109832.75 1328109832.75
Retained earnings 6136500508.99 6166600630.49
Total owners’ equity 8601884262.55 8629857976.60
Total liabilities and owners’ equity 10090993545.22 11371820951.91
3. Consolidated Income Statement
Unit: RMB
Item H1 2026 H1 2025
I Revenue 2686067577.19 2827110139.70
Including: Operating revenue 2686067577.19 2827110139.70
II Costs and expenses 2499245560.13 2525003547.23
Including: Cost of sales 2074860173.08 2168474896.26
Taxes and surcharges 29805293.26 31239434.94
Selling expense 67616713.85 69698089.77
65Lu Thai Textile Co. Ltd. Interim Report 2026
Administrative expense 164389279.21 162947077.39
R&D expense 82599598.53 100446619.98
Financial expenses 79974502.20 -7802571.11
Including: Interest expense 37908242.99 47165800.27
Interest income 31685689.40 34380042.79
Add: Other income 18222873.91 11191654.96
Return on investment (“-” for loss) 127463981.67 199543864.41
Including: Share of profit or loss of joint
ventures and associates -21570.27 1393710.04
Income from the derecognition of
financial assets at amortized cost (“-” for loss)
Exchange gain (“-” for loss)
Net gain on exposure hedges (“-” for loss)
Gain on changes in fair value (“-” for loss) 1826891.00 -53613179.42
Credit impairment loss (“-” for loss) -17729105.10 -6567343.20
Asset impairment loss (“-” for loss) -34299749.87 -33600593.45
Asset disposal income (“-” for loss) -1144249.34 -459023.14
III Operating profit (“-” for loss) 281162659.33 418601972.63
Add: Non-operating income 11394876.65 8777411.25
Less: Non-operating expense 1173625.92 2915155.95
IV Profit before tax (“-” for loss) 291383910.06 424464227.93
Less: Income tax expense 40280360.62 56505920.02
V Net profit (“-” for net loss) 251103549.44 367958307.91
i. By operating continuity
1. Net profit from continuing operations (“-” for net
loss) 251103549.44 367958307.91
66Lu Thai Textile Co. Ltd. Interim Report 2026
2. Net profit from discontinued operations (“-” for net
loss)
ii. By ownership
1. Net profit attributable to shareholders of the
Company as the parent (“-” for net loss) 253929756.96 360215726.72
2. Net profit attributable to non-controlling interests
(“-” for net loss) -2826207.52 7742581.19
VI Other comprehensive income net of tax -67945972.75 -11831196.13
Comprehensive income attributable to owners of the
Company as the parent net of tax -67948116.52
-11831196.13
i. Other comprehensive income that will not be
reclassified to profit or loss
ii. Other comprehensive income that will be
reclassified to profit or loss -67948116.52 -11831196.13
1. Other comprehensive income that will be
reclassified to profit or loss under the equity method
2. Changes in the fair value of investments in other
debt obligations
3. Other comprehensive income arising from the
reclassification of financial assets
4. Credit impairment allowance for investments in
other debt obligations
5. Reserve for cash flow hedges
6. Differences arising from the translation of
foreign currency-denominated financial statements -67964673.44 -11771402.38
7. Other 16556.92 -59793.75
Other comprehensive income attributable to non-
controlling interests net of tax 2143.77
VII Total comprehensive income 183157576.69 356127111.78
Total comprehensive income attributable to owners of
the parent company 185981640.44 348384530.59
-2824063.757742581.19
67Lu Thai Textile Co. Ltd. Interim Report 2026
VIII Earnings per share
i. Basic earnings per share 0.31 0.44
ii. Diluted earnings per share 0.29 0.40
Where business combinations under common control occurred in the Current Period the net profit
achieved by the acquirees before the combinations was RMB0.00 with the amount for the same
period of last year being RMB0.00.Legal representative: Liu Zibin Head of accounting affairs: Zhang Keming
Head of the accounting department: Zhang Keming
4. Income Statement of the Parent Company
Unit: RMB
Item H1 2026 H1 2025
I Operating revenue 1205656905.50 1380651274.50
Less: Cost of sales 980640838.87 1047508741.72
Taxes and surcharges 18634629.58 19174516.84
Selling expense 42292736.28 39895772.35
Administrative expense 89794595.09 89681738.86
R&D expense 58370918.35 74371809.78
Financial expenses 68551050.41 5147001.10
Including: Interest expense 20548545.77 27250219.49
Interest income 19038836.26 23939018.62
Add: Other income 5025867.73 5875520.30
Return on investment (“-” for loss) 153240267.43 527782025.32
Including: Share of profit or loss of joint
ventures and associates -21570.27 1393710.04
Income from the derecognition of
financial assets at amortized cost (“-” for loss)
Net gain on exposure hedges (“-” for loss)
68Lu Thai Textile Co. Ltd. Interim Report 2026
Gain on changes in fair value (“-” for loss) -1581214.37 -81239371.48
Credit impairment loss (“-” for loss) 3246068.17 829519.78
Asset impairment loss (“-” for loss) -17139525.45 -988284.62
Asset disposal income (“-” for loss) -1242633.94 -230391.26
II Operating profit (“-” for loss) 88920966.49 556900711.89
Add: Non-operating income 8614966.15 5108491.01
Less: Non-operating expense 451624.82 140072.91
III Profit before tax (“-” for loss) 97084307.82 561869129.99
Less: Income tax expense 4555588.27 24456794.18
IV Net profit (“-” for net loss) 92528719.55 537412335.81
i. Net profit from continuing operations (“-” for net
loss) 92528719.55 537412335.81
ii. Net profit from discontinued operations (“-” for net
loss)
V Other comprehensive income net of tax 10125.63 2375.18
i. Other comprehensive income that will not be
reclassified to profit or loss
ii. Other comprehensive income that will be
reclassified to profit or loss 10125.63 2375.18
1. Other comprehensive income that will be
reclassified to profit or loss under the equity method
2. Changes in the fair value of investments in other
debt obligations
3. Other comprehensive income arising from the
reclassification of financial assets
4. Credit impairment allowance for investments in
other debt obligations
5. Reserve for cash flow hedges
6. Differences arising from the translation of foreign
currency-denominated financial statements
69Lu Thai Textile Co. Ltd. Interim Report 2026
7. Other 10125.63 2375.18
VI Total comprehensive income 92538845.18 537414710.99
VII Earnings per share
i. Basic earnings per share 0.11 0.66
ii. Diluted earnings per share 0.11 0.58
5. Consolidated Cash Flow Statement
Unit: RMB
Item H1 2026 H1 2025
I Cash flows from operating activities:
Proceeds from sale of commodities and rendering of services 2660248959.83 2803150193.86
Tax rebates 33337651.00 36500294.08
Cash generated from other operating activities 27729182.78 25319329.63
Subtotal of cash generated from operating activities 2721315793.61 2864969817.57
Payments for commodities and services 1463240556.00 1542792623.46
Cash paid to and for employees 798734935.30 839987267.54
Taxes paid 102369301.97 115718037.97
Cash used in other operating activities 94594447.86 102478247.64
Subtotal of cash used in operating activities 2458939241.13 2600976176.61
Net cash flow from operating activities 262376552.48 263993640.96
II Cash flows from investing activities:
Proceeds from disinvestment 6007892872.97 3896975363.58
Return on investment 8515888.57 201151635.48
Net proceeds from the disposal of fixed assets intangible assets
and other long-lived assets 12639147.00 8019136.00
Net proceeds from the disposal of subsidiaries and other business
units 69846123.25
70Lu Thai Textile Co. Ltd. Interim Report 2026
Cash generated from other investing activities 574844610.07 286072065.68
Subtotal of cash generated from investing activities 6673738641.86 4392218200.74
Payments for the acquisition of fixed assets intangible assets and
other long-lived assets 135984380.98 63023782.20
Payments for investments 5585106000.00 4273214000.00
Cash used in other investing activities 144409100.77 52675673.76
Subtotal of cash used in investing activities 5865499481.75 4388913455.96
Net cash generated from/used in investing activities 808239160.11 3304744.78
III Cash flows from financing activities:
Capital contributions received
Borrowings raised 638809489.32 795615516.62
Cash generated from other financing activities
Subtotal of cash generated from financing activities 638809489.32 795615516.62
Cash paid for debt repayment 2183677786.11 858948490.13
Cash paid for distribution of dividend profit or payment of
interest 293305701.52 123410101.61
Including: Dividends paid by subsidiaries to non-controlling
interests
Cash used in other financing activities 9249306.00 9250108.12
Subtotal of cash used in financing activities 2486232793.63 991608699.86
Net cash generated from/used in financing activities -1847423304.31 -195993183.24
IV Effect of foreign exchange rates changes on cash and cash
equivalents -17625394.66 27327178.49
V Net increase in cash and cash equivalents -794432986.38 98632380.99
Add: Opening balance of cash and cash equivalents 2033439469.50 1371412259.52
VI Closing balance of cash and cash equivalents 1239006483.12 1470044640.51
71Lu Thai Textile Co. Ltd. Interim Report 2026
6. Cash Flow Statement of the Parent Company
Unit: RMB
Item H1 2026 H1 2025
I Cash flows from operating activities:
Proceeds from sale of commodities and rendering of services 1454530139.93 1290886102.43
Tax rebates 11192888.97 6773725.66
Cash generated from other operating activities 18763781.19 22231794.27
Subtotal of cash generated from operating activities 1484486810.09 1319891622.36
Payments for commodities and services 686987063.24 878878825.92
Cash paid to and for employees 371924019.67 395452125.89
Taxes paid 45519481.08 66045293.01
Cash used in other operating activities 45607480.67 57536555.13
Subtotal of cash used in operating activities 1150038044.66 1397912799.95
Net cash flow from operating activities 334448765.43 -78021177.59
II Cash flows from investing activities:
Proceeds from disinvestment 4433764872.97 2082614651.22
Return on investment 117073759.88 299534627.43
Net proceeds from the disposal of fixed assets intangible assets
and other long-lived assets 7257072.24 19406643.41
Net proceeds from the disposal of subsidiaries and other business
units
Cash generated from other investing activities 1434724180.54 1163480433.41
Subtotal of cash generated from investing activities 5992819885.63 3565036355.47
Payments for the acquisition of fixed assets intangible assets and
other long-lived assets 11871511.29 15352948.15
Payments for investments 3856010000.00 2259738000.00
Net payments for the acquisition of subsidiaries and other
72Lu Thai Textile Co. Ltd. Interim Report 2026
business units
Cash used in other investing activities 1283836420.00 913402246.98
Subtotal of cash used in investing activities 5151717931.29 3188493195.13
Net cash generated from/used in investing activities 841101954.34 376543160.34
III Cash flows from financing activities:
Capital contributions received
Borrowings raised 50000000.00 20000000.00
Cash generated from other financing activities
Subtotal of cash generated from financing activities 50000000.00 20000000.00
Cash paid for debt repayment 1454000630.75 8463198.74
Cash paid for distribution of dividend profit or payment of
interest 280308087.92 111038442.44
Cash used in other financing activities 9797248.50 9220803.28
Subtotal of cash used in financing activities 1744105967.17 128722444.46
Net cash generated from/used in financing activities -1694105967.17 -108722444.46
IV Effect of foreign exchange rates changes on cash and cash
equivalents -16093547.89 5369627.73
V Net increase in cash and cash equivalents -534648795.29 195169166.02
Add: Opening balance of cash and cash equivalents 1228997994.46 507628886.80
VI Closing balance of cash and cash equivalents 694349199.17 702798052.82
7. Consolidated Statements of Changes in Owners’ Equity
73Lu Thai Textile Co. Ltd. Interim Report 2026
H1 2026
Unit: RMB
H1 2026
Equity attributable to owners of the Company as the parent company
Item Other equity instruments Less: Equity of non-Other comprehensive Specific General Retained controlling Total owners’Share capital Preferred Perpetual Capital reserves Treasury Surplus reserves Other Subtotal equity
shares bonds Other stock income reserve reserve earnings interests
I Ending balances
of the prior year 817306920.00 71383045.46 178932155.02 108712967.46 1331218572.39 7303500526.72 9811054187.05 319041405.23 10130095592.28
Add:
Adjustments for
changed
accounting
policies
Adjustments for
corrections of
previous errors
Other
II Beginning
balances of the 817306920.00 71383045.46 178932155.02 108712967.46 1331218572.39 7303500526.72 9811054187.05 319041405.23 10130095592.28
year
III
Increase/decrease -
in the period (“-” 218687.00 71383045.46 73180590.89 -67948116.52 1851093.09 131300915.91 67220124.91 -2824063.75 64396061.16
for decrease)
i. Total
comprehensive -67948116.52 253929756.96 185981640.44 -2824063.75 183157576.69
income
ii. Capital
increased and
reduced by 218687.00
-
71383045.4673180590.892016232.432016232.43
owners
1. Ordinary
shares increased 218687.00 1799759.99 2018446.99 2018446.99
by shareholders
2. Capital
increased by
holders of other
equity
instruments
3. Share-based
payments
included in 91321.25 91321.25 91321.25
owners’ equity
4. Other -71383045.46 71289509.65 -93535.81 -93535.81
iii. Profit
distribution -122628841.05 -122628841.05 -122628841.05
1. Appropriation
to surplus
reserves
2. Appropriation
to general reserve
3. Appropriation
to owners (or -122628841.05 -122628841.05 -122628841.05
shareholders)
4. Other
iv. Transfers
within owners’
74Lu Thai Textile Co. Ltd. Interim Report 2026
equity
v. Specific
reserve 1851093.09 1851093.09 1851093.09
1. Increase in the
period 5471234.72 5471234.72 5471234.72
2. Used in the
period 3620141.63 3620141.63 3620141.63
vi. Other
IV Ending
balances of the 817525607.00 252112745.91 40764850.94 1851093.09 1331218572.39 7434801442.63 9878274311.96 316217341.48 10194491653.44
period
H1 2025
Unit: RMB
H1 2025
Equity attributable to owners of the Company as the parent company
Item Other equity instruments Less: Other Equity of non- Total owners’
Share capital Preferred Perpetual CapitalOther reserves Treasury comprehensive
Specific
reserve Surplus reserves
General Retained controlling
shares bonds stock income reserve earnings
Other Subtotal interests equity
I Ending balances of the prior year 817306010.00 71383438.11 178518667.31 166925985.26 1271429282.44 6933165006.16 9438728389.28 382839454.92 9821567844.20
Add: Adjustments for changed
accounting policies
Adjustments for corrections of
previous errors
Other
II Beginning balances of the year 817306010.00 71383438.11 178518667.31 166925985.26 1271429282.44 6933165006.16 9438728389.28 382839454.92 9821567844.20
III Increase/decrease in the period
(“-” for decrease) 412.00 -178.48 227729.80 -11831196.13 4210110.35 278485125.72 271092003.26 -67257418.81 203834584.45
i. Total comprehensive income -11831196.13 360215726.72 348384530.59 7742581.19 356127111.78
ii. Capital increased and reduced by
owners 412.00 -178.48 227729.80 227963.32 227963.32
1. Ordinary shares increased by
shareholders 412.00 3374.76 3786.76 3786.76
2. Capital increased by holders of
other equity instruments
3. Share-based payments included
in owners’ equity 224307.75 224307.75 224307.75
4. Other -178.48 47.29 -131.19 -131.19
iii. Profit distribution -81730601.00 -81730601.00 -75000000.00 -156730601.00
1. Appropriation to surplus reserves
2. Appropriation to general reserve
3. Appropriation to owners (or
shareholders) -81730601.00 -81730601.00 -75000000.00 -156730601.00
4. Other
iv. Transfers within owners’ equity
v. Specific reserve 4210110.35 4210110.35 4210110.35
1. Increase in the period 7971427.33 7971427.33 7971427.33
2. Used in the period 3761316.98 3761316.98 3761316.98
vi. Other
IV Ending balances of the period 817306422.00 71383259.63 178746397.11 155094789.13 4210110.35 1271429282.44 7211650131.88 9709820392.54 315582036.11 10025402428.65
8. Statements of Changes in Owners’ Equity of the Parent Company
H1 2026
Unit: RMB
75Lu Thai Textile Co. Ltd. Interim Report 2026
H1 2026
Item Other equity instruments Less: OtherShare capital Preferred Perpetual Other Capital reserves Treasury comprehensive Specific reserve Surplus reserves Retained earnings Other Total owners’ equityshares bonds stock income
I Ending balances of the prior year 817306920.00 71383045.46 246468448.57 -10900.67 1328109832.75 6166600630.49 8629857976.60
Add: Adjustments for changed accounting
policies
Adjustments for corrections of previous
errors
Other
II Beginning balances of the year 817306920.00 71383045.46 246468448.57 -10900.67 1328109832.75 6166600630.49 8629857976.60
III Increase/decrease in the period (“-” for
decrease) 218687.00 -71383045.46 73180590.89 10125.63 100049.39 -30100121.50 -27973714.05
i. Total comprehensive income 10125.63 92528719.55 92538845.18
ii. Capital increased and reduced by owners 218687.00 -71383045.46 73180590.89 2016232.43
1. Ordinary shares increased by shareholders 218687.00 1799759.99 2018446.99
2. Capital increased by holders of other
equity instruments
3. Share-based payments included in
owners’ equity 91321.25 91321.25
4. Other -71383045.46 71289509.65 -93535.81
iii. Profit distribution -122628841.05 -122628841.05
1. Appropriation to surplus reserves
2. Appropriation to owners (or shareholders) -122628841.05 -122628841.05
3. Other
iv. Transfers within owners’ equity
v. Specific reserve 100049.39 100049.39
1. Increase in the period 1462200.00 1462200.00
2. Used in the period 1362150.61 1362150.61
vi. Other
IV Ending balances of the period 817525607.00 319649039.46 -775.04 100049.39 1328109832.75 6136500508.99 8601884262.55
H1 2025
Unit: RMB
H1 2025
Item Other equity instruments Less: OtherShare capital Preferred Perpetual Other Capital reserves Treasury comprehensive Specific reserve Surplus reserves Retained earnings Other Total owners’ equityshares bonds stock income
I Ending balances of the prior year 817306010.00 71383438.11 246054960.86 -35886.10 1268320542.80 5791958278.26 8194987343.93
Add: Adjustments for changed accounting
policies
Adjustments for corrections of previous
errors
Other
II Beginning balances of the year 817306010.00 71383438.11 246054960.86 -35886.10 1268320542.80 5791958278.26 8194987343.93
III Increase/decrease in the period (“-” for
decrease) 412.00 -178.48 227729.80 2375.18 33042.22 455681734.81 455945115.53
i. Total comprehensive income 2375.18 537412335.81 537414710.99
ii. Capital increased and reduced by owners 412.00 -178.48 227729.80 227963.32
1. Ordinary shares increased by shareholders 412.00 3374.76 3786.76
2. Capital increased by holders of other
equity instruments
3. Share-based payments included in
owners’ equity 224307.75 224307.75
4. Other -178.48 47.29 -131.19
iii. Profit distribution -81730601.00 -81730601.00
1. Appropriation to surplus reserves
2. Appropriation to owners (or shareholders) -81730601.00 -81730601.00
76Lu Thai Textile Co. Ltd. Interim Report 2026
3. Other
iv. Transfers within owners’ equity
v. Specific reserve 33042.22 33042.22
1. Increase in the period 1525200.00 1525200.00
2. Used in the period 1492157.78 1492157.78
vi. Other
IV Ending balances of the period 817306422.00 71383259.63 246282690.66 -33510.92 33042.22 1268320542.80 6247640013.07 8650932459.46
77Lu Thai Textile Co. Ltd. Interim Report 2026
III Company Profile
Lu Thai Textile Co. Ltd. (hereinafter referred to as the “Company”) is a joint venture invested
by Zibo Lucheng Textile Investment Co. Ltd. (originally named Zibo Lucheng Textile Co.Ltd hereinafter referred to as Lucheng Textile) and Thailand Tailun Textile Co. Ltd. In
February 1993 it was restructured into a joint-stock company.In July 1997 with the approval of the Securities Committee of the State Council 80000000
foreign shares (B-shares) were listed domestically. On August 19 1997 it was listed on the
Shenzhen Stock Exchange with the B-share stock code being 200726. On November 24 2000
the CSRC approved the issuance of an additional 50000000 ordinary shares (A-shares) which
were listed on the Shenzhen Stock Exchange on December 25 2000 with the A-share stock
code being 000726.According to the resolution passed at the 10th meeting of the 10th Board of Directors on June
19 2023 and the Proposal on Repurchase of Domestically Listed Foreign Shares (B-shares)
passed at the First Extraordinary General Meeting on July 6 2023 the Company repurchased
and canceled 46176428.00 B-shares.According to the resolution passed at the 18th meeting of the 10th Board of Directors on
January 19 2024 and the Proposal on Repurchase and Cancellation of Authorized but
Unlocked Restricted Share of the Incentive Personnel not Conforming to the Incentive
Condition passed at the First Extraordinary General Meeting on February 5 2024 the Company
repurchased and canceled 66500.00 shares.According to the resolution passed at the 22nd meeting of the 10th session of the Board of
Directors on May 28 2024 and the Proposal on Repurchase and Cancellation of Authorized but
Unlocked Restricted Share of the Incentive Personnel not Conforming to the Incentive
Condition passed at the Second Extraordinary General Meeting on June 14 2024 the Company
repurchased and canceled 59000.00 shares.After several capital increases and repurchases as at June 30 2026 the Company’s registered
capital was RMB817525600. Specifically there were 591399600 A-shares and 226126000
B-shares.The Company’s registered address: No. 61 Luthai Avenue Hi-tech Development Zone Zibo
Shandong
The Company’s unified social credit code: 91370300613281175K
The Company’s legal representative: Liu Zibin
The main business scope of the Company and its subsidiaries includes: Fabric printing and
dyeing processing; garment manufacturing wholesale; procurement of primary agricultural
products; power generation and transmission business.The Company’s financial statements and Notes thereof have been approved by the 12th Meeting
of the 11th Board of Directors held on August 27 2026.IV Basis for Preparation of Financial Statements
1. Preparation Basis
The financial statements are prepared in accordance with the Accounting Standards for
Business Enterprises and their application guidelines interpretations and other relevantregulations issued by the Ministry of Finance (collectively: “Accounting Standards for Business
78Lu Thai Textile Co. Ltd. Interim Report 2026Enterprises”). In addition the Company also disclosed relevant financial information in
accordance with the Regulations on Information Disclosure and Compilation for Companies
Public Offering Securities No. 15-General Provisions on Financial Statements (Revised in
2023) issued by China Securities Regulatory Commission.
The Company’ accounting is based on the accrual basis. Except for certain financial
instruments this financial statement is measured on the basis of historical cost. If the asset is
impaired the corresponding impairment provision shall be made in accordance with relevant
regulations.
2. Going-concern
The financial statements are presented on the basis of continuing operations.V Significant Accounting Policies and Estimates
Specific accounting policies and accounting estimates indicators:
The Company determines income recognition policy according to its production and operation
characteristics and the specific accounting policies are shown in Note V (27).
1. Statement of Compliance with the Accounting Standards for Business Enterprises
The financial statements comply with the requirements of the Accounting Standards for
Business Enterprises and truly and completely reflect the consolidated and the Company’s
financial position as at June 30 2026 as well as the consolidated and the Company’s operating
results and cash flows for the period from January 1 to June 30 2026 and other relevant
information.
2. Fiscal Year
The Company’s fiscal year starts on January 1 and ends on December 31 of every year
according to the Gregorian calendar.
3. Operating Cycle
The Company regards 12 months as an operating cycle.
4. Recording Currency
The Company and its domestic subsidiaries adopt RMB as the recording currency. The
Company’s overseas subsidiaries confirm to adopt HKD and USD as the recording currency
according their major economic environment of the operating. When preparing the financial
statements for the Reporting Period the Company adopted RMB as the recording currency.
5. Methods for Determining Materiality Standards and Selection Criteria
□ Applicable □ Not applicable
Item Materiality standards
Significant receivables
withdrawal of bad debt Individual receivables exceeding 0.3% of total assets
provision separately accrued
Significant receivables Individual receivables exceeding 0.3% of total assets
79Lu Thai Textile Co. Ltd. Interim Report 2026
reversed or recovered during
the Reporting Period
Significant written-off of
receivables during the Individual receivables exceeding 0.3% of total assets
Reporting Period
Significant prepayments Individual prepayment amounts exceeding 0.3% of total
aging over one year assets
Significant construction in
progress Individual investment amounts exceeding 1% of total assets
Significant accounts payable Individual accounts payable amounts exceeding 0.3% of total
aging over one year assets
A subsidiary whose total assets operating revenue or total
Significant non-wholly- profit (or absolute loss amount) exceeds 10% of the
owned subsidiary corresponding item in the consolidated financial statements is
considered a significant non-wholly owned subsidiary
Significant investment
activity projects Individual investment amounts exceeding 5% of total assets
6. Accounting Treatment for Business Combinations under the Common Control and Not
under the Common Control
(1) Business Combinations under the Same Control
For business combinations under the same control the assets and liabilities of the merged party
acquired by the merger party in the merger shall be measured at the carrying value of the
merged party in the consolidated financial statement of the final controller on the combination
date. The difference between the carrying value of the combination consideration and the
carrying value of the net assets acquired in the combination is used to adjust the capital reserve
(share premium); if the capital reserve (share premium) is insufficient to offset the retained
earnings shall be adjusted.Business combination under common control achieved in stages through multiple transactions
The assets and liabilities of the combined party acquired by the combining party in the
combination shall be measured at the carrying value of the combined party in the consolidated
financial statement of the final controller on the combination date; the difference between the
sum of the carrying value of investment held before combination plus the carrying value newly
paid on the combination date and the carrying value of the net assets acquired in combination
is used for adjusting the capital reserve (capital stock premium) and if the capital reserves is
insufficient to offset the retained earnings shall be adjusted. The long-term equity investments
held by the combining party before acquiring the control right of the combined party if relevant
gains and losses other comprehensive income and changes in other owners’ equity have been
confirmed from the date of acquiring equity and the date when the combining party and the
combined party under the final control of the same party whichever is later to the combination
80Lu Thai Textile Co. Ltd. Interim Report 2026
date shall offset the retained earnings at the beginning or current profits and losses in the
period of comparing statements.
(2) Business Combinations Not under the Same Control
For a business combination not under the same control the cost of the combination is the assets
paid liabilities incurred or assumed and the fair value of the equity securities issued on the
acquisition date to obtain control over the purchased party.On the purchase date the acquired assets liabilities and contingent liabilities of the purchased
party are recognized at fair value.The difference between the combination cost and the fair value of the identifiable net assets of
the acquired party acquired in the combination (the former is greater than the latter) is
recognized as goodwill and subsequent measurement is made based on the cost deducting the
accumulated impairment provision; the difference between the combination cost and the fair
value of the identifiable net assets of the acquired party acquired in the combination (the former
is less than the latter) shall be recorded into the current profit or loss after the recheck.Business combination not under the same control achieved in stages through multiple
transactions
The combination cost is the sum of the consideration paid on the acquisition date and the fair
value on the acquisition date of the acquiree’s equity held prior to the acquisition date. For
equity of the acquired party that is already held before the purchase date it shall be re-
measured according to the fair value of the equity on the purchase date and the difference
between the fair value and its carrying value shall be included in the current investment income.If the equity of the acquired party held before the purchase date involves other comprehensive
income and the changes of other owner’s equity it shall be transferred to current income on the
purchase date other comprehensive income arising from the remeasurement of the net liability
or net assets of a defined benefit plan by the investee as well as other comprehensive income
related to investments in non-trading equity instruments designated at fair value through other
comprehensive income are excluded.
(3) Treatment of Transaction Costs in Business Combinations
Intermediary expenses such as auditing legal services evaluation and consulting and other
related administrative expenses incurred for the business combination shall be included in the
current profit and loss when incurred. The transaction costs of equity securities or debt
securities issued as the merger consideration shall be included in the initial recognition amount
of equity securities or debt securities.
