Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.Kunming Chuan Jin Nuo Chemical Co. Ltd.2025 Annual Report
Stock Code: 300505.SZ
Announcement No.: 2026-007
Announcement Date: March 2026
1Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Section I Important Notes Table of Contents and Definitions
The Board of Directors (or the “Board”) and the directors as well as senior management
personnel of Kunming Chuan Jin Nuo Chemical Co. Ltd. (hereinafter referred to as the
“Company”) hereby guarantee that the contents of this annual report are true accurate and
complete without any false records misleading statements or material omissions and assume
joint and several liability for its contents.Liu Meng the person in charge of the Company Huang Hai the person responsible for
accounting of the Company and Wang Shiya the person in charge of the accounting
institution (the person responsible for accounting) declare that they warrant the truthfulness
accuracy and completeness of the financial statements in this Annual Report.All the Company’s directors have attended the Board meeting for the review of this Report
and its summary.Any forward-looking statements in this Report such as those related to future plans
strategies or performance forecasts do not constitute any substantial commitment by the
Company to any investors or related parties. Investors and related parties should maintain
sufficient awareness of the associated risks and understand the differences between plans
forecasts and commitments.The Company has detailed the risks it faces in this Report. Please refer to Section III
“Management Discussion and Analysis” Part “XI. Outlook for the Company’s FutureDevelopment iii. Potential risks and mitigation measures”.The Company’s profit distribution plan approved at the meeting of the Board of Directors is
as follows: To distribute a cash dividend of RMB4 (tax-inclusive) per 10 shares and 0 bonus
shares (tax-inclusive) to all shareholders based on the total share capital of 274867523 shares
with the conversion of capital reserves into the share capital of 0 shares per 10 shares.
2Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Contents
Section I Important Notes Table of Contents and De....2
Section II Company Profile and Principal Financial... 7
Section III The Management Discussion and Analysis.. 11
Section IV Corporate Governance Environmental and .. 55
Section V Important Matters .........................78
Section VI Share Changes and Shareholder Informati. 101
Section VII Bond Information ...................... 109
Section VIII Financial Statements ................. 110
3Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Documents Available for Inspection
I. Financial statements bearing the signatures and seals of the person in charge of the Company the
person responsible for accounting and the person in charge of the accounting department
(Accounting Officer).
II. Originals of the auditor’ reports bearing the seals of the accounting firm and the signatures and
seals of a certified accountant.III. Originals of all company documents and manuscripts of all announcements disclosed on the
website designated by the China Securities Regulatory Commission during the Reporting Period.IV. The original text of the 2025 annual report bearing the signature of the Company’s legal
representative.V. Other Information
Place where the aforesaid reference documents can be obtained: Securities Department of the
Company.
4Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Definitions
Term Refers to Content
The Company
Company CJN Refers to Kunming Chuan Jin Nuo Chemical Co. Ltd.Kunming Jingcui Refers to Kunming Jingcui Engineering Technology Co. Ltd. a wholly-owned subsidiary of theCompany
Guangxi Chuan Jin
Nuo Chemical Refers to Guangxi Chuan Jin Nuo Chemical Co. Ltd. a holding subsidiary of the Company
Guangxi Chuan Jin
Nuo New Energy Refers to Guangxi Chuan Jin Nuo New Energy Co. Ltd. a wholly-owned subsidiary of the Company
Yingkou Chuan Xin Refers to Yingkou Chuan Xin Nuo High Technology Co. Ltd. a wholly-owned sub-subsidiary of theNuo Company
Kunming Heliwan Refers to Kunming Heliwan Industrial Solid Waste Treatment Co. Ltd. a wholly-owned subsidiaryof the Company
Yunnan Xinshenghai Refers to Yunnan Xinshenghai International Trade Co. Ltd. a wholly-owned subsidiary of theCompany
Chuan Jin Nuo (Hong
Kong) Refers to Chuan Jin Nuo Hong Kong Co. Ltd. a wholly-owned subsidiary of the Company
Chuan Jin Nuo
International Refers to Chuan Jin Nuo International Co. Ltd. a wholly-owned subsidiary of the Company
Egypt Chuan Jin Nuo
Chemical Refers to Egypt Chuan Jin Nuo Chemical Co. Ltd. a holding second-tier subsidiary of the Company
Chuan Jin Nuo Middle Refers to Chuan Jin Nuo ME International Holding Ltd. a holding second-tier subsidiary of theEast Holdings Company
Fangchenggang Refers to Fangchenggang Lingyun Enterprise Management Consulting Partnership EnterpriseLingyun (Limited Partnership)
Kunming Lingrong Refers to Kunming Lingrong Enterprise Management Consulting Partnership Enterprise (LimitedPartnership)
Company Law Refers to Company Law of the People’s Republic of China
Securities Law Refers to Securities Law of the People’s Republic of China
Accounting Law Refers to Accounting Law of the People’s Republic of China
China Securities
Regulatory Refers to China Securities Regulatory Commission
Commission
SZSE Refers to Shenzhen Stock Exchange
The Articles of
Association Refers to Articles of Association of Kunming Chuan Jin Nuo Chemical Co. Ltd.Board of Shareholders Refers to Board of Shareholders of Kunming Chuan Jin Nuo Chemical Co. Ltd.The Board of
Directors Refers to Board of Directors of Kunming Chuan Jin Nuo Chemical Co. Ltd.Board of Supervisors Refers to Board of Supervisors of Kunming Chuan Jin Nuo Chemical Co. Ltd.Listing Rules of the
ChiNext Board Refers to The Rules Governing the Listing of Shares on the ChiNext of Shenzhen Stock Exchange
The current period the
Reporting Period Refers to January 1 2025 - December 31 2025
The previous period
the same period of the Refers to January 1 2024 - December 31 2024
previous year
A common inorganic acid it is a moderately strong acid. It is classified into pure
Phosphoric acid Refers to phosphoric acid industrial phosphoric acid dilute phosphoric acid and so on dependingon the concentration; and into thermal phosphoric acid and wet-process phosphoric acid
depending on the manufacturing process.P?O? also known as phosphorus anhydride is a white amorphous powder or hexagonal
crystal that can dissolve in water releasing a large amount of heat. It first forms
metaphosphoric acid pyrophosphoric acid etc. and ultimately transforms into phosphoric
P?O? Refers to acid. It is hygroscopic and deliquesces in the air. It is the primary raw material forproducing high-purity phosphoric acid phosphates phosphides and phosphate esters. It is
commonly used to indicate the grade of phosphate rock with P?O? representing the
phosphorus content and phosphoric acid quality making it easier to calculate in both
industrial and laboratory settings.Thermal-process
phosphoric acid Refers to Yellow phosphorus burns in air to produce P?O? which is then absorbed by water or dilute
technology phosphoric acid to produce phosphoric acid.Wet-process Refers to Phosphoric acid produced by decomposing phosphate rock with inorganic acids such as
5Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Term Refers to Content
phosphoric acid sulfuric acid.technology
Salts of phosphoric acid that are important substances in inorganic chemistry biochemistry
Phosphate Refers to and biogeochemistry. As a key food ingredient and functional additive they are widely
used in agriculture industry animal feed food pharmaceuticals and military industries.Feed grade dicalcium Abbreviated as DCP it is a feed additive used in livestock and poultry feed to supplement
phosphate Refers to two types of mineral nutrients calcium and phosphorus. It is currently one of the main“calcium + phosphorus” additives used in China’s livestock and poultry farming industry.Feed grade Abbreviated as MCP it is an efficient and high-quality phosphate feed additive mainly
monocalcium Refers to used to supplement two types of mineral nutrients phosphorus and calcium in animals. It
phosphate has a high phosphorus content good water solubility and is currently the feed gradephosphate with the highest biological efficacy.Dicalcium phosphate Dicalcium phosphate (Type III) is mainly used in small animal feed has high biological
(Type III) Refers to efficacy and leaves less phosphorus residue in animal manure improving phosphorusresource utilization and benefiting environmental protection.Superphosphate also known as triple superphosphate an acidic fast-acting phosphate
Triple superphosphate Refers to fertilizer. It is currently the most widely used high-concentration water-soluble phosphate
fertilizer and has the effect of improving alkaline soils.Iron concentrate Refers to Iron ore (ore containing iron elements or iron compounds) processed into mineral powderpowder by crushing grinding and beneficiation also known as iron powder.Sodium fluorosilicate mainly synthesized from fluosilicic acid and sodium sulfate
Sodium fluorosilicate Refers to primarily used as a flux for enamel a glass opacifier an acid-resistant mud and concretehardening agent and wood preservative. In the pesticide industry it is used to manufacture
insecticides etc.Lithium iron A phosphate with an olivine structure used as a cathode material for lithium-ion batteries
phosphate Refers to mainly for lithium-ion power batteries and lithium-ion energy storage batteries. Thechemical formula is LiFePO4.Iron phosphate also known as ferric phosphate or orthophosphoric acid iron with the
molecular formula FePO4 a white or gray-white monoclinic crystal powder. It is a salt
Iron phosphate Refers to formed by the reaction of iron salt solution and phosphate. The iron is in the +3 oxidation
state. Its main use is in the production of lithium iron phosphate battery materials catalysts
and ceramics.Wet-process Phosphoric acid produced by decomposing phosphate rock with inorganic acids such as
phosphoric acid Refers to sulfuric acid that can be manufactured through various processes including dihydratehemihydrate anhydrous hemihydrate-dihydrate and dihydrate-hemihydrate processes.Wet-process purified
phosphoric acid Refers to
Wet-process phosphoric acid refined to meet industrial or food-grade standards after a
purification process to remove most impurities.New energy materials Refers to Mainly refer to iron phosphate and lithium iron phosphate for the Company.Commonly referred to as calcium-rich a gray-white powder made by decomposing
phosphate rock using mixed acids (sulfuric acid and phosphoric acid). The main
Enriched components of the product are monocalcium phosphate Ca(H?PO?)?·H?O and calcium
superphosphate Refers to sulfate with small amounts of free phosphoric acid and moisture. The effective P?O?
content of the product is between that of tricalcium phosphate and triple superphosphate
generally ranging from 20% P?O? to 30% P?O?.
52% commercial phosphoric acid a high-concentration wet-process fertilizer-grade
phosphoric acid with a P?O? content of 52%. It is made from dihydrate wet-process
52% commercial Refers to phosphoric acid or hemihydrate wet-process phosphoric acid through multi-stagephosphoric acid concentration standing and filtration. It can be used to produce fertilizer-grade ammonium
phosphate salts ammonium salts calcium salts and also as a raw material for purifying
phosphoric acid among other uses.
6Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Section II Company Profile and Principal Financial Indicators
I. Company information
Abbreviated stock name CJN Stock code 300505
Name of the Company in
Chinese 昆明川金诺化工股份有限公司
Abbr. of the Company name in
Chinese 川金诺
Name of the Company in
English (if any) Kunming Chuan Jin Nuo Chemical Co. Ltd
Abbr. of the Company name in
English (if any) KMCJNC
Legal representative of the
Company Liu Meng
Registered address Sifangdi Industrial Park Tongdu Town Dongchuan District Kunming City Yunnan Province
Postal code of the registered
address 654100
Historical change of registered
address of the Company Not applicable
Office address 55/F No. 1 Office Building (Gemini - Dubhe) Qicai Yunnan No. 1 City of Wulong Subdistrict’sAdministrative Agency Chenggong District Kunming City Yunnan Province
Postal code of the office
address 650500
Website https://www.cjnphos.com/
E-mail address cjnzqb@163.com
II. Contact persons and contact methods
Board Secretary Securities Affairs Representative
Name Huang Qiuhan Su Zhe and Liao Zuolin
55/F No. 1 Office Building (Gemini - 55/F No. 1 Office Building (Gemini -
Dubhe) Qicai Yunnan No. 1 City of Dubhe) Qicai Yunnan No. 1 City of
Contact address Wulong Subdistrict’s Administrative Wulong Subdistrict’s Administrative
Agency Chenggong District Kunming Agency Chenggong District Kunming
City Yunnan Province City Yunnan Province
Tel 0871-67436102 0871-67436102
Fax 0871-67412848 0871-67412848
E-mail address hqh@cjnphos.com ir@cjnphos.com lzl@cjnphos.com
III. Information disclosure and places for inspection
Website of the stock exchange where the Company’s Annual
Report is disclosed Shenzhen Stock Exchange: http://www.szse.cn
Name and website of the media for disclosure of the Company’s Securities Times China Securities Journal Securities Daily
Annual Report Shanghai Securities News CNINFO (www.cninfo.com.cn)
Securities Department at 55/F No. 1 Office Building (Gemini -
Archiving location of the Annual Report Dubhe) Qicai Yunnan No. 1 City of Wulong Subdistrict’sAdministrative Agency Chenggong District Kunming City
Yunnan Province
IV. Other information
Accounting firm appointed by the Company
Name of accounting firm ShineWing Certified Public Accountants LLP
Office address of the accounting firm 8/F Tower A Fuhua Building 8 Chaoyangmen North StreetDongcheng District Beijing
Names of signatory accountants Peng Rang and Li Qiuxia
The sponsor institutions engaged by the Company to perform the duties of continuous supervision
during the Reporting Period sponsor institutions
□Applicable □ Not applicable
7Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Name of sponsor
institutions Office address of sponsor institutions
Name of sponsor Duration of the
representatives continuous supervision
Unit 1401-1408 Unit 1501-1508 Unit 1601-1606 and Unit
Century Securities 1701-1705 Tower C Minsheng Internet Building 5073 Zhao Yu and Peng December 1 2022 -
Co. Ltd. Menghai Avenue Nanshan Street Qianhai Shenzhen-Hong Jun December 31 2025
Kong Cooperation Zone Shenzhen
The financial adviser engaged by the Company to perform the duties of continuous supervision
during the Reporting Period
□ Applicable□Not applicable
V. Principal accounting data and financial indicators
If the Company needs to retrospectively adjust or restate accounting data for previous years
□Yes□No
2025 2024 YoY Change 2023
Operating revenue (RMB) 4074660364.42 3207476951.57 27.04% 2711340092.29
Net profit attributable to
the listed company’s 453813148.37 176055944.37 157.77% -91459452.49
shareholders (RMB)
Net profit net of non-
recurring gains and losses
attributable to 442660283.81 167262876.25 164.65% -104437451.94
shareholders of the listed
company (RMB)
Net cash flows from
operating activities (RMB) 297896683.31 142811815.59 108.59% 27481409.10
Basic earnings per share
(RMB/share) 1.6510 0.6405 157.77% -0.3724
Diluted earnings per share
(RMB/share) 1.6510 0.6405 157.77% -0.3724
Weighted average return
on equity (ROE) (%) 16.67% 7.12% 9.55% -4.45%
End of 2025 End of 2024 Year-end Change YoY End of 2023
Total assets (RMB) 4343076100.48 3609153324.48 20.34% 3553892582.94
Net asset attributable to
shareholders of the listed 2918306184.95 2540802774.24 14.86% 2398803942.55
company (RMB)
In recent three fiscal years of the Company the lower of net profit before or after deducting non-
recurring gains and losses was negative. Moreover the auditor’s report for recent one year suggests
that the Company’s ability to continue as a going concern is plagued by uncertainties
□ Yes□No
The lowest of the Company’s audited total profit net profit and net profit after the deduction of
non-recurring gains and losses during the Reporting Period was negative
□Yes□No
VI. Principal financial indicators by quarters
Unit: RMB
Q1 Q2 Q3 Q4
Operating income 720860144.39 1023165871.48 1062673549.07 1267960799.48
Net profit attributable to
the shareholders of the 72021782.19 105473291.04 126922671.56 149395403.58
Company
Net profit attributable to
the shareholders of the 65867843.01 100669621.73 124158631.43 151964187.64
8Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Q1 Q2 Q3 Q4
listed company after
deduction of non-
recurring gains and
losses
Cash flows from
operating activities 118034078.99 52918636.35 32254096.74 94689871.23
Whether the aforesaid financial indicators or their sum are significantly different from relevant
financial indicators disclosed by the Company in its quarterly and semi-annual reports
□ Yes□No
VII. Accounting data differences under PRC GAAP and those under the GAAP of a foreign
jurisdiction
1. If there was any difference of the net profits and the net assets that were disclosed in the
financial statement under the International Financial Reporting Standards (IFRSs) with those
under the Generally Accepted Accounting Principles of the People’s Republic of China (PRC
GAAP)
□ Applicable□Not applicable
There was no difference of the net profits and the net assets that were disclosed in the financial
statement under the IFRSs with those under the PRC GAAP during the Reporting Period.
2. If there was any difference of the net profits and the net assets that were disclosed in the
financial statement under the GAAP of a foreign jurisdiction with those under the PRC
GAAP
□ Applicable□Not applicable
There was no difference of the net profits and the net assets that were disclosed in the financial
statement under the GAAP of any foreign jurisdiction with those under the PRC GAAP during the
Reporting Period.VIII. Non-recurring gains and losses
□Applicable □ Not applicable
Unit: RMB
Item Amount of 2025 Amount of2024 Amount of 2023 Note
Gain or loss on disposal of non-current assets (including
impairment allowance write-offs) 2386.93 22.74 2875222.42
Government grants recorded in the profit and loss for the current
period (except for those acquired in the ordinary course of the
Company’s business in line with national policies and 11406025.93 8236537.78 8460329.32
regulations or those enjoyed according to established standards
and consistently affect the Company’s gain or loss)
Gains or losses arising from changes in fair value of financial
assets and financial liabilities held by non-financial enterprises
and gains or losses arising from the disposal of financial assets 310885.40 455154.71 792842.47
and financial liabilities other than effective hedging business
related to the Company’s normal operating business
Profits arising from business combination when the combined
cost is less than the recognized fair value of net assets of the 192881.52
subsidiary and merged company
Other net non-operating income and expenses other than the
above items 1418423.71 1635449.19 2925663.03
Less: Income tax effects 1647832.93 1164743.66 2145138.16
9Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Item Amount of 2025 Amount of2024 Amount of 2023 Note
Non-controlling interests effects (after tax) 337024.48 369352.64 123801.15
Total 11152864.56 8793068.12 12977999.45 --
Details of other profit and loss items in line with the definition of non-recurring gains and losses:
□ Applicable□Not applicable
There are no other profit and loss items in line with the definition of non-recurring gains and losses
in the Company.Explanation of situations where items listed as non-recurring profits and losses in the Explanatory
Notice of Information Disclosure by Companies Offering Securities to the Public No.1 - Non-
recurring Gains and Losses are classified as non-recurring gains and losses
□Applicable□Not applicable
The Company involves no circumstances where the non-recurring gains and losses listed in the
Explanatory Notice of Information Disclosure by Companies Offering Securities to the Public No.1
- Non-recurring Gains and Losses are defined as recurring gains or losses.
10Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Section III The Management Discussion and Analysis
I. Principal business of the Company during the Reporting Period
Procurement model of principal raw materials
Unit: RMB
Proportion of
Principal raw Procurement model procurement
Any significant Average price in
materials amount in total change in Average price in H1 the second half of
procurement settlement method the year
Implement
procurement based
on production
plans raw materials
Phosphate ore market 52.32% No 566.31 598.10
prices and
inventory
conditions
Implement
procurement based
on production
plans raw materials
Sulfuric acid market 20.88% No 570.56 652.84
prices and
inventory
conditions
Procurement is
carried out based on
Sulfur the production planraw material market 10.24% No 1963.33 2607.70
prices and
inventory levels.Reason for significant changes in raw material prices compared with the previous Reporting Period
Due to fluctuations in the raw materials market the sulfur price increase led to a 45.02% increase in
the Company’s purchased sulfuric acid volume in 2025 decreasing self-produced sulfuric acid.Meanwhile the comprehensive average purchase price of sulfuric acid for the whole year increased
by 70.79% over the previous year.Whether energy procurement prices account for more than 30% of total production costs
□ Applicable□Not applicable
Reason for significant changes in principal energy types
Production technology overview of main products
Stage of Status of key
Main products production technical Patented technologies Advantages of product research
technology personnel and development
A sulfur-saving method for phosphoric Low sulfuric acid consumption in
All are acid extraction. - An energy-saving semi- wet-process phosphoric acidWet-process current hydrate–dihydrate wet-process extraction. - Short process flowphosphoric acid Industrial employees phosphoric acid co-production method for low energy consumption and(intermediate application of the white gypsum. - A method to improve minimal investment. - Efficientproduct) Company and stabilize the neutralization anddefluorination concentration in wet- recovery of unreacted P?O?