7. Criteria for Judging Control and Methods for Preparing Consolidated Financial
Statements
(1) Criteria for Judging Control
The consolidation scope of the consolidated financial statements is determined on the basis of
control. Control means that the Company has the power over the invested unit enjoys variable
returns by participating in the related activities of the invested unit and has the ability to use
the power over the invested unit to influence the amount of its return. When changes in relevant
facts and circumstances lead to changes in the elements involved in the definition of control
the Company will reassess.
81Lu Thai Textile Co. Ltd. Interim Report 2026
In determining whether to include a structured entity within the consolidation scope the
Company considers all facts and circumstances including assessing the purpose and design of
the structured entity’s establishment identifying the types of variable returns and evaluating
whether the Company controls the structured entity based on whether it has assumed some or
all of the variability in returns by participating in its relevant activities.
(2) Methods for Preparing Consolidated Financial Statements
The consolidated financial statements are prepared by the Company based on the financial
statements of the Company and its subsidiaries and other information. When preparing the
consolidated financial statements the accounting policies and accounting fiscal of the Company
and those of subsidiaries shall be consistent and the large transactions and intercourse balance
among companies shall be offset.Subsidiaries and businesses increased due to business combinations under the same control
during the Reporting Period shall be included into the Company’s combination scope since the
date when they are jointly controlled by the final controller and the operating result and cash
flow since then shall be respectively included into the consolidated income statement and
consolidated cash flow statement.As for subsidiaries and businesses increase due to business combinations not under the same
control during the Reporting Period the revenue expenses and profit or those subsidiaries and
businesses from the purchase date to the end of the Reporting Period shall be included into the
consolidated income statement and the cash flow thereof shall be included into the consolidated
cash flow statement.The share of shareholders’ equity in subsidiaries not belonging to the Company shall be
regarded as the equity of non-controlling interests and separately listed under the item of
shareholders’ equity in the consolidated balance sheet. The share of current portion of net profit
or loss in subsidiaries belonging to the equity of non-controlling interests shall presented as the
item of the equity of non-controlling interests under the item of net profit in the consolidated
income statement. The difference between the losses of subsidiaries born by non-controlling
shareholders and the share of the company’s owners’ equity at the period-beginning the non-
controlling shareholders enjoy (the former is larger than the latter) shall be offset the equity of
non-controlling interests.
(3) Acquisition of Minority Interests in Subsidiaries
The difference between the cost of the newly acquired long-term equity investment due to the
acquisition of minority interests and the share of the subsidiary’s net assets continuously
calculated from the acquisition date or combination date based on the newly increased
shareholding proportion and the difference between the disposal proceeds obtained from the
partial disposal of the equity investment in the subsidiary without losing control and the share
of the subsidiary’s net assets continuously calculated from the acquisition date or combination
date corresponding to the disposed long-term equity investment are both adjusted to the capital
reserve (share premium) in the consolidated balance sheet. If the capital reserve is insufficient
to offset the retained earnings are adjusted.
(4) Treatment of Loss of Control over a Subsidiary
Where control over a former subsidiary is lost due to the disposal of partial equity investment
or other reasons the remaining equity is remeasured at its fair value on the date when control is
lost; the sum of the consideration obtained from the disposal of equity and the fair value of the
remaining equity less the sum of the share of the carrying amount of the former subsidiary’s
82Lu Thai Textile Co. Ltd. Interim Report 2026
net assets continuously calculated from the acquisition date based on the original shareholding
proportion and the goodwill the resulting difference is recognized as investment income for the
period when control is lost.Other comprehensive income related to the equity investment in the former subsidiary is
accounted for on the same basis as the former subsidiary’s direct disposal of related assets or
liabilities when control is lost and other changes in owners’ equity related to the former
subsidiary under the equity method are transferred to profit or loss for the current period when
control is lost.
8. Classification of Joint Arrangements and Accounting Treatment of Joint Operations
Joint arrangement refers to an arrangement under the joint control of two or more participants.The Company’s joint arrangements are divided into joint operations and joint ventures.A joint operation refers to a joint arrangement whereby the Company enjoys relevant assets of
the arrangement and assumes obligations relevant liabilities of the arrangement.The Company recognizes the following items related to its interest share in a joint operation
and accounts for them in accordance with the provisions of relevant Accounting Standards for
Business Enterprises:
A. Recognize the assets held solely and recognize the jointly held assets according to its share;
B. Recognize the liabilities assumed solely and recognize the jointly assumed liabilities
according to its share;
C. Recognize the revenue generated from the sale of its share of the output of the joint
operation;
D. Recognize the revenue generated by the joint operation from the sale of output according to
its share;
E. Recognize the expenses incurred solely and recognize the expenses incurred by the joint
operation according to its share.
(2) Joint Venture
A joint venture refers to a joint arrangement whereby the Company enjoys the right of the net
assets of the arrangement only.Accounting treatment of the investment of a joint venture is conducted by the Company in line
with the provisions of relevant equity method of accounting for long-term equity investment.
9. Confirmation Standard for Cash and Cash Equivalent
The term “cash” refers to cash on hand and deposits that are available for payment at any time.Cash equivalents refer to investments held by the Company that are short-term highly liquid
easily convertible into known amounts of cash and have little risk of change in value.
10. Foreign Currency Businesses and Translation of Foreign Currency Financial
Statements
(1) Foreign Currency Business
The Company’s foreign currency business is translated into the amount of the recording
currency at the approximate exchange rate of the spot exchange rate on the transaction date.
83Lu Thai Textile Co. Ltd. Interim Report 2026
On the balance sheet date foreign currency monetary items are translated at the spot exchange
rate on the balance sheet date. The exchange difference arising from the difference between the
spot exchange rate on the balance sheet date and the spot exchange rate at the time of initial
recognition or the previous balance sheet date is included in the current profit and loss; for
foreign currency non-monetary items measured at historical cost the translation adopts the spot
exchange rate on the day the transaction occurs; for foreign currency non-monetary items
measured at fair value the translation adopts the spot exchange rate on the day when the fair
value is confirmed and the difference between the amount of recording currency and the
amount of original recording currency shall be included into the current profit or loss or other
comprehensive income based on the nature of non-monetary items.
(2) Translation of Foreign Currency Financial Statements
When converting the foreign currency financial statements of overseas subsidiaries on the
balance sheet date the assets and liabilities items in the balance sheet shall be converted at the
spot exchange rate on the balance sheet date. Other items of shareholders’ equity except for
“retained earnings” shall be converted at the spot exchange rate on the occurrence date.Income and expense items in the income statement shall be converted using the approximate
spot exchange rate on the transaction date.All items in the cash flow statement are converted according to the approximate spot exchange
rate on the occurrence date of cash flow. The impact of exchange rate changes on cash is takenas a reconciling item and the item “impact of exchange rate changes on cash and cashequivalents” is separately listed in the cash flow statement to reflect.The difference arising from the conversion of financial statements is reflected in the “othercomprehensive income” under the shareholders’ equity in the balance sheet.When disposing of the overseas operation and losing control rights the foreign currency
statement conversion difference related to the overseas operation shown under the shareholders’
equity in the balance sheet shall be transferred to current profit and loss of disposal in whole or
in proportion to the disposal of overseas operation.
11. Financial Instruments
Financial instruments refer to contracts that form one party’s financial assets and form other
parties’ financial liabilities or equity instruments.
(1) Recognition and Derecognition of Financial Instruments
The Company recognizes a financial asset or a financial liability when it becomes a party to the
contractual provisions of the financial instrument.A financial asset is derecognized when one of the following conditions is met:
a) The contractual rights to receive the cash flows from the financial asset expire;
b) The financial asset has been transferred and the transfer meets the derecognition conditions
for financial asset transfer described below.Only when the prevailing obligations of a financial liability are relieved in all or in part may the
recognition of the financial liability be terminated in all or partly. Where the Company (debtor)
enters into an agreement with a creditor so as to substitute the existing financial liabilities by
way of any new financial liability and if the contractual stipulations regarding the new
financial liability is substantially different from that regarding the existing financial liability it
84Lu Thai Textile Co. Ltd. Interim Report 2026
terminates the recognition of the existing financial liability and at the same time recognizes the
new financial liability.The purchase and sale of financial assets under the normal ways shall be recognized and
stopped to be recognized respectively at the price of transaction date.
(2) Classification and Measurement of Financial Assets
The Company classifies financial assets into the following three categories according to the
business mode of managing financial assets and the contractual cash flow characteristics of
financial assets upon initial recognition: financial assets measured at amortized cost financial
assets measured at fair value and whose changes are included in other comprehensive income
and financial assets at fair value through profit or loss.Financial assets are measured at fair value upon initial recognition. For financial assets at fair
value through profit or loss relevant transaction expenses are directly included in current profit
and loss; for other types of financial assets relevant transaction expenses are included in the
initial recognition amount. For accounts receivable arising from the sale of products or the
provision of labor services which do not include or do not consider significant financing
components the amount of consideration the Company is expected to be entitled to receive is
taken as the initial recognition amount.Financial assets measured at amortized cost
The Company classifies financial assets that simultaneously meet the following conditions and
are not designated as measured at fair value through profit or loss as financial assets measured
at amortized cost:
The business model of the Company for managing the financial asset is aimed at collecting
contractual cash flows;
The contractual terms of the financial asset stipulate that the cash flows generated on specific
dates are solely payments of principal and interest on the outstanding principal amount.Such financial assets are measured in amortized cost by the effective interest method after
initial recognition. Gains or losses arising from financial assets measured in amortized cost that
are not part of any hedging relationship are included in current profit and loss when
derecognition amortization according to the effective interest method or impairment is
recognized.Financial assets measured at fair value and whose changes are included in other
comprehensive income
The Company classifies financial assets that meet the following conditions and are not
designated to be measured at fair value through profit or loss as financial assets measured at fair
value and whose changes are included in other comprehensive income:
The Company’s business model for managing this financial asset is aimed at both collecting the
contractual cash flow and selling this financial asset;
The contractual terms of this financial asset stipulate that the cash flow generated on the
specific date is only the payment of principal and interest based on the principal amount
outstanding.Such financial assets are subsequently measured at fair value after initial recognition. Interest
impairment losses or gains and foreign exchange gains or losses calculated by the effective
85Lu Thai Textile Co. Ltd. Interim Report 2026
interest method are included in current profit and loss while other gains or losses are included
in other comprehensive income. When the financial asset is derecognized the accumulated
gains or losses previously included in other comprehensive income are transferred out and
included in current profit and loss.Financial assets measured at fair value with changes recognized in profit or loss
Except for the financial assets measured at amortized cost and those measured at fair value with
changes recognized in other comprehensive income the Company classifies all other financial
assets as financial assets measured at fair value with changes recognized in profit or loss. Upon
initial recognition in order to eliminate or significantly reduce accounting mismatches the
Company irrevocably designates some financial assets that should have been measured at
amortized cost or at fair value and whose changes are included in other comprehensive income
as financial assets at fair value through profit or loss.Such financial assets are subsequently measured at fair value after initial recognition and the
resulting gains or losses (including interest and dividend income) are included in current profit
and loss unless the financial assets are part of the hedging relationship.The business model of managing financial assets refers to how the Company manages financial
assets to generate cash flow. The business model determines whether the cash flow of the
financial assets managed by the Company comes from the collection of contractual cash flow
the sale of financial assets or both. The Company determines the business model for managing
financial assets on the basis of objective facts and specific business objectives decided by key
management personnel to manage financial assets.The Company evaluates the contractual cash flow characteristics of financial assets to
determine whether the contractual cash flow generated by the relevant financial assets on the
specific date is only the payment of principal and interest based on the principal amount
outstanding. Among them the principal refers to the fair value of financial assets upon initial
recognition; interest includes consideration for the time value of money credit risks related to
the principal amount outstanding in the specific period and other basic lending risks costs and
profits. In addition the Company evaluates the contract terms that may lead to changes in the
time distribution or amount of contractual cash flow of financial assets to determine whether
they meet the requirements of the above-mentioned contractual cash flow characteristics.Only when the Company changes the business mode of managing financial assets will all
affected related financial assets be reclassified on the first day of the first reporting period after
business model changes otherwise financial assets cannot be reclassified after initial
recognition.
(3) Classification and Measurement of Financial Liabilities
The Company’s financial liabilities are classified upon initial recognition as: financial liabilities
measured at fair value and whose changes are included in current profit and loss and financial
liabilities measured at amortized cost. For financial liabilities that are not classified as
measured at fair value and whose changes are included in current profit and loss relevant
transaction costs are included in the initial recognition amount.Financial liabilities measured at fair value with changes recognized in profit or loss
Financial liabilities measured at fair value with changes recognized in profit or loss include
held-for-trading financial liabilities and financial liabilities that are designated upon initial
recognition as measured at fair value with changes recognized in profit or loss. Subsequent
86Lu Thai Textile Co. Ltd. Interim Report 2026
measurement shall be carried out according to fair value for such financial liabilities. Gains or
losses resulting from changes in fair value and dividends and interest expenses related to such
financial liabilities shall be included in current profit and loss.Financial liabilities measured at amortized cost
Other financial liabilities are subsequently measured at amortized cost by using the effective
interest method. Gains or losses resulting from derecognition or amortization are included in
current profit and loss.Distinction between financial liabilities and equity instruments
Financial liabilities refer to liabilities that meet one of the following conditions:
a) The contractual obligation to deliver cash or other financial assets to other parties.b) The contractual obligation to exchange financial assets or financial liabilities with other
parties under potentially unfavorable conditions.c) Non-derivative contracts that must be or can be settled with the enterprise’s own equity
instruments in the future and the enterprise will deliver a variable number of its own equity
instruments according to the contract.d) Derivative contracts that must be or can be settled with the enterprise’s own equity
instruments in the future except derivatives contracts that exchange a fixed amount of cash or
other financial assets with a fixed amount of its own equity instruments.Equity instruments refer to contracts that can prove that an enterprise has the residual equity in
its assets after deducting all liabilities.If the Company cannot unconditionally avoid performing a contractual obligation by delivering
cash or other financial assets the contractual obligation meets the definition of financial
liability.If a financial instrument must be or can be settled with the Company’s own equity instruments
it is necessary to consider whether the Company’s own equity instruments used to settle the
instrument are used as substitutes for cash or other financial assets or to enable the holder of
this instrument to enjoy the residual equity in the assets after deducting all liabilities from the
issuer. If it is the former this instrument is the Company’s financial liability; if the latter is the
case this instrument is the Company’s equity instrument.
(4) Derivative Financial Instruments and Embedded Derivatives
The Company’s derivative financial instruments include forward foreign exchange contracts
foreign exchange option contracts and others. Initially the fair value on the date when the
derivative transaction contract is signed shall be used for measurement and the fair value shall
be used for subsequent measurement. Derivative financial instruments with positive fair value
are recognized as an asset while those with negative fair value are indeed recognized as a
liability. Any gains or losses arising from changes in fair value that do not conform to the
provisions of hedge accounting are directly included in current profit and loss.For hybrid instruments containing embedded derivatives such as the main contract is a
financial asset the relevant provisions on classification of financial assets shall apply to the
hybrid instruments as a whole. If the main contract is not a financial asset and the hybrid
instrument is not measured at fair value and its changes are included in current profit and loss
for accounting treatment the embedded derivative instrument has no close relationship with the
87Lu Thai Textile Co. Ltd. Interim Report 2026
main contract in terms of economic characteristics and risks and has the same conditions as the
embedded derivative instrument and the separate existing instrument meets the definition of
derivative instrument the embedded derivative instrument shall be separated from the hybrid
instrument and treated as a separate derivative financial instrument. If it is not possible to
separately measure embedded derivative instruments at the time of acquisition or the
subsequent balance sheet date the hybrid instruments as a whole are designated as financial
assets or financial liabilities measured at fair value through profit or loss.
(5) Fair Value of Financial Instruments
The methods for determining the fair value of financial assets and financial liabilities are
detailed in Note V (12).
(6) Impairment of Financial Assets
The Company conducts impairment accounting treatment for the following items and confirms
the loss provision based on the expected credit losses:
Financial assets measured at amortized cost;
Receivables and debt instrument investments measured at fair value through other
comprehensive income;
Contract assets as defined under Accounting Standards for Business Enterprises No. 14-
Revenue;
Lease receivables;
And financial guarantee contracts (excluding those measured at fair value through profit or loss
those arising from transfers of financial assets that do not qualify for derecognition or those
arising from continuing involvement in transferred financial assets).Measurement of expected credit losses
Expected credit loss refers to the weighted average of the credit losses of a financial instrument
weighted by the risk of default occurring. Credit loss refers to the difference between all
contractual cash flows discounted at the original effective interest rate and receivable according
to the contract and all cash flows expected to be collected of the Company i.e. the present
value of all cash shortfalls.Considering the reasonable and reliable information about past events current situation and the
forecast of future economic situation the Company takes the risk of default as the weight
calculates the probability weighted amount of the present value of the difference between the
cash flow receivable from the contract and the cash flow expected to be received and confirms
the expected credit loss.The Company separately measures the expected credit losses of financial instruments at
different stages. If the credit risk of financial instruments has not increased significantly since
the initial recognition it is in the first stage. The Company measures the loss reserve according
to the expected credit loss in the next 12 months; if the credit risk of financial instruments has
increased significantly since its initial recognition but no credit impairment has occurred it is in
the second stage. The Company measures the loss reserve according to the expected credit loss
during the whole duration of this instrument; if the financial instrument has suffered credit
impairment since its initial recognition it is in the third stage. The Company measures the loss
reserve according to the expected credit loss during the whole duration of this instrument.
88Lu Thai Textile Co. Ltd. Interim Report 2026
For financial instruments with low credit risk on the balance sheet date the Company assumes
that their credit risk has not increased significantly since the initial recognition and measures
the loss reserve according to the expected credit loss in the next 12 months.The expected credit loss during the whole duration refers to the expected credit loss caused by
all possible default events during the whole expected duration of financial instruments. The
expected credit loss in the next 12 months refers to the expected credit loss caused by the
possible default events of financial instruments within 12 months (or the expected duration if
the expected duration of financial instruments is less than 12 months) after the balance sheet
date which is part of the expected credit loss in the whole duration.When measuring the expected credit loss the longest term that the Company needs to consider
is the longest contract term that the enterprise faces credit risk (including the option to renew
the contract).The Company calculates interest income based on the carrying amount before deducting
impairment provisions and the effective interest rate for financial instruments in the first and
second stages and with low credit risk. The interest income shall be calculated according to
their carrying amount minus the amortized cost after impairment provision and the effective
interest rate for financial instruments in the third stage.For receivables such as notes receivable accounts receivable accounts receivables financing
and other receivables if the credit risk characteristics of a particular customer significantly
differ from those of other customers in the portfolio or if there is a significant change in the
customer’s credit risk characteristics the Company will make receivables withdrawal of bad
debt provision separately accrued. Apart from receivables withdrawal of bad debt provision
separately accrued are made the Company classifies receivables into portfolios based on credit
risk characteristics and calculates the allowance for doubtful debts on a portfolio basis.Notes receivable and accounts receivable
The Company always measures its loss reserves at an amount equivalent to the expected credit
loss during the entire duration for notes receivable and accounts receivable regardless of
whether there is any significant financing component.When information for assessing expected credit losses on individual financial assets or contract
assets cannot be obtained at reasonable cost the Company groups notes receivable and accounts
receivable based on credit risk characteristics and calculates expected credit losses on a
portfolio basis. The basis for determining the portfolios is as follows: A. Notes Receivable: 1.Bank acceptance bills with low credit rated 2. Commercial acceptance bills B. Accounts
Receivable: 1. Non-overdue receivables (with L/C) 2. Non-overdue receivables (excluding L/C)
3. Overdue receivables.
For notes receivable classified into portfolios the Company references historical credit loss
experience incorporating current conditions and forecasts of future economic conditions and
calculates expected credit losses using default risk exposure and lifetime expected credit loss
rates.For accounts receivable divided into portfolios with reference to historical credit loss
experience combined with current conditions and predictions of future economic conditions
the Company has prepared a comparison table between the aging of accounts receivable and the
expected credit loss rate over the entire duration and has calculated the expected credit loss.The aging of accounts receivable is calculated from the date of recognition.
89Lu Thai Textile Co. Ltd. Interim Report 2026
Other receivables
The Company classifies other receivables into several portfolios based on credit risk
characteristics and calculates the expected credit loss on a portfolio basis. The basis for
determining the portfolios is as follows:
Portfolio 1: Receivables from related parties within the scope of consolidation
Portfolio 2: Receivables from tax refunds
Portfolio 3: Receivables from deposits and guarantees
Portfolio 4: Receivables from other amounts
For other receivables classified into portfolios the Company calculates the expected credit loss
based on the default risk exposure and the expected credit loss rate over the next 12 months or
the entire life of the assets.Creditors’ investment and other creditors’ investment
For creditors’ investment and other creditors’ investment the Company calculates the expected
credit based on the nature of the investment as well as kinds of types of counterparties and risk
exposures the default risk exposure and the expected credit loss rate within the next 12 months
or the entire duration loss.Assessment of significant increase in credit risk
In order to determine the relative changes in the default risk of financial instruments during
their expected life and to assess whether the credit risk of financial instruments has increased
significantly since initial recognition the Company compares the default risk of financial
instruments on the balance sheet date with the default risk on the initial recognition date.When determining whether the credit risk has risen greatly since the initial recognition the
Company considers reasonable and reliable information (forward-looking information
inclusive) that can be obtained without unnecessary extra costs or efforts. The information the
Company considers shall include:
The debtor fails to pay the principal and interest according to the contract expiration date;
The external or internal credit ratings (if any) of financial instruments which have occurred or
are expected deteriorate significantly;
The debtor’s operating results which have occurred or are expected deteriorate significantly;
Existing or expected changes in technology market economy or legal environment will lead to
a great adverse effect on the debtor’s ability to repay the Company.Based on the nature of financial instruments the Company assesses whether there is great risk
in credit risk on the basis of individual financial instruments or financial instrument portfolios.During assessment based on financial instrument portfolios the Company can divide financial
instruments on the basis of common credit risk characteristics such as overdue information and
credit risk ratings.In case that the period overdue exceeds 30 days the Company determines that there is a
significant increase in the credit risk of financial instruments.Financial assets with depreciation of credit
90Lu Thai Textile Co. Ltd. Interim Report 2026
The Company assesses on the balance sheet date whether there is any credit impairment to
financial assets measured at amortized cost and debt investments measured at fair value and
whose changes are included in other comprehensive income. In case of one or more events that
adversely affect the expected future cash flow of a financial asset occur the financial asset will
become financial assets with depreciation of credit. Evidence of credit impairment for financial
assets includes the following observable information:
The issuer or debtor experiences significant financial difficulties;
The debtor breaches the contract such as defaulting on interest or principal payments or
overdue payments;
The Company makes concessions to the debtor due to economic or contractual considerations
related to the debtor’s financial difficulties which would not otherwise be made under normal
circumstances;
The debtor is likely to go bankrupt or undergo other financial restructuring;
Financial difficulties of the issuer or debtor result in the disappearance of an active market for
the financial asset.Presentation of expected credit loss provision
The Company remeasures expected credit losses on each balance sheet date to reflect the
changes in the credit risk of financial instruments since initial recognition; the increase or
reversal amount of the loss provision formed therefrom shall be included in the current profit or
loss as impairment losses or gains. For financial assets measured at amortized cost the loss
allowance offsets the carrying value of the financial asset listed in the balance sheet; for
creditors’ investment that are measured at fair value and its changes are included in other
comprehensive income the Company recognizes its loss reserve in other comprehensive
income and will not offset the carrying value of the financial asset.Write-offs
In case that the Company fails to reasonably expect the contract cash flow of the financial asset
to be recovered in a full or partial scale the book balance of the financial asset will be written
off directly. Such write-downs may constitute the derecognition for related financial assets.This situation occurs frequently when the Company determines that the debtor does not have
any assets or any source of income to generate sufficient cash flow to repay the amount that
will be written off. However in accordance with the procedures for recovering due payments of
the Company the written-off financial assets may still be affected by the execution activities.In case that the financial asset written off is recovered later it shall be included in the current
profit and loss as the reversal of the impairment loss.
(7) Transfer of Financial Assets
The transfer of financial assets refers to the transfer or delivery of financial assets to another
party (transferee) other than the issuer of the financial asset.If the Company has transferred almost all the risks and rewards of the ownership of financial
assets to the transferee derecognize the financial asset; if it retains almost all the risks and
rewards of the ownership of financial assets the financial asset will not be derecognized.If the Company has neither transferred nor retained almost all the risks and rewards of the
ownership of financial assets it shall be dealt with in the following situations: if the control of
91Lu Thai Textile Co. Ltd. Interim Report 2026
the financial asset is abandoned the confirmation of the financial asset shall be terminated and
the generated assets and liabilities shall be confirmed; If the financial assets are controlled the
relevant financial assets shall be recognized according to the extent of their continued
involvement in the transferred financial assets and the relevant liabilities shall be recognized
accordingly.
(8) Offsetting of Financial Assets and Financial Liabilities
When the Company has a legal right that is currently enforceable to set off the recognized
financial assets and financial liabilities and intends either to settle on a net basis or to realize
the financial asset and settle the financial liability simultaneously a financial asset and a
financial liability shall be offset and the net amount is presented in the balance sheet. Except for
the above circumstances financial assets and financial liabilities shall be presented separately
in the balance sheet and shall not be offset.
12. Measurement of Fair Value
Fair value refers to the price that market participants can receive from sales of an asset or shall
pay for transfer of a liability in the orderly transaction that occurs on the measurement date.The Company measures related assets or liabilities at fair value assuming that the orderly
transaction of selling assets or transferring liabilities is conducted in the main market of related
assets or liabilities; if there is no main market the Company assumes that the transaction is
conducted in the most beneficial market. The main market (or the most favorable market) is the
trading market that the Company can enter on the measurement date. The Company uses the
assumptions used by market participants to maximize their economic benefits when pricing the
asset or liability.For financial assets or financial liabilities with active markets the Company uses the quotation
in active markets to determine its fair value. If there is no active market for financial
instruments the Company uses valuation techniques to determine its fair value.When measuring non-financial assets at fair value the ability of market participants to best use
the asset for generating economic benefits or the ability to sell the asset to other market
participants that can best use the asset to generate economic benefits shall be considered.The Company adopts valuation techniques that are applicable in the current situation and have
sufficient available data and other information to support it. Priority is given to using relevant
observable input values. Only when observable input values are unavailable or are not feasible
to obtain the unobservable input values can be used.For assets and liabilities measured or disclosed at fair value in the financial statements the fair
value hierarchy to which they belong is determined based on the lowest level input value that is
important to the fair value measurement as a whole: the first level input value is the unadjusted
quotation of the same assets or liabilities able to be obtained in an active market on the
measurement date; the second level input value is the directly or indirectly observable input
value of the relevant asset or liability except the first level input value; the third level input
value is unobservable input value of related assets or liabilities.On each balance sheet date the Company reassessed the assets and liabilities continuously
measured at fair value confirmed in the financial statements to determine whether there is a
transition among levels of fair value measurement.
92Lu Thai Textile Co. Ltd. Interim Report 2026
13. Inventory
(1) Classification of Inventories
The Company’s inventories are classified into raw materials work-in-progress materials for
consigned processing goods on hand etc.