process phosphoric acid. reducing production costs.Dicalcium Industrial All are A method for preparing feed grade High automation stable operation.phosphate application current dicalcium phosphate from wet-process Low operating costs intrinsic
11Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Stage of Status of key
Main products production technical Patented technologies Advantages of product research
technology personnel and development
employees phosphoric acid organic extraction process safety. Full wastewater
of the raffinate. A method for treating reuse.Company wastewater from dicalcium phosphate
production. A method for producing
refined sodium phosphate from fertilizer-
grade dicalcium phosphate. A dosing
device for improving the crystallization of
feed grade dicalcium phosphate.A method to reduce free acid in feed Utilizes the Company’s expertise
All are grade monocalcium phosphate. A method in flotation of medium- and low-
current for producing high-quality enriched grade phosphate ores. IntegratesMonocalcium Industrial employees superphosphate as a by-product during the advantages of semi-hydratephosphate application of the feed grade dicalcium phosphate and dihydrate wet-process
Company production. An automatic hydrogen phosphoric acid technology. -sulfide gas control system in Enables graded utilization of
monocalcium phosphate production. phosphate rock.A method for preparing feed grade
dicalcium phosphate from wet-process
phosphoric acid organic extraction
raffinate. A method for removing arsenic
from feed-grade dicalcium phosphate in
All are wet-process phosphoric acid production.Dicalcium A method for producing high-quality
phosphate (Type Industrial
current
employees enriched superphosphate as a by-product
Aligns with phosphate market
III) application of the during feed grade dicalcium phosphate
development trends. High
Company production. A method for co-producing
efficiency low pollution.fertilizer-grade monoammonium
phosphate (MAP) with feed grade
dicalcium phosphate. A method for
producing feed grade dicalcium
phosphate using hydrochloric acid
without defluorination.A method for reducing free acid in triple
superphosphate using fertilizer-grade
dicalcium phosphate. An energy-saving
All are production method for granular triple Enables the use of low-grade
Triple Industrial current superphosphate. A method for producing phosphate rock to produce high
superphosphate application employees triple superphosphate using raffinate acid phosphate-to-feed ratio fertilizers.of the from purified wet-process phosphoric Reduces dependence on high-
Company acid. A method for producing nitrogen- quality phosphate rock.enriched triple superphosphate from
raffinate acid after phosphoric acid
purification.A production method and device for
purifying low-concentration wet-process
phosphoric acid. A liquid-liquid Enhances the purification of the
extraction phosphoric acid separator and Company’s wet-process
All are clarifier. A device for removing phosphoric acid. Increases the
current interphase impurities in wet-process added value of phosphoric acidPurified Industrial employees purified phosphoric acid production. A products. Provides technicalphosphoric acid application of the device for removing organic solvents reserves for producing iron
Company from raffinate acid in purified wet- phosphate as a precursor forprocess phosphoric acid production. A lithium iron phosphate (LFP).method for producing high-purity battery- Achieves tiered utilization of
grade monoammonium phosphate (MAP) phosphate resources.using by-product wash acid from purified
phosphoric acid.A preparation method for carbon-coated Utilizes the Company’s phosphoric
All are porous lithium iron phosphate powder. A acid iron raw materials. Combines
Lithium iron Industrial current one-step method for synthesizing lithium the Company’s expertise in lithium
phosphate application employees iron phosphate using ferric hydroxide as iron phosphate production.of the the iron source. A method for producing Enhances the value of phosphorus
Company battery-grade lithium iron phosphate from resources. Lays the foundation for
pyrite roasting slag. the Company’s expansion into the
12Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Stage of Status of key
Main products production technical Patented technologies Advantages of product research
technology personnel and development
battery materials market.Production capacity of main products
Main products Designed
Capacity Capacity
capacity utilization under Situation of investment constructionrate construction
Monocalcium phosphate 100000
(Dongchuan) tonnes/year 159.61% Completed and currently in normal operation:
Dicalcium phosphate 150000
(Dongchuan) tonnes/year 41.03% Completed and currently in normal operation:
Calcium dihydrogen phosphate 150000
(Dongchuan) tonnes/year 20.72% Completed and currently in normal operation:
Calcium carbonate (rich calcium) 150000
(Dongchuan) tonnes/year 63.40% Completed and currently in normal operation:
Sodium fluorosilicate 10000
(Dongchuan) tonnes/year 72.44% Completed and currently in normal operation:
Calcium carbonate (rich calcium) 140000
(Fangchenggang) tonnes/year 150.26% Completed and currently in normal operation:
Sodium fluorosilicate 30000 The original capacity was 15000 tons/year
(Fangchenggang) tons/year 81.39% and the phase completion of technicalrenovation has been put into production
Industrial wet-process purified 200000 The original capacity was 100000 tons/year
phosphoric acid tonnes per 92.05% and the phase completion of technical
(Fangchenggang) year renovation has been put into production
Note: The capacity utilization rate of the calcium dihydrogen phosphate at the Dongchuan base is
low primarily because the Company adopts flexible production methods using part of the capacity
for producing monocalcium phosphate products.Product types in major chemical industrial parks
Major chemical industrial parks Product type
Sifangdi Industrial Park Dongchuan Dicalcium phosphate monocalcium phosphate dicalcium phosphate (Type III) sodium
District fluorosilicate calcium carbonate (rich calcium)
Southwest Coastal Industrial Park Industrial wet-process purified phosphoric acid calcium carbonate (rich calcium) sodium
Fangchenggang fluorosilicate
Environmental Impact Assessment (EIA) approvals applied for or newly obtained during the
Reporting Period:
□Applicable □ Not applicable
1. During the Reporting Period the Chuan Jin Nuo (Egypt) Suez Canal Phosphorus Chemical
Project managed by Egypt Chuan Jin Nuo Chemical Co. Ltd. completed the environmental impact
assessment approval procedure according to local regulations and received approval documents in
February 2026.Any abnormal suspension of production by the listed company during the Reporting Period
□ Applicable□Not applicable
Relevant approvals licenses qualifications and their validity periods
□Applicable □ Not applicable
No. Qualification certificate Certificate Validityholder No. period Authorized unit
Registration Receipt of
1 Customs Import and Export CJN 451296005D - Fangcheng Customs
Goods Consignee/Consignor District P.R. China
13Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
No. Qualification certificate Certificate No. Validityholder period Authorized unit
The National
Registration Center for
2 Hazardous Chemicals February Chemicals (NRCC)Registration Certificate CJN 53012400057 24 2027 under the Ministry of
Emergency
Management of China
National Industrial Product Yunnan Provincial
3 Production Permit - inorganic CJN (Dian) XK13-006-00035 April 152026 Bureau of Quality andproduct hazardous chemicals Technical Supervision
National Industrial Product Yunnan Provincial
4 Production Permit - CJN (Dian) XK13-002-00008 February24 2028 Bureau of Quality andphosphate fertilizer Technical Supervision
5 Feed Additive Production
Kunming Municipal
License CJN Diansitian (2022) T01033
May 24
2027 Bureau of Agricultureand Rural Affairs
Yunnan Provincial
Production Approval Department of
Certificate Number of Feed Diansitian (2022) 033001 Agriculture and Rural
6 Additive and Additive CJN - Affairs
Premixed Feed in Yunnan Kunming Municipal
Province Diansitian (2022) 033002 Bureau of Agriculture
and Rural Affairs
7 Registration Certificate of
Yunnan Entry-Exit
Self-managed Inspection Unit CJN 5300601992 - Inspection andQuarantine Bureau
8 Safety Production License CJN (Kun) WH Anxuzhengzi [2019] October 15 Kunming Emergency0016 2026 Management Bureau
Customs Registration
9 Certificate of the People’s CJN 530196575E - Kunming Customs
Republic of China District P.R. China
Archival Filing and Archival filing and
10 Registration Form of Foreign CJN 2070737 - registration of foreign
Trade Operators trade operators(Kunming Yunnan)
11 Pollutant Permit CJN 91530100778560690W001Q August 14 Kunming Ecological2029 Environment Bureau
Emergency
12 Hazardous Chemical Diankundongweihuajingzi [2023] April 10 Management Bureau ofBusiness License CJN 0004 2026 Dongchuan District
Kunming City
Operation Filing Certificate Emergency
13 for Non-pharmaceutical CJN (Dian) 3J53011300009 May 14 Management Bureau of
Precursor Chemicals 2026 Dongchuan DistrictKunming City
14 Quality Management System January 3
Beijing Zhongshui
Certification CJN 08924Q50015R3M 2027 Brilliant CertificationCo. Ltd.
15 FAMI-QS Certificate CJN 11626FAM0005F3 February 1 HSL Certification2029 Service
Production Filing Certificate Emergency
16 for Non-pharmaceutical CJN (Dian) 3S53011300417 May 14 Management Bureau of
Precursor Chemicals 2026 Dongchuan DistrictKunming City
National Industrial Product Guangxi Market Supervision
17 Production Permit - inorganic Chuan Jin Gui XK13-006-06006 January 19 Administration of
product Nuo 2027 Guangxi ZhuangChemical Autonomous Region
National Industrial Product Guangxi Market Supervision
18 Production Permit - Chuan Jin Gui XK13-002-06002 May 16 Administration of
phosphate fertilizer Nuo 2029 Guangxi ZhuangChemical Autonomous Region
19 Safety Production License Guangxi (G. P) WH Anxuzhengzi [2024] October 15 EmergencyChuan Jin No. 0005 2027 Management
14Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
No. Qualification certificate Certificate No. Validityholder period Authorized unit
Nuo Department of Guangxi
Chemical Zhuang Autonomous
Region
Production Filing Certificate Guangxi Emergency
20 for Non-pharmaceutical Chuan Jin (Gui) 3J4506022024-003 May 23 Management Bureau of
Precursor Chemicals Nuo (Production) 2027 Gangkou DistrictChemical Fangchenggang City
Guangxi
21 Pollutant Permit Chuan Jin
Fangchenggang
Nuo 91450600MA5L4PE98E001V
February
25 2029 Administrative
Chemical Approval Bureau
Guangxi Chemical Registration
22 Hazardous Chemicals Chuan Jin 45062300007 June 3 Office of GuangxiRegistration Certificate Nuo 2026 Zhuang Autonomous
Chemical Region
Guangxi Fangchenggang Big
23 Food Production License Chuan Jin SC20145060200501 September Data andNuo 7 2027 Administrative
Chemical Approval Bureau
Guangxi Market Supervision
24 Food Business License Chuan Jin JY34506020093819 May 21 Administration ofNuo 2030 Gangkou District
Chemical Fangchenggang City
Guangxi Department ofAgriculture and Rural
25 Feed Production License Chuan JinNuo Gui Feed Additive (2022) T06001
November
13 2027 Affairs of Guangxi
Chemical Zhuang AutonomousRegion
Guangxi
26 Kosher Certificate Chuan Jin
KLBD Kashrut
Nuo 523897344
November
17 2026 Division London Beth
Chemical Din
Filing Certificate for Guangxi
27 Enterprises Handling Chuan Jin October 15
Gangkou Sub-branch of
Explosive Hazardous Nuo 2027 Public Security Bureau
Chemicals Chemical in Fangchenggang City
Guangxi
28 Halal Certificate Chuan Jin 04191549008996 December Halal FoundationNuo 28 2028 Center
Chemical
ISO9001 Quality Guangxi China Quality
29 Management System Chuan JinNuo 00123Q33052R0M/4500
May 5
2026 Certification CentreCertification certificate Chemical Co. Ltd.
The ISO14001 Guangxi China Quality
30 Environmental Management Chuan Jin 00123E31587R0M/4500 May 7 Certification Centre
System Certification Nuo 2026Chemical Co. Ltd.ISO22000 Food Safety Guangxi China Quality
31 Management System Chuan Jin NovemberNuo 4 2028 Certification CentreCertification Chemical Co. Ltd.
The ISO45001 Occupational Guangxi
32 Health and Safety Chuan Jin
China Quality
Management System Nuo CQC23S31288R0M/4500
May 07
2026 Certification Centre
Certification Chemical Co. Ltd.FSSC22000 Food Safety Guangxi China Quality
33 Management System Chuan JinNuo CQC24FS1157ROM/4500
November
Certification 13 2027
Certification Centre
Chemical Co. Ltd.Engaged in petroleum processing or petroleum trade industry
15Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
□Yes□No
Engaged in fertilizer industry
□Yes □ No
During the Reporting Period the Company’s fertilizer products were primarily triple
superphosphate (enriched superphosphate) which were mainly used for export. The marketing
strategy combines direct sales and distribution. Product sales are global mainly including regions
such as South America Southeast Asia and the Middle East. There are seasonal variations in
demand across these regions but the Company’s overall production and business operations are
relatively stable with no significant seasonal fluctuations. Tax policies do not have a significant
impact on the Company’s overseas business.Engaged in pesticide industry
□Yes□No
Engaged in the chloralkali or sodium carbonate industry
□Yes□No
II. Industry overview during the Reporting Period
i. Industry classification
The Company’s business revolves around the wet-process phosphoric acid technology with main
products including feed additives fertilizers and wet-process purified phosphoric acid. It falls
under the chemical raw materials and chemical products manufacturing industry within the
manufacturing sector (industry code C26).ii. Current state and development trends of the industry
The phosphorus chemical industry is based on phosphate rock as the raw material primarily
processed into crude phosphoric acid or yellow phosphorus through two methods: wet-process (the
blue section in the diagram below) and thermal-process (the red section in the diagram below).These are then further reacted with other chemical raw materials to produce chemical products such
as phosphate fertilizers phosphates and organophosphates which are widely applied in agriculture
industry new energy pharmaceuticals food and other sectors. As the core product of the
phosphorus chemical industry phosphoric acid plays a pivotal role in connecting the upstream and
downstream of the phosphorus chemical industrial chain. The situation of the phosphorus chemical
industrial chain based on different production processes is illustrated in the diagram below:
16Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
上游 Upstream
中游 Midstream
下游 Downstream
湿法路线 Wet-process route
磷矿 Phosphate ore
湿法工艺 Wet-process technology
粗磷酸 Crude phosphoric acid
硫酸 Sulfuric acid
净化 Purification
湿法净化磷酸（PPA） Wet-process purified phosphoric acid (PPA)
磷酸钙盐 Tricalcium phosphate salts
磷酸钾盐 Potassium phosphate salts
磷酸铵盐 Ammonium phosphate salts
重过磷酸钙 Triple superphosphate
磷酸氢钙 Dicalcium phosphate
磷酸一二钙 Mono-dicalcium phosphate
磷酸二氢钙 Monocalcium phosphate
肥料 Fertilizer
饲料添加剂 Feed additives
热法路线 Thermal-process route
磷矿 Phosphate ore
焦炭 Coke
硅石 Silica
点 Point
高温还原 High-temperature reduction
热法磷酸 Thermal-process phosphoric acid
热法工艺 Thermal-process technology
黄磷 Yellow phosphorus
工业级磷酸（盐） Industrial grade phosphoric acid (salt)
食品级磷酸(盐) Food grade phosphoric acid (salt)
磷酸铁/磷酸铁锂 Iron phosphate/lithium iron phosphate
电子级磷酸(盐) Electronic grade phosphoric acid (salt)
偏磷酸(盐) Metaphosphoric acid (salt)
聚磷酸(盐) Polyphosphoric acid (salt)
工业 Industry
17Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
食品添加剂 Food additives
新能源 New energy
电子/芯片 Electronics/chips
洗涤 Washing
防腐 Corrosion prevention
草甘膦 Glyphosate
赤磷 Red phosphorus
其他有机磷类 Other organic phosphorus compounds
除草 Weed control
火柴 Matchsticks
阻燃/医药 Flame retardant/pharmaceutical
备注：带*为公司涉足的业务，其中磷酸铁/磷酸铁锂业务正 Note: Business marked with * is engaged by the Company with在布局之中 iron phosphate/lithium iron phosphate business under planning
1. Phosphate fertilizer
Phosphorus is one of the three main essential nutrients in fertilizers. Common phosphate fertilizers
in China include monoammonium phosphate (MAP) diammonium phosphate (DAP)
superphosphate (normal superphosphate) and triple superphosphate (TSP). China Morocco and
Russia are the world’s main exporters of phosphate fertilizers.The Company’s phosphate fertilizer products are primarily based on triple superphosphate. The
active ingredient in triple superphosphate is monocalcium phosphate with the chemical formula
Ca(H?PO?)?. It is a single phosphate fertilizer with an effective phosphorus content exceeding 40%.Triple superphosphate is mainly used as a base fertilizer topdressing seed fertilizer and raw
material for the production of compound fertilizers. It is widely applicable to various grain crops
and economic crops such as rice wheat maize sorghum cotton fruits and vegetables. Due to
different fertilization practices triple superphosphate is mainly used for export with the export
destinations covering global markets primarily in South America Southeast Asia and the Middle
East. The global consumption of triple superphosphate is approximately 5 million tonnes per year.In the future as global agricultural planting scales and intensification continue to progress the
scientific use of highly water-soluble phosphate fertilizers will become an inevitable trend. Triple
superphosphate has further growth potential in the global market to replace ordinary calcium
fertilizers. Besides the Company domestic producers of triple superphosphate include Yunnan
Xiangfeng Sanhuan Zhonghua Guizhou Phosphate and Hubei Xiangyun.To meet market demand and leverage the advantages of flexible production lines the Company
introduced enriched superphosphate in 2024. Its main components are water-soluble monocalcium
phosphate and calcium sulfate with a total P?O? content greater than 36% and a higher effective
phosphorus content. Enriched calcium demonstrates excellent performance in improving soil
fertility and crop yield further enriching the Company’s phosphate fertilizer product portfolio.
2. Feed grade phosphate industry
The Company’s feed grade calcium phosphate salts include dicalcium phosphate (DCP)
monocalcium phosphate (MCP) and dicalcium phosphate (Type III) (MDCP). These are mainly
added to animal feed as a source of calcium during animal growth.
(1) Dicalcium phosphate (DCP)
Feed grade dicalcium phosphate is a core application in the field of animal and aquatic feed
additives. The livestock inventory is the core leading indicator of supply and demand in the industry
and the overall supply and demand changes in the industry are highly correlated with the production
fluctuations of the downstream feed industry. On the supply side under the background of
18Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
normalized environmental inspections in major DCP production areas such as Yunnan Sichuan
Hubei and Guizhou the industry continues to promote the “three phosphorus” special rectifications.Coupled with the implementation of policies such as total phosphorus ore mining control and
elimination of outdated production capacity the industry capacity structure is continuously
optimized with inefficient capacities gradually exiting the market. On the demand side as the
world’s largest feed production and marketing country China’s total national industrial feed output
reached 340368000 tons in 2025 a year-on-year increase of 8.2% showing a steady growth trend
in the industry. Alongside the scaled and standardized development of the aquaculture industry the
growth resilience of feed production continues to be prominent. The feed grade dicalcium
phosphate produced by the Company is a just-in-need feed additive for phosphorus and calcium
supplementation in livestock and poultry. In the market background of the steady development of
the downstream feed industry the product market demand maintains a stable growth trend.
(2) Monocalcium phosphate (MCP)
MCP is characterized by high water solubility and high absorption rate which helps reduce
pollution from livestock waste in water environments aligning with the trend of green agriculture
development. Therefore MCP has a strong product advantage as a phosphorus feed additive and is
regarded as an “upgraded product” of DCP. However due to cost constraints it is difficult to
replace DCP on a large scale in the short term.In recent years the production of freshwater aquaculture has maintained a continuous growth trend
driving the sustained growth of aquaculture feed production and the MCP market has expanded
accordingly. The domestic supply pattern of MCP is relatively stable with companies such as CJN
Chuanheng Co. Yuntianhua Sinochem Yunlong and Guizhou Yunfu occupying major positions in
the domestic market.
3. Purification phosphoric acid industry
After further removal of impurities and purification of crude phosphoric acid wet-process purified
phosphoric acid is produced. Depending on the impurity level it can be used in downstream
industries such as industrial food electronics and healthcare sectors. Wet-process purified
phosphoric acid is a substitute for thermal phosphoric acid. Compared to thermal phosphoric acid ithas the advantages of lower energy consumption less pollution and lower costs. The “wet processreplacing the thermal process” is an inevitable trend in the industry.On the supply side wet-process purified phosphoric acid has a high technological barrier. The
major domestic suppliers of wet-process purified phosphoric acid include Guizhou Phosphate CJN
Yuntianhua Liuguo Chemical Xingfa Group Sinopec Fuling Zhongfu Chemical Guizhou
Chanhen Chemical Corporation and others.
4. New energy materials industry
In the context of global carbon peaking and carbon neutrality the development potential of the new
energy vehicle and energy storage industries is immense. The explosive growth in the demand for
new energy vehicle power and energy storage for electricity and communications is driving the
rapid growth of demand for power and energy storage batteries. Lithium iron phosphate (LiFePO?)
cathode materials are widely favored by the market due to their safety large capacity discharge
performance fast charging ability and low cost becoming an important development direction for
cathode materials in power and energy storage batteries.iii. The Company’s position in the industry
After years of development the Company has become a high-quality enterprise in the field of wet-
19Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
process phosphoric acid. It is the only company in the country to mass-produce food grade purified
phosphoric acid using self-developed technology with technical capabilities on par with industry
leaders.Through continuous research and development of technologies such as flotation and utilization of
medium-to-low-grade phosphate ore purification of wet-process phosphoric acid sulfuric acid
production from pyrite and comprehensive utilization of phosphogypsum the Company has
achieved graded utilization of wet-process phosphoric acid improving the value of phosphorus
resources per unit. The Company is a leader in the industry in terms of production technology cost
control and international channels for traditional phosphorus chemical products.iv. Principal activities of the Company in the Reporting Period
1. Main business
Starting from the flotation of purchased phosphate rock the Company processes it into phosphate
concentrate which is then produced into crude phosphoric acid via the wet process. This crude
phosphoric acid is further reacted with other chemical raw materials to produce feed additives and
fertilizers such as dicalcium phosphate (Type I and Type III) monocalcium phosphate and triple
superphosphate. Simultaneously based on stable feed grade phosphates the Company focuses on
purification technology further refining crude phosphoric acid to produce industrial-grade and
food-grade wet-process purified phosphoric acid products.
2. Main product uses and market demand
Product Main application fields Main priceinfluencing factors Market demand
Abbreviated as DCP and MDCP the main
Feed grade function is to provide phosphorus calcium The market demand is Global meat consumption remains
dicalcium and other mineral nutrients in compound influenced by supply- stable and domestic feed production
phosphate (Type feed for livestock and poultry. It is mainly demand relationships stays steady with market demand
I Type III) used in pig feed poultry feed and some and cost-driven expected to increase moderatelycattle and sheep feed with an addition rate factors. alongside the downstream industry.generally ranging from 1% to 3%.Abbreviated as MCP it is an efficient and In the future with the refinement of
Feed grade high-quality phosphate feed additive
The market demand is aquaculture practices and the gradual
currently the feed grade phosphate with the influenced by supply- improvement of domestic water sourcemonocalcium highest biological efficacy. It is primarily demand relationships environmental protection requirementsphosphate used in aquaculture for fish shrimp and and cost-driven MCP has vast growth potential in both
other aquatic animals. factors. the aquaculture and livestock feedsectors.Abbreviated as TSP it is the highest
concentration single water-soluble As global agricultural planting scales
phosphate fertilizer currently in widespread and intensification continue to
use. It improves alkaline soils and mainly The market demand is
Triple supplies phosphorus and calcium to plants. influenced by supply-
progress the scientific use of highly
water-soluble phosphate fertilizers will
superphosphate It can be used alone or mixed with other demand relationships
nutrients and when mixed with nitrogen and cost-driven
become an inevitable trend. Triple
superphosphate has further growth
fertilizers it has a certain nitrogen-fixing factors. potential in replacing ordinary calcium
effect. It is primarily used in agriculture and fertilizers in the global market.horticulture.Abbreviated as DSP it is a medium-
concentration phosphate fertilizer with Enriched superphosphate with its
effective phosphorus content between higher effective phosphorus content
normal superphosphate and triple The market demand is and wide application range has strong
Enriched superphosphate. It is widely used in the influenced by supply- market prospects in the agricultural
superphosphate cultivation of food crops (such as wheat demand relationships sector. In the future with themaize and rice) and economic crops (such and cost-driven strengthening of environmental
as rapeseed cotton and sugarcane). It factors. protection policies and the growth of
improves crop yield and quality promotes agricultural demand it will have
root development and enhances plant considerable market potential.resistance to adversity.
20Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Product Main application fields Main priceinfluencing factors Market demand
As domestic wet-process phosphoric
acid purification technology continues
Abbreviated as PPA the Company produces The market demand is to develop downstream phosphate salt
Purified purified phosphoric acid in 75% 80% and influenced by supply- enterprises based on cost
phosphoric acid 85% industrial-grade or food-grade forms demand relationships considerations are increasinglyprimarily applied in the food and cost-driven inclined to purchase lower-priced wet-
pharmaceutical and new energy sectors. factors. process purified phosphoric acid to
replace thermal phosphoric acid.The Company primarily refers to 52% acid The market demand is
Wet-process and 40% acid. The 52% acid is mainly used influenced by supply-
With its wide application and
crude acid for phosphate fertilizer production while the demand relationships
continually growing market demand it
40% acid is primarily used in lithium iron and cost-driven is expected to maintain an important
phosphate manufacturing. factors. market position in the future.
3. Process flow
(1) Phosphate fertilizers and feed additives
The Company’s phosphate fertilizers and feed additives are mainly produced through the semi-
hydrate method or dihydrate method to obtain phosphoric acid which is then reacted with calcium
ore in the purification process to produce feed additives and reacted with phosphate concentrate to
produce phosphate fertilizers. The specific process flow is shown in the diagram below:
21Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
外购磷矿石 Purchased phosphate rock
磷矿浮选工序 Phosphate ore flotation process
磷精矿 Phosphate concentrate
二水磷酸工序 Dihydrate phosphoric acid process
半水磷酸工序 Hemihydrate phosphoric acid process
磷酸净化工序 Phosphoric acid purification process
硫酸贮槽 Sulfuric acid storage tank
硫酸生产线 Sulfuric acid production line
外购硫精砂 Purchased sulfur concentrate
肥料级磷酸氢钙产品 Fertilizer-grade dicalcium phosphate product
饲料级磷酸氢钙产品 Feed grade dicalcium phosphate product
磷酸氢钙生产工序 Dicalcium phosphate production process
副产 By-product
肥料级磷酸氢钙 Fertilizer-grade dicalcium phosphate
外购钙矿石 Purchased calcium ore
钙原料生产线 Calcium raw material production line
磷酸二氢钙生产工序 Monocalcium phosphate production process
磷酸-二钙生产工序 Mono-dicalcium phosphate production process
饲料级磷酸二氢钙产品 Feed grade monocalcium phosphate product
饲料级碳酸一二钙产品 Feed grade mono-dicalcium phosphate product
重过磷酸钙产品 Triple superphosphate product
重过磷酸钙生产工序 Triple superphosphate production process
(2) Purified phosphoric acid
Crude phosphoric acid undergoes a pre-purification process to obtain pre-purified phosphoric acid
which is then subjected to extraction washing back-extraction decolorization concentration and
other steps. This effectively reduces impurities in the phosphoric acid improving its purity and
ultimately producing industrial-grade purified phosphoric acid. The specific process flow is shown
in the diagram below:
粗磷酸 Crude phosphoric acid
多种除杂剂 Various impurity removal agents
萃取剂 Extractant
预净化 Pre-purification
萃取 Extraction
洗涤 Washing
反萃 Back-extraction
纯水 Pure water
Pre-purification residue and extraction residue acid used for
预净化渣及萃余酸去生产磷肥 phosphate fertilizer production
净化碳酸 Phosphoric acid purification
浓缩 Concentration
脱色 Decolorization
22Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
4. Business model
(1) Procurement model
The Company primarily bases its analysis of medium- to long-term market trends on recent
production and business plans to determine the next year’s sales plan guiding the preparation of the
product production plan. The demand for major raw materials is calculated based on the production
plan followed by in-depth analysis of the raw material market resulting in the preparation of the
annual procurement plan. The purchasing department during actual implementation formulates
monthly procurement plans based on the monthly production plan inventory status and market
research results. The purchasing department conducts price inquiries and negotiations according to
the monthly plan signing procurement agreements and carrying out the execution.
(2) Production model
The Company’s production organization adheres to a market-oriented approach. At the beginning of
the year based on the previous year’s production and market conditions an initial annual
production and sales plan is formulated. The monthly plan is then adjusted according to market
conditions ensuring that high-margin products are produced at full capacity while low-margin
products guarantee basic market supply. The Company generally follows the principle of
“production determined by sales” but also makes some stockpiling based on market predictions.The production department arranges actual production operations based on the annual and monthly
plans and assigns tasks to each workshop and department. Each workshop organizes production
based on operational procedures and safety standards ensuring that product quality meets customer
requirements. During the production process the production department periodically communicates
with the sales department to ensure that production serves sales and that sales are aligned with
market demand.
(3) Sale model
The Marketing Department of the Company is divided into the Domestic Department of Phosphate
in Animals and Plants International Trade Department I International Trade Department II The
Marketing Department based on the Company’s overall business plan and market information
analysis determines the annual sales plan monthly sales plan and weekly sales plan and assigns
execution responsibilities to each division. During the execution process each division also tracks
daily dynamic sales data to ensure process control and guarantee that the operational results meet
sales targets.The Company’s domestic sales operations combine direct sales to large domestic group clients with
signed distributors. The international sales operations adopt the model of local country agents and
direct sales to global large group clients. Based on market conditions supply-demand analysis and
the Company’s raw material procurement and production plans the monthly sales plan is
determined during the general operations meeting. This includes setting the order quantities and
prices for the products. Additionally at the weekly sales operations meeting the signed order
quantities and prices are confirmed. In the event of market emergencies the Company reports
promptly and makes timely decisions and adjustments.In order to adapt to the changes brought about by future industry intensification and scaling
development trends the Marketing Department of the Company has innovatively established a
technical service sales model. This model offers more professional phosphorus chemical product
technical services engaging in technical discussions to develop application solutions with
downstream market customers. This shifts the focus from selling products to selling solutions
thereby building closer cooperative relationships.
23Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
III. Core competitiveness analysis
i. Product structural advantages
The Company has the capability to rapidly adjust its existing product structure to maximize
profitability by optimizing equipment selection and process design based on market demand and
varying gross margins of different products. The Dongchuan base can flexibly adjust production
volumes across various product lines while the Fangchenggang plant supports seamless transitions
between industrial-grade phosphoric acid food-grade phosphoric acid 52% phosphoric acid and
triple superphosphate (TSP). The versatility of the Company’s production system and its flexible
product structure effectively mitigate market risks while enabling continuous innovation and
development of high-potential competitive products thereby enhancing its overall competitiveness
and sustainability.ii. Technical advantages
1. Phosphoric acid extraction and purification technology: The Company has independently
developed a wet-process purified phosphoric acid technology which has been successfully
implemented at its Guangxi Chuan Jin Nuo with an annual capacity of 200000 tonnes. Currently
the Company has achieved mass production of industrial-grade and food-grade purified wet-process
phosphoric acid with technical specifications reaching industry-leading levels.
2. Phosphate ore flotation technology: Leveraging proprietary technology the Company enhances
the quality of medium- and low-grade phosphate ores through flotation increasing the ore grade
from 18%-25% to 26%-33%. This process significantly reduces impurity levels of magnesium iron
and aluminum. Additionally through optimized flotation processes such as scavenging the
Company improves P?O? recovery rates while lowering overall flotation costs.
3. Semi-hydrate-dihydrate and purified phosphoric acid production technology: At its
Fangchenggang plant in Guangxi the Company utilizes the semi-hydrate-dihydrate method to
produce phosphoric acid achieving phosphorus recovery rates exceeding 98%. This process
optimizes phosphate rock consumption and minimizes phosphorus content in phosphogypsum
thereby facilitating the sustainable treatment and reuse of phosphogypsum.
4. Integration of phosphate and new energy materials technologies: By utilizing purified
phosphoric acid as a bridge the Company extends its industrial chain into the downstream new
energy sector. Its integrated industry layout effectively reduces intermediate costs enhancing cost
efficiency and competitiveness.iii. Location and cost advantages
1. Dongchuan production base advantages: (1) Phosphate Ore Resource Security: The region
within a 120 km radius of Dongchuan District Kunming City is abundant in phosphate resources
with ore grades ranging from 18% to 25% P?O? primarily consisting of medium- to low-grade
colloidal phosphate rock. To optimize the utilization of these resources the Company has
developed proprietary beneficiation technology enabling the flotation of phosphate concentrate
with a P?O? grade of 26% to 33% thereby meeting the Company’s requirements for graded
utilization of phosphate ore. (2) Sulfuric Acid Resource Security: The Company is co-located with
Jinshui Copper Smelting Plant in the Sifangdi Industrial Park in Dongchuan District creating an
integrated industrial chain advantage through the utilization of smelting-derived sulfuric acid
which supplements the Company’s own sulfuric acid production. (3) Pyrite Concentrate Resource
Security: Dongchuan is adjacent to Huize a region rich in pyrite concentrate resources. These
resources serve as a primary raw material for the Company’s sulfuric acid production facilities
24Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
ensuring a stable supply for its operations.
2. Guangxi Chuan Jin Nuo Chemical production base advantages: Located in Fangchenggang
City Guangxi the production facility is approximately 20 km from the port offering significant
logistical advantages. 1) Raw Material Procurement Advantage: Leveraging its proximity to the
port the Company sources high-quality phosphate rock and sulfur from international markets
ensuring a stable and efficient supply chain. (2) Product Transportation Advantage: The Company
exports products such as liquid phosphoric acid and triple superphosphate (TSP) via sea freight
significantly reducing transportation costs and enhancing its competitive edge in logistics.iv. Comprehensive utilization advantages
1. Resource-based and comprehensive utilization of wastewater waste gas and solid waste
(1) Dongchuan Base in Kunming: The Company has implemented a comprehensive waste
recycling system covering wastewater waste gas and waste residue. In addition to utilizing waste
gas waste heat and waste slag generated during sulfuric acid production from pyrite the Company
actively recycles industrial wastewater from the manufacturing process to reduce fresh water
consumption. This approach enables a closed-loop wastewater system achieving “zero discharge.”
Furthermore the Company recovers fluosilicic acid from wet-process dilute phosphoric acid
production which replaces sulfuric acid as a pH adjuster in phosphate ore flotation thereby
reducing the consumption of pH adjusters. Additionally sodium sulfate generated during iron
phosphate production is utilized for sodium fluorosilicate production. The mother liquor produced
in the sodium fluosilicate process serves as a substitute for sulfuric acid as a pH adjuster in
phosphate ore flotation which not only lowers wastewater treatment costs in fluosilicate production
but also further reduces the consumption of pH adjusters. Moreover the Company employs
phosphate slurry as an absorbent to capture sulfur dioxide from the tail gas of sulfuric acid
production converting it into sulfuric acid and effectively recovering sulfur resources from waste
gas.
(2) Guangxi Base: The Company has established a fully closed-loop wastewater recycling system
through rainwater and sewage separation clean and contaminated water segregation and graded
water reuse. Waste gas is treated through desulfurization denitrification dust removal washing
and electrostatic mist removal achieving ultra-low emissions that comply with environmental
standards. Fluorine tail gas is recovered through a circulating washing process and utilized in the
production of fluorine salt products ensuring the efficient resource utilization of fluorine.Additionally the by-product phosphogypsum undergoes deep modification and processing to
produce cement retarders which are supplied to nearby cement plants ensuring the complete
utilization of phosphogypsum resources.The adoption of these technologies strengthens the Company’s environmental management further
reducing pollutant emissions while lowering operational costs. Through an integrated production
system based on the principles of the circular economy the Company not only achieves its energy-
saving and environmental sustainability goals but also transforms waste into valuable resources
thereby creating a distinct cost advantage.
2. Efficient resource utilization
(1) Graded utilization of phosphate ore: Phosphate ore is the Company’s primary raw material.
The Company implements a graded and classified management system from the point of entry
followed by flotation and phased comprehensive utilization. Phosphate concentrate with a P?O?
grade of 33% is used for triple superphosphate (TSP) production 28% P?O? phosphate concentrate
25Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
is utilized in semi-hydrate acid production to produce high-quality phosphoric acid and 23% P?O?
phosphate concentrate is applied in dihydrate acid production for the manufacturing of calcium
hydrogen phosphate.
(2) Graded utilization of phosphoric acid: Graded utilization of phosphoric acid is the core of theCompany’s industrial value chain. Adopting the principle of “optimal use of high-quality acid andefficient allocation of lower-quality acid” the Company maximizes the value of phosphoric acid
across its production processes.
(3) Utilization of by-products: The Company’s primary by-products include phosphogypsum
fluorine tail gas and iron concentrate powder. At the Guangxi production base the Company
modifies and processes phosphogypsum into cement retarders leveraging its strategic location to
achieve complete utilization and environmentally compliant treatment. For fluorine tail gas the
Company recovers and refines it into fluorine salt products ensuring efficient resource utilization
and contributing to a sustainable circular production system. In the sulfuric acid production process
the by-product iron concentrate powder has been successfully developed as a new energy materials
specifically in iron phosphate production. This integration enables the Company to establish a fully
integrated iron phosphate industrial chain reinforcing its competitive advantage in the new energy
sector.v. Stable professional and competitive team
The Company has a mature stable and highly professional management team. The core
management members possess extensive expertise in both technical and managerial aspects of the
phosphorus chemical industry demonstrating a forward-looking approach to market dynamics and
technological advancements. The team is well-structured comprising professionals in management
marketing and research and development and is guided by the core values of integrity
collaboration innovation and excellence. Under the leadership of this high-caliber entrepreneurial
team the Company has established a robust corporate governance structure and maintains prudent
financial management practices. Furthermore in alignment with its new energy strategic plan the
Company is actively recruiting top talent and developing specialized teams in management sales
and technology to meet the evolving demands of the industry thereby laying a strong foundation
for future growth.The Company’s internal control system is sound and there is no behavior of family-run businesses
or infringement on the rights of minority shareholders. Over the years the Company has maintained
a prudent business approach and robust financial management demonstrating a strong awareness of
risk control. Key financial indicators including the asset-liability ratio and current ratio have been
consistently managed at a stable and prudent level ensuring a solid financial safety margin. The
Company has successfully navigated market fluctuations while maintaining financial stability.Furthermore the Company operates in compliance with industry best practices and has been
awarded an AAA credit rating certificate. It has also obtained ISO 9001:2008 certification and
FAMI-QS product quality management system certification.vi. Brand competitiveness
After years of market development and industry experience the Company has established a strong
reputation and enjoys distinct brand advantages. The “ ” brand of feed phosphates has been
recognized as a famous trademark in Kunming and a well-known trademark in Yunnan Province.Additionally the “CJN” brand of triple superphosphate (TSP) is acknowledged by international
customers as the highest-quality export-grade TSP from China. Over the years the Company's
development has not only established a good reputation and corporate image in the industry but also
26Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
accumulated a large and loyal customer base with companies such as New Hope Group Haid
Group Tongwei Group Da Bei Nong Group Wellhope Group Chia Tai Group Hunan Yuneng
MIDGULF INTERNATIONAL LIMITED Cargill De Heus Nutreco YUC and Quantum in both
domestic and international markets forming high-sticky cooperative relationships with long-term
stable customers. This has laid a solid foundation for the Company to maintain its leading position
in the phosphate chemical market with a strong sales network providing assurance for the
Company’s sustained performance growth and continuous market share expansion. Additionally
the Company’s purified phosphoric acid has gained multiple customers in the industrial and food
sectors.IV Analysis of core business
1. Overview
2025 was a year of opportunities and challenges for the phosphate chemical industry. Facing a
complex and ever-changing macro environment and increasingly fierce industry competition under
the correct leadership of the Board of Directors the Company’s management along with allemployees have resolutely implemented the business strategy of “traditional phosphate chemicalsas the foundation and global layout as the future extension”. On one hand the Company is deeply
cultivating its main business consolidating and enhancing its position in the fine phosphate
chemical field; on the other hand it is actively embracing change by successfully launching a
milestone Egyptian Suez phosphorus chemical project and strategically optimizing the new energy
business. The annual operating performance achieved a leap in growth and the core
competitiveness and sustainable development capabilities have been significantly enhanced laying
a more solid foundation for the Company’s long-term development.From the overall operating data in 2025 the Company achieved operating revenue of RMB4074
million a year-on-year increase of 27.04% mainly driven by the growth in phosphoric acid
business income; the net profit attributable to shareholders of the listed company was RMB454
million a year-on-year increase of 157.77% mainly due to favorable market conditions and further
improvement in the Company’s flexible production advantages and cost control capabilities; the net
operating cash flow was RMB298 million a year-on-year increase of 108.59%.By the end of the period the Company’s total assets amounted to RMB4343 million with total
liabilities of RMB1342 million and shareholders’ equity attributable to the parent company was
RMB2918 million with an asset-liability ratio of 30.90%. The details are as follows:
i. Business performance of each segment
1. Triple superphosphate (enriched superphosphate)
In 2025 the Company continued to leverage the advantages of flexible production lines and
dynamically adjusted the production structure of heavy calcium and enriched superphosphate
according to market demands. Throughout the year heavy calcium production reached 140600 tons
and sales reached 128600 tons achieving a revenue of RMB389 million contributing a gross profit
of approximately RMB84.13 million. Enriched superphosphate production reached 144800 tons
and sales reached 73400 tons achieving a revenue of RMB163 million contributing a gross profit
of RMB78.04 million with continuous enhancement in market recognition of the product.
2. Feed grade tricalcium phosphate salt
In 2025 thanks to the steady development of the downstream feed industry the market demand for
feed grade calcium phosphates continued to grow steadily. The Company’s calcium salt segment
27Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
produced 244300 tons and sold 238900 tons achieving a revenue of RMB1032 million
contributing a gross profit of approximately RMB178.16 million with further enhancement in
profitability.
3. Phosphoric acid
In 2025 with the recovery of the new energy industry and stable demand from the food industry
the market demand for purified phosphoric acid remained strong. The Company produced 183700
tons and sold 180200 tons of purified phosphoric acid achieving a revenue of RMB1071 million
and a gross profit of RMB46.82 million. Additionally to meet market demand the Company
continued to leverage the flexible production capability of its facilities to adjust the capacity layout
for crude phosphoric acid further exploring the Indian market for 52% phosphoric acid and the new
energy industry market for crude phosphoric acid (40 acid). The annual production of wet
phosphoric acid for industrial use reached 407200 tons and the sales reached 382300 tons
achieving a revenue of RMB1275 million contributing a gross profit of RMB258.19 million
effectively balancing the impacts of market fluctuations.
4. New energy materials business
In 2025 facing intensified market competition in the new energy materials industry the Company’s
management after careful evaluation decided to adopt a more cautious strategy regarding related
capital expenditures. During the Reporting Period the Company did not invest the raised funds into
the original new energy materials project. Simultaneously to use the raised funds more efficiently
and seize definite strategic opportunities based on thorough verification and completion of relevant
procedures the Company redirected approximately RMB455 million of the remaining raised fundsoriginally planned for the aforementioned project to invest in the “Chuan Jin Nuo (Egypt) SuezPhosphorus Chemical Project”.ii. Key tasks
1. Optimized resource allocation and focused on the Egypt project
In 2025 based on insights into the domestic new energy industry and precise grasp of global
strategic opportunities the Company’s management made a major decision to optimize resource
allocation. After deliberation and approval by the Board of Directors the Company changed the use
of the remaining RMB455 million raised funds originally planned to be invested in domestic new
energy materials projects and concentrated its superior resources on the Chuan Jin Nuo (Egypt)
Suez Phosphorus Chemical Project. This decision fully reflects the Company’s strategic execution
of “being pragmatic and flexible” and ensures that limited funds can be accurately invested in areas
with the greatest development potential and return space. It is a key strategic focus in the
Company’s development process.
2. The Egypt project has been fully launched opening a new chapter in globalization
In 2025 under the witness of Egyptian Prime Minister Mostafa Madbouly Egypt Chuan Jin Nuo
Chemical Co. Ltd. and the Egyptian land supplier El Sewedy Industrial Development Company-
Ain Sokhna S.A.E. (hereinafter referred to as “Sewedy”) signed the Usufruct Transfer Agreement
for the project land. With the injection of raised funds the project has been fully launched. The
project plans to invest a total of RMB1934 million (of which RMB455 million is raised after the
use change). The construction content includes an annual output of 800000 tons of sulfur acid
production 300000 tons of wet phosphoric acid for industrial use 150000 tons of 52% phosphoric
acid 300000 tons of monoammonium phosphate and 20000 tons of sodium fluorosilicate. Egypt
has the third largest phosphate rock reserves in the world and its procurement costs are about 30%
lower than domestic ones. Combined with the location advantage of the Suez Canal the project is
28Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
expected to have an annual net profit of over RMB300 million after reaching production. This
marks the Company’s official move from “products going global” to a new stage of “capacity goingglobal”. The project makes full use of Egypt’s rich phosphate rock resources superior geographical
location and local preferential policies. It is expected to become the Company’s most important
profit growth point and global operation platform in the future greatly enhancing the Company’s
ability to resist domestic resource constraints and single market risks.
3. Launched environmental supporting projects at the Dongchuan base and practiced
sustainable development
While promoting globalization the Company also attaches great importance to the sustainable
development of local bases. During the Reporting Period the Company launched the Heliwan
industrial waste centralized disposal project in the Sifangdi area of ? ? Dongchuan. The total
investment of the project is about RMB350 million. The main construction contents include slag
dam reservoir area anti-seepage flood drainage system return water spray system and supporting
environmental protection facilities. The project is a necessary supporting project for the production
and operation of the Dongchuan base aiming to address the disposal of waste rock and slag
generated during the production process and to achieve centralized standardized and safe disposalof solid waste. The implementation of this project not only reinforces the Company’s “resources-production-recycling” closed-loop environmental protection concept but also represents a
significant initiative for the Company to actively fulfill its environmental responsibility and ensure
the ecological safety of the region. Upon completion the project will provide a solid and reliable
environmental guarantee for the Company’s existing and future production activities at the
Dongchuan base further consolidating the Company’s environmental compliance advantages.iii. Other work
1. Increase R&D investment and prepare technical capability in advance
During the Reporting Period the Company continued to increase investment in research and
development focusing on core technology breakthroughs and product upgrades. In 2025 the
Company’s cumulative R&D investment reached RMB154046000 a year-on-year increase of
26.96%. In 2025 an additional five patents were authorized. As of the end of the Reporting Period
the Company and its subsidiaries owned 34 national invention patents and 30 utility model patents.