(2) Valuation Method for Issued Inventories
The Company’s inventories are valued at actual cost when acquired. Grey yarn dyed yarn and
fabric shall be measured at first-in first-out method when acquired and delivered; other
inventories shall be measured as per the weighted average method
(3) Basis for Determining and Method of Provisioning for Decline in Value of Inventories
On the balance sheet date inventories are measured at the lower of cost and net realizable
value. When their net realizable value falls below cost an allowance for inventory impairment
is provided.Net realizable value is the estimated selling price in the ordinary course of business less the
estimated costs of completion the estimated costs necessary to make the sale and relevant
taxes. Net realizable value is determined on the basis of clear evidence obtained and takes into
consideration the purpose of holding inventories and effect of post balance sheet date events.The Company generally provides for inventory depreciation on a per-item basis. For inventories
that are numerous in quantity and low in unit price an allowance for inventory impairment is
provided based on inventory categories.On the balance sheet date if the factors affecting the value of inventories previously written
down have disappeared the provision for inventory write-downs is reversed to the extent of the
original amount provided.
(4) Inventory System for Stock
The perpetual inventory system is maintained for the stock of the Company.
(5) Amortization Method for Low-value Consumables and Packaging Materials
The Company amortizes low-value consumables using the one-off amortization method upon
requisition.
14. Long-term Equity Investments
Long-term equity investments include equity investments in subsidiaries joint ventures and
associated enterprises. The investee that the Company is able to exert significant influence is an
associated enterprise of the Company.
(1) Determination of Initial Investment Cost
For long-term equity investments formed by business combination: For long-term equity
investments obtained by business combination under common control the investment cost is
determined on the merger date based on the share of the carrying value of the merged party’s
owners’ equity in the consolidated financial statements of the ultimate controller; for long-term
equity investments acquired by business combination not under common control the
combination cost is taken as the investment cost of the long-term equity investments.For long-term equity investments obtained by other means: the long-term equity investment
obtained by paying cash shall be the initial investment cost according to the actual purchase
93Lu Thai Textile Co. Ltd. Interim Report 2026
price; the long-term equity investment obtained by issuing equity securities shall be the initial
investment cost of the fair value of the equity securities issued.
(2) Subsequent Measurement and Profit or Loss Recognition Method
Investments in subsidiaries are accounted for using the cost method unless the investment
meets the conditions for classification as held for sale; investments in associated enterprises and
joint ventures are accounted for using the equity method.For long-term equity investments that are accounted for using the cost method in addition to
the cash dividends or profits that have been declared but not yet included in the actual payment
or consideration included in the investment the cash dividends or profits declared by the
invested entity are recognized as investment income and recorded into the current profit and
loss.For long-term equity investments accounted for using the equity method where the initial
investment cost is greater than the fair value share of the investee’s identifiable net assets at the
time of investment the investment cost of the long-term equity investment is not adjusted;
when the initial investment cost is less than the fair value share of the investee’s identifiable net
assets at the time of investment the carrying value of the long-term equity investment is
adjusted and the difference is included in the current profit and loss of the investment.When using the equity method of accounting the investment income and other comprehensive
income are recognized separately according to the share of net profit and loss and other
comprehensive income realized by the invested unit that should be enjoyed or shared and the
carrying value of the long-term equity investment is adjusted at the same time; The distribution
of profits or cash dividends should be calculated to reduce the carrying value of long-term
equity investment; the investee’s other changes in owner’s equity other than net profit and loss
other comprehensive income and profit distribution adjust the carrying value of long-term
equity investment and Included in capital reserves (other capital reserves). When confirming
the share of the investee’s net profit or loss based on the fair value of the investee’s identifiable
assets at the time of investment and in accordance with the Company’s accounting policies and
accounting period the net profit of the investee Confirm after making adjustments.If the additional investment and other reasons can exert significant influence on the investee or
exercise joint control but do not constitute control on the conversion date the sum of the fair
value of the original equity plus the additional investment cost will be used as the initial
accounting for the equity method cost of investment. If the original equity is classified as non-
trading equity instrument investment measured at fair value whose changes are included in
other comprehensive income the relevant original and accumulative changes in fair value
included in other comprehensive income shall be transferred to retained earnings when
accounting by equity method.If the joint control or significant influence on the invested unit is lost due to the disposal of part
of the equity investment etc. the remaining equity after the disposal shall be changed to the
Accounting Standards for Business Enterprises No. 22-Recognition and Measurement of
Financial Instruments is performed and the difference between fair value and carrying value is
included in the current profit and loss. Other comprehensive income recognized by the original
equity investment due to the equity method of accounting shall be accounted for on the same
basis as the investee’s direct disposal of related assets or liabilities when the equity method of
accounting is terminated; changes in other owners’ equity related to the original equity
investment Transfer to current profit and loss.
94Lu Thai Textile Co. Ltd. Interim Report 2026
If the control of the invested unit is lost due to the disposal of part of the equity investment if
the remaining equity after the disposal can exercise joint control or exert significant influence
on the invested unit the equity method is used for accounting and the remaining equity is
treated as when acquiring the equity method is adopted for adjustment; if the remaining equity
after disposal cannot exercise joint control or exert significant influence on the investee the
accounting shall be changed according to the relevant provisions of Accounting Standards for
Business Enterprises No. 22—Recognition and Measurement of Financial Instruments. The
difference between the fair value and the carrying value on the date of loss of control is
included in the current profit and loss.If the shareholding ratio of the Company decreases due to the capital increase of other
investors thereby losing control but being able to exercise joint control or exert significant
influence on the investee the new shareholding ratio shall be used to confirm that the Company
should enjoy the capital increase of the investee. The difference between the increase in share
and the increase in the share of net assets and the original carrying value of the long-term
equity investment corresponding to the decrease in the proportion of the shareholding that
should be carried forward are included in the current profit and loss; That is adjustments are
made using the equity method of accounting.The unrealized internal transaction gains and losses that occur between the Company and
associated enterprises and joint ventures are calculated according to the shareholding ratio and
are attributed to the Company and the investment gains and losses are recognized on the basis
of offset. However the unrealized internal transaction losses incurred by the Company and the
investee are the impairment losses of the transferred assets and shall not be offset.
(3) Basis for Determining Joint Control and Significant Influence over the Invested Entity
Joint control refers to shared control over an arrangement according to relevant agreements
where the related activities of the arrangement can only be decided with the unanimous consent
of the participants sharing control. When judging whether there is joint control first determine
whether all participants or a combination of participants collectively control the arrangement
and secondly determine whether the decision-making related activities of the arrangement must
be unanimously agreed by the participants who collectively control the arrangement. If all
participants or a Company of participants must act in concert to determine the relevant
activities of an arrangement it is considered that all participants or a Company of participants
collectively control the arrangement; if there is a combination of two or more participants can
collectively Controlling an arrangement does not constitute joint control. When judging
whether there is joint control the protective rights enjoyed are not considered.Significant influence means that the investor has the right to participate in the decision-making
of the financial and operating policies of the invested unit but cannot control or jointly control
the formulation of these policies with other parties. When determining whether significant
influence can be exerted on the investee consideration is given to the voting rights held directly
or indirectly by the investor in the investee as well as the impact of currently exercisable
potential voting rights held by the investor and other parties after assuming their conversion
into equity in the investee including the effects of currently convertible warrants share
options and convertible corporate bonds issued by the investee.When the Company directly or indirectly through subsidiaries owns 20% (inclusive) or more
but less than 50% of the voting shares of the investee it is generally considered to have a
significant influence on the investee unless there is clear evidence that under such
circumstances it cannot participate in the production and operation decisions of the investee and
does not form a significant influence; when the Company owns less than 20% (exclusive) of the
95Lu Thai Textile Co. Ltd. Interim Report 2026
voting shares of the investee it is generally not considered to have a significant influence on
the investee unless there is clear evidence that under such circumstances it can participate in
the production and operation decisions of the investee and form a significant influence.
(4) Impairment Testing Method and Provision for Impairment
The method for recognizing asset impairment on investments in subsidiaries associated
enterprises and joint ventures is detailed in Note V (22).
15. Investment Property
Measurement model of investment property
Cost method measurement
Depreciation or amortization method
The investment property refers to the real estate gaining the rent or capital appreciation or both.It includes rented land use rights holding land use right to be transferred after the appreciation
and rented building etc.The investment property is measured initially according to the cost and withdrawn depreciation
or amortization as regulations of fixed assets or intangible assets.The Company adopts the cost mode to conduct the subsequent measurement on the investment
property see the Note V (22) for the method of provision for impairment assets.The difference between the disposal income of investment property sales transfer scrap or
damage after deducting its carrying value and related taxes is included in the current profit and
loss.
16. Fixed Assets
(1) Conditions for Recognition
The term “fixed assets” refers to the tangible assets that simultaneously possess the features as
follows: (a) they are held for the sake of producing commodities rendering labor service
renting or business management; and (b) their useful life is in excess of one fiscal year.The fixed assets are only recognized when the relevant economic benefits probably flow in the
Company and its cost could be reliable measured.The fixed assets of the Company are initially measured at the actual cost at the time of
acquisition.The subsequent expenditures related to the fixed assets shall be included in the cost of the fixed
assets when the economic benefits related to the fixed assets are likely to flow into the
Company and the costs can be measured reliably. The daily repair expenses of fixed assets that
do not meet the conditions of capitalized subsequent expenditures of fixed assets shall be
included in the current profit and loss or the cost of relevant assets according to the
beneficiaries when incurred. The carrying value of the replaced part shall be terminated.
(2) Depreciation Methods
Category Depreciationmethod Useful life Salvage value (%)
Annual
deprecation (%)
96Lu Thai Textile Co. Ltd. Interim Report 2026
Housing and Average method of
building useful life 5-30 0-10 20-3
Machinery Average method of
equipment useful life 10-18 0-10 10-5
Transportation Average method of
vehicle useful life 5 0-10 20-18
Electronic
equipment and Average method of
others useful life
50-1020-18
(3) Recognition Basis Pricing and Depreciation Method of Fixed Asset under Finance
Lease
See the Note V (22) for details:
(4) At the End of Each Year Review Is Carried out by the Company for the Service Life
Estimated Net Residual Value and Depreciation Method of Fixed Assets
If there is any difference between the expected service life and the original estimated service
life the service life of fixed assets will be adjusted; if there is any difference between the
expected net residual value and the original estimated net residual value the expected net
residual value will be adjusted
(5) Disposal of Fixed Assets
A fixed asset shall be derecognized when it is disposed of or it is expected that no economic
benefit can be generated by using or disposing of it. The amount of the disposal income of
sales transfer scrap or damage of the fixed asset after deducting its carrying value and related
taxes is included in the current profit and loss.
17. Construction in Progress
Construction in progress is measured at actual cost. Actual cost comprises construction costs
borrowing costs that are eligible for capitalization before the fixed assets being ready for their
intended us and other relevant costs.Construction in progress is transferred to fixed assets when the assets are ready for their
intended use.See the details of the method of provision for impairment assets of the construction in progress
to Notes V (22).
18. Engineering Materials
Engineering materials of the Company refer to various materials prepared for construction in
progress including engineering materials equipment not yet installed tools and instruments
prepared for production etc.The purchased engineering materials will be measured according to the cost. The received
engineering materials will be transferred to the construction in progress and the remaining
engineering materials after the completion of the project will be stored as inventory.
97Lu Thai Textile Co. Ltd. Interim Report 2026
Please refer to Note V (22) for the method of provision for impairment assets for engineering
materials.In the balance sheet the ending balance of engineering materials is listed in the “construction inprogress” item.
19. Borrowing Costs
(1) Confirmation Principle of Capitalized Borrowing Costs
The borrowing costs incurred by the Company if can directly belong to acquisition
construction or production of assets meeting capitalization conditions are capitalized and
included in relevant asset cost; other borrowing costs are confirmed as expense according to its
amount at the time of occurrence and included in the current profits and losses. Borrowing costs
are capitalized when they meet the following conditions:
a) Asset expenditures have been incurred. Asset expenditures include those incurred for the
acquisition construction or production of assets that meet the capitalization criteria through
cash payments transfer of non-cash assets or the incurrence of interest-bearing debts;
b) Borrowing costs have been incurred;
c) The acquisition construction or production activities necessary to bring the asset to the
condition for intended use or sale have begun.
(2) Capitalization Period for Borrowing Costs
When the Company acquires constructs or produces assets which meet capitalization
conditions and reach the intended usable or saleable status the borrowing costs stop
capitalization. The borrowing costs that occur after the assets meeting capitalization conditions
reach the intended usable or saleable status are recognized as expenses according to its amount
at the time of occurrence and are included in the current profits and losses.If the assets meeting capital conditions generate improper interruption in the course of
acquisition construction or production and the interruption time continuously exceeds three
months capitalization of borrowing costs suspends; the borrowing costs in the normal
interruption period are continually capitalized.
(3) Capitalization Rate of Borrowing Costs and Calculation Method of Capitalized Amount
The interest expenses of special borrowing actually occurring in the Current Period minus the
interest income of the unused borrowed capital obtained from depositing in bank or the gain on
temporary investment are capitalized; for common borrowing the weighted average of asset
expenditure of the part that the cumulative asset expenditure exceeds special borrowing is
multiplied by the capitalization rate of the occupied common borrowing to determine
capitalization amount. Capitalization rate is calculated and determined according to the
weighted average rate of common borrowing.In the period of capitalization the exchange difference of special borrowing in foreign
currency is fully capitalized; the exchange difference of special borrowing in foreign currency
is included in the current profits and losses.
98Lu Thai Textile Co. Ltd. Interim Report 2026
20. Intangible Assets
(1) Service Life and Its Determination Basis Estimation Amortization Method or Review
Procedures
The Company’s intangible assets include land use rights software use rights patents and
others.Intangible assets are initially measured at cost and their service life is analyzed and determined
when intangible assets are acquired. If the service life of intangible assets is limited the
intangible assets shall be amortized by the method that can reflect the expected realization
method of the economic benefits related to the assets within the expected service life since they
are available for use. The method of line shall be used for amortization if no expected
realization method can be determined reliably. Intangible assets with uncertain service life shall
not be amortized.The amortization method of intangible assets with limited service life is as follows:
Category Service life Amortizationmethod Note
Land use rights Stipulated in the landcertificate Method of line
Patent use right 10 years Method of line
Software use rights 1-3 years Method of line
Trademark right 10 years Method of line
At the end of each year the Company reviews the service life and amortization method of
intangible assets with limited service life. If the estimate is different from the previous one the
original estimate shall be adjusted and treated as per accounting estimate change.If it is estimated that an intangible assets can no longer bring future economic benefits to the
enterprise on the date of balance sheet this carrying value of the intangible asset shall be
transferred into the current profit and loss.The method of provision for impairment assets on intangible assets was stated in the Note V
(22).
21. Research and Development Expenditures
The Company’s R&D expenditure relates directly to R&D activities including R&D
personnel’s employee remuneration direct input expenses depreciation charges and long-term
deferred expenses design expenses equipment commissioning expenses amortization expenses
of intangible assets commissioned external research and development expenses and other
expenses etc. The wages of R&D personnel are allocated to R&D expenditure based on project
hours. R&D activities that share equipment production lines or sites with other production and
operational activities are allocated to R&D expenditure based on the proportion of hours or area
used.
99Lu Thai Textile Co. Ltd. Interim Report 2026
The expenditures for internal research and development projects of an enterprise shall be
classified into research expenditures and development expenditures.The research expenditures shall be recorded into the profit or loss for the Current Period.The development expenditures can be capitalized only when they satisfy the following
conditions simultaneously: a) It is feasible technically to finish intangible assets for use or sale;
b) It is intended to finish and use or sell the intangible assets; c) The usefulness of methods for
intangible assets to generate economic benefits shall be proved including being able to prove
that there is a potential market for the products manufactured by applying the intangible assets
or there is a potential market for the intangible assets itself or the intangible assets will be used
internally; d) It is able to finish the development of the intangible assets and able to use or sell
the intangible assets with the support of sufficient technologies financial resources and other
resources; e) The development expenditures of the intangible assets can be reliably measured.The development expenditures shall be recorded into profit or loss for the Current Period when
they don’t satisfy the following conditions.The research and development project of the Company will enter the development stage after
meeting the above conditions and the project is approved and initiated through technical
feasibility and economic feasibility study.The capitalized expenditure in the development stage is listed as development expenditure on
the balance sheet and it will be transferred to intangible assets from the date when the project
reaches the intended purpose.
22. Asset Impairment
For long term equity investment in subsidiaries associated enterprises and joint ventures
investment property which follow-up measurement is carried out by cost pattern fixed assets
construction in progress right-of-use assets intangible assets goodwill etc. (excluding
inventory deferred income tax assets financial assets) the impairment of assets shall be
determined according to the following methods:
On the date of the balance sheet determination shall be made to see whether there is any sign
of possible impairment of assets. If there is the Company will estimate its recoverable amount
and conduct impairment test. For goodwill intangible assets with uncertain service life and
intangible assets that have not reached the intended purpose due to business combination
impairment test shall be carried out every year regardless of whether there is any sign of
impairment.The recoverable amount is determined according to the net amount of the fair value of the asset
minus the disposal expenses and the present value of the expected future cash flow of the asset
the higher amount shall prevail. The Company estimates the recoverable amount on the basis of
a single asset. If it is difficult to estimate the recoverable amount of a single asset the
recoverable amount of the asset group shall be determined based on the asset group to which
the asset belongs. The asset group is determined on the basis of whether the main cash inflow
generated by the asset group is independent of the cash inflow of other assets or asset groups.When the recoverable amount of an asset or asset group is lower than its carrying value the
Company will write down its carrying value to the recoverable amount and the written down
amount will be included in the current profit and loss and the corresponding asset impairment
reserve will be accrued.
100Lu Thai Textile Co. Ltd. Interim Report 2026
Regarding the impairment test of goodwill the carrying value of goodwill formed by business
combination shall be apportioned to the relevant asset group in a reasonable way from the date
of purchase. If it is difficult to apportion to the relevant asset group it shall be apportioned to
the relevant combination of asset group. The relevant asset group or combination of asset
groups is the one that can benefit from the synergy effect of business combination and is the
one smaller than the reportable segment determined by the Company.In the impairment test if there is any sign of impairment in the asset group or combination of
asset groups related to goodwill first impairment test shall be carried out on the asset group or
combination of asset groups not containing goodwill to calculate the recoverable amount and
recognize the corresponding impairment loss. Then impairment test shall be carried out on the
asset group or combination of asset group containing goodwill to compare the carrying value
with the recoverable amount. If the recoverable amount is lower than the carrying value the
impairment loss of goodwill shall be recognized.Once the asset impairment loss is recognized it will not be reversed in the future accounting
period.
23. Long-term Deferred Expenses
The long-term deferred expenses incurred by the Company are valued at the actual cost and
amortized averagely according to the expected benefit period. For long-term deferred expenses
the amortized value that cannot benefit the future accounting period shall be included in the
current profit and loss.
24. Payroll
(1) Scope of Employee Remuneration
Payroll refers to the various forms of remuneration or compensation given by an enterprise for
services provided by employees or for the termination of employment relations. Payroll mainly
includes short-term salary welfare after departure termination benefits and other long-term
staff welfare. Benefits provided to employees’ spouses children dependents survivors of
deceased employees and other beneficiaries also belong to the payroll.Based on liquidity payroll is presented in the balance sheet under the items “payroll payable”
and “long-term payroll payable”.
(2) Short-term Salary
During the accounting period in which employees provide services the Company recognizes
the actual employee wages bonuses social insurance premiums such as medical insurance
premiums work-related injury insurance premiums and maternity insurance premiums and
housing provident funds paid to employees according to the prescribed standards and
proportions as liabilities and included them in the current profit and loss or related asset costs.
(3) Post-employment Benefits
The post-employment benefit scheme includes a defined withdrawal plan and a defined benefit
scheme. Among them the defined withdrawal plan refers to the post-employment benefit
scheme that the enterprise no longer assumes further payment obligations after the fixed fund
has paid a fixed fee; the defined benefit scheme refers to the post-employment benefit scheme
other than the defined benefit scheme.Set withdrawal plan
101Lu Thai Textile Co. Ltd. Interim Report 2026
The set withdrawal plan includes basic pension insurance and unemployment insurance.During the fiscal year in which employees provide services the amount of deposit payable
calculated according to the set withdrawal plan is recognized as a liability and included in the
current profit and loss or related asset costs.Defined benefit scheme
For defined benefit schemes actuarial valuation is performed by an independent actuary on the
balance sheet date of the year and the cost of providing benefits is determined using the
projected unit credit method. Employee compensation costs arising from the Company’s
defined benefit schemes comprise the following components:
a) Service cost including current service cost past service cost and gains or losses on
settlement. Current service cost refers to the increase in the present value of the defined benefit
scheme obligation resulting from employee service rendered in the current period. Past service
cost refers to the increase or decrease in the present value of the defined benefit scheme
obligation related to employee service in prior periods arising from amendments to the defined
benefit scheme.b) Net interest on the net defined benefit liability or asset comprising interest income on plan
assets interest expense on the defined benefit scheme obligation and interest arising from the
effect of any asset ceiling.c) Changes arising from the remeasurement of the net defined benefit liability or asset.Unless other accounting standards require or permit employee benefit costs to be included in
the cost of assets the Company recognizes items a) and b) above in profit or loss for the current
period. Item c) is recognized in other comprehensive income and will not be reclassified to
profit or loss in subsequent fiscal years. Upon termination of the original defined benefit
scheme the amount previously recognized in other comprehensive income is transferred in full
within equity to retained earnings.
(4) Demission Welfare
The Company relieves the labor relation with the employees before the due date of the labor
contacts or puts forward the advice of providing the compensation for urging the employees
volunteered to receive the downsizing and when the Company could not unilaterally withdraw
the demission welfare owning to the relieving plan of the labor relation or the downsizing
advice should confirm the liabilities of the employees’ salary from the demission welfare on
the earlier day between the cost confirmed by the Company and the cost related to the
reorganization of the payment of the termination benefits and includes which in the current
gains and losses.For internal early retirement plans implemented for employees economic compensation
provided before the formal retirement date constitutes demission welfare. From the date the
employee ceases to provide service until the normal retirement date the wages and social
insurance contributions payable to internally retired employees are recognized in full as a one-
time charge to profit or loss for the current period. Economic compensation payable after the
formal retirement date (such as regular pension retirement benefits) is accounted for as post-
employment benefits.
102Lu Thai Textile Co. Ltd. Interim Report 2026
(5) Other Long-term Benefits
Other long-term employee benefits provided by the Company to employees that meet the
conditions of defined contribution plans shall be handled in accordance with the above-
mentioned relevant provisions on defined contribution plans. Those in line with the defined
benefit plan shall be handled in accordance with the above-mentioned relevant provisions onthe defined benefit plan. However the part of “changes caused by remeasuring the netliabilities or net assets of the defined benefit plan” in the salary cost of relevant employees shall
be included in the current profit and loss or the relevant asset cost.
25. Provisions
The Company recognizes an obligation related to a contingency as a provision when all of the
following conditions are met:
(1) The obligation is a present obligation of the Company;
(2) It is probable that an outflow of economic benefits will be required to settle the obligation;
(3) The amount of the obligation can be reliably measured.
The provisions are initially measured in accordance with the optimal estimate of the necessary
expenditures for the fulfillment of the current obligation with factors such as risks uncertainty
and the time value of money related to contingencies taken into consideration comprehensively.Where the time value of money has a significant impact the best estimate is determined by
discounting the relevant future cash outflow. The Company re-checks the carrying value of the
provisions on the balance sheet date and adjusts the carrying value to reflect the current best
estimate.If all or part of the expenditure required to settle recognized provisions is expected to be
compensated by a third party or other parties the amount of compensation shall be recognized
separately as an asset only when it is substantially certain that it will be received. The
recognized amount of compensation shall not exceed the carrying value of the recognized
liabilities.
26. Share-based Payments and Equity Instruments
(1) Category of Share-Based Payment
The share-based payments of the Company are divided into equity-settled share payments and
cash-settled share payments.
(2) Method of Determining the Fair Value of Equity Instruments
The Company shall determine the fair value of equity instruments such as options granted in
active markets according to the quotations in active markets. For granted equity instruments
such as options without active markets the fair value is determined by option pricing model.The following factors shall be considered for the selected option pricing model: A. Exercise
price of the option; B. Expiration date of the option; C. Current price of the object shares; D.Expected fluctuation rate of stock price; E. Estimated dividends of shares; F. Risk-free interest
rate within the option term.
(3) Ground for Recognizing the Optimal Estimation of Feasible Right Equity Instruments
On each balance sheet date during the waiting period the Company shall make the optimal
estimate based on subsequent information such as the latest change in the number of employees
103Lu Thai Textile Co. Ltd. Interim Report 2026
with feasible rights and revise the number of equity instruments for the estimated feasible
rights. On the feasible right date the final estimated number of feasible right equity instruments
shall be the same as the actual number of feasible rights.
(4) Relevant Accounting Treatment for Implementing Modifying and Terminating Share-based
Payment Plan
Equity-settled share-based payments shall be measured at the fair value of the equity
instruments granted to employees. Where the right is exercised immediately after the grant
relevant costs or expenses shall be included in accordance with the fair value of the equity
instruments on the grant date to accordingly increase the capital reserve. Where the right is
exercised upon the completion of the services during the waiting period or the achievement of
the specified result conditions the services obtained in the current period shall be included in
the relevant costs or expenses and the capital reserve according to the fair value of the equity
instruments on the grant date based on the optimal estimate of the number of feasible right
equity instruments on each balance sheet date during the waiting period. The recognized related
costs or expenses and total owner’s equity after the feasible right date shall not be adjusted any
more.The cash-settled share-based payments shall be measured according to the fair value of
liabilities calculated and determined on the basis of shares or other equity instruments which
are assumed by the Company. Where the right is exercised immediately after the grant the fair
value of the liabilities assumed by the Company shall be included in the relevant costs or
expenses on the grant date so as to accordingly increase the liabilities. For the cash-settled
share-based payments for which the right is exercised upon the completion of the services
during the waiting period or the achievement of the specified result conditions the services
obtained in the current period shall be included in costs or expenses and corresponding
liabilities according to the fair value amount of liabilities assumed by the Company based on
the optimal estimate of feasible status on each balance sheet date during the waiting period. On
each balance sheet date and settlement date before the relevant liabilities are settled the fair
value of the liabilities shall be re-measured and the changes shall be included in the current
profit and loss.When the Company modifies a share-based payment plan if the modification increases the fair
value of the equity instruments granted the increase in the services acquired shall be
recognized accordingly according to the increase in the fair value of the equity instruments; if
the modification increases the number of equity instruments granted the fair value of the
increased equity instruments shall be recognized accordingly as the increase in the services
acquired. The increase in the fair value of the equity instruments refers to the difference
between the fair values of the equity instruments before and after the modification on the
modification date. If the modification reduces the total fair value of the share-based payment or
any other method not conducive to the employees is adopted to modify the terms and conditions
of the share-based payment plan the accounting treatment of the services acquired would
continue as if such change had never occurred unless the Company cancels some or all of the
granted equity instruments.During the waiting period if the granted equity instrument is cancelled (Excluding those
cancelled due to failure to meet non-market-based vesting conditions such as service
conditions or non-market-based performance conditions.) the Company shall treat the
cancelled equity instrument as an accelerated exercise immediately include the left amount to
be recognized during the waiting period in the current profit and loss and recognize the capital
reserve at the same time. Where the employee or other party can choose to meet the non-
104Lu Thai Textile Co. Ltd. Interim Report 2026
feasible right condition but fails during the waiting period it shall be treated as the cancellation
of the granted equity instrument.
(5) Restricted Shares
In the equity incentive plan the Company grants restricted stocks to the incentive personnel
who firstly subscribe the stocks. If the unlocking conditions specified in the equity incentive
plan are not met the Company will repurchase the stocks at the previously agreed price. Where
the restricted stocks issued to the employees has gone through capital increase procedures such
as registration in accordance with relevant provisions the Company shall on the grant date
recognize the share capital and the capital reserve (capital stock premium) in conformity with
the subscription payment received from the employees. Meanwhile it shall recognize the
treasury stocks and other payables with respect to repurchase obligations.