2. Continuously improve management capability
During the Reporting Period the Company continued to refine its management structure aligning
its organizational framework with its current operational scale and industrial layout to improve
overall efficiency. Additionally the Company advanced management reforms further streamlining
processes and optimizing workflows to establish a more efficient lean and practical operational
system facilitating the Company’s sustained growth.
3. Market expansion
In 2025 overseas business revenue accounted for nearly 60% of total revenue. To continuously
consolidate this competitive advantage the Company implemented a dual-wheel-driven market
strategy: One aspect was to continue strengthening cooperation with existing customers improve
customer satisfaction and further consolidate and expand its share in the international market.Simultaneously it intensified efforts to expand international markets successfully growing its
global customer base.
4. Safety production and environmental protection work
The Company attaches great importance to work safety and environmental protection. During the
29Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Reporting Period the Company reinforced its safety management framework implementing
enhanced safety protocols and increasing investments in workplace safety to ensure the safe and
stable operation of its production processes. Furthermore the Company actively aligned with
national environmental policies increasing its commitment to environmental protection and
advancing its vision of developing green manufacturing facilities to drive sustainable business
growth.
2. Income and cost
(1) Composition of operating revenue
Overall operating revenue
Unit: RMB
20252024
As % of total As % of total YoY
Amount operating revenue Amount operating revenue Increase/Decrease
(%)(%)
Total operating
revenue 4074660364.42 100% 3207476951.57 100% 27.04%
By industry
Phosphate
chemical industry 3982759319.48 97.74% 3127606583.72 97.51% 27.34%
Others 91901044.94 2.26% 79870367.85 2.49% 15.06%
By product
Feed grade
phosphate 1032296282.47 25.33% 695115067.01 21.67% 48.51%
Phosphate
fertilizer 604869916.59 14.84% 853524810.68 26.61% -29.13%
Phosphoric acid 2345593120.42 57.57% 1578966706.03 49.23% 48.55%
Others 91901044.94 2.26% 79870367.85 2.49% 15.06%
By region
Northeast China 43590932.18 1.07% 33276870.43 1.04% 30.99%
North China 56344663.91 1.38% 42957897.54 1.34% 31.16%
East China 343581610.98 8.43% 369300564.72 11.51% -6.96%
South China 489884090.06 12.02% 386330402.03 12.04% 26.80%
Central China 121864455.46 2.99% 151502748.04 4.72% -19.56%
Northwest China 27151444.22 0.67% 36910988.28 1.15% -26.44%
Southwest China 620113667.78 15.22% 575579816.89 17.94% 7.74%
International 2372129499.83 58.22% 1611617663.64 50.25% 47.19%
By sales model
Direct sales 1490312802.76 36.58% 1106545130.81 34.50% 34.68%
Distribution 2584347561.66 63.42% 2100931820.76 65.50% 23.01%
Note: The statistics for international business are based on the end-consumption location of the
products and include income settled in RMB with domestic trade distributors.
(2) Industry product region or sales model contributing over 10% of the Company’s
operating revenue or profit
□Applicable □ Not applicable
Unit: RMB
Increase/Decrease Increase/Decrease Increase/Decrease
Gross in the operating in the operating in the gross margin
Operating revenue Operating cost profit revenue from the costs from the from the same
margin same period of the same period of the period of the
previous year previous year previous year
By industry
Phosphate
chemical 3982759319.48 3305903651.89 16.99% 27.34% 20.55% 4.68%
30Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
industry
By product
Feed grade
phosphate 1032296282.47 854136258.89 17.26% 48.51% 40.27% 4.86%
Phosphate
fertilizer 604869916.59 411183167.13 32.02% -29.13% -42.55% 15.87%
Phosphoric
acid 2345593120.42 2040584225.87 13.00% 48.55% 43.94% 2.79%
By operating segment
South China 489884090.06 421917899.62 13.87% 26.80% 20.84% 4.25%
Southwest
China 620113667.78 497636202.09 19.75% 7.74% 2.73% 3.91%
International 2372129499.83 1897815596.42 20.00% 47.19% 36.62% 6.19%
By sales model
Direct sales 1490312802.76 1298202265.57 12.89% 34.68% 35.78% -0.71%
Distribution 2584347561.66 2043020310.56 20.95% 23.01% 12.01% 7.76%
Core business data of the prior year restated according to the changed statistical caliber for the
Reporting Period:
□ Applicable□Not applicable
Units: tons RMB
Product name Production Sales Incomevolume volume performance Price trend during the Reporting Period Reasons for changes
Feed grade The sales price continued to rise Impact of raw material
dicalcium 59291.06 59270.05 187306159.16 resulting in an overall increase
phosphate compared to the average price of the
prices and product
same period of the previous year. market fluctuations.Feed grade The sales price continued to rise
monocalcium 154890.91 151673.87 717530149.94 resulting in an overall increase
Impact of raw material
phosphate compared to the average price of the
prices and product
same period of the previous year. market fluctuations.There was a slight decline in the first
half of the year and continuous rise
Triple after the second half resulting in an Impact of raw material
superphosphate 140649.49 128643.50 388905607.79 overall increase compared to the prices and product
average price of the same period of the market fluctuations.previous year.Enriched It fell back after a peak in June with Impact of raw material
superphosphate 144796.53 73386.68 163130606.24 year-end sales prices roughly flat prices and productcompared to the beginning of the year. market fluctuations.Wet The sales price continued to rise
phosphoric resulting in an overall increase Impact of raw material
acid for 407214.38 382258.31 1274512610.20 compared to the average price of the prices and product
industrial use same period of the previous year. market fluctuations.The price was stable throughout the
Industrial wet- year with slight fluctuations resulting Impact of raw material
processed 183742.73 180211.14 1071080510.22 in a slight increase compared to the prices and product
purified acid average price of the same period of the market fluctuations.previous year.The price was stable throughout the
Sodium year with slight fluctuations resulting Impact of raw material
fluorosilicate 31661.54 33150.08 67121283.54 in a slight decrease compared to the prices and productaverage price of the same period of the market fluctuations.previous year.The operating income or net profit generated from overseas business accounts for more than 10% of
the Company’s most recent audited operating income or net profit for the fiscal year.□Yes□No
31Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
(3) Whether the Company’s physical goods sales revenue exceeds service revenue
□Yes □ No
By industry Item Unit 2025 2024 YoYIncrease/Decrease
Sales volume 10000 tonnes 108.29 105.93 2.23%
Phosphate chemical Production volume 10000 tonnes 119.06 105.51 12.84%
industry Inventory 10000 tonnes 16.06 6.27 156.14%
Sales volume 10000 tonnes 10.04 6.63 51.43%
Production volume 10000 tonnes 10.23 6.75 51.56%
Others
Inventory 10000 tonnes 0.48 0.22 118.18%
Reasons for any YoY movements over 30% in relevant data
□Applicable □ Not applicable
1. The phosphate fertilizer market rose and the Company’s control of export sales pace combined
with the crossing periods of the end-of-period phosphoric acid delivery cycle led to an increase in
the inventory of phosphorus chemical products.
2. The Company’s holding subsidiary Guangxi Chemical has made technical modifications to the
sodium fluorosilicate production line to increase capacity leading to a rise in the production and
sales of other types of products.
(4) Performance of major sales or purchasing contracts signed as of the end of the Reporting
Period
□ Applicable□Not applicable
(5) Composition of operating costs
By industry
Unit: RMB
By 2025 2024
industry Item Amount Proportion to Proportion to
YoY
operating cost Amount operating cost Increase/Decrease
Phosphate
chemical Raw materials 2580507492.35 78.06% 2034309098.56 74.18% 26.85%
industry
Phosphate
chemical Salary 146063747.43 4.42% 136169617.78 4.97% 7.27%
industry
Phosphate Depreciation
chemical and 109163469.77 3.30% 112113424.63 4.09% -2.63%
industry amortization
Phosphate
chemical Manufacturingexpenses 296766291.64 8.98% 277350652.40 10.11% 7.00%industry
Phosphate Contract
chemical performance 173402650.70 5.25% 182372330.45 6.65% -4.92%
industry cost
Other
industries Raw materials 22964993.41 65.02% 21324233.39 56.62% 7.69%
Other
industries Salary 5956204.02 16.86% 7269010.62 19.30% -18.06%
Other Depreciation
industries and 3720913.56 10.54% 3743402.35 9.94% -0.60%amortization
32Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
By 2025 2024 YoY
industry Item Amount Proportion to Amount Proportion tooperating cost operating cost Increase/Decrease
Other Manufacturing
industries expenses 2429197.05 6.88% 4633366.59 12.30% -47.57%
Other Contract
industries performance 247616.20 0.70% 690049.87 1.83% -64.12%cost
Note: Not applicable
(6) Changes in the scope of consolidated financial statements for the Reporting Period
□Yes □ No
Name of subsidiaries Shareholding Reasons for changes
Chuan Jin Nuo International Co. Ltd. 100% Newly established
Chuan Jin Nuo Middle East International Holding Co. Ltd. 60% Newly established
Egypt Chuan Jin Nuo Chemical Co. Ltd. 60.04% Newly established
Yunnan Xinshenghai International Trade Co. Ltd. 100% Newly established
(7) Significant changes or adjustments to business products or services during the Reporting
Period
□ Applicable□Not applicable
(8) Major customers and suppliers
Major customers:
Total sales to top 5 customers (RMB) 1386339080.84
Total sales to top 5 customers as % of total sales of the Reporting
Period (%) 34.03%
Proportion of the sales of connected parties in the top 5
customers over the year’s total 0.00%
Information on the top 5 customers
No. Customer name Sales amount (RMB) As % of total sales revenue (%)
1 Customer One 683555951.75 16.78%
2 Customer Two 228437642.71 5.61%
3 Customer Three 217328815.86 5.33%
4 Customer Four 130243465.67 3.20%
5 Customer Five 126773204.85 3.11%
Total -- 1386339080.84 34.03%
Other information of major customers
□ Applicable□Not applicable
Major suppliers
Total purchases from top 5 suppliers (RMB) 936269068.12
Total purchases from top 5 suppliers as % of total purchases of
the Reporting Period (%) 30.91%
Proportion of purchases of related parties in the top 5 suppliers
over the year’s total 0.00%
Information on the top 5suppliers
No. Supplier name Procurement amount (RMB) As % of total purchases (%)
1 Supplier One 310976295.58 10.27%
2 Supplier Two 201837744.32 6.66%
33Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
3 Supplier Three 164959265.31 5.45%
4 Supplier Four 133647408.41 4.41%
5 Supplier Five 124848354.50 4.12%
Total -- 936269068.12 30.91%
Other information of major suppliers
□ Applicable□Not applicable
During the Reporting Period revenue from the Company’s trading business accounted for more
than 10% of its total operating revenue.□ Applicable□Not applicable
3. Expenses
Unit: RMB
2025 2024 YoYIncrease/Decrease Main reason for any significant change
Sales 30127307.53 25770734.74 16.91% Due to the increase in sales personnel compensation andexpense product losses during the Reporting Period.Management Due to the increase in management personnel
expenses 125893242.81 112173236.88 12.23% compensation and preliminary research costs for theEgypt project during the Reporting Period.Financial
expenses 9515899.25 6766546.85 40.63%
Due to exchange rate fluctuations leading to a decrease in
foreign exchange gains during the Reporting Period.R&D 18638565.20 50541802.40 -63.12% Due to the reduction in expenditure on R&D investmentsexpense during the Reporting Period.
4. R&D investment
□Applicable □ Not applicable
Names of main Project Expected impact on the
R&D projects Project objectives progress Objectives to be achieved future development of theCompany
After the successful
implementation of the
Research and The technology uses wet-process
project it can not only
Development Using industrial-grade wet- phosphoric acid to produce high-
expand the application fields
Project of High- process phosphoric acid and purity tricalcium phosphate
of wet-process phosphoric
acid but also effectively
purity refined milk of lime as raw solving the limitation of high-materials the process prepares Completed quality raw materials on the reduce production costsTricalcium
Phosphate tricalcium phosphate with a production process of tricalcium
achieve energy saving and
Preparation purity of ≥ 99% through multi- phosphate resulting in tricalcium
consumption reduction and
stage purification steps. phosphate with a purity greater has important significance inTechnology than 99%. promoting the Company’stechnological progress and
supporting green
development.It provides a process technology After the successful
Through technological that through technological implementation of the
improvements and process improvements and process project it will provide
Research and optimization the caking of optimization we can effectively important support for the
Development monocalcium phosphate can be solve the caking problem of Company’s future
Project of Anti- effectively resolved. By monocalcium phosphate development. This process
caking synergistically controlling Completed focusing on addressing issues breaks through the
Technology for indicators such as SO3 such as the tendency of limitations of traditional
Monocalcium moisture and product traditional monocalcium anti-caking offering
Phosphate temperature (after cooling) the phosphate to cake and its short excellent producthigh stability requirements of storage period resulting in Feed performance significantly
feed additives can be met while grade monocalcium phosphate enhancing the quality and
ensuring fluidity. that does not cake when stored in market competitiveness of
a sealed environment at room Feed grade phosphates
34Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Names of main Project Expected impact on the
R&D projects Project objectives progress Objectives to be achieved future development of theCompany
temperature for over three while providing key
months. technology for green low-
cost industry development
consolidating the Company’s
technological advantages and
industry position and aiding
sustainable high-quality
development.To develop a set of co-
Research and production equipment capable of
Development It provides a process for simultaneously producing Feed Upon successful
Project for the preparing feed grade dicalcium grade and food grade dicalcium implementation of the
Co-production phosphate along with food phosphate ensuring that the project it will enable the
Technology of grade dicalcium phosphate Feed grade product meets the production of food-grade and
Food-grade using wet-process phosphoric Completed GB22549-2017 standard and the feed grade dicalcium
Dicalcium acid and refined milk of lime as food-grade product meets the phosphate enhancing the
Phosphate and raw materials through a multi- GB1886.3-2021 standard and diversity of the Company’s
Feed-grade stage gradient neutralization determining the optimal process products and increasing the
Dicalcium process. parameters for co-production added value of wet-process
Phosphate using wet-process phosphoric phosphoric acid.acid and milk of lime.After successful
implementation of the
project it will not only
Research and To provide a method using only optimize the Company’s
Development silicon powder to react with To provide a process technology industrial chain layout and
Project for sulfuric acid and fertilizer-grade for recovering fluorine from effectively improve resource
High-efficiency dicalcium phosphate to achieve Completed white fertilizer resulting in
utilization but also
Fluorine the efficient extraction and industrial-grade fluosilicic acid significantly enhance the
Extraction recovery of fluorine elements with a fluorine recovery rate of ≥ Company’s core
Technology in from fertilizer-grade dicalcium 45%. competitiveness and
White Fertilizer phosphate. sustainable developmentcapability providing a strong
and solid foundation for the
Company’s long-term stable
development.After the successful
implementation of the
project it can expand the
application field of wet-
process phosphoric acid
R&D Project To verify the reliability and significantly reduce costs
for the rationality of the small test
To obtain qualified food-grade
parameters for producing food- trisodium phosphate products
and increase efficiency
Technology of improve economic benefits
Producing grade trisodium phosphate by
that meet the GB25565-2010 optimize product structure
Food-grade neutralizing wet-process
National Food Safety Standard— strengthen technical
Trisodium phosphoric acid through pilot
Standard for Uses of Food
verification and produce food- Completed Additives and determine the
advantages and significantly
Phosphate enhance market
Using Wet- grade trisodium phosphate that
optimal process parameters for
producing this product by using competitiveness injecting
process meets the GB25565-2010 wet-process phosphoric acid new momentum into the
Phosphoric National Food SafetyStandard—Standard for Uses of neutralized with sodium
Company’s sustainable and
Acid hydroxide. healthy development. ItFood Additives. plays an important
supporting role in long-term
high-quality development
green low-carbon
transformation and industry
technological progress.Low- The initial setting time of β-
Temperature
Calcination of To solve the issue of low
hemihydrate gypsum is ≥ 3 min To realize the
Medium-Grade utilization rate and large Completed
final setting time is ≤ 30 min 2 h comprehensive utilization of
Phosphogypsum stockpile of phosphogypsum
flexural strength is ≥ 3.0 Mpa phosphogypsum as a
and 2 h compressive strength is ≥ resource
to Produce β- 6.0 Mpa; to establish a
35Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Names of main Expected impact on the
R&D projects Project objectives
Project
progress Objectives to be achieved future development of theCompany
Hemihydrate production line for building
Building gypsum powder from
Gypsum and phosphogypsum with an annual
Production capacity of 200000 tons
Demonstration
Efficient
Utilization of To promote enterprise
Residual Acid product structure adjustment
in Wet-process High-value-added hierarchical To apply for two patents form
Purified utilization of raffinate acid In progress new industrial products and
and drive the development of
Phosphoric build a pilot production line
high-tech industries. It will
bring direct economic
Acid benefits to the Company
Technology
To achieve economic
Efficient benefits improvement; at the
Utilization of To improve the recovery same time reduce
Secondary Slag efficiency of phosphorus
To obtain qualified high-calciumelements in purified phosphoric Completed fertilizer with “36% totalphosphorus resource waste
from Purified and solid waste emissions
Phosphoric acid residue and convert them
phosphorus and 34% effectivephosphorus” providing companies with aAcid into valuable products dual solution of“environmental protection +benefits”
To utilize the solubility
difference of sulfate ions
Deep between aqueous and organic The reaction results in organic
Desulfurization phases combined with multi- phase SO42-≤ 50 ppm meeting It will solve the
Process stage countercurrent washing the expected target. Products and desulfurization problem in
Research Using and reaction precipitation Completed phosphorus-containing barium the organic phase improving
Organic technology to achieve efficient slurry can be returned to the the quality of purified
Extractants removal of sulfate ions from the production system. phosphoric acid
organic phase and high recovery
rate of the organic phase
Key
Technological
Research on
Improving
Product Purity Research on the synergisticdecolorization technology route Finished phosphoric acid color
Combining technical
and connectivity withTransparency of “activated carbon columnstability controlled at ≤ 30
pretreatment + hydrogen Completed Hazen;
environmental compliance it
Through Deep peroxide high-temperature TOC content controlled at < 20
will provide a cost-effective
Decolorization ppm; path for product upgrades forTechnology of oxidation” enterprises
Wet-process
Phosphoric
Acid
Key
Technological To reduce sulfur content to
Research to SO42-≤ 0.01% arsenic content
Solve Impurity To develop efficient low-cost to ≤ 0.5 ppm achieving
Removal and environmentally friendly industrial/food grade phosphoric It will assist enterprises in
Problems with deep desulfurization and acid standards; improve achieving green
Deep dearsenic technology exploring Completed comprehensive desulfurization transformation and
Desulfurization key parameters for and dearsenic efficiency by over upgrading enhancing market
and Dearsenic simultaneous removal of sulfur 20%; realize energy competitiveness
Technology of and arsenic consumption reduction by 15%-
Crude 20% and reagent usage
Phosphoric reduction by 10%-15%
Acid
Key To study the effect of To optimize the balance point Diatomaceous earth serves
Technological diatomaceous earth addition on between filtration efficiency and as the core filter aid and will
Research on filtration efficiency; economy (5% diatomaceous reshape the project’s
Improving To study the correlation In progress earth plus 50% phosphoric acid economic benefit modelFiltration between phosphoric acid concentration) reduce unit from both “sourceEfficiency and concentration and filtration processing cost by 35% and development” and “cost
36Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Names of main Expected impact on the
R&D projects Project objectives
Project
progress Objectives to be achieved future development of theCompanyProduct performance; provide reliable technical reduction” perspectives.Concentration To study the synergistic effect support for high-end fields such Direct cost savings from
through of diatomaceous earth and as electronic grade phosphoric operating expenses will
Concentrated phosphoric acid acid and new energy materials bring comprehensive
Phosphoric benefits through significant
Acid Filtration improvement in main
Technology process efficiency
R&D personnels
2025 2024 YoY Change
Number of R&D personnels 248 201 23.38%
R&D personnels as % of workforce 11.92% 9.73% 2.19%
Educational background of R&D personnels
Bachelor’s degree 44 52
Master’s degree 5 5
Age distribution of R&D personnels
Aged below 30 48 38
30–4010993
R&D investment over the past three years and as a percentage of operating revenue
202520242023
R&D investment amount
(RMB) 154045964.55 121335204.30 88238190.26
Proportion of R&D investment
to operating income 3.78% 3.78% 3.25%
Amount of capitalized R&D
expenditure (RMB) 0.00 0.00 0.00
Capitalized R&D expenditure
as a percentage of R&D 0.00% 0.00% 0.00%
investment
Capitalized R&D expenditure
as a percentage of net profit for 0.00% 0.00% 0.00%
the current period
Reasons for significant changes in R&D personnel composition and their impacts
□ Applicable□Not applicable
Reasons for significant changes in R&D investment as a percentage of operating revenue compared
to the previous year
□ Applicable□Not applicable
Reasons for the significant change in R&D investment capitalization ratio and its reasonableness
□ Applicable□Not applicable
5. Cash flow
Unit: RMB
37Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Item 2025 2024 YoYIncrease/Decrease
Subtotal of cash inflows from operating activities 4104657396.83 3188307189.77 28.74%
Subtotal of cash outflows from operating activities 3806760713.52 3045495374.18 25.00%
Cash flows from operating activities 297896683.31 142811815.59 108.59%
Subtotal of cash inflows from investing activities 406683235.40 102554604.71 296.55%
Subtotal of cash outflows from investing activities 268223159.13 490849456.32 -45.36%
Net cash flows from investing activities 138460076.27 -388294851.61 135.66%
Subtotal of cash inflows from financing activities 789462640.71 553334381.27 42.67%
Subtotal of cash outflows from financing activities 756579679.85 658349341.13 14.92%
Net cash flows from financing activities 32882960.86 -105014959.86 131.31%
Net increase in cash and cash equivalents 474780012.43 -345903013.77 237.26%
Explanation of why any of the data above varies significantly:
□Applicable □ Not applicable
1. During the Reporting Period the Company’s phosphoric acid sales increased and the prices of
various products rebounded with market conditions. This resulted in an increase in cash flow from
product sales leading to a higher net cash flow from operating activities.
2. During the Reporting Period the Company retrieved funds raised for stable financial
management leading to an increase in cash inflow from investment activities;
3. During the Reporting Period increased borrowing led to an increase in cash inflow from
financing activities.Explanations for great differences between the net cash flows from operating activities of the
Company during the Reporting Period and the net profits of the current year
□ Applicable□Not applicable
V. Situation of non-principal business
□Applicable □ Not applicable
Unit: RMB
Amount Proportion to thetotal profit Reasons for the changes Sustainable or not
Investment
income 43493.53 0.01%
Payment of 6+9 bank acceptance bill discount
fees No
Asset
impairments -2062941.05 -0.38%
Impairment provision for inventory by the
Company No
Non-operating
income 4366125.71 0.81% Income from the Company’s sale of scrap No
Non-operating 2943306.00 0.54% The Company’s Expenses on Asset Damageexpense Scrap Donations and Fines No
Credit Company’s provision for bad debts for
impairment loss -3053418.39 -0.56% accounts receivable and other receivables Nobased on relevant accounting policies
Return on
disposal of assets 2386.93
Loss from disposing of old office equipment
by the Company No
Other income 14997046.16 2.77% Government grants received by the Company No
VI. Analysis of assets and liabilities
1. Significant changes in asset composition
Unit: RMB
End of 2025 Beginning of 2025
Amount As % of total Amount As % of total Increase/Decrease
Reason for any
assets assets significant change
38Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
End of 2025 Beginning of 2025
Amount As % of total Amount As % of total Increase/Decrease
Reason for any
assets assets significant change
Monetary
funds 880337677.42 20.27% 736429466.16 20.40% -0.13%
Accounts
receivable 120242318.52 2.77% 143689250.29 3.98% -1.21%
Inventories 856727721.33 19.73% 678193678.14 18.79% 0.94%
Due to depreciation
accrued according to
Fixed assets 1352145779.54 31.13% 1389503456.07 38.50% -7.37% the fixed assetdepreciation policy
within the Reporting
Period.Construction
in progress 205874302.13 4.74% 186814695.26 5.18% -0.44%
Right-of-use
assets 12272022.73 0.28% 533401.28 0.01% 0.27%
Short-term
loans 537457449.83 12.38% 340736998.42 9.44% 2.94%
Contract
liabilities 37031414.06 0.85% 32084741.04 0.89% -0.04%
Long-term
loans 78062610.42 1.80% 102118708.32 2.83% -1.03%
Lease
liabilities 2825860.91 0.07% 501785.73 0.01% 0.06%
Notes
receivable 129417984.60 2.98% 115148915.93 3.19% -0.21%
Intangible
assets 186983638.21 4.31% 166581024.22 4.62% -0.31%
Accounts
payable 220186306.77 5.07% 196746861.33 5.45% -0.38%
Other non- Due to land
current 371551471.07 8.56% 51957207.09 1.44% 7.12% prepayments made
assets during the ReportingPeriod.Current
portion of
non-current 217726380.04 5.01% 227740157.71 6.31% -1.30%
liabilities
A high proportion was recorded in offshore assets
□ Applicable□Not applicable
2. Assets and liabilities measured at fair value
□Applicable □ Not applicable
Unit: RMB
Gain/loss Provision
on fair- Cumulative set aside
Opening value fair-value for Purchased inItem balance changes changes impairment the current
Sold in the Other Closing
in the recorded in in the period current period changes balance
current equity current
period period
Financial assets
1.
Derivative
financial 4329785.08 4329785.08
assets
2.
Accounts 73237761.38 450850682.30 433787478.22 90300965.46
receivable
39Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Gain/loss Provision
on fair- Cumulative set aside
Opening value fair-value for Purchased inItem Sold in the Other Closingbalance changes changes impairment the currentin the recorded in in the period current period changes balance
current equity current
period period
financing
Total of
the above 73237761.38 450850682.30 433787478.22 94630750.54
Financial
liabilities 1050954.68 -1050954.68 0.00
Other change
Significant changes to the measurement attributes of the major assets during the Reporting Period:
□ Yes□No
3. Restricted assets right as at the end of the Reporting Period
Item End of the yearBook balance Book value Type of restriction Restriction details
Monetary Letters of credit margin exchange lock-in frozen
funds 26769770.01 26769770.01 Frozen margin etc.Notes Endorsed or117411304.07 117411304.07 discounted not yet Bank acceptance bills that have been endorsed orreceivable matured discounted but not yet derecognized at year-end
Intangible
assets 77987315.66 66289218.31 Mortgage Long-term loans secured by mortgages
Total 222168389.74 210470292.39 - -
VII. Analysis of investment
1. Overall situation
□Applicable □ Not applicable
Investment amount during the Reporting Investment amount during the same period
Period (RMB) of the previous year (RMB) Change (%)
220393378.50222322591.20-0.87%
2. Major equity investments acquired during the Reporting Period
□Applicable □ Not applicable
40Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Gains and
Progress as losses on WhetherName of Principal Investment Amount Source of Investment Product of the Expected investments involved Disclosure Disclosureinvestee
corporation business method invested
Shareholding fund Partners period type balance returns for the in any date index
sheet date current legal (If any) (If any)
period actions
Chuan Jin
Nuo Investment Newly USD100 Self-owned Indefinite
International holding established million 100.00% fund Not applicable period - Established No
Co. Ltd.Shun Long Energy
Chuan Jin (Hong Kong) Co.Nuo Middle The Limited Shunlong
East Investment Newly USD150 Company’s Energy International Indefinite
International holding established million 60.00% own Limited period - Established No
Holding money LIMITEDMIDGULF
Co. Ltd. INTERNATIONAL
LIMITED
Egypt Production
Chuan Jin and sales Self-owned
Nuo of Newly USD50established million 60.04%
funds
raised Not applicable
Indefinite
Chemical chemical period
- Established No
Co. Ltd. products funds
Yunnan
Xinshenghai Sales of
International material Newly RMB20 100.00% Self-owned Not applicable Indefinite - Established No
Trade Co. equipment established million fund period
Ltd.Total -- -- Notapplicable -- -- -- -- -- -- 0.00 0.00 -- -- --
41Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Note: To promote the implementation of the Chuan Jin Nuo (Egypt) Suez Phosphorus Chemical Project the Company established a wholly-
owned subsidiary Chuan Jin Nuo International Co. Ltd. in Hong Kong. Along with Shunlong Energy (Hong Kong) Co. Ltd. a wholly-owned
subsidiary of Kunming Shunlong Energy Co. Ltd. established in Hong Kong and Shunlong Energy International Limited. a wholly-owned
subsidiary of Sino Choice International Limited established in Hong Kong and the overseas enterprise Midgulf International Ltd. jointly
established Chuan Jin Nuo Middle East International Holdings Limited in the UAE (where Chuan Jin Nuo International Co. Ltd. holds 60%
Shun Long Energy (Hong Kong) Co. Limited. holds 15% Shunlong Energy International Co. Ltd. holds 15% Midgulf International Ltd. holds
10%). Subsequently Chuan Jin Nuo International Co. Ltd. and Chuan Jin Nuo Middle East International Holdings Limited jointly established
Egypt Chuan Jin Nuo Chemical Co. Ltd. in Suez Governorate Egypt (where Chuan Jin Nuo International Co. Ltd. holds 0.1% Chuan Jin Nuo
Middle East International Holding Co. Ltd. holds 99.9%) to manage project implementation. Through the above equity arrangement the
Company ultimately holds 60.04% of Chuan Jin Nuo Egypt Chemical Co. Ltd.; simultaneously to ensure the procurement work of the Egypt
project the Company established a wholly-owned subsidiary Yunnan Xinshenghai International Trade Co. Ltd. in Kunming.
3. Major non-equity investments ongoing during the Reporting Period
□Applicable □ Not applicable
Unit: RMB
Cumulative Reasons
Amount actual for not
Investment Is it a invested
Cumulative returns by meeting Disclosure Disclosure
Item method fixed asset
Industry
involved during the
investment by Source of Project Expected planned
investment Reporting the end of the fund progress returns
the end of progress date indexthe (If any) (If any)
Period Reporting Period Reporting and
Period expectedreturns
50000
tonnes/year
Battery-grade
Lithium Iron
Phosphate
Precursor Self-owned
Material (Iron Self-built Yes Chemical funds
Phosphate) and New Energy
144437144.00 raised 19.92% 131000000.00 0.00 N/A
Supporting 60 funds
tonnes/year
Sulfuric Acid
Production
Project
100000 The
tonnes/year Self-construction Yes New energy 557594.89 21506997.30 Company’s 1.19% 399000000.00 0.00 N/ABattery-grade own
42Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Cumulative Reasons
Amount actual for not
Investment Is it a Industry invested
Cumulative
investment by Source of Project Expected returns by
meeting
planned Disclosure DisclosureItem method fixed assetinvestment involved
during the the end of the fund progress returns the end ofReporting the progress
date index
(If any) (If any)
Period Reporting Period Reporting and
Period expectedreturns
Lithium Iron money
Phosphate Project
100000
tonnes/year
Battery-grade
Lithium Iron The
Phosphate Self- Yes New energy 9476003.82 117537464.17 Company’sconstruction own 14.69% 0.00 N/APrecursor
Material (Iron money
Phosphate)
Project
Total -- -- -- 10033598.71 283481605.47 -- -- 530000000.00 0.00 -- -- --
43Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
4. Financial asset investments
(1) Securities investments
□ Applicable□Not applicable
No such cases in the Reporting Period.
(2) Investments in derivative financial instruments
□Applicable □ Not applicable
1) Derivatives held for hedging purposes during the Reporting Period
□Applicable □ Not applicable
Unit: RMB10000
Proportion of
Gain/loss investments at
on fair- Cumulative
Types of Initial value fair-value Purchased
the end of the
Sold during period to net
derivative investment Openingamount changes changes
during the the Reporting Closing assets of the
investment amount in the recorded in Reporting Period amount Company at
current equity Period the end of the
period Reporting
Period
Foreign exchange 9711.31 9711.31 0 518.12 139011.36 110627.59 38095.08 12.69%
Total 9711.31 9711.31 0 518.12 139011.36 110627.59 38095.08 12.69%
Description of
accounting
policies and
specific
principles of
accounting for
hedging
operations during
the Reporting No significant changes have occurred
Period as well as
whether there
were any
significant
changes
compared with
the previous
Reporting Period
Description of To mitigate the risk of exchange rate fluctuations arising from export business settled in foreign currencies the
actual profit and Company has conducted forward foreign exchange contracts for foreign currency receivables from export sales.losses during the The scale of these contracts is within the expected sales volume with a clear business basis. During the
Reporting Period Reporting Period the Company’s gain or loss amount from forward foreign exchange contracts wasRMB4549500.The Company’s forward foreign exchange transactions are based on normal production and operations with no
Description of speculative or profit-seeking intentions. During the period due to significant fluctuations in exchange rates the
hedging effects forward exchange rate set in the contracts was higher than the real-time exchange rate leading to a certain level
of exchange gain.Sources of funds
for derivative Foreign currency receivables from export sales
investments
Risk analysis and I. Risk Analysis
description of The forward foreign exchange contracts conducted by the Company and its subsidiaries follow the principle of
control measures reducing exchange rate risks and do not involve speculative or arbitrage trading operations. However there are
for derivative inherent risks in forward foreign exchange transactions:
positions during 1. Exchange Rate Fluctuation Risk: In cases of large fluctuations in exchange rates if the forward exchange rate
the Reporting agreed upon in the contract is lower than the real-time exchange rate it may result in exchange losses.Period (including 2. Customer Default Risk: If accounts receivable from customers are overdue and the payment cannot be
but not limited to collected within the predicted time frame it may lead to delayed forward foreign exchange settlements causing
44Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
market risk losses for the Company.liquidity risk 3. Receivables Forecast Risk: The Financial Department forecasts receivables based on customer orders and
credit risk expected orders. However customers may adjust their orders and forecasts during the actual process which
operational risk could lead to inaccurate receivables forecasts and a risk of delayed forward foreign exchange settlements.legal risk etc.) II. Risk Control Measures
1. According to the Company’s Forward Settlement and Sale of Foreign Exchange Management Policy the
Company’s forward foreign exchange transactions must follow the principles of locking in profits and avoiding
risks. These transactions aim to reduce the impact of exchange rate fluctuations on the Company’s profits and
prohibit any form of speculative trading. The Forward Settlement and Sale of Foreign Exchange Management
Policy clearly defines the operational principles approval authorities responsible departments and individuals
internal operational procedures and internal risk reporting systems related to the Company’s foreign exchange
transactions.
2. The Financial Department as the execution departments for forward foreign exchange contracts will closely
monitor market conditions related to these transactions and promptly report to the management.
3. To prevent delayed forward foreign exchange settlements the Company places high importance on managing
accounts receivable actively following up on overdue receivables to avoid overdue accounts.Changes in the
market price or
product fair value
of invested
derivatives during
the Reporting
Period (The
specific
methodology At the end of each month the fair value changes are determined based on market quotations from external
used and the financial institutions.setting of relevant
assumptions and
parameters for
the analysis of the
fair value of
derivatives
should be
disclosed)
Involvement in
litigation (if None
applicable)
Disclosure date(s)
of the
announcement(s)
of the Board of
Directors about March 13 2025
the approval of
derivatives
investment(s) (if
any)
Date of the
announcement
disclosing the
approval of
derivatives April 9 2025
investment at
Board of
Shareholders (if
any)
2) Derivatives investments for speculative purposes during the Reporting Period
□ Applicable□Not applicable
No such cases in the Reporting Period.VIII. Sale of material assets and equities
45Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
1. Sale of material assets
□ Applicable□Not applicable
The Company did not sell material assets in the Reporting Period.
2. Sale of material equities
□ Applicable□Not applicable
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
Company name Company Registered Total Operating Operatingtype Principal business capital assets Net assets revenue profit Net profit
Guangxi Chuan Production and
Jin Nuo Subsidiary sales of chemicalChemical Co. products 55396 204774.72 105691.32 263951.44 38747.29 34832.49
Ltd. fertilizers etc.Subsidiaries obtained or disposed in the Reporting Period:
□ Applicable□Not applicable
Statement on the status of the Company’s major subsidiaries and investees
X. Structured entities controlled by the Company
□ Applicable□Not applicable
XI. Outlook for the Company’s future development
i. Development strategy
In April 2023 at the 2022 Annual Board of Shareholders the Company reviewed and approved its
five-year strategic plan establishing the goal of becoming a leading new energy materials supplier
through the deep integration of the electrochemical and phosphorus chemical industries under the
“one body two wings” strategy. The Company will center its development around phosphorus
using purified phosphoric acid as a strategic bridge and expanding its industry chain toward
electrochemical materials by leveraging the increasing value of phosphorus-based products.In 2025 based on deeply analyzing the trends in the domestic new energy industry and global
strategic opportunities the Company’s management made crucial decisions to optimize resource
allocation with strategic resilience of “being pragmatic and flexible”. Approved by the Board of
Directors the Company has redirected the remaining RMB455 million raised funds originally
planned for domestic new energy material projects to focus on the Chuan Jin Nuo (Egypt) Suez
Phosphorus Chemical Project which has more potential for development and definite returns. This
initiative was not only a deepening realization of the five-year strategic plan approved by the Board
of Shareholders in April 2023 but also marked a key step in the Company’s strategic goal of
becoming a leading new energy materials supplier through the deep integration of the
electrochemical and phosphorus chemical industries under the “one body two wings” strategy
focusing resources and clarifying the path.
46Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
ii. 2026 operational plan
The year 2026 is a crucial year for the launch of the Company’s Egypt project as well as a decisive
year for improving and enhancing domestic business quality and breaking through the overseaslayout. The Company will adhere to the business philosophy of “technological innovation as corelean management as base and global layout as wings” focusing on three main lines: Stable and
efficient domestic production initiation of overseas projects and industrial structure upgrades to
fully enhance operational efficiency and global competitiveness ensuring the strategic
implementation is effective. The specific plans are as follows:
In 2026 the Company will continue to adhere to the development philosophy of technologicalinnovation and pragmatic pursuit of truth centered around the core policy of “deepeningmanagement optimizing layout reinforcing innovation expanding the market and empoweringtalents” to drive the efficient implementation of various strategic initiatives to achieve sustainable
and high-quality development. The specific plans are as follows:
1. Make every effort to ensure the high-quality construction of the Egypt project. As the Company’s
current “number one project” the entire company will be mobilized to ensure that the Chuan Jin
Nuo (Egypt) phosphorus chemical project is advanced on schedule and to high standards. The core
task in 2026 is to complete the main infrastructure construction critical equipment procurement
and to form a dedicated overseas project management and operation team.
2. Steadily advance the centralized disposal project of waste slag in the Dongchuan industrial area.
The Company will solidly advance the construction and asset acquisition of the Dongchuan waste
rock disposal field project ensuring timely completion and operation eliminating environmental
and production operation risks and solidifying the sustainable development foundation of the local
production base.
3. Optimize the raw materials supply layout. Relying on the geographic advantage of the Fangcheng
Port area the Company will expand overseas cost-effective phosphate ore resource channels to
enhance the resilience and cost control of the raw material supply chain. Simultaneously the
Company will deepen the research and development of beneficiation technology at the Dongchuan
base strengthen the capability to utilize medium- and low-grade phosphate ore and build
differentiated resource competitiveness.
4. Expand overseas markets: The Company will make full use of the logistic and locational
advantages of Fangchenggang to further expand the breadth and depth of core products like purified
phosphoric acid and fertilizer phosphoric acid in overseas markets and enhance global sales
capabilities.
5. Deepen the construction of management systems. The Company will continuously improve and
optimize the Company’s governance structure internal control and business processes promote
systematic and scientific management processes and comprehensively enhance the efficiency of
operations and risk control level.
6. Strengthen technological innovation and industrial upgrade. The Company will increase R&D
investment focus on the research and development of technologies such as fine phosphorus
chemicals and new energy materials promote the optimization of industrial structure towards high
value-added and lay a solid technical foundation for long-term development.
7. Strengthen the building of talent pipeline. The Company will build a rational and sustainable
talent pipeline through a combination of internal training and external recruitment. Moreover the
Company will establish a systematic and market-oriented talent incentive and development
mechanism to stimulate organizational vitality and employee creativity providing solid talent
47Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
support for strategic implementation.iii. Potential risks facing the Company and countermeasures
In advancing domestic production quality Egypt project construction and global layout the
Company needs to face the common industry and exclusive overseas expansion risks and use
systematic measures to build a solid risk control defense ensuring the implementation of strategy
and stable operations. The specific risks and countermeasures are as follows:
1. Safety and environmental protection risks
The Company has always attached great importance to safety and environmental protection
management but if the national ecological civilization construction continues to deepen with
further increases in safety and environmental standards combined with the Company’s production
and operation involving various hazardous chemical products and the Egypt project facing
challenges in adapting to and executing local environmental protection policies it will lead to
increased investment in safety and environmental protection and higher compliance pressure.Countermeasures: Domestically continuously improve the safety production management system
strengthen employees’ safety and environmental awareness and practical ability through regular
training improve the emergency handling mechanism for safety accidents strictly implement
responsibility to individuals and simultaneously deepen the circular economy model to achieve
high-efficiency utilization of waste gas wastewater and waste residue resources enhancing
environmental protection processing capacity. Overseas proactively connect with Egyptian local
environmental protection departments precisely adapt to local environmental protection policies
and standards introduce mature domestic environmental processes and management experiences
into the Egypt project and implement environmental facilities in the design and construction stages
to ensure full-process compliant operations lowering cross-regional environmental protection risks.
2. Supply chain risk
The Company’s production relies on the procurement of core raw materials such as external ore
sulfuric acid and sulfur. With the advancement of the Egypt project and the expansion of the export
scale the dependence on overseas phosphate ore resources and maritime logistics is further
increasing. Factors such as fluctuations in raw material prices changes in international shipping
costs and geopolitical impacts on logistics flow can all impact the Company’s cost control and
production continuity.Response measures: On the resource side take the Egypt project as an opportunity to deeply bind
with local phosphate ore suppliers establish a standardized procurement and quality inspection
system and build a localized supply closed loop of “overseas resources-overseas production”.Meanwhile optimize the overseas phosphate ore procurement channel in Fangchenggang to
complement Egyptian resources and reduce single dependence. On the cost hedging side closely
track the price trends of raw materials shipping and auxiliary materials such as sulfur and stabilize
costs through long-term order pricing and diversified channels; on the technology side
continuously improve the mineral processing technology and production technology of the
Dongchuan base to enhance the utilization rate of medium and low-grade phosphate ore reduce raw
material consumption and strengthen cost competitiveness.
3. Operational management risk
With the expansion of the Company’s business scale and the implementation of the Egypt project
business coverage in both domestic and international markets puts higher demands on corporate
governance cross-regional business decision-making technological innovation transformation
48Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
overseas market expansion international team building and capital operation capabilities. If the
Company fails to quickly adapt to the pace of global operations it may trigger risks such as
insufficient operational management efficiency and decision-making deviations.Response measures: On the institutional side the Company will gradually improve the systems for
human resource management financial control and compliance management that are adapted to
global operations optimize the entire process of recruitment training and incentives and build a
professional and stable core team. On the capability side the Company will increase efforts to
attract and cultivate international talent focusing on recruiting professionals familiar with Egyptian
local business rules legal policies and chemical operations. Simultaneously the Company will
select and dispatch domestic key personnel to overseas locations to enhance cross-cultural
management and decision-making efficiency; strengthen corporate governance and internal control
streamline and optimize domestic and overseas production and operation processes achieve a
combination of management standardization and localized adaptation and improve overall
operational efficiency.