27. Revenue
Accounting policies adopted for the recognition and measurement of revenue disclosed by type
of business
(1) General Principle
The Company recognizes revenue when it has fulfilled its contract performance obligation in a
contract namely when the customer obtains the control over the related commodity or service
If a contract contains two or more performance obligations the Company allocates transaction
price to single performance obligations on the contract commencement date according to the
relative ratio of separate price of goods or services committed by single performance
obligation and income is measured according to the transaction price allocated to single
performance obligation.When meeting one of the following conditions the Company belongs to performance of
contract performing obligations in a period or otherwise the Company belongs to performance
of contract performing obligations at a point of time:
a) While the Company is performing the contract the customer acquires and consumes the
economic benefit arising from performance by the Company.b) The customer can control the goods in construction in the course of performance by the
Company.c) The goods outputted in the course of performance by the Company have irreplaceable
purpose and the Company has the right to collection of money for the completed performance
part cumulative up to now in the whole term of contract.For the performance obligation performed in a period the Company confirms income according
to the performance progress in such period. When the performance progress cannot be
reasonably determined if the cost that the Company has incurred is expected to be
compensated income is confirmed according to the cost amount that has occurred until the
performance progress can be reasonably determined.For the performance obligation performed at a point of time income is confirmed at the point
of time when the customer acquires the control right to relevant goods or services. When it
judges whether the customer has acquired the control right to the goods or services the
Company will consider the following indications:
105Lu Thai Textile Co. Ltd. Interim Report 2026
a) The Company enjoys the current collection right to the goods or services i.e. the customer
undertakes current payment obligation to the goods.b) The Company has transferred the legal ownership of the goods to the customer that is the
customer has owned the legal ownership of the goods.c) The Company has transferred the kind of the goods to the customer namely the customer
has possessed the good in kind.d) The Company has transferred the major risks and remuneration on the ownership of the
goods i.e. the customer has acquired the major risks and remuneration on the ownership of the
goods.e) The customer has accepted the goods or services.f) Other indications showing that the customer has acquired the control right to the goods.
2) Specific Methods
The specific income confirming methods of the Company are following:
For income of domestic products after the Company delivers products to the purchaser
according to the provisions of the contract and the purchaser confirms receipt the purchaser
acquires the control right of products and the Company confirms income.For income of exportable products after the Company completes customs declaration of
products departure and obtains bill of lading according to the provisions of the contract the
purchaser acquires the control right of products and the Company confirms income.Differences in methods for the recognition and measurement of revenue caused by different
business models for the same type of business
Not applicable.
28. Contract Costs
Contract cost includes the incremental cost incurred for acquiring contract and contract
performance cost.The incremental cost incurred for acquiring contract refers to the cost that will not occur if the
Company has not acquired contract (for example sales commission). If the cost is expected to
be recovered the Company regards it as contract acquiring cost and confirms it as an asset. The
expenses incurred by the Company for acquiring contract other than the incremental cost
expected to be recovered are included in the current profits and losses at the time of
occurrence.If the cost incurred for performance of contract does not belong to inventory and other scope of
other corporate accounting standards and meets the following conditions the Company will
regard it as contract performance cost and confirm it as an asset:
a) The cost is directly related to a copy of contract currently acquired or expected to be
acquired including direct labor direct materials manufacture expenses (or similar expenses)
cost determined to be undertaken by the customer and other cost incurred due to the contract;
b) The cost increases the resources of the Company that will be used for performance of
contract obligations in the future;
c) The cost is expected to be recovered.
106Lu Thai Textile Co. Ltd. Interim Report 2026
The assets confirmed by the contract acquiring cost and the assets confirmed by the contract
performance cost (“assets related to contract cost”) are amortized according to the same basis as
confirmation of goods or service income related to the asset and are included in the current
profits and losses. If the amortization term does not exceed one year it will be included in the
current profits and losses at the time of occurrence.When the carrying value of an asset related to contract cost is higher than the difference
between the following two items the Company accrues provision for impairment to the
excessive part and confirms it as asset impairment loss:
a) The remaining consideration that the Company expects to acquire from transfer of goods or
services related to the asset;
b) The cost that will occur for transfer of such related goods or services as estimated.
29. Government Grants
Government grants are recognized when they meet the conditions attached to government
grants and when they can be received.Government grants for monetary assets shall be measured according to the amount received or
receivable. Government grants for non-monetary assets shall be measured by fair value; if the
fair value cannot be obtained reliably they are measured at a nominal amount of RMB1.Asset related government grants refer to the government grants obtained by the Company for
acquisition and construction or other forms of long-term assets. In addition they are
government grants related to income.Regarding the government grants that the government document does not specify the object of
subsidy and can form long-term assets the part of government subsidy corresponding to the
asset value shall be regarded as the asset-related government subsidy and the rest shall be
regarded as income-related government subsidy. If it is difficult to distinguish the government
subsidy shall be regarded as the income-related government subsidy.The government grants related to assets shall be recognized as the deferred income which shall
be included in the profit and loss in installment in a reasonable and systematic way within the
service life of the relevant assets. Income-related government grants which are used to
compensate the relevant costs or losses incurred shall be included in the current profit and loss.Those used to compensate the relevant costs or losses in the later period shall be included in the
deferred income and shall be included in the current profit and loss during the recognition
period of the relevant costs or losses. The government grants measured according to the
nominal amount shall be directly included in the current profit and loss. The same method is
adopted for the same or similar government grants businesses of the Company.Government grants related to daily activities shall be included in other incomes according to the
essence of business transactions. Government grants irrelevant to daily activities are included in
non-operating income.When the recognized government grants need to be returned and are used to offset the carrying
value of related assets when initially recognized the carrying amount of the assets shall be
adjusted; the book balance of relevant deferred income shall be offset if there is a balance of
relevant deferred income and the excess part shall be included in the current profit and loss.Otherwise it shall be directly included in the current profit and loss.
107Lu Thai Textile Co. Ltd. Interim Report 2026
Regarding the interest subsidy of the policy preferential loan obtained if the Ministry of
Finance allocates the interest subsidy to the loan bank the actual received loan amount shall be
taken as the entry value of the loan and the borrowing costs shall be calculated according to the
loan principal and the policy preferential interest rate. If the Ministry of Finance allocates the
interest subsidy directly to the Company the interest subsidy will offset the borrowing costs.
30. Deferred Income Tax Assets and Deferred Income Tax Liabilities
Income tax includes current income tax and deferred income tax. All shall be included in the
current profit and loss as income tax expense except the adjustment goodwill arising from
business combination or the deferred income tax related to the transactions or events directly
included in the owner’s equity is included in the owner’s equity.Pursuant to the temporary difference between the carrying value of assets and liabilities on the
date of balance sheet and the tax basis the Company recognizes the deferred income tax by
balance sheet liability method.For all taxable temporary differences related deferred income tax liabilities are recognized
unless the taxable temporary differences are generated in the following transactions:
(1) The initial recognition of goodwill or the initial recognition of assets or liabilities arising
from transactions with the following characteristics: The transaction is not a business
combination and does not affect the accounting profit or income tax payable when it occurs
(Excluding transactions that initially recognized assets and liabilities resulting in equal taxable
temporary differences and deductible temporary differences.);
(2) Regarding the taxable temporary difference related to the investment of subsidiaries joint
ventures and associated enterprises the time of reversal of the temporary difference can be
controlled and the temporary difference is unlikely to be reversed in the foreseeable future.For deductible temporary differences deductible losses and tax credits that can be carried
forward in subsequent years the Company is likely to obtain the future income tax payable as
the limit to offset the deductible temporary differences deductible losses and tax credits in
which way to recognize the deferred income tax assets arising from the deductible temporary
differences deductible losses and tax credits unless the deductible temporary differences are
generated in the following transactions:
(1) The transaction is not a business combination and does not affect the accounting profit nor
income tax payable when it occurs (Excluding transactions that initially recognized assets and
liabilities resulting in equal taxable temporary differences and deductible temporary
differences.);
(2) The corresponding deferred income tax assets shall be recognized if the deductible
temporary differences related to the investment of subsidiaries joint ventures and associated
enterprises meet the following conditions simultaneously: The temporary differences are likely
to be reversed in the foreseeable future and the income tax payable used to deduct the
deductible temporary differences is likely to be obtained in the future.On the balance sheet date the deferred income tax assets and deferred income tax liabilities
shall be measured by the Company on the basis of the applicable tax rate during the period
when the assets are expected to be recovered or the liabilities are expected to be paid off and
the income tax impact on the expected recovery of assets on the date of the balance sheet or on
the method to pay off the liabilities shall be reflected.
108Lu Thai Textile Co. Ltd. Interim Report 2026
The carrying value of deferred income tax assets shall be reviewed at each balance sheet date. If
it is unlikely to obtain sufficient income tax payable to offset against the benefit of the deferred
income tax asset the carrying value of the deferred income tax assets shall be written down.Any such write-down should be subsequently reversed where it becomes probable that
sufficient income tax payable will be available.As at the balance sheet date deferred income tax assets and deferred income tax liabilities are
presented as a net amount when the following conditions are simultaneously met:
(1) The tax entity within the Company has a legally enforceable right to set off current income
tax assets against current income tax liabilities;
(2) The deferred income tax assets and deferred income tax liabilities are related to income
taxes levied by the same taxation authority on the same taxable entity within the Company.
31. Lease
(1) Identification of Lease
On the start date of the contract the Company assessed as the lessee or the lessor whether the
customers in the contract are entitled to obtain almost all the economic benefits arising from the
use of the identified assets during the use period and have the right to dominate the use of the
identified assets during the use period. If a party to the contract transferred the right allowing
the control over the use of one or more assets that have been identified within a certain period
in exchange for a consideration such contract is determined by the Company to be a lease or
includes a lease.
(2) The Company as the Lessee
On the commencement date of the lease term the Company recognizes the right-of-use assets
and lease liabilities for all leases except for short-term leases and low-value asset leases with
simplified treatment.For accounting policies for the right-of-use assets see Note V (32).Lease liabilities are initially measured in line with the lease payments not yet paid on the
commencement date of the lease term using the present value calculated by the interest rate
implicit in lease. If the interest rate implicit in lease cannot be determined the incremental
borrowing rate shall be used as the discount rate. Lease payments include: Fixed payment and
substantial fixed payment and the relevant amount after deducting the lease incentive if any;
variable lease payments depending on index or ratio; exercise price of the purchased option
provided that the lessee reasonably determines that the option will be exercised; the amount to
be paid for the exercise of the lease termination options provided that the lease term reflects
that the lessee will exercise the options to terminate the lease; and estimated payments due to
the guaranteed residual value provided by the lessee. Subsequently it calculates the interest
expenses of the lease liabilities during each period of the lease term at a fixed periodic interest
rate and includes them in current profit and loss. Variable lease payments that are not covered
in the measurement of the lease liabilities are included in current profit or loss when actually
incurred.Short-term lease
A short-term lease refers to a lease for a period not exceeding 12 months on the commencement
date of the lease except for leases with a purchase option.
109Lu Thai Textile Co. Ltd. Interim Report 2026
The Company includes the short-term lease payment in the cost of relevant assets or the current
profit and loss in each period of the lease term by the method of line.Low-value asset lease
A low-value asset lease refers to a lease where the value of a single leased asset is less than
RMB40000 when the asset is new.The Company includes the lease payment of the low-value asset lease in the cost of relevant
assets or the current profit and loss in each period of the lease term by the method of line.For low-value asset lease it chooses to adopt the aforesaid simplified treatment method in line
with the specific status of each lease.Lease change
If a lease changes and meets the following conditions simultaneously the lease change shall be
regarded as a separate lease for accounting treatment: a) The lease change expands its lease
scope by increasing one or multiple use rights of lease assets; and b) The increased
consideration is equivalent to the amount of the separate price for the expanded part of the
lease which is adjusted according to the contract.Where the lease change is not regarded as a separate lease for accounting treatment on the
effective date of the lease change by the Company the consideration of the contract is
amortized again upon change the lease term is redetermined and the lease liabilities are
remeasured according to the present value that is calculated by the lease payments and the
revised discount rate upon change.The Company shall correspondingly reduce the carrying value of the right-of-use assets and
include the profit or loss of the lease terminated in part or whole in the current profit or loss if
the lease change narrows the scope of lease or shortens the lease term.The Company shall correspondingly adjust the carrying value of the right-of-use assets if other
lease changes result in the re-calculation of the lease liability.
(3) The Company as the Lessor
When the Company is a lessor it shall recognize leases that substantially transfer all risks and
remuneration related to the ownership of assets as finance leases and leases other than finance
leases as operating leases.Finance lease
In a finance lease the Company recognizes the net lease investment as the book value of
finance lease receivables on the commencement date of the lease term. The net lease investment
is the sum of the unguaranteed residual value and the present value of lease receivables not yet
received on the commencement date of the lease term at the interest rate implicit in lease. The
Company calculates and confirms the interest income at a fixed periodic interest rate in each
period in the lease term. Variable lease payments obtained that are not included in the net lease
investment for measurement where the Company is the lessor are included in the profit or loss
of the Current Period when actually incurred.Accounting treatment shall be conducted for the derecognition and impairment of finance lease
receivables in accordance with the provisions of the Accounting Standards for Business
Enterprises No.22—Recognition and Measurement of Financial Instruments and the Accounting
Standards for Business Enterprises No.23—Transfer of Financial Assets.
110Lu Thai Textile Co. Ltd. Interim Report 2026
Operating lease
The Company shall recognize the current profit and loss of the rent of the operating lease in
each period of the lease term by the method of line. The initial direct costs related to the
operating lease shall be capitalized amortized within the lease term on the same basis as the
recognition of rental earning and included in profit or loss for the Current Period. The received
variable lease payments related to the operating lease that are not included in the lease
payments receivable are included in profit or loss for the Current Period when they are actually
incurred.Lease change
Where an operating lease changes the accounting treatment is conducted for it which is
regarded as a new lease from the effective date of the change and receivables in advance or
lease receivables related to lease before change are deemed as the receivables in the new lease.Where a finance lease changes and meets the following conditions simultaneously the change
is regarded as a separate lease by the Company for accounting treatment: a) The change
expands its lease cope by increasing one or multiple use rights of lease assets; and b) The
increased consideration is equivalent to the amount of the separate price for the expanded part
of the lease which is adjusted according to the contract.Where a finance lease changes and is not regarded as a separate lease for accounting treatment
the Company treats the changed lease under the following circumstances: a) If the change
comes into force on the commencement date of the lease term the lease will be clarified as an
operating lease while it will be regarded as a new lease for accounting treatment by the
Company on the effective date of the lease change and the net lease investment before the
effective date of lease change will be regarded as the carrying value of lease assets; and b) If
the change comes into force on the commencement date of the lease term the lease will be
clarified as a finance lease the Company will carry out accounting treatment in accordance
with the provisions on modification or renegotiation of a contract of the Accounting Standard
for Business Enterprises No. 22—Recognition and Measurement of Financial Instruments.
32. Right-of-Use Assets
(1) Recognition Conditions for Right-of-Use Assets
The term “right-of-use assets” refers to the right of the lessee to use the leased assets during the
lease term.At the start date of the lease term the Company initially measures the right-of-use assets at
cost. The cost includes: the initial measurement amount of lease liabilities; the lease payments
paid on or prior to the inception of the lease (less the related amount of lease incentives already
enjoyed if any); the initial direct cost incurred by the lessee; and the anticipated cost of
dismantling and removing the leasehold property restoring the site where the leasehold
property is located or bringing the leasehold property back to the state agreed upon in the lease
terms. As the lessee the Company shall recognize and measure the cost of demolition and
restoration in accordance with the Accounting Standards for Business Enterprises No.13 -
Contingencies. Subsequent adjustments are made for any re-measurement of the lease
liabilities.
(2) Depreciation Method of Right-of-Use Assets
The Company uses the method of line for depreciation. Where it can be reasonably certain that
the Company the lessee can obtain ownership of the leased assets at the expiry of the lease
111Lu Thai Textile Co. Ltd. Interim Report 2026
term the leased assets are depreciated over the residual service life. Where it cannot be
reasonably certain that the Company can obtain ownership of the leased assets at the end of the
lease term the leased assets are depreciated at the shorter of the lease term and the residual
service life of the leased assets.
(3) Impairment test method and impairment provision method of right-of-use assets See Note V
(22).
33. Safety Production Costs and Costs for Sustaining Simple Reproduction
In accordance with the regulations of the Notice on Issuing the Management Measures for the
Provision and Use of Enterprise Production Safety Costs (C.Z. [2022] No. 136) issued by the
Ministry of Finance and the Ministry of Emergency and based on the above actual annual
operating revenue of power generation and supply enterprises the Company adopts the method
where the deduction rate declines when the operating revenue increases to deduct safety
production costs according to the following standards:
Annual actual sales revenue standard Proportion of safety production cost (%)
Not exceeding RMB10 million 3
RMB10 million to RMB100 million 1.5
RMB100 million to RMB1 billion 1
RMB1 billion to RMB5 billion 0.8
Safety production costs and costs for sustaining simple reproduction are included in the cost of
relevant production or current loss and profit when deducted and are simultaneously included
in the “specific reserve”.When using the deducted safety production costs and the costs for sustaining simple
reproduction in conformity with regulations the outgoing expenditures shall directly be used to
offset the specific reserve; the costs becoming fixed assets shall be aggregated under
“construction in progress” and then be recognized as fixed assets when the safety project is
completed and reaches the intended available status; The aforesaid fixed assets will not be
depreciated as accrued in the future period. The aforesaid fixed assets will not be depreciated as
accrued in the future period.
34. Repurchase of Shares
Before the shares repurchased by the Company are cancelled or transferred they are managed
as treasury shares and all expenditures for the repurchase of shares are transferred to the cost of
treasury shares. Consideration and transaction costs paid in share repurchase reduce
shareholders’ equity. When buying back transferring or cancelling shares in the Company no
profits or losses are recognized.The transfer of inventory shares shall be credited to the capital reserve on the basis of the
difference between the amount actually received and the carrying amount of the treasury stock.Write off surplus reserves and retained earnings if capital reserves are insufficient to offset.Write-off of treasury stocks can reduce share capitals in par with par value and number of
write-out stocks. The capital reserve is offset based on the difference between carrying amount
112Lu Thai Textile Co. Ltd. Interim Report 2026
and par value of cancelled treasury stocks. Write off surplus reserves and retained earnings if
capital reserves are insufficient to offset.
35. Material Accounting Judgments and Estimates
Important accounting estimates and critical assumptions that have a significant risk of causing a
material adjustment to the carrying value of assets and liabilities within the next fiscal year are
listed as follows:
Classification of financial assets
The significant judgments involved when the Company determines the classification of
financial assets include analysis of business models and contractual cash flow characteristics.The Company evaluates the important accounting estimates and key assumptions adopted on an
ongoing basis based on historical experience and other factors including reasonable
expectations of future events.The Company determines the business model for managing financial assets at the level of the
financial asset portfolio taking into account factors such as the approach of evaluating and
reporting the performance of financial assets to key management personnel the risks affecting
the performance of financial assets and the manner in which they are managed and way in
which the relevant business management personnel are compensated.When the Company evaluates whether the contractual cash flows of financial assets are
consistent with the basic lending arrangements it makes the following main judgments:
whether the time distribution or amount of the principal may change during the duration due to
early repayment; whether the interest is only Includes time value of money credit risk other
fundamental lending risks and consideration against costs and profits. For example whether the
amount of early repayment reflects only the outstanding principal and interest based on the
outstanding principal as well as reasonable compensation paid for early termination of the
contract.Measurement of expected credit losses of accounts receivable
The Company calculates the expected credit loss of accounts receivable using the exposure to
default risk of accounts receivable and the expected credit loss ratio and determines the
expected credit loss ratio based on the probability of default and the default loss ratio. When
determining the expected credit loss ratio the Company uses data such as internal historical
credit loss experience and adjusts historical data to take into account current conditions and
forward-looking information. When considering forward-looking information the Company
uses indicators such as the risk of economic downturn and changes in the external market
environment technological environment and customer profile. The Company regularly
monitors and reviews the assumptions related to the calculation of expected credit losses.Goodwill impairment
The Company assesses at least annually whether goodwill has been impaired. This requires
estimating the use value of the asset group to which goodwill has been assigned. When
estimating the use value the Company shall estimate the future cash flows from the asset group
and select the appropriate discount rate to calculate the present value of future cash flows at the
same time.Deferred income tax assets
113Lu Thai Textile Co. Ltd. Interim Report 2026
To the extent that it is probable that sufficient taxable profit will be available to offset the
losses the Company recognizes deferred income tax assets for all unused tax losses. This
requires the Company’s management to use many judgments to estimate the timing and amount
of future taxable profits taking into account tax planning strategies so as to determine the
amount of deferred income tax assets to be recognized.Determination of fair value of unlisted equity investment
The fair value of unlisted equity investment is the expected future cash flows discounted at the
current discount rate for items with similar terms and risk characteristics. Such valuation
requires the Company to estimate expected future cash flows and discount rates and is therefore
subject to uncertainty. Under limited circumstances if the information used to determine fair
value is insufficient or if the range of possible estimates of fair value is wide and the cost
represents the best estimate of fair value within that range the cost may represent its
appropriate estimate of fair value within that range of distribution.
36. Changes in Significant Accounting Policies and Estimates
(1) Significant Changes in Accounting Policies
□ Applicable □ Not applicable
(2) Significant Changes in Accounting Estimates
□ Applicable □ Not applicable
(3) Adjustments to Financial Statement Items at the Beginning of the Year of the First
Implementation of the New Accounting Standards Implemented since 2026
□ Applicable □ Not applicable
VI Taxation
1. Main Taxes and Tax Rate
Category of
taxes Tax basis Tax rate
Taxable value-added amount (the taxable
amount is calculated by multiplying the taxable
VAT sales by the applicable tax rate and deducting 13% 9% 6% 5% 3% 0
the input tax allowed to be deducted in the
Current Period)
Urban
maintenance
and Turnover tax actually paid 7% 5%
construction
tax
Enterprise
income tax Income tax payable 0 11% 15% 16.5% 20% 25%
Notes of the disclosure situation of the taxpaying bodies with different enterprises income tax
rate
114Lu Thai Textile Co. Ltd. Interim Report 2026
Taxpayer Income tax rate
The Company 15%
LuFeng Company 25%
Lulian New Materials 15%
Lu Thai Hong Kong 16.50%
Luqun Textile 25%
Xinsheng Thermal Power 25%
Shanghai Luthai 20%
Lujia Import & Export 20%
Zhishu Consulting 20%
Lu Thai Vocational Training School 0%
Banyang Villa 20%
Huilin International 15%
VACL 11%
Tianyi Apparel 0%
2. Tax Preference
In accordance with the Notice for Announcing the First Batch of Hi-tech Enterprise
Identification List of Shandong Province in 2023 (L.K.Z. [2024] No. 4) the Company was
identified as a hi-tech enterprise and the certificate issuing date was November 29 2023.In
accordance with the Notice for Announcing Hi-tech Enterprise List of Shandong Province in
2025 the majority-owned subsidiary Lulian New Materials was identified as a hi-tech
enterprise and the certificate issuing date was December 8 2025. Therefore in accordance
with Article 28 of the Enterprise Income Tax Law of the People’s Republic of China and the
Announcement of the State Administration of Taxation on Issues Concerning the
Implementation of Preferential Income Tax Policies for High-tech Enterprises (Announcement
No. 24 [2017] of the State Administration of Taxation) the applicable enterprise income tax
rate shall be 15%.The wholly-owned subsidiaries including Shanghai Luthai Zhishu Consulting Banyang Villa
and Lujia IMP. & EXP. have been recognized as small low-profit enterprises. According to the
Announcement of the Ministry of Finance and the State Taxation Administration on Further
Implementing the Preferential Income Tax Policies for Micro and Small Enterprises
(Announcement No. 13 [2022] of the Ministry of Finance and the State Taxation
115Lu Thai Textile Co. Ltd. Interim Report 2026
Administration) the income tax payable of small low-profit enterprises shall be calculated at a
reduced rate of 25% and enterprise income tax shall be levied at a tax rate of 20%.The wholly-owned subsidiary Lu Thai Occupational Training School has been recognized as a
non-profit making organization exempt from tax between 2026 and 2030. According to Article
26 Item 4 of the Enterprise Income Tax Law of the People’s Republic of China the policy
whereby eligible non-profit making organizations are exempt from enterprise income tax shall
apply to the foregoing subsidiary.Lu Thai (HK) Textile Co. Ltd. (hereinafter refers as Lu Thai (HK) Textile) the wholly-owned
subsidiary of the Company was incorporated in Hong Kong SAR whose profit tax shall be
paid at tax rate of 16.5%.The wholly own subsidiary VACL according to the Burma’s Special Economic Zone Law
issued by Pyidaungsu Hluttaw VACL enjoys tax preference on enterprise income tax of 7 (7
years tax holiday) + 5 (5 years tax revenues drop by half) + 5 (re-invest the profits within 1 year
and continues to enjoy the half tax revenues 5 years afterwards). After grace period enterprise
income tax rate was of 22%. Year 2026 is the fourth year of tax halving period with the
enterprise income tax rate at 11%.The wholly-owned subsidiary Tianyi Apparel enjoys a five-year enterprise income tax
preference starting from the operating year in accordance with the Myanmar Investment Law
issued by the Myanmar Parliament. After grace period enterprise income tax rate was of 22%.
2026 is the second year of the tax exemption period.
The wholly-owned subsidiary Huilin International which was registered in the Hainan Free
Trade Port and operates in the encouraged industry shall pay enterprise income tax at a reduced
tax rate of 15% between January 1 2020 and December 31 2027 according to the
Announcement of the Ministry of Finance and the State Taxation Administration on the
Preferential Income Tax Policies for Enterprises Registered in the Hainan Free Trade Port
(C.SH. [2020] No. 31) and the Notice of the Ministry of Finance and the State Taxation
Administration on Continuing to Implement the Preferential Income Tax Policies for
Enterprises Registered in the Hainan Free Trade Port (C.SH. [2025] Document No. 3).VII Notes to Main Items of Consolidated Financial Statements
1. Monetary Capitals
Unit: RMB
Item Ending balance Beginning balance
Cash on hand 6895822.24 5336336.72
Bank deposits 1608117743.56 2338764463.79
Other monetary capital 8036910.44 52750659.21
Total 1623050476.24 2396851459.72
Of which: Total amount
deposited overseas 300226944.24 309624659.59
116Lu Thai Textile Co. Ltd. Interim Report 2026
Other notes:
(1) As of June 30 2026 the restricted monetary capital amounted to RMB8036867.45.
(2) The interest receivable in bank deposits was RMB20511058.34.