4. The risk of exchange rate fluctuations
The Company’s export scale and proportion are relatively high with overseas sales revenue mainly
settled in foreign currencies. The Egypt project construction and subsequent operations involve
multi-currency fund exchanges. The RMB exchange rate is increasingly affected by the domestic
and international political and economic environment which may impact the Company’s foreign
currency-denominated income and exchange gain or loss adversely affecting profit stability.Countermeasures: The Company will continuously improve the exchange rate risk management
mechanism and under the premise of ensuring the security and liquidity of funds authorize the
management team to carry out forward foreign exchange settlement and sales and other hedging
transactions within the approved limit to hedge exchange rate fluctuation risks. Meanwhile the
Company will optimize the overseas fund settlement model reasonably plan multi-currency fund
allocation in line with the operational needs of the Egypt project to reduce the impact of exchange
rate fluctuations on project construction and operational income.
5. Risk of overseas investment not meeting expectations
The Company plans to build projects in Egypt with an annual production of 800000 tons of sulfuric
acid 300000 tons of wet phosphoric acid for industrial use 150000 tons of 52% phosphoric acid
300000 tons of monoammonium phosphate and 20000 tons of sodium fluorosilicate. This project
involves a large investment and long construction period during which time it may face multiple
factors including changes in local Egyptian policies changes in industry market supply and demand
geopolitical conflicts construction progress not meeting expectations and cost overruns leading to
investment returns not meeting expectations.Countermeasures: The Company will form a professional team composed of domestic and foreign
chemical operations legal compliance and local business experts to be fully responsible for project
construction operation and management and strengthen risk prediction and response capabilities.From the project advancement side the Company will implement step-by-step control in strict
accordance with the pace refine construction node control and handle domestic and foreign
approval and filing procedures in advance to avoid policy and process risks. From the technical and
operational side the Company will introduce mature domestic wet process phosphor-chemical
technology into the project and optimize plans based on local resources and market conditions to
improve operational efficiency after the project is put into production. From the market side the
Company will make advance preparation in the Middle East Africa and Europe markets leverage
the location advantages of the Egypt project to expand product sales channels flexibly respond to
49Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
market changes and ensure project investment returns.
50Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
XII. Registration form for activities during the Reporting Period including surveys communication and interviews
□Applicable □ Not applicable
Reception Way of Type of
date Place communication received visitor Received visitor Main topics discussed and information provided
Index to main inquiry
information
BOC International (China) Co. Ltd. Zheshang Introduction of the Company’s main production
The Asset Management Lion Fund Amundi BOC base main products and production capacity;
January 17 Company’s Wealth Management Co. Ltd. Guotai Junan reasons for the Company’s turnaround to profit See Investor Relations
2025 conference By phone Institution Securities Asset Management Zhong Ou in 2024; sources and price outlook for Activity Record Form
room Asset Xingyin Fund Management and phosphate ore procurement; countries of origin (2025-001)
Taikang Asset for phosphate ore imports and product exportdestinations; company strategy etc.Sustainability of the Company’s dividends;
international market development plan; the“Interactive Company’s sulfuric acid production capacity;Platform Online what are the logics supporting the continuous
March 14 for Investor communication improvement of the phosphorus chemical See Investor Relations
2025 Relations” via an online Others Online investors industry’s prosperity; how to view the price Activity Record Form
of the platform difference between the Company’s main (2025-002)
p5w.net products on the international and domesticmarkets and is it possible to narrow; the
Company’s products and application conditions
etc.What are the highlights of the second-quarter
report how is the progress of the Egypt project
how to solve the RMB2 billion funding gap is it“Interactive through raising funds by issuing shares arePlatform Online there any expectations for product price
May 16 for Investor communication increases; progress of the Egypt project See Investor Relations
2025 Relations” via an online Others Online investors investment income expectations and its Activity Record Form
of the platform strategic significance for the Company’s future (2025-003)
p5w.net development; whether there is new productioncapacity put into production in Guangxi base
this year; how does the Company ensure the
stable supply of raw materials and reduce costs
etc.Reasons for the substantial year-on-year
increase in first-quarter performance; the
The Company’s Feed grade phosphate products and
June 16 Company’s Field research Institution Shenwan Hongyuan Securities Yude Capital production capacity situation; recent market
See Investor Relations
2025 conference Dajia Asset and Huatai Asset Management price trends of products and outlook for the Activity Record Form
room Company’s second-quarter performance; (2025-004)
progress of the Egypt project phosphate ore
resource assurance measures etc.
51Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Reception Place Way of Type of Index to main inquirydate communication received visitor Received visitor Main topics discussed and information provided information
Summary of business conditions in the first half
of 2025; reasons for the substantial year-on-year
The Sinolink Securities China Asset Management increase in performance in the first half of 2025;
August 15 Company’s Online Institution Co. Ltd. Huatai Securities (Shanghai) Asset the Company’s sulfuric acid production
See Investor Relations
2025 conference exchange Management Co. Ltd. Yongxing Securities capacity; view on future trends in phosphate Activity Record Form
room Co. Ltd. and other 30 institutional investors prices; estimated production time of the Egypt (2025-005)
project; future plans for new energy projects
etc.Introduction to main production bases main
The products and production capacity; overview of
September Company’s Minsheng Securities BOCOM Schroders business conditions in the first half of 2025; Refer to Investor
19 2025 conference Field research Institution Caitong Securities Asset Management Co. reasons for the significant year-on-year increase Relations Activity
room Ltd. and GF Securities in 2025 H1 performance; third quarter Record Form (2025-006)performance and production and operation
status etc.Introduction to main production bases main
The Linrui Fund UOB-Kay Hian in Singapore products and production capacity; overview of
September Company’s One-on-one Institutions Hengtiancheng Fund Wang Xing Chen business conditions in the first half of 2025; Refer to Investor
22 2025 conference meeting individuals Xiaodan Yang Zaizhen Bian Wei Luo Yiling reasons for the significant year-on-year increase Relations Activity
room Qiu Renyu and Li Xianwen in 2025 H1 performance; third quarter Record Form (2025-006)performance and production and operation
status etc.Guolian Minsheng Securities Co. Ltd.Everbright Securities SWS MU Fund
Management Guotai Junan Securities Asset Performance forecast for the first three quarters
Management Golden Eagle Asset of 2025 reasons for year-on-year performance
Venue of Management Co. Ltd Hua Nan Securities growth; how to look forward to the business
the Investment Trust Co. Ltd. Orient Securities situation in the fourth quarter of 2025; based onOctober 15 Refer to Investor
2025 Brokerage Others Institution Fupei Investment Shanghai Torch Investment
the performance in the first three quarters of this Relations Activity
Strategy Co. Ltd. Minsheng Tonghui Yuanxi Private year the Company’s performance will be better
Meeting Equity Huatai Securities Songxi Asset Lion this year will the annual dividend ratio
Record Form (2025-007)
Fund Hongfu Fund Haitong Securities increase; does the Company have any plans to
Yiyuan Private Equity Shanxi Securities Ping raise funds from the capital market in the future
An Caizhi Investment Minsheng Tonghui etc.Huatai Asset and Maxwealth Fund
Overview of business conditions in the first
three quarters of 2025; currently what are the
The Shenwan Hongyuan Securities AIA Life operating rates of the Dongchuan base and
October 20 Company’s Online Institution Insurance Co. Ltd. Chang’An Fund Ping An Guangxi Fangchenggang Chemical Base; in
Refer to Investor
2025 conference exchange Fund Management Company Limited and 2025 how much phosphate rock is expected to Relations Activity
room other 21 institutions be imported by Guangxi Fangchenggang Record Form (2025-008)
Chemical Base etc. and the previously
disclosed investor exchanges
October 29 The Online Institution Guolian Minsheng Securities Co. Ltd. Yinhua Basically the same as the previously disclosed See the Investor
52Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Reception Place Way of Type ofdate communication received visitor Received visitor Main topics discussed and information provided
Index to main inquiry
information
2025 Company’s exchange Fund investor exchange content no new substantive Relations Activity
conference exchange content occurred Record Form (2025-009)
room
Basic situation of Guangxi Chuan Jin Nuo; the
start time and technical source of the research
and development of wet-process purified
The phosphoric acid; the expected production
November Company’s Guosen Securities Tianhong Asset Rongtong capacity of Guangxi Chuan Jin Nuo Chemical in See the Investor
12 2025 conference Field research Institution Fund Origin Asset Wanjia AssetManagement and Prosperous Capital 2025 calculated as P?O?; the process used in the
Relations Activity
room Record Form (2025-010)wet purified phosphoric acid production
technology at the Guangxi base and the
previously disclosed investor communication
content
Basic situation of Guangxi Chuan Jin Nuo; the
start time and technical source of the research
Guangxi and development of wet-process purified
Chuan Jin CCB Pension Xizang Sinowise Investment phosphoric acid; the expected production
November Nuo Base On-site Co. Ltd. Shenwan Hongyuan Securities capacity of Guangxi Chuan Jin Nuo Chemical in See the Investor
13 2025 and the research Institution Qianhai Starlight Capital AXA SPDB 2025 calculated as P?O?; the process used in the Relations Activity
Meeting Investment Managers and 7 other organizations Record Form (2025-010)wet purified phosphoric acid production
Room technology at the Guangxi base and the
previously disclosed investor communication
content
53Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
XIII. The Formulation and implementation of the market value management system and
valuation promotion plan
Has the Company established a market value management system
□ Yes□No
Has the Company disclosed a valuation improvement plan
□ Yes□No
XIV. Implementation of the “quality and earnings dual improvement” action plan
Has the Company disclosed the “quality and return improvement” action plan announcement
□ Yes□No
54Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Section IV Corporate Governance Environmental and Social Matters
I. General information of corporate governance
During the Reporting Period in accordance with the requirements of the Company Law Securities
Law the laws and regulations of the China Securities Regulatory Commission and Shenzhen Stock
Exchange and normative documents the Company revised its internal control regulations
continuously improved the Company’s governance structure enhanced the Company’s standardized
operation level and formed a corporate governance structure with clear responsibility and authority
each performing its own duties mutual checks and balances scientific decision-making and
coordinated operation. The actual situation of the Company’s governance meets the requirements of
the normative documents related to the governance of listed companies issued by the China
Securities Regulatory Commission. The operations of the Board of Shareholders and the Board of
Directors are standardized. Independent directors the specialized committees of the Board of
Directors and the Company’s management team each fulfill their responsibilities. The Company
continues to carry out corporate governance activities in depth further improving its governance
level.i. Shareholders and the Board of Shareholders
The Company strictly convenes and holds shareholders’ meetings in accordance with the provisions
of the Company Law Articles of Association and the Company’s Shareholders’ Meeting Rules
issuing meeting notices on time before the meeting and ensuring the legitimacy and validity of the
attendees’ qualifications. The Company treats all shareholders equally. The Board of Shareholders
adopts a combination of on-site and online voting methods to ensure the equal status of minority
shareholders and major shareholders and that all shareholders fully exercise their rights. During the
Reporting Period there were no major issues that bypassed the Board of Shareholders or were
implemented before being reviewed. The convening holding and voting procedures of the Board
of Shareholders were legal and valid and there were no violations of the Rules for Shareholders’
Meetings of Listed Companies.ii. Directors and the Board of Directors
The Company strictly follows the selection procedures stipulated in the Articles of Association to
elect directors. There are currently seven directors including three independent directors which is
not less than one-third of the members of the Board of Directors and a sound independent director
system has been established; the number and composition of the Board of Directors meet legal and
regulatory requirements. Each director diligently fulfills their duties conscientiously attending
Board of Directors and Board of Shareholders and clearly understanding their rights obligations
and responsibilities. In accordance with the Code of Corporate Governance for Listed Companies
the Company has established four specialized committees under the Board of Directors: The
Strategy Committee the Nomination Committee the Audit Committee and the Remuneration and
Assessment Committee to provide scientific and professional support for decisions of the Board of
Directors. Each specialized committee operates in compliance with the Articles of Association the
Rules of Procedure of the Board of Directors and its own working guidelines conducting research
and making recommendations on specialized matters.iii. About the Company and its controlling shareholder
The Company has independent business operation capabilities and a complete operational system
with independence in terms of business personnel assets and finance separate from the
controlling shareholder. The Company’s Board of Directors and internal institutions operate
independently in strict accordance with their rules of procedure or company systems. The
55Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
controlling shareholder strictly regulates its own behavior exercising rights and fulfilling
obligations through the Board of Shareholders in accordance with the law without directly or
indirectly interfering with the Company’s business activities. During the Reporting Period the
Company did not provide any guarantees for the controlling shareholder nor did the controlling
shareholder engage in non-operating use of the Company’s funds.iv. Information disclosure and transparency
The Company strictly follows relevant laws and regulations and the Company Information
Disclosure Management System to strengthen the management of information disclosure affairs
effectively fulfilling information disclosure obligations. It designates the Securities Times the
China Securities Journal the Securities Daily the Shanghai Securities News and the information
disclosure websites for the ChiNext market designated by the China Securities Regulatory
Commission (CNINFO www.cninfo.com.cn) as the Company’s information disclosure channels
ensuring that information disclosure is true accurate timely and complete and ensuring that all
investors have equal access to company information.v. Stakeholders
The Company fully respects and protects the legitimate rights and interests of relevant stakeholders
highly values its social responsibility and actively engages in communication exchange and
cooperation with stakeholders. This approach aims to achieve a coordinated balance of interests
among shareholders employees society and other parties jointly promoting the healthy and
sustainable development of the Company.vi. About performance evaluation and incentive constraint mechanism
Combining the Company’s actual situation and the overall remuneration level of the industry and
market the Company has established selection removal and remuneration assessment mechanisms
for directors and senior management personnel strictly implementing them in accordance with laws
regulations and company systems. At the same time the performance evaluation and assessment
system for other employees is improved to fully motivate all employees and provide assurance for
the Company’s long-term development.vii. Internal audit system
The Audit Committee established under the Board of Directors is mainly responsible for
communicating on audit matters supervising and reviewing the execution of internal control
systems and verifying the Company’s financial information among other related tasks. During the
Reporting Period the Company continuously promoted the establishment and improvement of the
internal audit system. By strengthening internal audit management it effectively regulated business
behavior prevented operational risks and ensured the orderly conduct of the Company’s business
activities.Does the actual governance status of the Company differ materially from the relevant laws
administrative regulations and the CSRC’s rules on corporate governance for listed companies
□ Yes□No
The actual governance status of the Company does not differ materially from the relevant laws
administrative regulations and the CSRC’s rules on corporate governance for listed companies.II. The independence of the Company from its controlling shareholder and de facto controller
in terms of assets personnel finance organizations business and other aspects
The Company strictly operates in accordance with the Company Law the Securities Law and the
56Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Articles of Association. During the Reporting Period although the Company’s controlling
shareholder and de facto controller served as the chairman of the Company they always adhered to
corporate governance rules clarified the scope of their responsibilities and ensured the Company’s
independence through measures such as defining responsibilities and authorities honoring
commitments and standardizing decision-making. This ensured complete separation in terms of
business personnel assets institutions and finances from the controlling shareholder and de facto
controller maintaining an independent and complete operational capability with no circumstances
affecting the Company’s independence.i. Regarding business operations
The Company has an independent and complete business system operating autonomously in
procurement production and sales. The business is independent from the controlling shareholder
and related persons with no situations of industry competition or unauthorized interventions.ii. Regarding personnel
The controlling shareholder and de facto controller do not use their positions to interfere in the
Company’s personnel appointments and removals or senior management functions respecting the
Company’s internal personnel decision-making authority. The Company’s senior management
personnel independently exercise their powers and do not hold any other positions at the controlling
shareholder and related persons. Recruitment and salary management are conducted independently
ensuring a fully independent personnel system.iii. Regarding assets
The controlling shareholder and de facto controller strictly define asset boundaries do not occupy
or misappropriate company assets through the Chairman’s position and do not interfere with the
Company’s asset operations. The Company possesses complete assets and intellectual property
related to its production and operation with independent procurement and sales systems clear asset
ownership and no instances of asset occupation or domination.iv. Regarding institutions
The controlling shareholder and de facto controller do not use their positions to interfere with the
Company’s institutional setup and operations and do not share internal institutions with the
Company.. The Company has established a comprehensive internal operation and management
institutions where each unit’s responsibilities and authorities are clear and operate independently.There is complete separation from the institutions of the controlling shareholder and related persons
with no confusion of institutions.v. Regarding finances
The controlling shareholder and de facto controller do not use their positions to interfere with the
Company’s financial decisions nor occupy the Company’s funds respecting the Company’s
independent financial decision-making rights. The Company establishes an independent financial
accounting system and management system has independent financial departments and bank
accounts makes financial decisions independently and does not share bank accounts with the
controlling shareholder or mix funds.In summary the controlling shareholders and de facto controllers strictly adhere to the boundaries
of their duties effectively implementing measures to ensure the Company’s independence without
using their positions to influence the Company’s independence. The Company’s independence in all
aspects is fully guaranteed with no situations affecting this independence.
57Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
III. Competition with peers in the industry
□ Applicable□Not applicable
IV. The Company has differentiated arrangements for voting power
□ Applicable□Not applicable
V. Corporate governance of the red-chip structure
□ Applicable□Not applicable
58Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
VI. Directors and senior management personnels
1. General information
Shares Shares
Initial increased decreased Other Final shares Reasons for
Name Gender Age Office title Incumbent/Former Start of End of during the during thetenure tenure shares held current current changes held changes in(shares) period period (shares) (shares) shareholding
(shares) (shares)
Liu Meng Male 56 Chairman Incumbent September September15 2011 15 2026 72364501 0 0 0 72364501 None
Director
Wei Jiagui Male 56 and General Incumbent September September
Personal
15 2011 15 2026 4246091 0 1000000 0 3246091 financialManager needs
Director
Huang Hai Male 57 Chief September SeptemberFinancial Incumbent 15 2017 15 2026 0 0 0 0 0 None
Officer
Hong Hua Male 56 Employee September SeptemberDirector Incumbent 14 2023 15 2026 64476 0 0 0 64476 None
Tian Jun Male 54 Independent September SeptemberDirector Incumbent 14 2023 15 2026 0 0 0 0 0 None
He Male 59 Independent Incumbent September SeptemberGuozhong Director 14 2023 15 2026 0 0 0 0 0 None
Zhu Jinyu Male 59 Independent Incumbent September SeptemberDirector 14 2024 15 2026 0 0 0 0 0 None
Deputy
Li Lei Male 41 General Incumbent September September
Manager 15 2017 15 2026
0 0 0 0 0 None
Deputy
Huang General
Qiuhan Male 32 Manager Incumbent
March 28 September
2023 15 2026 0 0 0 0 0 Noneand Board
Secretary
Total -- -- -- -- -- -- 76675068 0 1000000 0 75675068 --
Has there been any resignation of directors or senior management personnels during the Reporting Period
□Yes□No
Changes in directors and senior management personnels
□Applicable □ Not applicable
59Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Name Office title Type Date Reason
Hong Hua Director Appointment September 26 2025 Director changed to EmployeeDirector
60Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
2. Biographical information
The professional backgrounds main work experience and current primary responsibilities of the
Company’s existing directors and senior management personnels
1. Mr. Liu Meng: Male born February 1970 Chinese nationality no permanent residence abroad
bachelor’s degree. He is an outstanding private entrepreneur in Yunnan Province and Excellent
Entrepreneur in the 10th Kunming Awarding. He graduated in 1992 from the Department of
Physics at Dalian University of Technology. From August 1992 to May 1995 he worked at the
Foreign Economic and Trade Commission of Deyang Sichuan; from June 1995 to June 1998 he
worked at Deyang Power Supply Company of State Grid Sichuan Electric Power Company; from
July 1998 to February 2001 he started his own business mainly focusing on waste material
recycling and utilization; from February 2004 to September 2009 he served as Chairman of Shifang
Jinnuo Metal Co. Ltd.; from June 2005 to August 2011 he was Chairman of Chuan Jin Nuo
Chemical Co. Ltd.; since September 2011 he has served as the Chairman of the Company.
2. Mr. Wei Jiagui: Male born September 1970 Chinese nationality no permanent residence
abroad secondary vocational education. He is an advanced individual in the 5th anniversary of the
Reemployment Special Zone Construction of Dongchuan District Kunming and an excellent
builder of socialism with Chinese characteristics in Kunming. He was awarded as an excellent
entrepreneur in the 12th Kunming session. From July 1990 to October 1999 he served as the
factory manager of the sub-factory of Sichuan Shihua Group; from November 1999 to December
2002 he worked as the factory manager of Sichuan Shunfeng Chemical Co. Ltd.; from January
2003 to May 2005 he served as the factory manager of Sichuan Shifang Jinnuo Metal Co. Ltd.;
from June 2005 to August 2011 he was the general manager of Chuan Jin Nuo Chemical Co. Ltd.;
since September 2011 he has served as the Company’s Director and General Manager.
3. Mr. Huang Hai: Male born July 1969 Chinese nationality no permanent residence abroad
bachelor’s degree. From June 1989 to June 1993 he worked at the Road Maintenance Machinery
Factory of Chengdu Railway Bureau as the Deputy Director of the Office; from June 1993 to June
2000 he worked as a loan officer at the Deyang Office Sichuan Trust and Investment Company;
from June 2000 to January 2007 he worked as the director of General Affairs Department at the
Deyang Sales Department Sichuan Trust and Securities; from January 2007 to March 2017 he
served as the General Manager of Deyang Nanfang Renewable Resources Co. Ltd. Since
September 2017 he has been the Chief Financial Officer of the Company and has served as a
director since September 2020.
4. Mr. Hong Hua: Male born October 1970 Chinese nationality no permanent residence abroad
associate degree. From August 1992 to July 1999 he worked at the Sichuan Mianzhu Knitting
Factory; from July 1999 to December 2006 he worked at Guizhou Zhengda Industrial Co. Ltd. as
Deputy General Manager; since December 2006 he served as Deputy General Manager of Chuan
Jin Nuo Chemical Co. Ltd.; from August 2011 to September 15 2017 he was the Company’s
Deputy General Manager; from September 2017 to September 14 2023 he served as the Chairman
of the Board of Supervisors and since September 14 2023 he has been a Director of the Company.
5. Mr. He Guozhong: Male born August 1967 Chinese nationality no permanent residence
abroad master’s degree senior economist. He has served as the Director of the Salt Administration
Office of the Yunnan Salt Affairs Administration Bureau the Director of the Department of Human
Resources and Labor director of the Office and director of the Restructuring Office of the
Company at Head Office of Yunnan Salt Industry Deputy General Manager and Board Secretary at
Yunnan Salt & Chemical Industry Co. Ltd. and held senior roles in other companies such as
Yunnan Landsun Tea Co. Ltd. and Kunming Zhitong Enterprise Management Consulting Co. Ltd.Yunnan Lincang Xinyuan Germanium Industry Co. Ltd. Linoya Electronic Technology Co. Ltd.
61Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
CJN Yunnan Copper Company Limited Yunnan Energy Investment Co. Ltd. Yunnan
Germanium Yunnan Luoping Zinc & Electricity Co. Ltd. Yunnan Jiayuan Huamu Green Industry
Co. Ltd. He is currently the Executive Director of Kunming Zhitong Enterprise Management
Consulting Co. Ltd. Independent Director of Yunnan Coal & Energy Co. Ltd. Independent
Director of Yunnan Botanee Bio-technology Group Co. Ltd. and since September 2023 has been
an Independent Director of the Company.
6. Mr. Tian Jun: Male born October 1972 Chinese nationality no permanent residence abroad
master’s degree qualifications as an independent director (including qualifications as an
independent director of the Science and Technology Innovation Board) board secretary senior
accountant and certified accountant. Since July 1994 Mr. Tian Jun has held various positions
including accountant at the Creditlink Securities Department of Wuhan Commercial Bank
investment project manager at the Securities Department at Wuhan International Trust and
Investment Corporation industry analysis project manager at the Information Consulting
Department of Wuhan Securities Company financial manager at Harbin Sales Department of
Wuhan Securities Co. Ltd. and financial manager at the Planned Finance Headquarters of Wuhan
Securities Co. Ltd. From September 2005 to September 2006 he served as compliance manager at
New Times Securities Co. Ltd. From October 2006 to October 2007 he was the Chief Financial
Officer (CFO) at Sonac (China) Biology Co. Ltd. From November 2007 to May 2009 he served as
investment director at Yunnan Hongxiang Pharmaceutical Co. Ltd. From June 2009 to December
2010 he was the board secretary at Yunnan Hongxiang Yixintang Pharmaceutical (Group) Co. Ltd.
From December 2010 to December 2019 he served as vice president financial manager and board
secretary at Yunnan Hongxiang Yixintang Pharmaceutical (Group) Co. Ltd. He was appointed as a
part-time master’s tutor at the School of Finance Yunnan University of Finance and Economics in
October 2019 Independent Director of Yunnan Shennong Agricultural Industry Group Co. Ltd.from January 2020 to December 2025. Since September 2023 he was appointed as Independent
Director of Kunming Chuan Jin Nuo Chemical Co. Ltd. Since January 2026 he served as the
Deputy Director of the First Independent Directors Committee and the Audit Professional
Committee of the Yunnan Association of Listed Companies. Currently he is a professional investor
and a capital operation consultant for multiple enterprises.
7. Mr. Zhu Jinyu:Male Chinese nationality born May 1967 no permanent residence abroad PhD
in Accounting Associate Professor level-2 professor qualified as a Certified Accountant and Asset
Appraiser. Since 1993 he has been teaching at Yunnan University of Finance and Economics
where he has served as associate dean of the School of Accounting Party Committee Secretary
Director of the Research Administration Office and director of the Office of Human Resources.Since September 2001 he has been an independent director for several listed companies including
Yunnan Chihong Zn & Ge Co. Ltd. Yunnan Luoping Zinc & Electricity Co. Ltd. Yunnan Malong
Industry Group Co. Ltd. Yunnan Coal & Energy Co. Ltd. Walvax Biotechnology Co. Ltd Xiyi
Co. Ltd. CJN Yunnan Metropolitan Real Estate Development Co. Ltd. Huaneng Lancang River
Hydropower Inc. Yunnan Aerospace Engineering Geophysical Detecting Co. Ltd. and Yunnan
Luliang Rural Commercial Bank. He is currently an independent director of Walvax Biotechnology
Co. Ltd. (300142) Hdy Ocean Technology Co. Ltd. Qujing City Commercial Bank and Yunnan
Huize Rural Commercial Bank. Since September 2024 he has resumed his role as an independent
director of the Company.
8. Mr. Li Lei: Male born October 1985 Chinese nationality no permanent residence abroad
bachelor’s degree. From 2007 to 2013 he served as the Company’s Regional Business Manager;
from 2013 to 2016 he was the Company’s Sales Director; from 2016 to September 15 2017 he
served as assistant general manager; since September 15 2017 he has served as the Company’s
Deputy General Manager.
62Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
9. Mr. Huang Qiuhan: Male born 1994 Chinese nationality no permanent residence abroad
bachelor’s degree in Civil Engineering from Tsinghua University in 2016 master’s degree in
Systems Engineering from University of Pennsylvania in 2018 with a qualification in fund
management. He has obtained the Board Secretary qualification certificate from the Shenzhen Stock
Exchange (Certificate No.: 2023-4A-0035). He has held roles at SZ DJI Technology Co. Ltd. as
Process Management Specialist Hopson Development Holdings Limited as Deputy Operations
Manager and Hopson Capital Investment as Deputy Director. He is currently serving as the
Company’s deputy General Manager and Board Secretary.Circumstances in which the controlling shareholder or de facto controller concurrently serves as
Chairman and General Manager of the listed company
□ Applicable□Not applicable
Position held in shareholding units
□ Applicable□Not applicable
Position held in other units
□Applicable □ Not applicable
Receipt of
Name Name of the other entities Positions held in Starting date of
Expiration date
of assuming remuneration andother entities assuming duties duties allowance in theshareholder
Tian Jun Yunnan Shennong Agricultural Independent December 25Industry Group Co. Ltd. Director March 11 2022 2025 Yes
Kunming Zhitong Enterprise
He Guozhong Management Consulting Co. Executive
Ltd. Director
Yes
He Guozhong Yunnan Coal & Energy Co. Independent October 16Ltd. Director 2025 Yes
He Guozhong Yunnan Botanee Biotechnology IndependentGroup Co. Ltd. Director May 15 2025 Yes
Zhu Jinyu Walvax Biotechnology Co. Ltd. Independent October 13Director 2022 Yes
Zhu Jinyu Hdy Ocean Technology Co. Independent September 30Ltd. Director 2021 Yes
Zhu Jinyu Qujing City Commercial Bank IndependentDirector July 29 2022 Yes
Zhu Jinyu Yunnan Huize Rural IndependentCommercial Bank Director June 5 2020 Yes
Zhu Jinyu Yunnan University of Financeand Economics Professor Yes
Punishments imposed by securities regulation institutes on current and resigned directors and senior
management personnel of the Company in the past three years during the Reporting Period
□ Applicable□Not applicable
3. Remuneration of directors and senior management personnels
Decision-making procedures basis for determining and actual payment of remuneration for
directors and senior management personnels
(1) Decision-making process for remuneration of directors and senior management personnel
The allowances and remuneration for company directors (including independent directors) and
senior management personnel are proposed by the Board of Directors’ Remuneration and
Assessment Committee based on relevant company compensation system regulations. Director
63Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
allowances and remuneration are determined upon approval by the Company’s Board of
Shareholders; remuneration for senior management personnel is determined upon approval by the
Board of Directors.
(2) Criteria for determining remuneration for directors and senior management personnel
The allowances and remuneration are determined based on the Company’s profitability the
performance of the directors and senior management personnel in fulfilling their duties and the
completion of annual performance goals. Since January 1 2022 the salary standards for the
Company’s directors and senior management personnel have been implemented based on the
Announcement on Adjusting the Salary Standards for Directors Supervisors and Senior
Management Personnel. For detailed information please refer to www.cninfo.com.cn.
(3) Actual payment situation of remuneration for directors and senior management
personnel
The allowances for the Company’s directors as well as the salaries for senior management
personnel are paid on a monthly basis. The performance part is determined based on the
comprehensive assessment results of personal job performance evaluation completion of the
Company’s goal etc. and is issued after the completion of the assessment.Remuneration of directors and senior management personnels during the Reporting Period
Unit: RMB10000
Whether obtaining
Name Gender Age Office title Incumbent/Former Pre-tax total remunerationfrom the Company (RMB) remuneration from relatedparties of the Bank
Liu Meng Male 56 Chairman Incumbent 79.92 No
Wei
Jiagui Male 56
Director and General
Manager Incumbent 74.96 No
Huang
Hai Male 57
Director Chief
Financial Officer Incumbent 68.77 No
Hong Hua Male 56 Employee Director Incumbent 55.16 No
Zhu Jinyu Male 54 Independent Director Incumbent 12 No
He
Guozhong Male 59 Independent Director Incumbent 12 No
Tian Jun Male 59 Independent Director Incumbent 12 No
Li Lei Male 41 Deputy GeneralManager Incumbent 71.83 No
Huang Deputy General
Qiuhan Male 32 Manager and Board Incumbent 73.91 NoSecretary
Total -- -- -- -- 460.55 --
Performance appraisal basis for actual remuneration of all Remuneration Management System for Directors and Senior
directors and senior management personnel at the end of Management Personnel and Remuneration Standard Plan for Directors
the Reporting Period and Senior Management Personnel
Performance completion status for actual remuneration of
all directors and senior management personnel at the end Completed
of the Reporting Period
deferred payment arrangements for the remuneration
actually received by all directors and senior management Not applicable
personnel at the end of the Reporting Period
Payment suspension or recourse for the remuneration
actually received by all directors and senior management Not applicable
personnel at the end of the Reporting Period
64Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Other explanations
□ Applicable□Not applicable
VII. Performance of duties of the directors during the Reporting Period
1. Attendance of directors at Board Meetings and Shareholders’ Meetings
Attendance of Directors at Board Meetings and Shareholders’ Meetings
Total Board Board Number of
Director Meetings Consecutive absence
name attended in the
meetings Attendance via Proxy Shareholders’
Reporting attended on communication attendance
Absence from two Board
site Meetings
Meetings
Period attended
Liu Meng 7 5 2 0 0 No 4
Wei Jiagui 7 5 2 0 0 No 4
Huang
Hai 7 5 2 0 0 No 4
Hong Hua 7 5 2 0 0 No 4
Tian Jun 7 5 2 0 0 No 4
He
Guozhong 7 5 2 0 0 No 4
Zhu Jinyu 7 5 2 0 0 No 4
Explanation for not attending two consecutive Board of Directors meetings in person
Not applicable
2. Directors’ objections to company matters
Did any directors raise objections regarding company matters during the Reporting Period
□ Yes□No
No objections were raised by any director during the Reporting Period.
3. Other explanation on directors’ performance
Were the directors’ suggestions regarding the Company adopted
□Yes □ No
Explanation on the adoption or non-adoption of the directors’ relevant suggestions to the Company
During the Reporting Period all of the Company’s directors strictly adhered to the Company Law
the Securities Law the Rules Governing the Listing of Shares on the ChiNext of Shenzhen Stock
Exchange the Guidelines No. 2 of Shenzhen Stock Exchange on Self-regulation for Listed
Companies - Standard Operation of Listed Companies on the ChiNext Market as well as the
Articles of Association and other relevant laws regulations and normative documents. They
actively attended the relevant meetings carefully reviewed various proposals and provided advice
on the Company’s strategic development business management and other aspects. This has
enhanced the scientific decision-making of the Board and contributed to the Company’s steady
development. At the same time the directors continued to monitor the implementation of the
Board’s resolutions the Company’s business operations and financial status offering timely
suggestions or opinions to protect the Company’s interests and safeguard the legitimate rights and
interests of all shareholders.
65Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
VIII. The specialized committees under the Board of Directors during the Reporting Period
Details
Number about
Committee Members of Convening
issues
name meetings date Meeting content Important opinions and suggestions
Other information about
the performance of duty with
held objections(if any)
The Audit Committee
Deliberated on the proposal for asset The Audit Committee strictly carried out communicated with the
impairment provision for the year 2024 its work in accordance with relevant laws external audit institutions
2024 audit report the internal audit work regulations the Articles of Association on the 2024 annual report
The Audit Tian Jun He March 3 report the internal control self-evaluation
and the Board Audit Committee Rules. It audit matters before
Committee Guozhong and 4 2025 report the annual report and its summary
diligently performed its duties and during and after the
Zhu Jinyu the special report on the deposit and use of responsibilities. audit staying updated on
None
raised funds the 2025 internal audit work Based on the Company’s actual situation the audit progress and
plan the 2024 financial final accounts relevant opinions were proposed. After providing effective
report etc. thorough communication and discussion suggestions and opinionsall proposals were unanimously approved. on the annual report audit
matters.Reviewed the Company’s first quarter
The Audit Tian Jun HeGuozhong and 4 April 14 report of 2025 first quarter internal auditCommittee Zhu Jinyu 2025 report and the proposal to reappoint the
None None
external audit institutions for 2025
Reviewed the 2025 semi-annual report and
The Audit Tian Jun HeGuozhong and 4 August 4
its summary the second quarter internal
Committee 2025 audit report and the special report on 2025 None NoneZhu Jinyu semi-annual placement and use of raised
funds
The Audit Tian Jun HeGuozhong and 4 October 17 Reviewed the 2025 third quarter report andCommittee 2025 the third quarter internal audit report None NoneZhu Jinyu
The Remuneration and Assessment
Committee carried out its work in strict
The accordance with relevant laws
Remuneration Liu Meng He March 11 Proposal on the remuneration standards for
regulations the Articles of Association
and Guozhong and 1 2025 the Company’s directors and senior
and the Compensation and Assessment
Assessment Tian Jun management personnel Committee Rules. Based on the
None None
Committee Company’s actual situation relevantopinions were proposed. After thorough
communication these proposals were
approved.
66Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
IX. Work status of the Audit Committee
Whether the Audit Committee identified any risks in its supervisory activities during the Reporting
Period
□Yes□No
The Audit Committee raised no objections regarding its supervisory matters during the Reporting
Period.X. Employee information
1. Employee quantity professional composition and educational level
Number of in-service employees of the Company at the end of
Reporting Period 1219
Number of in-service employees of main subsidiaries at the end
of the Reporting Period 893
Total number of in-service employees at the end of Reporting
Period 2112
Total number of employees with remuneration in this Reporting
Period 2112
Number of retirees to whom the parent company or its main
subsidiaries need to pay retirement pension 31
Specialty composition
Category Number of professionals (person)
Production personnel 1528
Sales personnel 41
Technical personnel 89
Financial personnel 25
Administrative personnel 429
Total 2112
Educational level
Category of education level Number of people (person)
Doctorate 1
Master 16
Bachelor degree 225
Associate degree and below 1870
Total 2112
2. Remuneration policy
(1) Maintain Market Competitiveness: Maintain the market competitiveness of salaries for core
positions with key talent competing on an industry-wide basis and general talent competing on a
local basis. Open multiple recruitment channels place great emphasis on talent acquisition and
development and strengthen the building of a talent pipeline. Build a strong talent pool to further
support the Company’s sustainable development.
(2) Comprehensive Job Level System and Broadband Compensation Structure: To support the
business objectives with talent ensure fair and efficient selection and allocation of key personnel
enhance per capita labor efficiency and drive business growth through self-motivated talent the
Company sets job levels based on factors such as the importance and complexity of positions. A
standardized and clear salary structure is established enabling employees to advance through a
“dual-track” promotion system.
(3) Integration of Job and Performance: The value of each position is determined through job
evaluation which serves as the basis for setting employee salaries. Salary adjustments are made
based on performance results establishing a fair and competitive salary management system.Appropriately allocate more resources to positions with challenging working environments high
67Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
operational risks significant responsibilities and high technical requirements.
3. Training plans
New employee onboarding training: New hires should undergo pre-job training which will be
coordinated and arranged by the Human Resources Department. The training content includes:
(1) Company overview and human resources management system: A brief introduction to the
Company the human resources management system and the functions and situations of various
departments.
(2) Departmental management systems and processes job skills: An overview of departmental
management systems and processes as well as the skills required for various positions.Professional training: Depending on production or business needs outstanding employees will be
selected to attend professional training at external training institutions or experts and scholars will
be invited to the Company to give a series of special lectures. This aims to enhance their job skills
and facilitate the completion of tasks.The Company also considers employee training an important tool for strengthening internal
cohesion and building the Company’s core competitiveness.
4. Outsourcing of labor
□Applicable □ Not applicable
Total labor outsourcing hours (hours) 210992.06
Total rewards paid (RMB) 6329761.75
XI. Profit distribution and capital reserve transfer to share capital
The formulation implementation or adjustment of profit distribution policies especially cash
dividend policies during the Reporting Period
□Applicable □ Not applicable
During the Reporting Period the Company strictly followed the relevant profit distribution policies
and review procedures as outlined in the Articles of Association implementing the profit
distribution plan. The dividend standards and distribution ratio were clear and well-defined and the
relevant decision-making procedures and mechanisms were complete. In the drafting and decision-
making of the distribution proposal the independent directors fulfilled their duties and played their
appropriate role. The relevant proposals were reviewed by the Board of Directors before being
submitted to the Board of Shareholders for approval with independent directors providing their
independent opinions effectively safeguarding the interests of all shareholders. During the
Reporting Period the profit distribution policy remained unchanged.The specific execution situation is: The Company held the thirteenth meeting of the fifth Board of
Directors and the tenth meeting of the Board of Supervisors on March 11 2025 and held the 2024
annual Board of Shareholders on April 8 2025 to approve the Proposal on the 2024 Profit
Distribution Plan of the Company agreeing to use the total share capital of 274867523 shares as
of December 31 2024 as the distribution base to distribute a cash dividend of RMB3.0 per 10
shares (tax included) to all shareholders totaling RMB82460256.90 without distributing bonus
shares or using capital reserves to increase share capital. During the period from the disclosure date
of the profit distribution plan to the equity registration date for implementing the rights distribution
if there is any change in the total share capital of the Company the Company will adjust the totalcash dividend amount based on the principle of “the cash dividend distribution ratio remains
68Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.unchanged”. This distribution plan was implemented on May 29 2025.Specific Description of the Cash Dividend Policy
Does the policy comply with the Company’s Articles of Association and the resolutions of the Shareholders’ Meeting Yes
Is the dividend standard and ratio clear and unambiguous Yes
Are the relevant decision-making procedures and mechanisms complete Yes
Have the independent directors fulfilled their duties and played their expected role Yes
If the Company did not distribute a cash dividend the specific reasons shall be disclosed along with measures to Not
enhance investor return levels. applicable
Did the minority shareholders have sufficient opportunity to express their opinions and were their legitimate rights fully
protected Yes
If the cash dividend policy was adjusted or changed were the conditions and procedures compliant and transparent Notapplicable
The profit distribution plan and capital reserve transfer to share capital plan for the Reporting
Period are consistent with the regulations of the Company’s Articles of Association and dividend
management measures
□Yes □No □Not applicable
The profit distribution plan and capital reserve transfer to share capital plan for the Reporting
Period are in line with the Company’s Articles of Association and relevant regulations.Profit Distribution And Capital Reserve Transfer to Share Capital for the Year
Number of bonus shares per 10 shares (shares) 0
Amount to be distributed for every 10 shares (RMB) (tax
inclusive) 4
Number of shares to be converted into share capital for every 10
shares (share) 0
The current cash dividend distribution
Others
Detailed note on the plan for profit distribution or the conversion of capital provident fund into the share capital
This profit distribution plan complies with relevant regulations such as Guideline No. 3 for Listed Company Supervision - Cash
Dividends for Listed Companies Self-regulatory Guidelines No. 2 for Listed Companies on the Shenzhen Stock Exchange -
Regulated Operations for ChiNext-listed Companies and the Company’s Articles of Association. The proposal was put forward by
the Board of Directors after considering factors such as profitability financial condition and future development prospects. It is
beneficial for all shareholders to share in the Company’s growth achievements. The implementation of the proposal will not lead to
any shortage of working capital or other adverse effects on the Company.The Company reported a profit during the Reporting Period and the parent company had a positive
profit available for distribution to shareholders. However no cash dividend distribution plan was
proposed during this period
□ Applicable□Not applicable
XII. Implementation of the Company’s stock incentive plan employee stock ownership plan
or other employee incentive measures
□Applicable □ Not applicable
1. Stock incentive
Not applicable.Equity incentives granted to the directors and senior management personnel
□ Applicable□Not applicable
Appraisal mechanism and incentives for senior management personnel
69Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
During the Reporting Period the Company did not have any equity incentive plans and therefore
there were no performance evaluation mechanisms or incentive arrangements for senior
management personnel.
2. Implementation of employee stock ownership plans
□ Applicable□Not applicable
3. Other employee incentive measures
□Applicable □ Not applicable
(1) To promote the business development of Guangxi Chuan Jin Nuo Chemical the Company
established “Fangchenggang Lingyu (Limited Partnership)” (Limited Partnership) and “KunmingLingrong (Limited Partnership)” (Limited Partnership) as employee stock ownership platforms. The
aim is to enable core members of the company in its early stages to also hold shareholder status
thus integrating the interests of shareholders the Company and employees. This encourages more
cautious decision-making in project investments focuses on lean management in the Company’s
operations strengthens the execution power of the entire team and reflects the values of co-creation
shared responsibility and shared benefits. The goal is to establish a good and balanced value
distribution system fully motivate key employees and support the realization of the Company’s
strategy and long-term sustainable development.
(2) On January 16 2020 the 3rd Board of Directors’ 20th Meeting and the 3rd Board of
Supervisors’ 18th Meeting were held followed by the 2020 First Extraordinary Board of
Shareholders on February 6 2020 during which the Proposal on Approving the Capital Increase of
the Holding Subsidiary and Waiving Priority Subscription Rights was reviewed and approved. The
registered capital of the Company’s Holding subsidiary Guangxi Chuan Jin Nuo Chemical Co. Ltd.(hereinafter referred to as “Guangxi Chuan Jin Nuo Chemical”) was increased from RMB100
million to RMB110 million. Among this Fangchenggang Lingyu Enterprise ManagementConsulting Partnership Enterprise (Limited Partnership) (hereinafter referred to as “FangchenggangLingyun”) subscribed to RMB5 million of the newly increased registered capital and Kunming
Lingrong Enterprise Management Consulting Partnership Enterprise (Limited Partnership)
(hereinafter referred to as “Kunming Lingrong”) subscribed to RMB5 million of the newly
increased registered capital. The Company waived its priority subscription rights. For detailed
information please refer to the announcement disclosed by the Company on January 17 2020 on
the China Securities Regulatory Commission-designated ChiNext information disclosure website
(http://www.cninfo.com.cn): Announcement on the Approval of the Capital Increase of the holding
Subsidiary and Waiver of Priority Subscription Rights (Announcement No.: 2020-002).