2. Held-for-trading Financial Assets
Unit: RMB
Item Ending balance Beginning balance
Financial assets at fair value through profit or
loss 691734186.83 1094067591.31
Of which:
Investment in debt instruments 270724086.35 684327576.29
Equity instrument investment 419219913.09 409094411.86
Derivative financial assets 1790187.39 645603.16
Total 691734186.83 1094067591.31
3. Notes Receivable
(1) Notes Receivable Listed by Category
Unit: RMB
Item Ending balance Beginning balance
Bank acceptance bills 39089583.83 34764092.88
Trade acceptance notes 6939778.82 2736574.68
Total 46029362.65 37500667.56
(2) Disclosure by Withdrawal Methods for Bad Debts
Unit: RMB
Ending balance Beginning balance
Category Carrying amount Bad debt provision Carrying amount Bad debt provision
Carrying Carrying
value value
Amount Percentage (%) Amount Withdrawalproportion Amount
Percentage Withdrawal
(%) Amount proportion
Notes
receivable of
bad debt 46394614.17 100.00% 365251.52 0.79% 46029362.65 37644697.81 100.00% 144030.25 0.38% 37500667.56
provision
withdrawn by
117Lu Thai Textile Co. Ltd. Interim Report 2026
groups
Of which:
Commercial
acceptance bills 7305030.34 15.75% 365251.52 5.00% 6939778.82 2880604.93 7.65% 144030.25 5.00% 2736574.68
Bank
acceptance bills
with low credit 39089583.83 84.25% 39089583.83 34764092.88 92.35% 34764092.88
ratings
Total 46394614.17 100.00% 365251.52 0.79% 46029362.65 37644697.81 100.00% 144030.25 0.38% 37500667.56
If adopting the general mode of expected credit loss to withdraw bad debt provision of notes
receivable:
□ Applicable □ Not applicable
(3) Bad Debt Provision Withdrawn Reversed or Recovered in the Current Period
Withdrawal of bad debt provision:
Unit: RMB
Changes in the Current Period
Category Beginning Endingbalance Reversed or balanceWithdrawal recovered Write-offs Other
Commercial
acceptance 144030.25 221221.27 365251.52
bills
Total 144030.25 221221.27 365251.52
Of which significant amount of recovered or transferred-back bad debt provision for the
Current Period:
□ Applicable □ Not applicable
(4) Notes Receivable Which Had Endorsed by the Company or Had Discounted and Had
Not Due on the Balance Sheet Date at the Period-End
Unit: RMB
Item Amount of recognition Amount of not terminatedtermination at the period-end recognition at the period-end
Bank acceptance bills 35370093.64
Total 35370093.64
118Lu Thai Textile Co. Ltd. Interim Report 2026
4. Accounts Receivable
(1) Disclosure by Aging
Unit: RMB
Aging Ending carrying amount Beginning carrying amount
Within one year (including one
year) 808060703.36 920652598.73
One to two years 71065797.34 49370421.45
Two to three years 1714034.97 1304300.21
More than three years 861143.40 878541.40
Three to four years 644492.40 736346.40
Four to five years 123074.00 5055.00
Over five years 93577.00 137140.00
Total 881701679.07 972205861.79
119Lu Thai Textile Co. Ltd. Interim Report 2026
(2) Disclosure by Withdrawal Methods for Bad Debts
Unit: RMB
Ending balance Beginning balance
Category Carrying amount Bad debt provision Carrying amount Bad debt provision
Carrying value Carrying value
Amount Percentage Amount Withdrawal Amount Percentage Amount Withdrawal(%) proportion (%) proportion
Accounts receivable
withdrawal of bad
debt provision 38189403.30 4.33% 20723986.86 54.27% 17465416.44 8485612.48 0.87% 6719047.69 79.18% 1766564.79
separately accrued
Accounts receivable
withdrawal of bad
debt provision of by 843512275.77 95.67% 81630834.44 9.68% 761881441.33 963720249.31 99.13% 75743599.48 7.86% 887976649.83
group
Of which:
Group 1: Undue
accounts (L/C) 146023781.96 16.56% 0.00% 146023781.96 188652027.41 19.41% 188652027.41
Group 2: Undue
accounts (excluding 457556058.16 51.89% 20590022.69 4.50% 436966035.47 576222816.54 59.27% 25930026.64 4.50% 550292789.90
L/C)
Group 3: Overdue
amounts 239932435.65 27.21% 61040811.75 25.44% 178891623.90 198845405.36 20.45% 49813572.84 25.05% 149031832.52
Total 881701679.07 100.00% 102354821.30 11.61% 779346857.77 972205861.79 100.00% 82462647.17 8.48% 889743214.62
The category name of bad debt provision separately accrued: June 2026
120Lu Thai Textile Co. Ltd. Interim Report 2026
Unit: RMB
Beginning balance Ending balance
Name
Carrying amount Bad debt provision Carrying amount Bad debt provision Withdrawalproportion Reason for withdraw
Customer 1 4094029.81 2327465.02 2042593.52 2042593.52 100.00% Customer in financial difficulty
Customer 2 2464080.59 2464080.59 2620410.21 2620410.21 100.00% Customer in financial difficulty
Customer 3 1600187.96 1600187.96 1443782.86 1443782.86 100.00% Customer in financial difficulty
Zhuhai Suichang Technology Co.Ltd. 327314.12 327314.12 327314.12 327314.12 100.00% Customer in financial difficulty
Customer 4 31755302.59 14289886.15 45.00% Customer in financial difficulty
Total 8485612.48 6719047.69 38189403.30 20723986.86
If adopting the general mode of expected credit loss to withdraw bad debt provision of accounts receivable:
□ Applicable □ Not applicable
121Lu Thai Textile Co. Ltd. Interim Report 2026
(3) Bad Debt Provision Withdrawn Reversed or Recovered in the Current Period
Withdrawal of bad debt provision:
Unit: RMB
Changes in the Current Period
Category Beginningbalance Ending balance
Withdrawal Reversed orrecovered Write-offs Other
Bad debt provision
separately accrued 6719047.69 14004939.17 20723986.86
Withdrawal of bad
debt provision by 75743599.48 5920610.32 -17866.76 51242.12 81630834.44
group
Total 82462647.17 19925549.49 -17866.76 51242.12 0.00 102354821.30
(4) Accounts Receivable Written-off in Current Period
Unit: RMB
Item Written-off amount
Written-off accounts receivable 51242.12
(5) Top 5 of the Ending Balance of the Accounts Receivable and the Contract Assets
Collected According to Arrears Party
Unit: RMB
Ending balance
Ending Proportion to of bad debt
Ending balance balance Ending balance total ending provision of
Name of the entity of accounts of of accounts balance of accounts
receivable contract receivable and accounts receivable and
assets contract assets receivable and impairmentcontract assets provision for
contract assets
Summary of the top 5
of the ending balance
of the accounts 235955607.02 235955607.02 26.76% 50342810.38
receivable and the
contract assets
122Lu Thai Textile Co. Ltd. Interim Report 2026
Total 235955607.02 235955607.02 26.76% 50342810.38
5. Receivables Financing
(1) Receivables Financing Listed by Category
Unit: RMB
Item Ending balance Beginning balance
Notes receivable 4714987.78 10375801.86
Other comprehensive income-fair
value change -20842.92 -40498.90
Total 4694144.86 10335302.96
(2) Notes Receivable Which Had Endorsed by the Company or Had Discounted and Had Not Due
on the Balance Sheet Date at the Period-End
Item Amount of recognition termination at Amount of not terminatedthe period-end recognition at the period-end
Bank acceptance bills 263414952.34
Total 263414952.34
6. Other Receivables
Unit: RMB
Item Ending balance Beginning balance
Dividend receivable 11098176.37 1267187.27
Other receivables 27165942.09 34184996.13
Total 38264118.46 35452183.40
(1) Dividend Receivable
1) Dividend receivable classification
Unit: RMB
Item (or investee) Ending balance Beginning balance
123Lu Thai Textile Co. Ltd. Interim Report 2026
Dividend receivable 11098176.37 1267187.27
Total 11098176.37 1267187.27
2) Disclosure by withdrawal methods for bad debts
□ Applicable □ Not applicable
Unit: RMB
Ending balance Beginning balance
Category Carrying amount Bad debt provision Carrying amount Bad debt provision
Carrying Carrying
Amount Percentage Amount Withdrawal
value Percentage Withdrawal value
(%) proportion Amount (%) Amount proportion
Of which:
Withdrawal
of bad debt
provision by 11682290.92 100.00% 584114.55 5.00% 11098176.37 1333881.34 100.00% 66694.07 5.00% 1267187.27
group
Of which:
Dividend
receivable 11682290.92 100.00% 584114.55 5.00% 11098176.37 1333881.34 100.00% 66694.07 5.00% 1267187.27
Total 11682290.92 584114.55 11098176.37 1333881.34 66694.07 1267187.27
Changes of carrying amount with significant amount changed of loss provision in the Current
Period
□ Applicable□ Not applicable
(2) Other Receivables
1) Other receivables classified by nature
Unit: RMB
Nature Ending carrying amount Beginning carrying amount
Export rebates 2942068.05 7018001.62
VAT to be returned 7360072.76
Payment on behalf 27129965.93 26960896.72
Guarantee deposit and cash deposit 3169846.97 1891753.34
Borrowings and petty cash 1874761.43 1463362.43
Other 6368259.90 6744955.59
124Lu Thai Textile Co. Ltd. Interim Report 2026
Total 41484902.28 51439042.46
2) Disclosure by aging
Unit: RMB
Aging Ending carrying amount Beginning carrying amount
Within one year (including one
year) 17354880.95 40698373.07
One to two years 19081689.45 1582916.07
Two to three years 1711692.39 995281.34
More than three years 3336639.49 8162471.98
Three to four years 98643.27 4924357.74
Four to five years 54000.00 166000.00
Over five years 3183996.22 3072114.24
Total 41484902.28 51439042.46
3) Disclosure by withdrawal methods for bad debts
□ Applicable □ Not applicable
Unit: RMB
Ending balance Beginning balance
Category Carrying amount Bad debt provision Carrying amount Bad debt provision
Carrying Carrying
Amount Percentage Withdrawal
value
Amount Amount Percentage Amount Withdrawal
value
(%) proportion (%) proportion
Of which:
Withdrawal
of bad debt
provision by 41484902.28 100.00% 14318960.19 34.52% 27165942.09 51439042.46 100.00% 17254046.33 33.54% 34184996.13
group
Of which:
Bad debt
provision in 18314029.75 44.15% 915701.54 5.00% 17398328.21 22861526.12 44.44% 1143076.29 5.00% 21718449.83
Stage 1
Bad debt
provision in 22957860.48 55.34% 13190246.60 57.45% 9767613.88 28364504.29 55.14% 15897957.99 56.05% 12466546.30
Stage 2
125Lu Thai Textile Co. Ltd. Interim Report 2026
Bad debt
provision in 213012.05 0.51% 213012.05 100.00% 213012.05 0.41% 213012.05 100.00%
Stage 3
Total 41484902.28 100.00% 14318960.19 34.52% 27165942.09 51439042.46 100.00% 17254046.33 33.54% 34184996.13
Withdrawal of bad debt provision by adopting the general mode of expected credit loss:
Unit: RMB
First stage Second stage Third stage
Bad debt provision Expected credit loss Expected credit loss Expected credit loss Total
of the next 12 in the duration in the duration
months (credit impairment (credit impairmentnot occurred) occurred)
Balance of January
120261143076.2915897957.99213012.0517254046.33
Balance of January
1 2026 in the
current period
Withdrawal of the
Current Period -227374.75 -2707711.39 -2935086.14
Balance of June 30
2026915701.5413190246.60213012.0514318960.19
Basis of classification of stages and percentage of provision for bad debts
Changes of carrying amount with significant amount changed of loss provision in the Current
Period
□ Applicable□ Not applicable
4) Bad debt provision withdrawn reversed or recovered in the Current Period
Withdrawal of bad debt provision:
Unit: RMB
Changes in the Current Period
Category Beginning Endingbalance balance
Withdrawal Reversed or Charged-recovered off/Verification Other
Expected credit loss of
the next 12 months at 1143076.29 -227374.75 915701.54
the first stage
Expected credit loss in -
the duration (credit 15897957.99 2707711.39 13190246.60
impairment not
126Lu Thai Textile Co. Ltd. Interim Report 2026
occurred) at the second
stage
Expected credit loss in
the duration (credit
impairment occurred) at 213012.05 0.00 213012.05
the third stage
Total 17254046.33 -2935086.14 0.00 0.00 0.00 14318960.19
5) Top 5 of the ending balance of the other receivables collected according to the arrears
party
Unit: RMB
Proportion to Ending
Name of the entity Nature Ending Aging total endingbalance balance of other balance of bad
receivables % debt provision
Haideng Co. Ltd. Payment 17725365.41 Within one yearon behalf one to two years 42.73% 10635219.25
Withholding and
remitting of
personal Paymenton behalf 5935900.85 Within one year 14.31% 296795.04endowment
insurance
Withholding and
remitting of Payment
personal medical on behalf 1420798.20 Within one year 3.42% 71039.91
insurance
Withholding and
remitting of Payment
personal housing on behalf 1385054.25 Within one year 3.34% 69252.71
provident fund
Deposits Deposits 1259771.74 Within one year 3.04% 62988.59
Total 27726890.45 66.84% 11135295.50
7. Prepayments
(1) Prepayments Listed by Aging Analysis
Unit: RMB
Aging Ending balance Beginning balance
127Lu Thai Textile Co. Ltd. Interim Report 2026
Amount Percentage (%) Amount Percentage (%)
Within one year 105017107.53 99.79% 70200605.55 99.95%
One to two years 194950.57 0.19% 20116.61 0.03%
Two to three years 28802.80 0.03% 12400.80 0.02%
Total 105240860.90 70233122.96
Notes of the reasons of the prepayments aging over one year with significant amount but failed
settled in time:
There were no significant prepayments aged over one year during the year.
(2) Top 5 Prepayment in Ending Balance Collected According to the Prepayment Target
The prepayments to suppliers from the top five of prepaid parties classified based on the ending
balance totals RMB71121578.96 in the Current Period accounting for 67.58% of the total
ending balance of the prepayments to suppliers.
8. Inventory
Whether the Company needs to comply with the disclosure requirements for the real estate
industry
No
(1) Category of Inventory
Unit: RMB
Ending balance Beginning balance
Falling price Falling price
Item reserves or reserves or
Carrying amount provision forimpairment on Carrying value Carrying amount
provision for
impairment on Carrying value
contract contract
performance cost performance cost
Raw materials 1049818533.16 55625153.79 994193379.37 948796192.27 57414663.40 891381528.87
Work-in-
progress 486417876.76 6030001.01 480387875.75 504540889.35 5995564.27 498545325.08
Inventory goods 850291879.45 174835370.93 675456508.52 883354382.70 178299089.81 705055292.89
Commissioned
products 17261748.05 17261748.05 12317857.99 12317857.99
Total 2403790037.42 236490525.73 2167299511.69 2349009322.31 241709317.48 2107300004.83
128Lu Thai Textile Co. Ltd. Interim Report 2026
(2) Falling Price Reserves of Inventory and Impairment Reserves for Contract Performance
Costs
Unit: RMB
Increased amount of the Current Decreased amount for the Current
Period Period
Item Beginningbalance Ending balance
Withdrawal Other Recovered orcharged-off Other
Raw materials 57414663.40 -1070139.88 39488.71 679881.02 55625153.79
Work-in-
progress 5995564.27 92513.18 58076.44 6030001.01
Inventory
goods 178299089.81 32255371.48 29024686.05 6694404.31 174835370.93
Total 241709317.48 31277744.78 0.00 29064174.76 7432361.77 236490525.73
9. Other Current Assets
Unit: RMB
Item Ending balance Beginning balance
Other tax 9834215.55 9076861.29
Prepaid income tax 4914582.22 1916166.81
Prepaid other taxes 538923.85
Convertible broken lot fund 199652.61
Deposit for recognizance 11070000.00 4033475.68
OTC securities clearing funds 5000000.00 2000000.00
Total 30818797.77 17765080.24
129Lu Thai Textile Co. Ltd. Interim Report 2026
10. Long-term Equity Investments
Unit: RMB
Increase/decrease for the Current Period
Beginning Ending
Investee Beginning balance
balance of balance of
(carrying value) provision Adjustment of Changes Cash bonus Withdrawal
Ending balance
for (carrying value)
provision
impairment Additional investment
Reduced Gains and losses recognized under other or profits of for
investment the equity method comprehensive of other announced impairment Other impairment
income equity to issue provision
I. Joint ventures
II. Associated enterprises
Ningbo Meishan
Bonded Port Area
Haohong Equity
Investment
Partnership (L.P.) 18247919.86 -19723.19 18228196.67
(hereinafter referredto as “HaohongInvestment”)
Ningbo Haoying
Equity Investment
Partnership (L.P)
(hereinafter referred 81629997.66 -1847.08 81628150.58to as “HaoyingInvestment”)
Yuanjing Apparel
Co. Ltd.(hereinafter referred 120934192.98 -1369055.95 119565137.03to as “YuanjingApparel”)
Subtotal 99877917.52 120934192.98 -1390626.22 219421484.28
Total 99877917.52 120934192.98 -1390626.22 219421484.28
The recoverable amount is determined based on the net amount of the fair value minus disposal costs
□ Applicable□ Not applicable
130Lu Thai Textile Co. Ltd. Interim Report 2026
The recoverable amount is determined by the present value of the forecasted future cash flow.□ Applicable□ Not applicable
131Lu Thai Textile Co. Ltd. Interim Report 2026
11. Other Non-current Financial Assets
Unit: RMB
Item Ending balance Beginning balance
Equity instrument investment 76360000.00 76360000.00
Financial assets assigned measured
by fair value through profit or loss 12000000.00 12000000.00
Total 88360000.00 88360000.00
12. Investment Property
(1) Investment Property Adopting the Cost Measurement Mode
□ Applicable □ Not applicable
Unit: RMB
Item Houses and Land use Constructionbuildings rights in progress Total
I. Original carrying value
1. Beginning balance 33708658.12 33708658.12
2. Increased amount for the Current
Period
(1) Outsourcing
(2) Transfer from inventory/fixed
assets/construction in progress
(3) Business combination increase
3. Decreased amount for the Current
Period
(1) Disposal
(2) Other transfer
4. Ending balance 33708658.12 33708658.12
II. Accumulative depreciation and
accumulative amortization
1. Beginning balance 15935766.79 15935766.79
132Lu Thai Textile Co. Ltd. Interim Report 2026
2. Increased amount for the Current
Period 451321.15 451321.15
(1) Withdrawal or amortization 451321.15 451321.15
3. Decreased amount for the Current
Period
(1) Disposal
(2) Other transfer
4. Ending balance 16387087.94 16387087.94
III. Impairment provisions
1. Beginning balance
2. Increased amount for the Current
Period
(1) Withdrawal
3. Decreased amount for the Current
Period
(1) Disposal
(2) Other transfer
4. Ending balance
IV. Carrying value
1. Ending carrying value 17321570.18 17321570.18
2. Beginning carrying value 17772891.33 17772891.33
The recoverable amount is determined based on the net amount of the fair value minus disposal
costs
□ Applicable□ Not applicable
The recoverable amount is determined by the present value of the forecasted future cash flow.□ Applicable□ Not applicable
(2) Investment Property Adopting the Fair Value Measurement Mode
□ Applicable□ Not applicable
133Lu Thai Textile Co. Ltd. Interim Report 2026
13. Fixed Assets
Unit: RMB
Item Ending balance Beginning balance
Fixed assets 5382641342.07 5705325739.27
Total 5382641342.07 5705325739.27
(1) List of Fixed Assets
Unit: RMB
Item Housing and Machinery Transportation
Electronic
building equipment vehicle equipment and Totalothers
I. Original
carrying value:
1. Beginning
balance 4252549697.32 7925714259.02 60111960.63 147600028.08 12385975945.05
2. Increased
amount for the 48319908.14 33211702.41 1755555.44 1894799.64 85181965.63
Current Period
(1) Purchase 0.00 33211702.41 1755555.44 1894799.64 36862057.49
(2) Transfer
from
construction in 48319908.14 48319908.14
progress
(3) Business
combination 0.00
increase
3. Decreased
amount for the 162357986.68 211575061.81 4401624.51 2140759.31 380475432.31
Current Period
(1) Disposal
or scrap 580428.71 77340972.12 2162467.97 286647.35 80370516.15
(2) Transfer
from
construction in 17782074.12 17782074.12
progress
(3) Transfer to
investment
134Lu Thai Textile Co. Ltd. Interim Report 2026
properties
(4) Other
decrease 143995483.85 134234089.69 2239156.54 1854111.96 282322842.04
4. Ending
balance 4138511618.78 7747350899.62 57465891.56 147354068.41 12090682478.37
II. Accumulative
depreciation
1. Beginning
balance 1580778192.98 4848508329.31 46203540.22 126819250.64 6602309313.15
2. Increased
amount for the 66234552.17 157475159.00 1608175.37 3104219.27 228422105.81
Current Period
(1)
Withdrawal 66234552.17 157475159.00 1608175.37 3104219.27 228422105.81
3. Decreased
amount for the 52452796.72 141341877.55 3336385.88 1757600.72 198888660.87
Current Period
(1) Disposal
or scrap 207256.05 67180970.66 1946221.17 258445.16 69592893.04
(2) Transfer
from
construction in 4297334.15 4297334.15
progress
(3) Transfer to
investment
properties
(4) Other
decrease 47948206.52 74160906.89 1390164.71 1499155.56 124998433.68
4. Ending
balance 1594559948.43 4864641610.76 44475329.71 128165869.19 6631842758.09
III. Impairment
provisions
1. Beginning
balance 28926815.95 49340582.11 5671.30 67823.27 78340892.63
2. Increased
amount for the 3022005.09 3022005.09
Current Period
135Lu Thai Textile Co. Ltd. Interim Report 2026
(1) Withdrawal 3022005.09 3022005.09
3. Decreased
amount for the 5150006.69 14512.82 5164519.51
Current Period
(1) Disposal
or scrap 5150006.69 14512.82 5164519.51
4. Ending
balance 28926815.95 47212580.51 5671.30 53310.45 76198378.21
IV. Carrying
value
1. Ending
carrying value 2515024854.40 2835496708.35 12984890.55 19134888.77 5382641342.07
2. Beginning
carrying value 2642844688.39 3027865347.60 13902749.11 20712954.17 5705325739.27
(2) Fixed Assets Leased out by Operation Lease
Unit: RMB
Item Ending carrying value
Houses 2833291.22
(3) Fixed Assets Failed to Accomplish Certification of Property
Unit: RMB
Item Carrying value Reason
LuFeng weaving dye Under the relevant certificate procedures of acceptance
grey yarn warehouse 10565505.36 measurement examination by the real estate trading centerand other departments
Lu Thai Textile
Warehouse 01 02 5665992.62 The same as above
Lulian New Materials
Yarn Warehouse 7164757.97 The same as above
Overseas production
base factory 1076309986.67
To be submitted to the relevant department for processing
upon completion
136Lu Thai Textile Co. Ltd. Interim Report 2026
14. Construction in Progress
Unit: RMB
Item Ending balance Beginning balance
Construction in progress 118248830.14 76276743.94
Engineering materials 34125070.42 13880434.61
Total 152373900.56 90157178.55
(1) List of Construction in Progress
Unit: RMB
Ending balance Beginning balance
Item Provision for Provision for
Carrying amount impairment Carrying value Carrying amount impairment Carrying value
losses losses
Production line project of high-
grade fabrics (Phase I) 0.00 0.00 1074046.11 1074046.11
Thermoelectric cogeneration
project 67995991.84 67995991.84 42120224.61 42120224.61
Apparel processing project 8434060.54 8434060.54 0.00
Linen yarn 9120030.28 9120030.28 0.00
Reform project of Xinsheng
Thermal Power 9250877.72 9250877.72 8146973.06 8146973.06
137Lu Thai Textile Co. Ltd. Interim Report 2026
Other sporadic projects 23447869.76 23447869.76 24935500.16 24935500.16
Total 118248830.14 0.00 118248830.14 76276743.94 76276743.94
(2) Changes in Significant Construction in Progress during the Reporting Period
Unit: RMB
Of which:
Increased Amount of Other Proportion of Amount of Capitalization
Beginning amount of the transfer into decreased accumulated
Accumulated interest rate of
Project name Budget balance Current fixed assets in amount for Ending balance investment in
Project amount of Source of
the Current the Current constructions progress interest
capitalization interests for
Period in the the Current
fund
Period Period to budget capitalization Current Period
Period
Production
line project of
high-grade 464800000.00 1074046.11 424796.71 1498842.82 0.00 0.00 119.00% 100% 11598184.16 Self-raised
fabrics (Phase + raised
I)
Thermoelectric
cogeneration 250000000.00 42120224.61 25875767.23 0.00 0.00 67995991.84 27.00% 27% Self-
project financing
Apparel
processing 67520000.00 0.00 8434060.54 0.00 0.00 8434060.54 12.00% 12% Self-
project financing
Linen yarn 36410000.00 0.00 9121855.87 0.00 1825.59 9120030.28 25.00% 25% Self-financing
Reform project
of Xinsheng Self-
Thermal 7200000.00 8146973.06 1103904.66 0.00 0.00 9250877.72 44.00% 44% financing
Power
Other sporadic
projects 24935500.16 50178287.01 46821065.32 4844852.09 23447869.76 Other
Total 825930000.00 76276743.94 95138672.02 48319908.14 4846677.68 118248830.14 11598184.16
138Lu Thai Textile Co. Ltd. Interim Report 2026
(3) Impairment Test of Construction in Progress
□ Applicable□ Not applicable
(4) Engineering Materials
Unit: RMB
Ending balance Beginning balance
Item Provision Provision
Carrying for
amount impairment Carrying value
Carrying for
amount impairment Carrying value
losses losses
Special
materials 405004.07 405004.07 405004.07 405004.07
Special
equipment to be 33720066.35 33720066.35 13475430.54 13475430.54
installed
Total 34125070.42 34125070.42 13880434.61 13880434.61
15. Right-of-use Assets
(1) List of Right-of-use Assets
Unit: RMB
Item Housing and building Land use rights Total
I. Original carrying value
1. Beginning balance 76222749.04 460279527.43 536502276.47
2. Increased amount for
the Current Period 141639.26 0.00 141639.26
(1) Rent 141639.26 0.00 141639.26
(2) Lease Liabilities
Adjustment
(3) Other increase
3. Decreased amount for
the Current Period 259469.82 27232429.33 27491899.15
(1) Sublease is a
financial lease
139Lu Thai Textile Co. Ltd. Interim Report 2026
(2) Transfer or hold
for sale
(3) Maturity 147191.78 147191.78
(4) Other decrease 112278.04 27232429.33 27344707.37
4. Ending balance 76104918.48 433047098.10 509152016.58
II. Accumulative
depreciation
1. Beginning balance 36427464.04 62708787.16 99136251.20
2. Increased amount for
the Current Period 5564389.54 7328889.06 12893278.60
(1) Withdrawal 5564389.54 7328889.06 12893278.60
(2) Other increase
3. Decreased amount for
the Current Period 249802.30 2708788.84 2958591.14
(1) Disposal
(2) Maturity 147191.78 147191.78
(3) Other decrease 102610.52 2708788.84 2811399.36
4. Ending balance 41742051.28 67328887.38 109070938.66
III. Impairment provisions
IV. Carrying value
1. Ending carrying value 34362867.20 365718210.72 400081077.92
2. Beginning carrying
value 39795285.00 397570740.27 437366025.27
(2) Impairment Test of Right-of-use Assets
□ Applicable□ Not applicable
Other notes
The Company recognizes lease expenses related to short-term leases and leases of low-value
assets as detailed in Note 7 Note 62.
140Lu Thai Textile Co. Ltd. Interim Report 2026
16. Intangible Assets
(1) List of Intangible Assets
Unit: RMB
Item Land use rights Patent right Non-patent Software use Trademarktechnologies rights right Total
I. Original
carrying value
1. Beginning
balance 470338494.00 409550.00 1808727.38 283018.87 472839790.25
2. Increased
amount for the 42477.88 42477.88
Current Period
(1) Purchase 42477.88 42477.88
(2) Internal
R&D
(3) Business
combination
increase
(4) Other
increase
3. Decreased
amount for the 4812.43 4812.43
Current Period
(1) Disposal
(2) Other
decrease 4812.43 4812.43
4. Ending
balance 470338494.00 409550.00 1846392.83 283018.87 472877455.70
II.Accumulated
amortization
1. Beginning
balance 148611118.36 194536.44 1399995.58 85563.79 150291214.17
2. Increased 5048199.60 20477.52 232644.37 39490.98 5340812.47
amount for the
141Lu Thai Textile Co. Ltd. Interim Report 2026
Current Period
(1)
Withdrawal 5048199.60 20477.52 232644.37 39490.98 5340812.47
(2) Other
increase
3. Decreased
amount for the 3168.25 3168.25
Current Period
(1) Disposal
(2) Other
decrease 3168.25 3168.25
4. Ending
balance 153659317.96 215013.96 1629471.70 125054.77 155628858.39
III.Impairment
provisions
IV. Carrying
value
1. Ending
carrying value 316679176.04 194536.04 216921.13 157964.10 317248597.31
2. Beginning
carrying value 321727375.64 215013.56 408731.80 197455.08 322548576.08
The proportion of intangible assets formed from the internal R&D of the Company at the period-
end to the ending balance of intangible assets was 0.00%.
(2) Impairment Test of Intangible Assets
□ Applicable□ Not applicable
17. Goodwill
(1) Original Carrying Value of Goodwill
Unit: RMB
Increased amount of the Decreased amount for
Name of the Current Period the Current Period
invested units or
events generating Beginning balance
Ending
Formed by balance
goodwill business Disposal
combination
142Lu Thai Textile Co. Ltd. Interim Report 2026
Xinsheng Thermal
Power 20563803.29 20563803.29
Total 20563803.29 20563803.29
18. Long-term Deferred Expenses
Unit: RMB
Beginning Increased AmortizationItem balance amount of the amount of the
Other decreased
Current Period Current Period amount
Ending balance
Decoration fee 2893266.33 182445.47 2710820.86
Technical
service charges 73474.51 0.00 18368.64 55105.87
Total 2966740.84 0.00 200814.11 2765926.73
19. Deferred Income Tax Assets/Deferred Income Tax Liabilities
(1) Deferred Income Tax Assets Had Not Been Off-set
Unit: RMB
Ending balance Beginning balance
Item Deductible Deductible
temporary Deferred income temporary Deferred income
differences tax assets differences tax assets
Provision for impairment
of assets 335930797.14 59871850.53 322281534.52 50256653.70
Internal unrealized profit 114613138.15 15311276.42 127896106.50 17391278.40
Deductible losses 14577011.84 2194486.56 46957871.96 7051615.58
Payroll payable 73467747.86 11020204.95 73467747.86 11020204.95
Deferred income 135621409.44 23495382.58 139239353.54 21445645.55
Contract liabilities 67641914.12 16910478.53 75875498.44 18790050.86
The changes of receivables
financing in fair value 20842.92 5119.55 40498.90 6074.84
Lease liabilities 79637203.13 12495009.95 85127159.16 12762030.00
Convertible bonds 0.00 0.00 26560767.92 3984115.19
143Lu Thai Textile Co. Ltd. Interim Report 2026
Associated enterprises 29867543.40 4480131.51 29847820.21 4477173.03
Accrued expenses 2575386.13 386307.92 2575386.13 386307.92
Changes in fair value of
held-for-trading financial 1565000.00 297350.00
liabilities
Total 855517994.13 146467598.50 929869745.14 147571150.02
(2) Deferred Income Tax Liabilities Had Not Been Off-set
Unit: RMB
Ending balance Beginning balance
Item
Taxable temporary Deferred income Taxable temporary Deferred income
difference tax liabilities difference tax liabilities
Depreciation of
fixed assets 554225054.64 96464586.99 563242301.02 88476994.31
Changes in fair
value of held-for-
trading financial 66073.67 12509.89 680555.64 102083.34
assets
Changes in the fair
value of other non-
current financial 19077400.00 2861610.00 19077400.00 2861610.00
assets
Associated
enterprises 5870334.07 880550.11 5872181.17 880827.18
Right-of-use assets 68217502.35 11879108.25 75721216.95 11349507.46
Fund profit 67529825.67 10129473.85 45621634.18 6843245.13
Total 714986190.40 122227839.09 710215288.96 110514267.42
(3) Deferred Income Tax Assets or Liabilities Had Been Off-set Listed in Net Amount
Unit: RMB
Ending off-set Beginning off-set Beginning balance
Item amount of deferred
Ending balance of amount of deferred of deferred income
income tax assets deferred income tax
and liabilities assets and liabilities
income tax assets tax assets and
and liabilities liabilities
Deferred income 146467598.50 147571150.02
144Lu Thai Textile Co. Ltd. Interim Report 2026
tax assets
Deferred income
tax liabilities 122227839.09 110514267.42
(4) List of Unrecognized Deferred Income Tax Assets
Unit: RMB
Item Ending balance Beginning balance
Deductible temporary differences 99987193.02 40525358.98
Deductible losses 366332411.79 352599532.44
Total 466319604.81 393124891.42
(5) Deductible Losses of Unrecognized Deferred Income Tax Assets Will Due in the
Following Years
Unit: RMB
Year Ending amount Beginning amount Note
Y2028 702282.74 702282.74
Y2029 760443.41 760443.41
Y2030 1182124.10 1182124.10
Y2031 84762167.26 71029287.91
Y2032 96903840.68 96903840.68
Y2033 86555343.03 86555343.03
Y2034 57775658.65 57775658.65
Y2035 37690551.92 37690551.92
Total 366332411.79 352599532.44
20. Other Non-current Assets
Unit: RMB
Ending balance Beginning balance
Item
Carrying Provision Provision
amount for Carrying value
Carrying
amount for Carrying value
impairment impairment
145Lu Thai Textile Co. Ltd. Interim Report 2026
losses losses
Project
prepayment 200000.00 200000.00
Prepayment
for equipment 33983815.42 33983815.42 12554487.99 12554487.99
Prepayment
for land 39754880.25 39754880.25 27255406.47 27255406.47
transfer fee
Term deposits
over 1 year 50000000.00 50000000.00 460000000.00 460000000.00
Interest
receivable
from term 2286666.72 2286666.72 14994355.84 14994355.84
deposits over 1
year
Total 126025362.39 126025362.39 515004250.30 515004250.30
21. Assets with Restricted Ownership or Right to Use
Unit: RMB
Period-end Period-beginning
Item
Carrying Carrying Type of Status of Carrying Carrying Type of Status of
amount value restriction restriction amount value restriction restriction
Monetary 8036867.45 8036867.45 Deposits for 1910848.94 1910848.94 Deposits forcapitals L/Cs L/Cs
Endorsed or Endorsed or
Notes
receivable 35370093.64 35370093.64
discounted but
not yet due for 25694417.18 25684917.18
discounted but
not yet due for
derecognization derecognization
Other
current 11070000.00 11070000.00 Deposit for 4033475.68 4033475.68 Deposit for
assets recognizance recognizance
Total 54476961.09 54476961.09 31638741.80 31629241.80
22. Short-term Loans
(1) Category of Short-term Loans
Unit: RMB
Item Ending balance Beginning balance
146Lu Thai Textile Co. Ltd. Interim Report 2026
Borrowings secured by guarantee 19470558.76 130196987.50
Credit loan 471004100.64 522639885.39
Total 490474659.40 652836872.89
Notes of the category for short-term loans:
The short-term loans include interest payable of RMB517921.42.
23. Held-for-trading Financial Liabilities
Unit: RMB
Item Ending balance Beginning balance
Held-for-trading financial
liabilities 2463160.63 0.00
Of which:
Derivative financial liabilities 2463160.63 0.00
Total 2463160.63
24. Notes Payable
Unit: RMB
Category Ending balance Beginning balance
Bank acceptance bills 14647132.88
Total 14647132.88
25. Accounts Payable
(1) List of Accounts Payable
Unit: RMB
Item Ending balance Beginning balance
Payment for goods 129202509.77 118175135.19
Engineering equipment 52243842.08 77362678.88
Other 33724146.90 36810344.23
Total 215170498.75 232348158.30
147Lu Thai Textile Co. Ltd. Interim Report 2026
(2) Significant Accounts Payable Aging over One Year or Overdue
No significant accounts payable over one year at the period-end.
26. Other Payables
Unit: RMB
Item Ending balance Beginning balance
Dividends payable 441113.64 441113.64
Other payables 21329058.52 17139703.76
Total 21770172.16 17580817.40
(1) Dividends Payable
Unit: RMB
Item Ending balance Beginning balance
Dividends payable to individual
shareholders 441113.64 441113.64
Total 441113.64 441113.64
Other notes: Including significant dividends payable unpaid for over one year the unpaid reason
shall be disclosed:
Name of the shareholders Dividends payable Reason
Dividends payable to
individual shareholders 441113.64
Cash dividend of previous year not received by
individual shareholders
Total 441113.64 -
(2) Other Payables
1) Other payables listed by nature
Unit: RMB
Item Ending balance Beginning balance
Deposits and cash deposits etc. 7560141.21 5950933.17
Collecting payment on behalf of
others 395507.78 643709.44
Other 13373409.53 10545061.15
148Lu Thai Textile Co. Ltd. Interim Report 2026
Total 21329058.52 17139703.76
27. Contract Liabilities
Unit: RMB
Item Ending balance Beginning balance
Advance from sales 168038044.14 186972951.24
Less: Contract liability recorded in
other current liabilities -6421487.15 -8237811.01
Total 161616556.99 178735140.23
28. Payroll Payable
(1) List of Payroll Payable
Unit: RMB
Increased amount Decreased amount
Item Beginning balance of the Current for the Current Ending balance
Period Period
I. Short-term salary 301478485.76 641384795.25 708293205.05 234570075.96
II. Post-
employment
benefit-defined 18723.86 85570086.87 85371370.37 217440.36
contribution plans
III. Termination
benefits 420365.94 420365.94 0.00
Total 301497209.62 727375248.06 794084941.36 234787516.32
(2) List of Short-term Salary
Unit: RMB
Increased amount Decreased amount
Item Beginning balance of the Current for the Current Ending balance
Period Period
1. Salary bonus allowance
subsidy 216648265.94 568945052.07 639430628.76 146162689.25
2. Employee welfare 19318008.82 19052318.18 265690.64
3. Social insurance 37858.31 36948416.57 36896681.05 89593.83
149Lu Thai Textile Co. Ltd. Interim Report 2026
Of which: Medical
insurance premiums 34941.22 34238205.00 34190979.04 82167.18
Work-related injury
insurance premiums 2188.31 2705838.89 2701329.33 6697.87
Maternity insurance 728.78 4372.68 4372.68 728.78
4. Housing fund 7090303.07 7090303.07 0.00
5. Labor-union expenditure
and employee education 84792361.51 9083014.72 5823273.99 88052102.24
budget
Total 301478485.76 641384795.25 708293205.05 234570075.96
(3) List of Defined Contribution Plans
Unit: RMB
Increased amount Decreased amount
Item Beginning balance of the Current for the Current Ending balance
Period Period
1. Basic pension
insurance 18156.48 81317603.83 81132411.88 203348.43
2. Unemployment
insurance premiums 567.38 4252483.04 4238958.49 14091.93
Total 18723.86 85570086.87 85371370.37 217440.36
Other notes:
The Company in line with the requirement participates in endowment insurance unemployment
insurance plans and so on. Under these plans the Company makes monthly contributions to these
plans at 16% and 0.7% of the social security contribution base respectively. No further payment
obligations will be incurred by the Company beyond the above monthly contribution fees. The
relevant expense occurred was recorded into current profits and losses or related asset costs.
29. Taxes Payable
Unit: RMB
Item Ending balance Beginning balance
VAT 811476.67 6777237.80
Enterprise income tax 6721844.36 37231505.40
Personal income tax 505342.58 2188488.20
150Lu Thai Textile Co. Ltd. Interim Report 2026
Urban maintenance and
construction tax 662200.65 2609448.44
Stamp duty 488798.23 601861.56
Real estate tax 5538311.51 5230109.92
Land use tax 3652528.97 1927644.52
Educational fee 332286.97 1311350.61
Local educational surcharge 221524.65 775166.23
Tax on natural resources 64738.80 20275.20
Environmental protection tax 144324.88 200346.02
Total 19143378.27 58873433.90
30. Current Portion of Non-current Liabilities
Unit: RMB
Item Ending balance Beginning balance
Long-term borrowings matured
within one year 395807239.83 315426401.72
Current portion of bonds payable 1539049797.44
Lease liabilities matured within
one year 13542512.58 16086352.54
Total 409349752.41 1870562551.70
31. Other Current Liabilities
Unit: RMB
Item Ending balance Beginning balance
Tax to be charged off 6421487.15 8237811.01
Endorsed undue bill under non-
derecognition 35370093.64 25694417.18
Total 41791580.79 33932228.19
151Lu Thai Textile Co. Ltd. Interim Report 2026
32. Long-term Borrowings
(1) Category of Long-term Borrowings
Unit: RMB
Item Ending balance Beginning balance
Credit loan 565538439.90 563339125.33
Less: Current portion of long-term
borrowings -395807239.83 -315426401.72
Total 169731200.07 247912723.61
Note to the category of long-term borrowings:
Other notes including the interest rate range:
Item Ending balance Interest rate range % Beginning balance Interest rate range %
Credit loan 565538439.90 1.85-2.90 563339125.33 1.95-2.90
33. Bonds Payable
(1) Bonds Payable
Unit: RMB
Item Ending balance Beginning balance
Convertible bonds 1539049797.44
Less: Bonds payable due within
one year -1539049797.44
(2) Changes of Bonds Payable (excluding other financial instruments divided as financial
liabilities such as preferred shares and perpetual bonds)
Unit: RMB
Issued in Amortization Shares
Name Par value Coupon Issue Bond Issue amount Beginning the
Interest
accrued at par of premium Repaid in the converted in Ending Defaultrate date duration balance Reporting value and Current Period the Current balance or notPeriod depreciation Period
0.3%
LuThai 0.6%
Convertible 1% April -
Bond 1400000000.00 1.5% 9 6 years 1400000000.00 1539049797.44 41133563.18 1551787492.70 1835100.00 0.00 No
(127016)1.8%2020
26560767.92
2%
Total 1400000000.00 1539049797.44 41133563.18 -26560767.92 1551787492.70 1835100.00 0.00
152Lu Thai Textile Co. Ltd. Interim Report 2026
(3) Notes to the Convertible Corporate Bonds
According to the Approval of the Public Issue of Convertible Corporate Bonds of Lu Thai Textile
Co. Ltd. (ZH.J.X.K. [2020] No. 299) of the China Securities Regulatory Commission the
Company issued 14 million convertible bonds with a par value of RMB100 each for a total issue
amount of RMB1.4 billion with a maturity of 6 years i.e. from April 9 2020 to April 8 2026.The coupon rates of the convertible bonds issued by the Company are 0.3% 0.6% 1% 1.5%
1.8% and 2% in the following order from the first stage to the sixth stage with interest payable
annually. The conversion period shall commence from (and include) the first trading day on
October 15 2020 six months after the date of issue and shall end on (and include) the trading
day prior to the maturity date of the convertible bonds (April 8 2026). Holders may apply for
conversion during the conversion period. Within five trading days following the maturity of the
convertible bonds the Company will redeem all unconverted convertible bonds from holders at a
price equal to 111% of the par value of the convertible bonds issued (inclusive of the final year’s
interest). As of April 8 2026 (the last conversion date) a cumulative total of 19951 convertible
bonds had been converted into company shares with a cumulative number of converted shares of
236742. The number of remaining “LuThai Convertible Bond” that was not converted into shares
upon maturity was 13980019 and the total redemption amount upon maturity was
RMB1551782109.00 (including tax and the last installment of interest). The redemption was
completed on April 9 2026 and the “LuThai Convertible Bond” was delisted from the Shenzhen
Stock Exchange.
34. Lease Liabilities
Unit: RMB
Item Ending balance Beginning balance
Lease payments 101236589.35 111879716.39
Unrecognized financing costs -19698276.56 -21634096.59
Less: Current portion of lease
liabilities -13542512.58 -16086352.54
Total 67995800.21 74159267.26
Other notes
The amount of interest expense on lease liabilities accrued from January to June 2026 was
RMB2252033.40 which was included in financial expenses - interest expense.
35. Long-term Payroll Payable
(1) List of Long-term Payroll Payable
Unit: RMB
Item Ending balance Beginning balance
III. Other long-term welfare 58241342.34 58241342.34
153Lu Thai Textile Co. Ltd. Interim Report 2026
Total 58241342.34 58241342.34
36. Deferred Income
Unit: RMB
Item Beginning
Increased Decreased
balance amount of the amount for the Ending balance SourceCurrent Period Current Period
Government
grants 139473294.93 36825.00 3663383.28 135846736.65
Government
grants
Total 139473294.93 36825.00 3663383.28 135846736.65
37. Share Capital
Unit: RMB
Increase/decrease in the Reporting Period (+/-)
Beginning Shares as Shares as
balance New dividend dividend
Ending balance
issues converted converted Other Subtotalfrom from capital
profit reserves
Total
shares 817306920.00 218687.00 218687.00 817525607.00
Other notes
During the Current Period the Company converted 218687 shares of convertible bonds into
equity.
38. Other Equity Instruments
(1) Changes of Outstanding Financial Instruments Such as Preferred Shares and Perpetual
Bonds at the Period-End
Unit: RMB
Increased amount
Period-beginning of the Current Decreased amount forthe Current Period Period-endOutstanding Period
financial
instruments
Number Carrying value Number Carryingvalue Number Carrying value Number
Carrying
value
Convertible
debt to equity 71383045.46 71383045.46 0.00
154Lu Thai Textile Co. Ltd. Interim Report 2026
Total 71383045.46 71383045.46
39. Capital Reserves
Unit: RMB
Decreased
amount
Item Beginning balance Increased amount ofthe Current Period for the Ending balanceCurrent
Period
Capital premium (premium
on stock) 125370558.86 73089226.68 198459785.54
Other capital reserves 53561596.16 91364.21 53652960.37
Total 178932155.02 73180590.89 0.00 252112745.91
Other notes including a description of the increase or decrease for the Current Period and the
reasons for the change:
1. Convertible bonds converted into equity during the Current Period increased capital reserve -
share capital premium by RMB1799759.99 and the transfer of other equity instruments to
capital reserve for unconverted convertible bonds upon maturity amounted to
RMB71289466.69;
2. The recovery of restricted shares from departing participants under the restricted stock
incentive plan increased other capital reserves by RMB91321.25 and the fractional dividends for
the 2025 B-share equity dividend distribution increased other capital reserves by RMB42.96.
40. Other Comprehensive Income
Unit: RMB
H1 2026
Less: Recorded Less: Recorded
in other in other
Item Beginning
Amount before comprehensive comprehensive
balance deducting income in prior income in prior Attributable to Attributable Ending balance
income tax for period and period and Less: Income the parent minority
the Current transferred in transferred in tax expense company after shareholders
Period profit or loss in retained tax after tax
the Current earnings in the
Period Current Period
II. Other
comprehensive
income that
may 108712967.46 -67942250.00 0.00 0.00 3722.75 -67948116.52 2143.77 40764850.94
subsequently
be reclassified
to profit or loss
Differences
arising from
the translation 108741510.67 -67964673.44 -67964673.44 40776837.23
of foreign
currency-
155Lu Thai Textile Co. Ltd. Interim Report 2026
denominated
financial
statements
The changes
of receivables
financing in -28543.21 22423.44 3722.75 16556.92 2143.77 -11986.29
fair value
Total of
other
comprehensive 108712967.46 -67942250.00 0.00 0.00 3722.75 -67948116.52 2143.77 40764850.94
income
41. Specific Reserve
Unit: RMB
Increased amount Decreased amount
Item Beginning balance of the Current for the Current Ending balance
Period Period
Safety production
costs 0.00 5471234.72 3620141.63 1851093.09
Total 5471234.72 3620141.63 1851093.09
42. Surplus Reserves
Unit: RMB
Increased amount Decreased amount
Item Beginning balance of the Current for the Current Ending balance
Period Period
Other capital
reserves 1327876999.81 1327876999.81
Statutory surplus
reserves 3341572.58 3341572.58
Total 1331218572.39 0.00 0.00 1331218572.39
43. Retained Earnings
Unit: RMB
Item Reporting period Same period of last year
Beginning balance of retained
earnings before adjustments 7303500526.72 6933165006.16
Beginning balance of retained
earnings after adjustments 7303500526.72 6933165006.16
156Lu Thai Textile Co. Ltd. Interim Report 2026
Add: Net profit attributable to owners
of the parent company 253929756.96 360215726.72
Dividends of common shares
payable 122628841.05 81730601.00
Ending retained earnings 7434801442.63 7211650131.88
List of adjustment of beginning retained earnings:
1) RMB0.00 beginning retained earnings was affected by retrospective adjustment conducted
according to the Accounting Standards for Business Enterprises and relevant new regulations.
2) RMB0.00 beginning retained earnings was affected by changes in accounting policies.
3) RMB0.00 beginning retained earnings was affected by correction of significant accounting
errors.
4) RMB0.00 beginning retained earnings was affected by changes in combination scope arising
from same control.
5) RMB0.00 beginning retained earnings was affected totally by other adjustments.
44. Operating Revenue and Cost of Sales
Unit: RMB
H1 2026 H1 2025
Item
Operating revenue Cost of sales Operating revenue Cost of sales
Main operations 2612461319.65 2014836218.67 2761593924.22 2114102945.55
Other operations 73606257.54 60023954.41 65516215.48 54371950.71
Total 2686067577.19 2074860173.08 2827110139.70 2168474896.26
45. Taxes and Surcharges
Unit: RMB
Item H1 2026 H1 2025
Urban maintenance and
construction tax 5319119.42 7709315.81
Educational fee 2321805.84 3352777.94
Tax on natural resources 99457.20 225561.60
Real estate tax 11087342.94 11082230.94
157Lu Thai Textile Co. Ltd. Interim Report 2026
Land use tax 7992691.97 5126449.13
Vehicle and vessel usage tax 32463.16 41816.34
Stamp duty 989656.25 972888.98
Local educational surcharge 1547870.53 2235185.25
Environmental protection tax 414885.95 493208.95
Total 29805293.26 31239434.94
Other notes
Please refer to Note VI. Taxes for details of various taxes and surcharges standards for calculation
and payment.
46. Administrative Expense
Unit: RMB
Item H1 2026 H1 2025
Salaries 78165496.46 75165450.56
Depreciation charges 16304147.63 19839428.51
Warehouse funding 18938959.25 18803130.99
Labor-union expenditure 4860453.45 5179275.40
Employee education budget 3348181.46 3555159.13
Amortization of intangible assets 6712748.92 6915254.58
Carriage charges 4034519.95 3940267.62
Other 32024772.09 29549110.60
Total 164389279.21 162947077.39
47. Selling Expense
Unit: RMB
Item H1 2026 H1 2025
Salaries 31196715.19 32470002.40
Marketing expense 20956938.12 16455458.63
158Lu Thai Textile Co. Ltd. Interim Report 2026
Depreciation charges 2064707.92 2417716.59
Business travel expenses 3153666.05 3481536.38
Office operating fee 6026548.51 9776313.03
Other 4218138.06 5097062.74
Total 67616713.85 69698089.77
48. R&D Expense
Unit: RMB
Item H1 2026 H1 2025
Labor cost 47820351.39 56204005.76
Material expense 17399539.82 26511331.44
Depreciation charges 7827123.25 8622551.12
Other 9552584.07 9108731.66
Total 82599598.53 100446619.98
49. Financial Expenses
Unit: RMB
Item H1 2026 H1 2025
Interest expense 37908242.99 47165800.25
Less: Capitalized interest expense
Interest income -31685689.40 -34380042.79
Add: Capitalized interest income
Foreign exchange gains or losses 70461738.86 -24018113.45
Less: Capitalized foreign exchange
gains or losses
Commission charge and other 3290209.75 3429784.88
Total 79974502.20 -7802571.11
159Lu Thai Textile Co. Ltd. Interim Report 2026
50. Other Income
Unit: RMB
Sources H1 2026 H1 2025
Government grants 14559490.63 7517472.62
Transfer of deferred revenue to
government grants 3663383.28 3674182.34
Total 18222873.91 11191654.96
51. Gain on Changes in Fair Value
Unit: RMB
Sources of gain on changes in fair
value H1 2026 H1 2025
Held-for-trading financial assets 4290051.63 -68635671.97
Of which: Gain on changes in fair
value generated by derivative 1144584.23
financial instruments
Held-for-trading financial liabilities -2463160.63 15022492.55
Total 1826891.00 -53613179.42
52. Investment Income
Unit: RMB
Item H1 2026 H1 2025
Long-term equity investments
income accounted by equity -1390626.22 1393710.04
method
Return on investment from
disposal of long-term equity 88483392.06
investment
Investment income from disposal
of held-for-trading financial asset 28901215.83 196029346.86
Interest income from debt
investments during the holding 2120807.51
period
Investment income during the 11470000.00
160Lu Thai Textile Co. Ltd. Interim Report 2026
holding period of financial assets
measured at fair value through
profit or loss
Total 127463981.67 199543864.41
53. Credit Impairment Loss
Unit: RMB
Item H1 2026 H1 2025
Loss on uncollectible notes
receivable -221221.27 -27500.00
Loss on uncollectible accounts
receivable -19925549.49 -6459634.43
Loss on uncollectible other
receivables 2935086.14 -80208.77
Bad debt provision for dividend
receivable -517420.48
Total -17729105.10 -6567343.20
54. Asset Impairment Loss
Unit: RMB
Item H1 2026 H1 2025
I. Inventory falling price loss and
impairment provision for contract -31277744.78 -29091375.28
performance costs
IV. Fixed assets impairment losses -3022005.09 -4509218.17
Total -34299749.87 -33600593.45
55. Asset Disposal Income
Unit: RMB
Source of asset disposal income H1 2026 H1 2025
Impairment loss on fixed assets (“-”
for loss) -1144249.34 -459023.14
56. Non-operating Income
Unit: RMB
161Lu Thai Textile Co. Ltd. Interim Report 2026
Amount recorded in the
Item H1 2026 H1 2025 current non-recurring
profit or loss
Claim income 7537342.76 6576005.30
Other 3857533.89 2201405.95
Total 11394876.65 8777411.25
57. Non-operating Expense
Unit: RMB
Amount recorded in the
Item H1 2026 H1 2025 current non-recurring
profit or loss
Donations 524525.46 643300.48
Other 649100.46 2271855.47
Total 1173625.92 2915155.95
58. Income Tax Expense
(1) List of Income Tax Expense
Unit: RMB
Item H1 2026 H1 2025
Current income tax expense 27464192.72 57174040.37
Deferred income tax expense 12816167.90 -668120.35
Total 40280360.62 56505920.02
(2) Adjustment Process of Accounting Profit and Income Tax Expense
Unit: RMB
Item H1 2026
Profit before tax 291383910.06
Current income tax expense accounted at
statutory/applicable tax rate 43707586.51
Influence of applying different tax rates by
subsidiaries 3072326.98
162Lu Thai Textile Co. Ltd. Interim Report 2026
Influence of income tax before adjustment 5828890.28
Effect of deductible temporary differences or
deductible losses on deferred income tax assets not 3040890.10
recognized in the period
Non-taxable income from profit or loss of joint
ventures and associated enterprises accounted by -7381425.68
equity method
Influence of additional deduction of R&D expenses -7987907.57
Income tax expense 40280360.62
59. Cash Flow Statement
(1) Cash Related to Operating Activities
Cash generated from other operating activities
Unit: RMB
Item H1 2026 H1 2025
Government grants 11854238.82 2252168.15
Claim income 3557959.55 4895904.55
Recovery of employee borrowings
guarantee deposit and cash deposit 9201719.20 13450587.74
Collection for employees 1393256.05 1929902.80
Other 1722009.16 2790766.39
Total 27729182.78 25319329.63
Cash used in other operating activities
Unit: RMB
Item H1 2026 H1 2025
Business travel charges 15351121.94 18229532.20
Insurance 2490643.06 2041400.38
Audit advisory announcement fee 3372355.66 2383967.23
Decoration fee 746169.10 1061443.64
163Lu Thai Textile Co. Ltd. Interim Report 2026
Donations 502627.78 602561.40
Payment of employee borrowings
petty cash and deposit 7814312.58 11815144.40
Agency service fee 11971763.93 21250368.31
Other 52345453.81 45093830.08
Total 94594447.86 102478247.64
(2) Cash Related to Investing Activities
Cash generated from other investing activities
Unit: RMB
Item H1 2026 H1 2025
Interest income 45494765.27 30860778.46
Income from forward foreign
exchange 1254000.00
Recovery of fixed time deposits 528095844.80 255211287.22
Total 574844610.07 286072065.68
Cash generated from important investing activities
Unit: RMB
Item H1 2026 H1 2025
Government bond reverse repo 2985138000.00 1383943000.00
Structural deposits 3005000000.00 2499100000.00
Recovery of proceeds from
industrial investment funds 17754872.97 13932363.58
Total 6007892872.97 3896975363.58
Cash used in other investing activities
Unit: RMB
Item H1 2026 H1 2025
Term deposits 136372233.32 52675673.76
164Lu Thai Textile Co. Ltd. Interim Report 2026
Payment of deposits 8036867.45
Total 144409100.77 52675673.76
Cash used in significant investing activities
Unit: RMB
Item H1 2026 H1 2025
Government bond reverse repo 3037606000.00 1534114000.00
Structural deposits 2547500000.00 2739100000.00
Total 5585106000.00 4273214000.00
(3) Cash Related to Financing Activities
Cash used in other financing activities
Unit: RMB
Item H1 2026 H1 2025
Repayment of lease liabilities and
prepaid rent 9249306.00 9250108.12
Total 9249306.00 9250108.12
Changes in liabilities arising from financing activities
□ Applicable □ Not applicable
Unit: RMB
Increased amount of the Current Decreased amount for the Current
Period Period
Item Beginning balance Ending balance
Cash fluctuations Non-cash Non-cashfluctuations Cash fluctuations fluctuations
Short-term
loans 652836872.89 415685606.36 201297718.56 765677155.36 13668383.05 490474659.40
Long-term
borrowings 563339125.33 22295459.56 117055.87 20213200.86 565538439.90
Bonds
payable 1539049797.44 14572795.26 1551787492.70 1835100.00 0.00
Lease
liabilities 90245619.80 2252033.40 9249306.00 1710034.41 81538312.79
165Lu Thai Textile Co. Ltd. Interim Report 2026
Total 2845471415.46 437981065.92 218239603.09 2346927154.92 17213517.46 1137551412.09
60. Supplemental Information for Cash Flow Statement
(1) Supplemental Information for Cash Flow Statement
Unit: RMB
Supplemental information H1 2026 Same period of lastyear
1. Reconciliation of net profit to net cash flows generated
from operating activities:
Net profit 251103549.44 367958307.91
Add: Provision for impairment of assets 52028854.97 40167936.65
Depreciation of fixed assets oil-gas assets and
productive biological assets 228873426.96 243072636.34
Depreciation of right-of-use assets 12893278.60 13382543.58
Amortization of intangible assets 5340812.47 5493695.85
Amortization of long-term deferred expenses 200814.11 2194483.31
Losses from disposal of fixed assets intangible assets
and other long-lived assets (gains: negative) 1144249.34 459023.14
Losses from scrap of fixed assets (gains: negative)
Losses from changes in fair value (gains represented
by “-”) -1826891.00 53613179.42
Financial expenses (gains: negative) 76684292.45 -11232355.99
Investment loss (gains represented by “-”) -127463981.67 -199543864.41
Decrease in deferred income tax assets (gains:
negative) 1102596.23 10212729.67
Increase in deferred income tax liabilities (“-” means
decrease) 11713571.67 -10880850.02
Decrease in inventory (gains: negative) -54780715.11 4325004.41
Decrease in accounts receivable generated from
operating activities (gains represented by “-”) 62707078.22 41054910.16
166Lu Thai Textile Co. Ltd. Interim Report 2026
Increase in accounts payable used in operating
activities (decrease represented by “-”) -257344384.20 -296283739.06
Other
Net cash flow from operating activities 262376552.48 263993640.96
2. Significant investing and financing activities without
involvement of cash receipts and payments:
Conversion of debt to capital
Convertible corporate bonds matured within one year
Fixed asset under finance lease
3. Net changes in cash and cash equivalents:
Ending balance of cash 1239006483.12 1470044640.51
Less: Beginning balance of cash 2033439469.50 1371412259.52
Plus: Ending balance of cash equivalents
Less: Beginning balance of cash equivalents
Net increase in cash and cash equivalents -794432986.38 98632380.99
(2) Cash and Cash Equivalents
Unit: RMB
Item Ending balance Beginning balance
I. Cash 1239006483.12 2033439469.50
Including: Cash on hand 6895822.24 5336336.72
Bank deposits on demand 1232110617.89 1977263322.51
Other monetary capital on
demand 42.99 50839810.27
III. Ending balance of cash and cash
equivalents 1239006483.12 2033439469.50
61. Foreign Currency Monetary Items
(1) Foreign Currency Monetary Items
Unit: RMB
167Lu Thai Textile Co. Ltd. Interim Report 2026
Item Closing foreign currency Exchange rate Ending balance convertedbalance to RMB
Monetary capitals
Of which: USD 104484014.57 6.8109 711630174.83
EUR 69374.74 7.7671 538840.54
HKD 3211186.85 0.8686 2789236.90
JPY 9974023.00 0.0420 418908.97
GBP 27.18 9.0145 245.01
VND 413505980208.00 0.0002591 107139399.47
MMK 4006874338.45 0.0032433 12995495.54
AUD 1430005.01 4.6804 6692995.45
Accounts receivable
Of which: USD 104284410.00 6.8109 710270688.07
EUR 322330.66 7.7671 2503574.47
HKD
JPY 3058043.22 0.0420 128437.82
CHF 8426.00 8.4228 70970.51
VND 37166952469.00 0.0002591 9629957.38
MMK 939888180.00 0.0032433 3048339.33
Other receivables:
Of which: USD 101480.10 6.8109 691170.81
EUR 33200.00 7.7671 257867.72
HKD 127793.00 0.8686 111001.00
JPY 1722000.00 0.0420 72324.00
VND 74733004177.00 0.0002591 19363321.38
168Lu Thai Textile Co. Ltd. Interim Report 2026
MMK 166234080.00 0.0032433 539146.99
Accounts payable:
Of which: USD 10788377.62 6.8109 73478561.13
EUR 16219.94 7.7671 125981.90
JPY 4854510.00 0.0420 203889.42
CHF 4400.00 8.4228 37060.32
VND 68897614439.00 0.0002591 17851371.90
MMK 692568461.58 0.0032433 2246207.29
Other payables:
Of which: USD 5000.00 6.8109 34054.50
VND 395483229.00 0.0002591 102469.70
MMK 1000000.00 0.0032433 3243.30
Short-term loans:
Of which: USD 26619140.71 6.8109 181300305.46
VND 335595606241.92 0.0002591 86952821.58
Long-term borrowings
Of which: USD
EUR
HKD
(2) Notes to overseas entities including: For significant oversea entities main operating
place recording currency and selection basis shall be disclosed; if there are changes in
recording currency relevant reasons shall be disclosed.□ Applicable □ Not applicable
The operating places of the Company’s overseas subsidiaries were Hong Kong Burma Vietnam
Singapore and Cambodia and the recording currency was HKD for Hong Kong and USD for
other overseas companies.
169Lu Thai Textile Co. Ltd. Interim Report 2026
62. Lease
(1) The Company was Lessee
□ Applicable □ Not applicable
Variable lease payments that are not covered in the measurement of the lease liabilities
□ Applicable□ Not applicable
Simplified short-term lease or lease expense for low-value assets
□ Applicable □ Not applicable
Item H1 2026
Expense relating to short-term leases 269105.93
Low-value lease expenses
Variable lease payments that are not covered in the measurement of
the lease liabilities
Total 269105.93
(2) The Company was Lessor
Operating leases with the Company as lessor
□ Applicable □ Not applicable
Unit: RMB
Of which: Income related to
Item Rental income variable lease payments not
included in lease receipts
Rental income 1881329.46
Total 1881329.46
Finance leases with the Company as lessor
□ Applicable□ Not applicable
Undiscounted lease receipts for each of the next five years
□ Applicable □ Not applicable
Unit: RMB
Undiscounted lease receipts per year
Item
Ending amount Beginning amount
170Lu Thai Textile Co. Ltd. Interim Report 2026
The first year 1101675.42 807699.96
The second year 593348.90 173644.40
The third year 277376.60 52378.30
Total undiscounted lease receipts
after five years - - 1972400.92 1033722.66
(3) Recognition of Gain or Loss on Sales Under Finance Leases with the Company as a
Manufacturer or Distributor
□ Applicable□ Not applicable
VIII Research and Development Expenditure
Unit: RMB
Item H1 2026 H1 2025
Labor cost 47820351.39 56204005.76
Material expense 17399539.82 26511331.44
Depreciation charges 7827123.25 8622551.12
Other 9552584.07 9108731.66
Total 82599598.53 100446619.98
Of which: Expensed research and
development expenditure 82599598.53 100446619.98
1. Development Costs
Increased amount of the
Current Period Decreased amount for the Current Period
Item Beginning Endingbalance Internal Recognized Recognized in balance
development Other as profit or loss for Other
expenditures increase intangible the current decreaseassets period
R&D of
products 82599598.53 82599598.53
Total 82599598.53 82599598.53
171Lu Thai Textile Co. Ltd. Interim Report 2026
IX Change of Consolidation Scope
1. Disposal of Subsidiary
Whether there were any transactions or events during the period in which control of the subsidiary was lost
□ Yes □ No
Unit: RMB
Difference
between the Amount of
disposal Determination other
consideration Carrying amount Fair value of method and key comprehensive
and the share of remaining remaining Gains or losses assumptions for income related
Disposal Proportion of Method of of net assets of Proportion equity at the equity at the from the fair value of to the equity
Name consideration disposal at the disposal at the Point of loss
Basis for determining of remaining investment in
at the point of point of loss point of loss of of control the point of loss of
the subsidiary equity at the consolidated consolidated remeasurement the remaining
control at the date of loss financial financial of remaining equity interest at
the former
loss of control of control control consolidated of control statement level at statement level equity interest the consolidated
subsidiary
financial the date of loss of at the date of at fair value financial statement transferred to
statement level control loss of control level on the date of investment
corresponding loss of control income or
to the disposed retained
investment earnings
The determination
method for the fair
As the shareholding value of the
ratio decreased to 33% remaining equity
on April 30 2026 and interest is the
the Company no asset-based
Tianqin Transfer and longer held more than approach; key
International capital increase April 30 half of the voting assumptions
Investment 145437143.88 67.00% by the 2026 rights it was unable to 61375118.45 33.00% 86720811.41 116950347.36 30229535.95 include the -10917935.22
Co. Ltd. counterparty direct the relevant transaction
activities of the assumption open
investee and therefore market
lost control on April assumption asset
30 2026. going concernassumption and
special
assumptions.Other notes
“Tianqin International Investment Co. Ltd.” has now been renamed “Yuanjing Apparel Co. Ltd. (hereinafter referred to as ‘YuanjingApparel’)”.
172Lu Thai Textile Co. Ltd. Interim Report 2026
Whether there was a step-by-step disposal of investment in a subsidiary through multiple transactions and loss of control during the Current
Period
□ Yes□ No
2. Other Reasons for Changes of Consolidation Scope
Notes of other changes in the combination scope (e.g. new subsidiaries liquidation of subsidiaries etc.) and relevant situations:
During the Reporting Period the overseas subsidiaries invested in linen yarn and apparel processing and two newly established subsidiaries
were included in the scope of consolidation.X Equity in Other Entities
1. Equity in Subsidiary
(1) Compositions of the Group
Unit: RMB
Shareholding
Main
Name Registered capital operating Registration Nature of
percentage (%)
Way of gaining
place place business
Directly Indirectly
Lu Thai (Hong Kong) Textile Co. Ltd.(hereinafter referred to as “Lu Thai 128771800.00 Hong Kong Hong Kong Wholesale andretail industry 100% Incorporated(HK)”)
Shanghai Lu Thai Textile Garment
Co. Ltd. (hereinafter referred to as 20000000.00 Shanghai Shanghai Wholesale andretail industry 100% Incorporated“Shanghai Lu Thai”)
LuFeng Company Limited (hereinafter
referred to as “LuFeng Company”) 706160000.00 Zibo Zibo
Manufacturing
industry 75% Incorporated
Zibo Luqun Textile Co. Ltd. 168220000.00 Zibo Zibo Manufacturing 100% Incorporated(hereinafter referred to as “Luqun industry
173Lu Thai Textile Co. Ltd. Interim Report 2026Textile”)
Zibo Xinsheng Thermal Power Co. Business
Ltd. (hereinafter referred to as 162435600.00 Zibo Zibo Manufacturing combination not
“Xinsheng Thermal Power”) industry
100% under the same
control
Shandong Lulian New Materials Co.Ltd. (hereinafter referred to as “Lulian 900000000.00 Zibo Zibo Manufacturing 75% 25% IncorporatedNew Materials”) industry
Shandong Lujia Import & Export Co.Ltd. (hereinafter referred to as “Lujia 10000000.00 Zibo Zibo Import and exportImport & Export”) trade
100% Incorporated
Beijing Zhishu Management
Consulting Co. Ltd. (hereinafter 2000000.00 Beijing Beijing Management 100% Incorporated
referred to as “Zhishu Consulting”) consulting
Lu Thai Vocational Training School
Huilin International 100000.00 Zibo Zibo Skill training 100% Incorporated
Zibo Banyang Villa Hotel Co. Ltd.(hereinafter referred to as “Banyang 5000000.00 Zibo Zibo Catering services 100% IncorporatedVilla”)
Hainan Huilin International Holdings 880000000.00 Wenchang Wenchang Modern serviceCo. Ltd. (“Huilin International”) industry 100% Incorporated
Wholesale
TP Company 398203876.00 Singapore Singapore textiles andleather holding 100% Incorporated
company
Vanguard Apparel Co. Ltd. 62337887.93 Burma Burma Manufacturing 100% Incorporated(hereinafter referred to as “Vanguard industry
174Lu Thai Textile Co. Ltd. Interim Report 2026Apparel”)
Tianyi Apparel Co. Ltd. (hereinafter Manufacturing
referred to as “Tianyi Apparel”) 10719000.00 Burma Burma industry 100% Incorporated
Yuanhui Dividend No. 2 PrivateSecurities Investment Fund (“Yuanhui 100% SubscribeFund”)
Basis of controlling significant structural entities incorporated in the scope of combination:
The structural entity incorporated in the scope of consolidation of the Group is Yuanhui Dividend No. 2 Private Securities Investment Fund.The Group assesses its share of investment holdings the power it enjoys and variable returns comprehensively and includes the structural entity
that the Company has control power into the consolidation scope.
(2) Significant Non-wholly-owned Subsidiary
Unit: RMB
Declaring dividends Equity of non-controlling
Name Shareholding proportion of The profit or loss attributable tonon-controlling interests the non-controlling interests distributed to non-controlling interests at the end of theinterests period
LuFeng Company 25.00% -2824063.75 316217341.48
(3) The Main Financial Information of Significant Non-wholly-owned Subsidiary
Unit: RMB
Ending balance Beginning balance
Name
Current assets Non-currentassets Total assets
Current Non-current Non-current Current Non-current
liabilities liability Total liabilities Current assets assets Total assets liabilities liability Total liabilities
LuFeng
Company 962728063.88 524468227.00 1487196290.88 155880445.25 59949995.96 215830441.21 851605157.37 545711428.13 1397316585.50 69938570.13 46272418.96 116210989.09
175Lu Thai Textile Co. Ltd. Interim Report 2026
Unit: RMB
H1 2026 H1 2025
Name Total Cash flows from TotalOperating revenue Net profit comprehensive operating activities Operating revenue Net profit comprehensive
Cash flows from
income income operating activities
LuFeng Company 417083730.46 -9946494.10 -9937919.04 -113468698.28 493360293.18 28443221.22 28381052.29 -55574848.58
176Lu Thai Textile Co. Ltd. Interim Report 2026
2. Equity in Joint Ventures or Associated Enterprises
(1) Significant Joint Ventures or Associated Enterprises
Shareholding percentage (%) Accounting
Name of treatment of
joint ventures Main Registration Nature of the
or associated operatingplace place business
investment to
enterprises Directly Indirectly joint ventureor associated
enterprise
I. Joint
ventures
II.Associated
enterprises
Haohong Equity Equity
Investment Ningbo Ningbo investment 33.33% method
Haoying Ningbo Ningbo Equity EquityInvestment investment 47.62% method
Yuanjing
Apparel Singapore Singapore
Equity
investment 33.00%
Equity
method
(2) Main Financial Information of Significant Associated Enterprises
Unit: RMB
Ending balance/reporting period Beginning balance/the same period of lastyear
Haohong Haoying Yuanjing Haohong Haoying Yuanjing
Investment Investment Apparel Investment Investment Apparel
Current assets 57929494.87 174500682.49 244598321.22 57988670.36 174505531.00
Non-current
assets 94497483.20
Total assets 57929494.87 174500682.49 339095804.42 57988670.36 174505531.00
Current
liabilities 3253866.05 76328084.43 3253866.05
Non-current
liability
Total 3253866.05 76328084.43 3253866.05
177Lu Thai Textile Co. Ltd. Interim Report 2026
liabilities
Net assets 54675628.82 174500682.49 262767719.99 54734804.31 174505531.00
Equity of non-
controlling
interests
Equity
attributable to
shareholders 54675628.82 174500682.49 262767719.99 54734804.31 174505531.00
of the parent
company
Net assets
shares
calculated at
the 18228196.67 83097225.00 86713347.60 18247919.86 83099533.86
shareholding
proportion
Adjusted items
- Goodwill
- Internal
unrealized
profit
- Others -1469074.42 32851789.43 -1469536.20
Carrying value
of investment
to associated 18228196.67 81628150.58 119565137.03 18247919.86 81629997.66
enterprises
Fair value of
equity
investments in
associated
enterprises
with publicly
quoted prices
Operating
revenue
Net profit -59175.49 -4848.51 12105916.77 4233797.47 -45712.59
Net profit
from
discontinued
operations
178Lu Thai Textile Co. Ltd. Interim Report 2026
Other
comprehensive
income
Total
comprehensive -59175.49 -4848.51 12105916.77 4233797.47 -45712.59
income
Dividends
received from
the associated
enterprises in
the Current
Period
XI Government Grants
1. Government Grants Recognized at the End of the Reporting Period at the Amount
Receivable
□ Applicable□ Not applicable
Reasons for failing to receive government grants in the estimated amount at the estimated point in
time
□ Applicable□ Not applicable
2. Liability Items Involving Government Grants
□ Applicable□ Not applicable
3. Government Grants Recognized in Profit or Loss for the Current Period
□ Applicable □ Not applicable
Unit: RMB
Accounting items H1 2026 H1 2025
Other income 18222873.91 11191654.96
Financial expenses 0.00 126500.01
Total 18222873.91 11318154.97
XII Risks Associated with Financial Instruments
1. Various Types of Risks Arising from Financial Instruments
The Company’s major financial instruments include monetary assets notes receivable accounts
receivable accounts receivable financing other receivables other current assets trading financial
assets other non-current financial assets other non-current assets - time deposits over one year
accounts payable other payables short-term loan trading financial liabilities current portion of
non-current liabilities other current liabilities - endorsed outstanding notes long-term
borrowings bonds payable lease liabilities and other equity instruments. Details of various
179Lu Thai Textile Co. Ltd. Interim Report 2026
financial instruments are disclosed in relevant Notes. Risks related to these financial instruments
and risk management policies the Company has adopted to reduce these risks are described as
follows. The Company management manages and monitors the risk exposure to ensure the above
risks are controlled in a limited scope.
1. Risk management objectives and policies
The major risks caused by financial instruments of the Company are credit risk liquidity risk and
market risk (including foreign exchange risk interest rate risk and commodity price risk).The Company has conducted the risk management to achieve an appropriate balance between the
risk and the income and to minimize the adverse influence of financial risks on the Company’s
financial performance. According to such risk management objective the Company has
formulated corresponding risk management policy to recognize and analyze possible risks
encountered by the Company set the appropriate acceptable risk level and designed
corresponding internal control procedures to monitor the Company’s risk level. Meanwhile the
Company will regularly review these risk management policies and relevant internal control
system so as to cater for the market or respond to any change in the Company’s business
operations. Accordingly the Company’s internal audit department will also regularly or randomly
check whether the internal control system is implemented in conformity with relevant risk
management policies.The Board of Directors shall be responsible for planning and establishing the risk management
framework for the Company formulating the Company’s risk management policies and relevant
guidelines and monitoring the implementation of various risk management measures. However
the Company has established corresponding risk management policies to recognize and analyze
possible risks encountered by the Company. Besides various risks are specified in these risk
management policies including the credit risk the liquidity risk and the market risk management
etc. On a regular basis the Company will evaluate the specific marketing environment and
various changes in the Company’s business operations so as to determine whether any risk
management policy and system need be updated.
(1) Credit Risk
Credit risk means that the Company will suffer any financial losses due to the counterparty’s
failure in fulfilling the contract obligations. The Company shall manage the credit risk based on
the specific Group Classification. The credit risk mainly arises from bank deposit notes
receivable accounts receivable other receivables and debt investment etc.The Company’s bank deposits are mainly saved in state-owned banks and other large and
medium-sized listed banks. The Company’s bank deposits are expected not to suffer any major
credit risks.For notes receivable accounts receivable other accounts receivable and long-term receivables
the Company has established relevant policies to control the credit risk exposure. According to
the client’s financial status credit record and other factors (including the current market
condition) the Company will evaluate the client’s credit qualification and set corresponding
credit period. The Company regularly monitors the credit records of customers. For customers
with bad credit records the Company adopted corresponding methods such as written pressing
for payment shortening credit period and canceling credit period so as to ensure the Company’s
overall credit risk is controllable.The hugest credit risk exposure borne by the Company is the book value of each financial asset
reflected in the balance sheet.
180Lu Thai Textile Co. Ltd. Interim Report 2026
In terms of accounts receivable the top 5 customers in accounts receivable were accounted for
26.76% of the total amount of accounts receivable of the Company (23.88% in 2025). As for
other receivables the top 5 of the ending balance according to the arrears party was accounted for
66.84% of the total amount of other receivables of the Company (75.79% in 2025).
Debt investment The Company generally limits its exposure to credit risk by investing only in
securities for which there is an active market (other than long-term strategic investments) and for
which the counterpart has a high credit rating.The Company supervised the changes of credit risk through tracking the published external credit
ratings. In order to make sure whether the credit rating was the latest and whether the credit risk
has increased obviously of evaluation report date but not been reflected in the published external
ratings the Company has supplemented through examining the changes of bond yield and the
available news and supervision information.On the balance sheet date the carrying value of investment in debt obligations of the Company
are listed as follows according to report items. (Unit: RMB’0000):
Ending balance Closing balance of last year
Held-for-trading financial assets 27072.41 68432.76
Bond investment due within one year
Total 27072.41 68432.76
(2) Liquidity Risk
Liquidity risk refers to the risk of capital shortage encountered by the Company during the cash
payment or the settlement of other financial assets.During the management of liquidity risk the Company shall reserve and monitor corresponding
cash and cash equivalent deemed sufficient by the management so as to meet the Company’s
operational requirements and mitigate the impact caused by the cash flow fluctuation. The
Company’s management will monitor the use of bank loans and guarantee the fulfillment of loan
agreement. Meanwhile major financial institutions shall promise to provide the Company with
sufficient reserve funds in order to satisfy the short-term and long-term fund demand. The
Company shall raise its working capital based on the capital generated from business operations
and bank loans.At the end of the period the analysis of financial liabilities and off-balance sheet guarantee items
held by the Company based on the maturity period of the undiscounted remaining contractual
cash flows is as follows (Unit: RMB):
Ending balance
Item
Within one year Within one to fiveyears Over five years Total
Financial
liabilities:
181Lu Thai Textile Co. Ltd. Interim Report 2026
Short-term loans 270834531.20 270834531.20
Accounts
payable 215170498.75 215170498.75
Other payables 21329058.52 21329058.52
Long-term
borrowings 399974992.44 157830294.66 557805287.10
Bonds payable 0.00
Lease liabilities 16807581.83 44488233.75 39940773.77 101236589.35
Total 924116662.74 202318528.41 39940773.77 1166375964.92
At the end of the previous year the analysis of financial liabilities and off-balance sheet guarantee
items held by the Company based on the maturity period of the undiscounted remaining
contractual cash flows is as follows (Unit: RMB):
Closing balance of last year
Item
Within one year Within one to fiveyears Over five years Total
Financial
liabilities:
Short-term loans 657674037.79 657674037.79
Accounts
payable 232348158.30 232348158.30
Other payables 17580817.40 17580817.40
Long-term
borrowings 321424010.14 253279126.91 574703137.05
Bonds payable 1399837000.00 1399837000.00
Lease liabilities 19781352.15 49311573.87 42786790.37 111879716.39
Total 2648645375.78 302590700.78 42786790.37 2994022866.93
The amounts of financial liabilities disclosed in the table above represent undiscounted
contractual cash flows and may differ from the carrying amounts in the balance sheet.
(3) Market Risk
182Lu Thai Textile Co. Ltd. Interim Report 2026
The financial instrument’s market risk refers to the fluctuation risk of fair value of financial
instrument or future cash flow caused by the changes of market price including the interest rate
risk and the exchange rate risk.Interest rate risk
Interest rate risk refers to the risk of fluctuations in the fair value or future cash flows of financial
instruments arising from changes in market interest rates. The interest rate can derive from the
recognized interest-bearing financial instruments and unrecognized financial instruments
(including certain loan commitment).The Company’s interest rate risk mainly arises from the long-term interest-bearing debt such as
the bank loan and bonds payable. Financial liabilities based on the floating interest rate will cause
the cash flow interest rate risk to the Company and financial liabilities based on the fixed interest
rate the fair value interest rate risk.However the Company has paid close attention the impact of interest rate fluctuations on the
Company’s interest rate risk. At present the Company has not taken any interest rate hedging
measures. The rise of interest rate will increase the cost of newly-added interest-bearing debts and
the interest cost of the Company’s unsettled interest-bearing debts based on the floating interest
rate and cause major adverse influence on the Company’s financial performance. The
management will timely make corresponding adjustment according to the latest market situation
and corresponding interest rate swap will be arranged to reduce the interest rate risk.The interest-bearing financial instruments held by the Company are as follows (Unit:
RMB’0000):
Item End of the current period End of the previous year
Fixed-interest financial instruments
Including: Short-term loans 34705.98 61552.74
Long-term borrowings matured within
one year
Long-term borrowings
Current portion of bonds payable - 153904.98
Total 34705.98 215457.72
Floating-interest financial instruments
Financial assets 27072.41 68432.76
Including: Held-for-trading financial assets 27072.41 68432.76
Debt investment due within one year
Financial liabilities 56553.84 58164.86
183Lu Thai Textile Co. Ltd. Interim Report 2026
Including: Short-term loans 1830.95
Long-term borrowings matured within one year 39580.72 31542.64
Long-term borrowings 16973.12 24791.27
Total 83626.25 126597.62
On June 30 2026 if the lending rate calculated at floating interest rate up or down 100 basis
points with other variables unchanged the net profit and shareholders’ equity will be decreased or
increased about RMB4784800 (compared to RMB4962300 as of the end of last year).For financial instruments held at the balance sheet date that expose the Company to fair value
interest rate risk the impact on net profit and shareholders’ equity in the sensitivity analysis above
is the impact of re-measuring the above financial instruments at the new interest rate assuming
that there is a change in interest rates at the balance sheet date. For floating rate non-derivative
instruments held at the balance sheet date that expose the Company to cash flow interest rate risk
the impact on net profit and shareholders’ equity in the above sensitivity analysis is the impact of
changes in the above interest rates on interest expense or income estimated on an annualized
basis. The previous year’s analysis was based on the same assumptions and methodology.Exchange rate risk
Foreign exchange risk is referred to the fluctuation risk of fair value of financial instruments or
future cash flows resulted from the change of foreign exchange rate. The foreign exchange rate
was originated from the financial instruments denominated in foreign currencies other than the
recording currency.The Company’s recognized foreign currency assets and liabilities as well as future foreign
currency transactions (the denomination currencies of foreign currency assets and liabilities and
foreign currency transactions are mainly USD VND EUR and HKD) are exposed to foreign
exchange risk.On June 30 2026 the amount of foreign currency financial assets and foreign currency financial
liabilities converted to renminbi is as follows (Unit: RMB’0000):
Foreign currency liabilities Foreign currency assets
Item
Ending amount Beginning amount Ending amount Beginning amount
USD 25481.29 64491.63 142259.20 214525.98
EUR 12.60 37.71 330.03 311.65
JPY 20.39 28.75 61.97 23.03
HKD 290.02 157.13
GBP 0.02 0.03
184Lu Thai Textile Co. Ltd. Interim Report 2026
CHF 3.71 3.89 7.10
VND 10490.67 7960.70 13613.27 11116.39
MMK 224.95 164.13 1658.30 1193.24
KHR 157.87
AUD 669.30
Total 36233.61 72686.81 158889.21 227485.32
The Company has paid close attention the impact of exchange rate fluctuations on the Company’s
exchange rate risk. The Company has signed contracts of futures exchange for the purpose of the
aversion of foreign exchange risk. As at the end of each reporting period for the Company’s
monetary capitals notes receivable accounts payable other payables short-term loans and long-
term loans denominated in foreign currencies assuming a 10% appreciation or depreciation of
RMB against foreign currencies while other factors remain unchanged the impact of possible
reasonable changes in the Company’s foreign currency exchange rate against RMB on the
Company’s profit and loss for the Current Period is as follows (Unit: RMB’0000):
Reporting period H1 2025
Exchange rate
fluctuations Impact on total Impact on Impact on total Impact on
comprehensive income shareholders’ equity comprehensive income shareholders’ equity
10% appreciation
against RMB -10836.63 -10836.63 -8467.99 -8467.99
10% depreciation
against RMB 10836.63 10836.63 8467.99 8467.99
2. Capital Management
The objectives of capital management policies of the Company are to ensure the continuous
operation of the Company so as to provide return to shareholders and benefit other stakeholders
as well as to reduce capital cost by maintaining the optimal capital structure.In order to maintain or adjust capital structure the Company might adjust financing method and
the dividends paid to shareholders return capital to shareholders issue new shares and other
equity instruments or sell assets to reduce debts.The Company supervised the capital structure based on the asset-liability ratio (namely total
liabilities divide total assets). On June 30 2026 the asset-liability ratio was 17.54% of the
Company (28.19% on December 31 2025).XIII Disclosure of Fair Value
1. Ending Fair Value of Assets and Liabilities at Fair Value
Unit: RMB
185Lu Thai Textile Co. Ltd. Interim Report 2026
Closing fair value
Item Fair value Fair value Fair value
measurement items measurement items measurement items Total
at level 1 at level 2 at level 3
I. Consistent fair
value measurement -- -- -- --
i. Held-for-
trading financial 68160444.16 623573742.67 691734186.83
assets
1. Financial assets
at fair value through 68160444.16 623573742.67 691734186.83
profit or loss
(1) Investment in
debt instruments 68160444.16 202563642.19 270724086.35
(2) Equity
investments 419219913.09 419219913.09
(3) Derivative
financial assets 1790187.39 1790187.39
The total amount of
assets consistently
measured at fair 68160444.16 623573742.67 93054144.86 784788331.69
value
vi. Held-for-
trading financial 2463160.63 2463160.63
liabilities
Derivative financial
liabilities 2463160.63 2463160.63
II. Inconsistent fair
value measurement -- -- -- --
2. Market Price Recognition Basis for Consistent and Inconsistent Fair Value Measurement
Items at Level 1
Quoted prices in active markets for identical assets or liabilities (unadjusted).
3. Valuation Technique Adopted and Nature and Amount Determination of Important
Parameters for Consistent and Inconsistent Fair Value Measurement Items at Level 2
The Company determines the fair value of structural deposits and wealth management products
based on the prospective earning rate as agreed in the contract.
186Lu Thai Textile Co. Ltd. Interim Report 2026
The Company determines the fair value of fund products based on the changes in net value
published by the private equity funds.The Company determines the fair value of forward options based on bank forward foreign
exchange quotations at the end of the period.
4. Valuation Technique Adopted and Nature and Amount Determination of Important
Parameters for Consistent and Inconsistent Fair Value Measurement Items at Level 3
For the unlisted equity investment the Company adopts the comparable listed company
comparison method and the non-observable input value of the comparable listed company
comparison method includes the liquidity discount.The investment into Shandong Hongqiao Thermoelectric Co. Ltd. made by Luqun Textile (the
Company’s subsidiary) is expected to be held in the long run for obtaining the discount on power
purchase. As no revenue distribution right is vested in the investment the invested unit’s
operating profit and loss are not shared or borne and the equity transfer is not proposed the
Company regards it as the financial asset which shall be measured based on the fair value and
whose variations are included in the current profit and loss and the investment cost is deemed as
the fair value of the financial asset.For accounts receivables financing at fair value and the changes included in other comprehensive
income its fair value shall be determined by the discount cash flow method.
5. Fair Value of Financial Assets and Financial Liabilities Not Measured at Fair Value
The financial assets and financial liabilities measured at amortized cost mainly include monetary
assets other non-current assets - time deposits notes receivable accounts receivable other
receivables short-term loan notes payable accounts payables other payables current portion of
long-term borrowings current portion of bonds payable long-term borrowings and bonds
payable.XIV Related Party and Related-party Transactions
1. Information Related to the Company as the Parent Company
Proportion of Proportion ofvoting rights
Name Registration Registered
share held by the
place Nature of business
owned by the
capital parent companyagainst the parent company
Company (%) against theCompany (%)
Lucheng Textile Zibo Textile chemistry RMB63260and investment 000 17.17% 17.17%
Notes: Information on the parent company
The final controllers of the Company are Mr. Liu Zibin and Mr. Liu Deming.
2. Subsidiaries of the Company
Refer to Note X. 1.
3. Information on the Joint Ventures and Associated Enterprises of the Company
Refer to Note X. 2.
187Lu Thai Textile Co. Ltd. Interim Report 2026
4. Information on Other Related Parties
Name Relationship with theCompanyZibo Limin Purified Water Co. Ltd. (hereinafter referred to as “Limin PurifiedWater”) Same parent company
Zibo Luqun Land Co. Ltd. (hereinafter referred to as “Luqun Land”) Same parent company
Zibo Lurui Fine Chemical Co. Ltd. (hereinafter referred to as “Lurui Chemical”) Same parent companyZibo Lujia Property Management Co. Ltd. (hereinafter referred to as “LujiaProperty”) Same parent company
Hong Kong Tung Hoi International Company Limited (hereinafter referred to as
“Tung Hoi International”) Same parent companyZibo Chengshun Hosiery Co. Ltd. (hereinafter referred to as “ChengshunHosiery”) Same parent company
Zibo Chengshun Economic and Trade Co. Ltd. (hereinafter referred to as
“Chengshun Economic and Trade”) Same parent company
Chengshun Petrochemical (Zhejiang Zhoushan) Co. Ltd. (hereinafter referred to
as “Chengshun Petrochemical”) Same parent companyZibo Lucheng Petrochemical Sales Co. Ltd. (hereinafter referred to as “LuchengPetrochemical”) Same parent company
Shanghai Hengjiu Textile New Materials Co. Ltd. (hereinafter referred to as
“Hengjiu Textile”) Same parent companyZibo Lumei Economic and Trade Co. Ltd. (hereinafter referred to as “LumeiEconomic and Trade”) Same parent companyShandong Xirui New Materials Co. Ltd. (hereinafter referred to as the “Xirui New Subsidiary of the parentMaterial”) company’s subsidiaryZibo Hesheng Chemical Trading Co. Ltd. (hereinafter referred to as “Hesheng Subsidiary of the parentChemical Trading”) company’s subsidiary
ZhiFeng (Vietnam) International Trading Co. Ltd. (hereinafter referred to as Subsidiary of the parent
“ZhiFeng International”) company’s subsidiary
Liu Zibin Xu Zhinan Xu Jianlv Zheng Huisheng Liu Deming Zhang Zhanqi
Zhang Keming Du Lixin Zhu Beina Yu Mingtao Quan Yuhua Wei Jian Shang Key management
Chenggang Yu Shouzheng Liu Zilong Dong Shibing Guo Heng Lv Wenquan personnel
Xu Feng Li Kun
188Lu Thai Textile Co. Ltd. Interim Report 2026
5. List of Related-party Transactions
(1) Information on Acquisition of Goods and Reception of Labor Service
Information on acquisition of goods and reception of labor service
Unit: RMB
Whether
Related party Content H1 2026 The approval exceedtrade credit trade credit H1 2025
or not
Limin Purified Recycled water
Water sewage treatment 12982517.80 14850000.00 No 11966867.49
Lurui Chemical
Donghai
International Auxiliaries 64339069.37 69800000.00 No 57785824.90
Hesheng Industry
and Trade
Paper core
Chengshun hosiery
Hosiery and Luqun purchase ofmaterials such as 3254347.03 4020833.33 No 3039439.51Land hose electrical
etc.Chengshun
Economic and Supermarketretail 1319870.84 1560000.00 No 903874.20Trade
Lucheng
Petrochemical Oil 1713218.26 1990000.00 No 1721161.37
Petrochemical
Chengshun
Petrochemical Oil natural gas 22652815.39 31400000.00 No 21651580.57
Information of sales of goods and provision of labor service
Unit: RMB
Related party Content H1 2026 H1 2025
Chengshun
Hosiery Yarn yarn-dyed fabric etc. 175796.37 170156.08
Chengshun Materials electricity running
Hosiery water heating steam 114546.76 108565.44
Chengshun Materials electricity running 252193.50 104193.73
Economic and water yarn garments food
189Lu Thai Textile Co. Ltd. Interim Report 2026
Trade heating steam
Lucheng
Petrochemical Materials electricity 6750.66 7843.35
Petrochemical
Limin
Purified Materials electricity garments
Water meal service in classes foods
2683952.172936176.07
Lurui
Chemical Garments fabrics foods 129037.82 10394.59
Lujia Property Materials garments 32265.33 22153.93
Xirui New Catering and accommodation
Material service 4756.60 5107.54
Xirui New
Material Materials garments etc. 25164.84 27351.24
(2) Information on Related-party Lease
The Company was lessor:
Unit: RMB
The lease income The lease income
Name of lessee Category of leased assets confirmed in the Current confirmed in the same
Period period of last year
Chengshun Economic Rent of houses and
and Trade buildings 50636.00 50636.00
Chengshun Hosiery Rent of houses andbuildings 50114.28 8400.00
The Company was lessee:
Unit: RMB
Rental expense of Variable lease payments
simplified short-term that are not covered in
Category of leases and low-value the measurement of the Rent payable
Interest expense on lease Added right-of-use
Name of leased asset leases (if lease liabilities (if
liabilities borne assets
lessor assets applicable) applicable)
H1 2026 H1 2025 H1 2026 H1 2025 H1 2026 H1 2025 H1 2026 H1 2025 H1 2026 H1 2025
Lucheng
Textile Rent of land 1807428.60 1807428.60 375449.43 440389.20
Lucheng Rent of gas
Textile station 116571.42 116571.42 44208.33 47489.98
190Lu Thai Textile Co. Ltd. Interim Report 2026
Lucheng Rent of
Textile buildings 5511114.30 5511114.30 752956.82 931811.76
Rent of land
Luqun Land and 985714.26 985714.26 506632.13 528358.35
buildings
6. Accounts Receivable and Payable of Related Party
(1) Accounts Payable
Unit: RMB
Project name Related party Ending carrying amount Beginning carryingamount
Accounts payable Lurui Chemical 831856.08 708092.56
Accounts payable Tung Hoi International 9629387.46 8053417.70
Accounts payable Hesheng ChemicalTrading 975295.00 920603.97
XV Commitments and Contingencies
1. Significant Commitments
Significant commitments on balance sheet date
Commitments signed but hasn’t been recognized in financial Ending balance Closing balance ofstatements last year
Commitment on constructing and purchasing long-lived assets
(RMB’0000) 15278.62 9328.14
2. Contingency
(1) Significant Contingencies Existing at the Balance Sheet Date
None.
(2) Explanation Shall Be Given Even if There Is No Significant Contingency for the
Company to Disclose
There was no significant contingency in the Company to disclose.XVI Events after Balance Sheet Date
1. Distribution of Profit
Amount to be distributed for every ten
shares (RMB) 1.00
191Lu Thai Textile Co. Ltd. Interim Report 2026
Dividend shares to be distributed for every
ten shares (share) 0
Number of shares to be converted into
share capital for every ten shares (share) 0
Amount to be distributed for every ten
shares after consideration and approval 1.00
(RMB)
Dividend shares to be distributed for every
ten shares after consideration and approval 0
Number of shares to be converted into
share capital for every ten shares after 0
consideration and approval (share)
On August 27 2026 the 12th meeting of the 11th Board of
Directors of the Company approved the profit distribution plan for
H1 2026 as follows: The Company plans to distribute a cash
dividend of RMB1.00 (inclusive of tax) for every 10 shares based
on a share capital base of 817525607 shares. The total amount of
Distribution of profit dividends calculated on this basis is RMB81752560.70. At the2025 Annual Shareholders’ Meeting held on May 8 2026 the
Company authorized the Board of Directors to formulate and
implement the 2026 interim profit distribution plan within the
specified time frame provided that the conditions for distribution of
profit are met without requiring further shareholders meeting
approval.
2. Notes to Other Events after Balance Sheet Date
As at August 27 2026 the Company has no other events after balance sheet date that should be
disclosed.XVII Notes of Main Items in the Financial Statements of the Company as the Parent
Company
1. Accounts Receivable
(1) Disclosure by Aging
Unit: RMB
Aging Ending carrying amount Beginning carrying amount
Within one year (including one
year) 306275198.19 447952834.23
One to two years 2701785.30 2058512.47
Two to three years 1079006.73 798993.21
192Lu Thai Textile Co. Ltd. Interim Report 2026
More than three years 651660.00 795210.00
Three to four years 457320.00 550870.00
Four to five years 100763.00 107200.00
Over five years 93577.00 137140.00
Total 310707650.22 451605549.91
(2) Disclosure by Withdrawal Methods for Bad Debts
Unit: RMB
Ending balance Beginning balance
Category Carrying amount Bad debt provision Carrying amount Bad debt provision
Carrying value Carrying value
Amount Percentage Withdrawal Percentage Withdrawal(%) Amount proportion Amount (%) Amount proportion
Accounts
receivable
withdrawal
of Bad debt 2472262.99 0.80% 2472262.99 100.00% 2675133.33 0.59% 2675133.33 100.00%
provision
separately
accrued
Of which:
Accounts
receivable
withdrawal
of bad debt 308235387.23 99.20% 23243959.40 7.54% 284991427.83 448930416.58 99.41% 27576420.06 6.14% 421353996.52
provision
of by group
Of which:
Group 1:
Undue
accounts 41086828.41 13.22% 41086828.41 58751484.97 13.01% 58751484.97
(L/C)
Group 2:
Undue
accounts 205102723.71 66.01% 9229622.57 4.50% 195873101.14 337021632.71 74.63% 15165973.47 4.50% 321855659.24
(excluding
L/C)
Group 3:
Overdue 62045835.11 19.97% 14014336.83 22.59% 48031498.28 53157298.90 11.77% 12410446.59 23.35% 40746852.31
amounts
Total 310707650.22 100.00% 25716222.39 8.28% 284991427.83 451605549.91 100.00% 30251553.39 6.70% 421353996.52
The category name of bad debt provision separately accrued: June 2026
Unit: RMB
193Lu Thai Textile Co. Ltd. Interim Report 2026
Beginning balance Ending balance
Name
Carrying Bad debt Carrying Bad debt Withdrawal Reason for
amount provision amount provision proportion withdraw
Customer in
Customer 1 1600187.96 1600187.96 1443782.86 1443782.86 100.00% financial
difficulty
Customer in
Customer 2 640627.61 640627.61 598726.94 598726.94 100.00% financial
difficulty
Zhuhai
Suichang Customer in
Technology 327314.12 327314.12 327314.12 327314.12 100.00% financial
Co. Ltd. difficulty
Customer in
Customer 3 107003.64 107003.64 102439.07 102439.07 100.00% financial
difficulty
Total 2675133.33 2675133.33 2472262.99 2472262.99
If adopting the general mode of expected credit loss to withdraw bad debt provision of accounts
receivable:
□ Applicable□ Not applicable
(3) Bad Debt Provision Withdrawn Reversed or Recovered in the Current Period
Withdrawal of bad debt provision:
Unit: RMB
Changes in the Current Period
Category Beginning Endingbalance Reversed or balanceWithdrawal recovered Write-offs Other
Bad debt
provision 30251553.39 -4549222.22 -17866.76 3975.54 25716222.39
Total 30251553.39 -4549222.22 -17866.76 3975.54 25716222.39
(4) Accounts Receivable Written-off in Current Period
Unit: RMB
Item Written-off amount
Written-off accounts receivable 3975.54
194Lu Thai Textile Co. Ltd. Interim Report 2026
(5) Top 5 of the Ending Balance of the Accounts Receivable and the Contract Assets
Collected According to Arrears Party
Unit: RMB
Ending balance
Ending Proportion to of bad debt
Ending balance balance Ending balance total ending provision of
Name of the entity of accounts of of accounts balance of accounts
receivable contract receivable and accounts receivable and
assets contract assets receivable and impairmentcontract assets provision for
contract assets
Summary of the top 5
of the ending balance
of the accounts 103836500.84 103836500.84 33.42% 8762850.40
receivable and the
contract assets
Total 103836500.84 103836500.84 33.42% 8762850.40
2. Other Receivables
Unit: RMB
Item Ending balance Beginning balance
Other receivables 1602342122.27 1439542031.30
Total 1602342122.27 1439542031.30
(1) Other Receivables
1) Other receivables classified by nature
Unit: RMB
Nature Ending carrying amount Beginning carrying amount
Intercourse funds 1594782873.45 1429802870.14
Export rebates 461239.99 2938078.95
Payment on behalf 6963204.88 6556079.00
Guarantee deposit and cash deposit 2562193.68 1793585.03
Borrowings and petty cash 1170681.14 940291.04
Other 3930986.36 3958251.59
195Lu Thai Textile Co. Ltd. Interim Report 2026
Total 1609871179.50 1445989155.75
2) Disclosure by aging
Unit: RMB
Aging Ending carrying amount Beginning carrying amount
Within one year (including one
year) 1342678684.14 1135915012.24
One to two years 18932826.13 237366753.23
Two to three years 213059521.47 26699785.22
More than three years 35200147.76 46007605.06
Three to four years 20529788.75 12651840.00
Four to five years 12313620.00 31109026.05
Over five years 2356739.01 2246739.01
Total 1609871179.50 1445989155.75
3) Disclosure by withdrawal methods for bad debts
Unit: RMB
Ending balance Beginning balance
Category Carrying amount Bad debt provision Carrying amount Bad debt provision
Carrying value Carrying value
Amount Percentage Amount Withdrawal Percentage(%) proportion Amount (%) Amount
Withdrawal
proportion
Of which:
Withdrawal
of bad debt
provision 1609871179.50 100.00% 7529057.23 0.47% 1602342122.27 1445989155.75 100.00% 6447124.45 0.45% 1439542031.30
by group
Of which:
Bad debt I.provision 1605578925.25 99.73% 5324151.21 Restricted 1600254774.04 1443161404.69 99.80% 4957335.34 0.34% 1438204069.35
in Stage 1 shares
Bad debt
provision 4079242.20 0.25% 1991893.97 48.83% 2087348.23 2614739.01 0.18% 1276777.06 48.83% 1337961.95
in Stage 2
Bad debt 213012.05 0.01% 213012.05 100.00% 0.00 213012.05 0.02% 213012.05 100.00% 0.00
provision
196Lu Thai Textile Co. Ltd. Interim Report 2026
in Stage 3
Total 1609871179.50 100.00% 7529057.23 0.47% 1602342122.27 1445989155.75 100.00% 6447124.45 0.45% 1439542031.30
Withdrawal of bad debt provision by adopting the general mode of expected credit loss:
Unit: RMB
First stage Second stage Third stage
Bad debt provision Expected credit loss Expected credit loss Expected credit loss Total
of the next 12 in the duration in the duration
months (credit impairment (credit impairmentnot occurred) occurred)
Balance of January
120264957335.341276777.06213012.056447124.45
Balance of January
1 2026 in the
current period
Withdrawal of the
Current Period 366815.87 715116.91 1081932.78
Balance of June 30
20265324151.211991893.97213012.057529057.23
Basis of classification of stages and percentage of provision for bad debts
Changes of carrying amount with significant amount changed of loss provision in the Current
Period
□ Applicable□ Not applicable
4) Bad debt provision withdrawn reversed or recovered in the Current Period
Withdrawal of bad debt provision:
Unit: RMB
Changes in the Current Period
Category Beginning Endingbalance balance
Withdrawal Reversed or Charged-off/recovered Verification Other
Bad debt
provision 6447124.45 1081932.78 7529057.23
Total 6447124.45 1081932.78 7529057.23
197Lu Thai Textile Co. Ltd. Interim Report 2026
5) Top 5 of the ending balance of the other receivables collected according to the arrears
party
Unit: RMB
Proportion to total
Name of the Ending
entity Nature Ending balance Aging
ending balance of
other balance of bad
receivables % debt provision
WX Company Intercourse
Within one year; one to
funds 862577696.48 two years; two to three 53.58% 2587733.09years
XZ Company Intercoursefunds 252847769.53 Within one year 15.71% 758543.31
Shandong Lulian
New Materials Intercoursefunds 134362135.50 Within one year 8.35% 403086.41Co. Ltd.Zibo Xinsheng
Thermal Power Intercoursefunds 113000000.00 Within one year 7.02% 339000.00Co. Ltd.ZJ Company Intercoursefunds 108675603.57 Within one year 6.75% 326026.81
Total 1471463205.08 91.41% 4414389.62
3. Long-term Equity Investments
Unit: RMB
Ending balance Beginning balance
Item Provision Provision
Carrying amount for Carrying value Carrying amount forimpairment impairment Carrying value
losses losses
Investment
to 3748363071.28 0.00 3748363071.28 3766117944.25 3766117944.25
subsidiaries
Investment
to joint
ventures
and 99856347.25 99856347.25 99877917.52 99877917.52
associated
enterprises
Total 3848219418.53 3848219418.53 3865995861.77 3865995861.77
198Lu Thai Textile Co. Ltd. Interim Report 2026
(1) Investment to Subsidiaries
Unit: RMB
Increase/decrease for the Current Period
Beginning Ending
Beginning balance balance of Ending balance balance ofInvestee Withdrawal(carrying value) provisionfor Additional Reduced of (carrying value)
provision
Other for
impairment investment investment impairment impairment
provision
Xinsheng
Thermal 176340737.93 176340737.93
Power
LuFeng
Company 529620000.00 529620000.00
Luqun
Textile 171784550.00 171784550.00
Lu Thai
(Hong 128771800.00 128771800.00
Kong)
Shanghai
Luthai 20000000.00 20000000.00
VACL 62337956.32 62337956.32
Lulian New
Materials 619443900.00 619443900.00
Lujia Import
& Export 10000000.00 10000000.00
Lu Thai
Vocational
Training
School 100000.00 100000.00
Huilin
International
Zhishu
Consulting 2000000.00 2000000.00
Huilin
International 1630000000.00 1630000000.00
Banyang
Villa 5000000.00 5000000.00
Tianyi
Apparel 10719000.00 10719000.00
Yuanhui
Fund 400000000.00 17754872.97 382245127.03
199Lu Thai Textile Co. Ltd. Interim Report 2026
Total 3766117944.25 17754872.97 3748363071.28 0.00
(2) Investment to Joint Ventures and Associated Enterprises
Unit: RMB
Increase/decrease for the Current Period
Beginning Beginning Ending Ending
Investee balance
balance of Gains and balance of
(carrying provision losses Adjustment of
Cash Withdrawal balance provision
for Additional Reduced recognized other Changes
bonus or of (carrying
value) of other profits Other forimpairment investment investment under the comprehensive impairment value) impairment
equity income equity announcedto issue provisionmethod
I. Joint ventures
II. Associated enterprises
Haohong
Investment 18247919.86 -19723.19 18228196.67
Haoying
Investment 81629997.66 -1847.08 81628150.58
Subtotal 99877917.52 -21570.27 99856347.25
Total 99877917.52 -21570.27 99856347.25
The recoverable amount is determined based on the net amount of the fair value minus disposal
costs
□ Applicable□ Not applicable
The recoverable amount is determined by the present value of the forecasted future cash flow.□ Applicable□ Not applicable
4. Operating Revenue and Cost of Sales
Unit: RMB
H1 2026 H1 2025
Item
Operating revenue Cost of sales Operating revenue Cost of sales
Main operations 1133269156.96 912946011.38 1279023281.60 976688435.81
Other operations 72387748.54 67694827.49 101627992.90 70820305.91
Total 1205656905.50 980640838.87 1380651274.50 1047508741.72
Information in relation to the transaction price apportioned to the residual contract performance
obligation:
The amount of revenue corresponding to performance obligations of contracts signed but not
performed or not fully performed yet was RMB0.00 at the period-end among which RMB0.00
200Lu Thai Textile Co. Ltd. Interim Report 2026
was expected to be recognized in XXX RMB0.00 was expected to be recognized in XXX and
RMB0.00 was expected to be recognized in XXX.
5. Investment Income
Unit: RMB
Item H1 2026 H1 2025
Long-term equity investments income
accounted by cost method 108926000.00 325000000.00
Long-term equity investments income
accounted by equity method -21570.27 1393710.04
Return on investment from holding of
held-for-trading financial asset 6379500.00
Investment income from disposal of
held-for-trading financial asset 9120054.45 199267507.77
Interest income from debt investments
during the holding period 28836283.25 2120807.51
Total 153240267.43 527782025.32
XVIII. Supplementary Materials
1. Items and Amounts of Non-recurring Profit or Loss
□ Applicable □ Not applicable
Unit: RMB
Item Amount Note
Gains and losses on disposal of non-current assets 86960374.41
Government grants recognized in profit or loss for the Current Period
(exclusive of those that are closely related to the Company’s normal business
operations and given in accordance with defined criteria and in compliance 16253060.02
with government policies and have a continuing impact on the Company’s
profit or loss)
Gain/loss on changes in fair value in financial assets and liabilities held by a
non-financial enterprise as well as on disposal of financial assets and financial
liabilities (exclusive of the effective portion of hedges that is related to the 41178906.33
Company’s normal business operations)
Non-operating income and expense other than the above 10598160.74
Less: Income tax effects 17543514.96
201Lu Thai Textile Co. Ltd. Interim Report 2026
Non-controlling interests effects (after tax) 1104665.22
Total 136342321.32 --
Particulars about other items that meet the definition of exceptional gain/loss:
□ Applicable□ Not applicable
No such cases for the Reporting Period.Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item listed in
the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their
Securities to the Public—Non-recurring Gains and Losses:
□ Applicable□ Not applicable
2. Return on Equity and Earnings Per Share
EPS
Profit as of Reporting Period Weighted average ROE(%)
EPS-basic (RMB/share) EPS-diluted(RMB/share)
Net profit attributable to
ordinary shareholders of the 2.55% 0.31 0.29
Company
Net profit attributable to
ordinary shareholders of the
Company after deduction of 1.18% 0.14 0.14
non-recurring profit or loss
Chairman of the Board: Liu Zibin
Lu Thai Textile Co. Ltd.August 29 2026
202
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