(3) The Company completed the industrial and commercial registration on March 30 2020. For
detailed information please refer to the announcement disclosed by the Company on March 30
2020 on the China Securities Regulatory Commission-designated ChiNext information disclosure
website (http://www.cninfo.com.cn): Announcement on the Completion of Industrial and
Commercial Registration Change and the Reissuance of Business License for the Controlling
Subsidiary (Announcement No.: 2020-032).
(4) In 2021 the Company increased the capital of Guangxi Chuan Jin Nuo Chemical Co. Ltd.
raising its registered capital from RMB110 million to RMB553.96 million. Both Fangchenggang
Lingyun and Kunming Lingrong made proportional capital increases in Guangxi Chuan Jin Nuo
Chemical.
(5) In 2023 the Company engaged an appraisal agency to assess Guangxi Chuan Jin Nuo Chemical.
According to the appraisal report issued by the qualified Beijing Yachao Assets Appraisal Co. Ltd.
70Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
with a base date of December 31 2022 titled Appraisal Report on the Full Equity Value of
Shareholders of Guangxi Chuan Jin Nuo Chemical Co. Ltd. for the Proposed Share Repurchase by
Kunming Chuan Jin Nuo Chemical Co. Ltd. (Y.C. (2023) No. A171) the appraisal value of
Guangxi Chuan Jin Nuo was RMB1735271358.89. After comprehensive consideration the
Company decided to acquire 1.3655% of the equity in Guangxi Chuan Jin Nuo Chemical. held by
Kunming Lingrong for RMB22.53 million and 1.3655% of the equity held by Fangchenggang
Lingyun for RMB22.53 million. After the acquisition the Company’s equity stake in Guangxi
Chuan Jin Nuo Chemical. increased from 90.91% to 93.64%. Kunming Lingrong’s equity stake
decreased from 4.5455% to 3.18% and Fangchenggang Lingyun’s equity stake decreased from
4.5455% to 3.18%.
(6) In 2025 Guangxi Chuan Jin Nuo Chemical based on the Audit Report
(XYZH/2025KMAA2B0015) issued by ShineWing Certified Public Accountants LLP after the
shareholders’ meeting resolution held by all shareholders agreed to distribute a total of
RMB140000000 in profit to the Company’s shareholders in proportion to the paid-up capital
contributed by the shareholders. Among them RMB131096000 was distributed to the Company
and RMB4452000 each was distributed to Kunming Lingrong and Fangchenggang Lingyun.XIII. Internal control system construction and implementation during the Reporting Period
1. Internal control construction and implementation
During the Reporting Period the Company organized internal control work in accordance with the
Internal Control Manual of Kunming Chuan Jin Nuo Chemical Co. Ltd. SZSE’s Guidelines for
Internal Control of Listed Companies and the Company’s internal control system and other
relevant regulations.During the Reporting Period the Company organized and carried out the 2025 Annual Internal
Control Evaluation in accordance with the procedures stipulated in the enterprise internal control
normative system and the Company’s internal control evaluation methods. Based on the
identification of significant internal control deficiencies as of the internal control evaluation
reporting date the Company has no significant internal control deficiencies related to financial or
non-financial statement.During the Reporting Period the Company essentially achieved reasonable assurance of the legal
and compliant operation of business management asset security the authenticity and completeness
of financial statements and related information while improving operational efficiency and
effectiveness. This has facilitated the achievement of the Company’s internal control goals in
supporting the realization of its development strategy.
2. Significant deficiencies in internal control during the Reporting Period
□Yes□No
XIV. Subsidiary management and control during the Reporting Period
Problems
Company name Integration plan Integrationprogress encountered in Measures taken
Solution
integration progress
Future plans
Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable
Abnormalities in the management and control of subsidiaries
□Yes□No
XV. Internal control evaluation report and internal control audit report
71Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
1. Internal control evaluation report
Full
disclosure
date of the
internal March 20 2026
control
evaluation
report
Full
disclosure
index of the
internal CNINFO (http://www.cninfo.com.cn)
control
evaluation
report
The
proportion of
the total assets
of the
included
entities in the 100.00%
total assets of
the company’s
consolidated
financial
statements
The
proportion of
the operating
income of the
included
entities in the
operating 100.00%
income of the
company’s
consolidated
financial
statements
Deficiency Identification Standards
Category Weaknesses in internal control over financial statement Weaknesses in internal control not related to financialstatement
I. Identification of significant deficiencies: 1. Fraud by I. Identification of significant deficiencies: A
Directors Supervisors and Senior Management deficiency is classified as significant if its likelihood is
Personnel; 2. Significant violations and incidents in areas high and it severely impacts work efficiency or
such as financial accounting asset management capital effectiveness significantly increases uncertainty in
operations information disclosure product quality safety outcomes or causes a serious deviation from expected
production and environmental protection which result in goals. Examples include: a. The Company lacks
major losses or adverse effects for the Company or democratic decision-making procedures; b. The
significant administrative regulatory penalties; 3. The Company’s decision-making procedures are
certified accountant identifies a significant misstatement unscientific leading to significant errors; c. The
in the current period’s financial statement which the Company severely violates national laws regulations
internal control system fails to detect during its operation; or normative documents; d. The Company experiences
Qualitative 4. The Company’s Audit Committee and Internal Audit significant turnover of senior management personnel
criteria institutions fail to effectively supervise internal controls. and key technical personnel; e. The media frequentlyII. Identification of important deficiencies: 1. Failure to reports negative news which has a wide scope and the
select and apply accounting policies in accordance with negative impact has not been eliminated; f. The
generally accepted accounting principles; 2. Failure to Company’s key business operations lack institutional
establish anti-fraud procedures and control measures; 3. control or the institutional system is ineffective; g.Failure to establish corresponding control mechanisms or Significant internal control deficiencies in the
implement compensating controls for the accounting Company have not been rectified; h. The execution of
treatment of non-routine or special transactions; 4. strategic and operational goals or key performance
Existence of one or more deficiencies in the control over indicators is unreasonable seriously deviating with
the year-end financial statement process which cannot directional errors causing a severe negative impact on
reasonably ensure that the prepared financial statements the achievement of strategic and operational objectives.meet the objectives of truthfulness and accuracy. III. II. Identification of important deficiencies: A
Identification of general deficiencies: Any control deficiency is classified as important if its likelihood is
72Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
deficiencies that are not classified as significant relatively high and it significantly reduces work
deficiencies or important deficiencies mentioned above efficiency or effectiveness increases the uncertainty of
can be identified as general deficiencies. outcomes or causes a notable deviation from expected
goals. Examples include: a. The Company’s decision-
making procedures lead to significant errors; b. The
Company violates internal regulations resulting in
significant losses; c. The Company experiences severe
turnover of key business personnel in critical positions;
d. The media reports negative news that affects specific
regions; e. There are flaws in the Company’s important
business systems or processes; f. Significant internal
control deficiencies in the Company have not been
rectified; g. The execution of strategic and operational
goals or key performance indicators is unreasonable
significantly deviating from them causing a notable
negative impact on the achievement of strategic and
operational objectives. III. Identification of general
deficiencies: A deficiency is classified as general if its
likelihood is low and it reduces work efficiency or
effectiveness increases the uncertainty of outcomes or
causes a deviation from expected goals. Examples
include: a. The Company’s decision-making
procedures are inefficient; b. The Company violates
internal regulations but no losses are incurred; c. There
is significant turnover of staff in general positions; d.The media reports negative news but the impact is
minimal; e. There are flaws in the Company’s general
business systems or processes; f. General deficiencies
in the Company have not been rectified; g. There are
minor inconsistencies in the execution of the
Company’s strategic and operational goals or key
performance indicators causing slight deviations that
have a minimal impact on achieving the strategic and
operational objectives.Standards for identifying significant deficiencies:
Misstatement amount ≥ 3% of total assets or misstatement Standards for identifying significant deficiencies: Lossamount ≥ 3% of total assets or loss amount ≥ 2% of
Quantitative amount ≥ 2% of income; Important deficiencies:
criteria Misstatement amount between 1% and 3% of total assets
income; Important deficiencies: Loss amount between
or misstatement amount between 1% and 2% of income; 1% and 3% of total assets or loss amount between 1%
General deficiencies: Misstatement amount < 1% of total and 2% of income; General deficiencies: Loss amount
assets or misstatement amount < 1% of income. < 1% of total assets or loss amount < 1% of income.Number of
material
weaknesses in
internal 0
control over
financial
statement
Number of
material
weaknesses in
internal
control not 0
related to
financial
statement
Number of
serious
weaknesses in
internal 0
control over
financial
statement
Number of
serious
weaknesses in 0
internal
73Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
control not
related to
financial
statement
2. Internal control audit report
□Applicable □ Not applicable
Review Opinion in the Internal Control Audit Report
We believe that Kunming Chuan Jin Nuo Chemical Co. Ltd. in accordance with the Basic Standard for Enterprise Internal Control
and relevant regulations maintained effective internal control related to financial statement in all material aspects as of December 31
2025.
Disclosure of the internal control audit report Disclosure
Full disclosure date of the internal control audit report March 20 2026
Index of full disclosure of the internal control audit report CNINFO (http://www.cninfo.com.cn)
Type of opinion on the internal control audit report Standard unqualified opinion
Existence of major defects in non-financial statement No
Does the accounting firm issue a non-standard opinion in the internal control audit report
□Yes□No
Does the accounting firm’s internal control audit report agree with the Board of Directors’ self-
assessment report
□Yes □ No
Did a non-standard audit opinion on internal control issued during the Reporting Period or the
previous year
□Yes□No
XVI. Corrective actions for issues identified by self-inspection in the special action for listed
company governance
In 2022 according to the China Securities Regulatory Commission’s Listed Company Governance
Self-Inspection Checklist System the Company adhering to the principle of seeking truth from
facts strictly compared and aligned with relevant laws and regulations such as the Company Law
Securities Law as well as internal regulations including the Articles of Association Rules of
Procedure of the Board of Directors and the Rules for Specialized Committee Meetings. The self-
inspection covered a total of seven major areas and 119 questions. The Company carefully reviewed
and completed the submission. Based on this self-examination the Company believes that its
corporate governance complies with the requirements of the Company Law Securities Law
Guidelines for Articles of Listed Companies the Rules Governing the Listing of Shares on the
ChiNext and other laws and regulations. The corporate governance structure is relatively perfect
and operations are standardized without significant errors. Currently the Company does not have
the aforementioned issues.XVII. 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
Number of enterprises included in the list of
enterprises legally required to disclose 2
environmental information
No. Company name Reference for statutory environmental information disclosure report
1 Kunming Chuan Jin Nuo Chemical http://183.224.17.39:10097/ynyfpl/frontal/index.html#/home/index
74Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Co. Ltd.
2 Guangxi Chuan Jin Nuo Chemical Co.Ltd. https://bqfq.sthjt.gxzf.gov.cn/GXHJXXPLQYD/frontal/index.html#/home/index
Related environmental accidents information
During the Reporting Period the Company did not experience any environmental incidents.XVIII. Social responsibility
i. OverviewCJN as always adhered to the corporate culture of “Integrity as the Foundation Technology forEnterprise Growth” with the goal of establishing a modern corporate system and building a
publicly listed company that is open transparent and standardized. The Company actively explores
and continuously improves its corporate governance aiming to establish long-term trust and win-
win relationships with investors. It places great emphasis on protecting the legitimate rights and
interests of investors particularly small and medium-sized investors. While pursuing wealth
creation the Company actively gives back to society and supports social welfare causes.ii. Social responsibility in promoting circular economy through energy conservation and
environmental protection
The Company insists on self-development and enhancing core technologies as the foundation for its
survival and development. It continuously innovates in five key areas: flotation and utilization of
medium- and low-grade phosphate ores wet-process phosphoric acid purification graded
utilization of wet-process phosphoric acid sulfuric acid production from pyrite and energy-saving
and environmental protection. The Company transforms these innovations locally into resources
and energy integrates the industry chain to achieve more efficient and effective utilization of
sulfur-phosphorus resources and realizes a circular economy with the goal of energy conservation
and environmental protection.iii. Protection of shareholder and creditor rights
Shareholders and creditors are the providers of financial resources for the Company. Protecting the
legitimate rights and interests of shareholders and creditors is the Company’s responsibility and
obligation and it is also the foundation for the Company’s continued operation and development.During the Reporting Period the Company further improved its governance structure fully
respecting and protecting the legitimate rights and interests of all shareholders and creditors
especially minority shareholders. The Company ensured that shareholders fully enjoy the legal
rights and interests provided by laws regulations and rules. During the Reporting Period the
Company strictly adhered to the principles and requirements of relevant laws regulations and
normative documents including the Code of Corporate Governance for Listed Companies the
Rules Governing the Listing of Shares on the ChiNext of Shenzhen Stock Exchange and the
Guidelines No. 2 of Shenzhen Stock Exchange on Self-regulation for Listed Companies - Standard
Operation of Listed Companies on the ChiNext Market. The Company standardized its operations
and continued to implement internal control measures. The Company also continued to improve and
its corporate governance structure ensuring the Company’s long-term stable and healthy
development.iv. Protection of employee rights
The Company has always adhered to the principle of integrating both morality and talent in its
employment practices focusing on the comprehensive development of employees’ abilities and
their individual career growth. Based on its development strategy and human resources planning
the Company strives to ensure that every employee can fully realize their personal value on the
75Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
broad platform of CJN aligning their career development plan with the Company’s development
goals to achieve the maximum synergy fostering mutual growth for both employees and the
Company. The Company strictly adheres to the Labor Law and the Labor Contract Law ensuring
the protection of employees’ legal rights and interests in accordance with the law. All employees
sign Labor Contracts with the Company in accordance with relevant national and local laws and
regulations. The Company strictly provides welfare protection for employees in accordance with
national regulations and standards and makes contributions to the five social insurances and one
housing fund as required by the state. The contribution rate and the contribution base for statutory
benefits are executed in accordance with relevant national regulations.v. Company’s 2026 social responsibility targets
In 2026 the Company will continue to fulfill its corporate social responsibility and make
unremitting efforts for the economic and social development of Dongchuan and Fangchenggang.The Company will continue to drive technological innovation reduce energy consumption and
achieve the maximum integrated use of energy resources. It will strictly comply with national laws
and regulations operate with integrity and create a positive social environment delivering better
performance to repay society and investors.In 2026 CJN will continue to uphold the development strategy of seeking progress while
maintaining stability further improving the management of corporate social responsibility
enhancing communication and engagement with stakeholders and continuing to adhere to the
corporate culture of “Integrity as the Foundation Technology for Enterprise Growth”. The
Company aims to create value for the country provide more returns to shareholders offer higher
quality products and better services to customers provide broader development opportunities for
employees and contribute to social harmony and sustainable development.The Company is required to comply with the disclosure requirements related to “ChemicalIndustry-related Business” in the Guidelines No. 3 of Shenzhen Stock Exchange for Self-
regulation of Listed Companies– Industry-specific Information Disclosure
The Company has established a comprehensive safety management system and set up a safe
production management department. It conducts production safety operations through multiple
channels and in-depth efforts. The Company conscientiously implements the relevant requirements
of national and industry laws and regulations fully enforcing the safety production responsibility
system for all employees. In 2025 the Company conducted regular safety production inspections as
required continuously improving and enhancing the safety production environment for employees.It developed an annual safety education and training plan providing safety training for new
employees and specialized workers as per the plan. The Company also established an emergency
drill plan regularly conducting fire drills chemical leakage drills confined space operation
emergency drills and other drill activities. These drills aimed to improve the emergency awareness
and capabilities of the Company’s personnel ensuring that safety production activities proceed in
an orderly manner. The Company has implemented the Level 3 Safety Standardization for
Hazardous Chemicals focusing on the implementation of a dual prevention mechanism of risk
classification control and hazard investigation and rectification. The Company actively cooperates
with emergency management departments for inspections and guidance. In 2025 the Company did
not experience any major safety production accidents.XIX. Consolidation and expansion of poverty alleviation achievements and rural
revitalization
The Company actively responds to the calls of the local Party Committee and District Government
as well as the national call to consolidate and expand the achievements of poverty alleviation. It
76Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
actively fulfills its corporate citizenship responsibilities and genuinely gives back to society. The
Company actively recruits registered poverty-stricken households for employment and makes
donations to further consolidate the achievements of poverty alleviation.
77Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Section V Important Matters
I. Fulfilment of commitment matters
1. Commitments made by the de facto controllers shareholders related parties acquirers and other parties related to the Company
which have been fulfilled during the Reporting Period and those that have not been fulfilled by the end of the Reporting Period.□Applicable □ Not applicable
Commitment reason Committer Commitmenttype Commitment content
Commitment
date Commitment term
Performance
status
If the issuer’s prospectus contains false records misleading
statements or significant omissions which materially affect
the assessment of whether the issuer meets the legal
requirements for issuance the issuer shall promptly convene
a board meeting to review a plan for repurchasing all newly
issued shares from the initial public offering and the plan
shall be implemented after being submitted to and resolved
by the Board of Shareholders. Regarding this proposal the
Commitment made in Kunming Chuan Jin Nuo Share controlling shareholder shall voluntarily abstain from voting From March 15
IPO or refinancing Chemical Co. Ltd.; Liu repurchase and urge the issuer to repurchase all newly issued shares
March 14 2016 until Proper
Meng commitment from the initial public offering in accordance with the law. 2016 fulfillment performance
The issuer and its controlling shareholder shall determine the
repurchase price in accordance with the relevant laws and
regulations in effect at the time of repurchase the normative
documents issued by the China Securities Regulatory
Commission and the Shenzhen Stock Exchange and the
provisions of the Articles of Association and the repurchase
price shall not be lower than the market price at the time of
repurchase.
1. As of the date of this commitment I am not engaged in
any production or business operations that compete or may
compete with the issuer’s business for purposes other than
the interests of the issuer. 2. In order to avoid new (or
Commitments potential) direct (or indirect) business competition with the
on horizontal issuer’s production and operations I commit that during my
Commitment made in competition period as a shareholder of the issuer: for purposes other than From March 15
IPO or refinancing Liu Meng related-party the interests of the issuer I will not directly engage in the
March 14 2016 until Proper
transactions and production and business operations of products that are the 2016 fulfillment performance
capital same as or similar to those of the issuer; I will not invest in
appropriation any enterprise whose product production and business
operations compete or may compete with those of the issuer;
I guarantee that I will ensure that any enterprise I control or
that I am able to actually control (hereinafter collectively
referred to as “controlled enterprises”) will not directly or
78Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Commitment reason Committer Commitment Commitment content Commitment Commitment term Performancetype date status
indirectly engage in participate in or conduct any activities
that compete with the issuer’s product production and
business operations; if any enterprise in which I hold equity
engages in product production and business operations that
compete with the issuer I will avoid becoming the
controlling shareholder of such enterprise or gaining actual
control over it; if the issuer subsequently expands its product
or business scope neither I nor any controlled enterprise will
compete with the issuer’s expanded products or business; if I
or any controlled enterprise competes or may compete with
the issuer’s expanded products or business I will personally
take action and encourage the controlled enterprise to adopt
measures to exit such competition in a manner that
maximizes the interests of the issuer including but not
limited to: a) ceasing the production of products that
constitute or may constitute competition; b) ceasing the
operation of businesses that constitute or may constitute
competition; c) transferring the competing business to an
unrelated third party; d) integrating the competing business
into the issuer for operation. (3) I and the related enterprises
I control will strictly limit the use of the issuer’s funds in any
operational financial transactions with the issuer. Neither I
nor the related enterprises I control shall request the issuer to
advance salaries benefits insurance advertising or other
expenses nor shall we request the issuer to bear any costs or
other expenditures on our behalf. Neither I nor the related
enterprises I control will seek to directly or indirectly
provide the issuer’s funds for our own use or for the use of
the related enterprises I control in any of the following
ways: a) lending the issuer’s funds to myself or the related
enterprises I control whether for a fee or free of charge; b)
providing entrusted loans to myself or the related enterprises
I control through banks or non-bank financial institutions; c)
entrusting myself or the related enterprises I control to
conduct investment activities; d) issuing commercial
acceptance bills without a genuine transaction background
for myself or the related enterprises I control; e) repaying
debts on behalf of myself or the related enterprises I control;
f) any other methods as determined by the China Securities
Regulatory Commission.Commitment made to Liu Meng; Chen Yong; (1) Not to transfer benefits to other units or individuals
minority shareholders of Chen Zhilong; Feng Other without compensation or on unfair terms nor to adopt other March 14
From March 15 Proper
the company Fajun; He Guozhong; commitments methods that harm the interests of the Company; (2) To 2016
2016 until performance
Hong Hua; Li Xuecao; restrain personal consumption behavior related to their fulfillment
79Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Commitment reason Committer Commitment Commitment content Commitmenttype date Commitment term
Performance
status
Liu Mingyi; Sun position; (3) Not to use the Company’s assets for investment
Weicheng; Wang or consumption activities unrelated to the performance of
Jianhua; Wang Zongbo; their duties; (4) The compensation system formulated by the
Wei Jiagui; Zeng Board of Directors or the Remuneration Committee shall be
Runguo; Zhang Hejin; linked to the implementation of the Company’s
Zhu Jinyu; Zi Hongyun compensation and return measures; (5) The exercise
conditions of the Company’s equity incentive plan to be
announced shall be linked to the implementation of the
Company’s compensation and return measures.In accordance with the relevant regulations of the China
Securities Regulatory Commission to ensure the effective
implementation of the Company’s compensation and return
measures the controlling shareholder and the de facto
Commitment made to Other controller commit to: not interfering with the Company’s From March 15minority shareholders of Liu Meng commitments business management activities beyond their authority; not
March 14 2016 until Proper
the Company transferring benefits to other units or individuals without 2016 fulfillment performance
compensation or on unfair terms nor adopting other
methods that harm the Company’s interests; and not using
the Company’s assets for investment or consumption
activities unrelated to the performance of their duties.The controlling shareholder and de facto controller Liu
Meng has made a commitment regarding social insurance
and housing provident fund matters: if CJN and its
Commitment made to subsidiaries incur any claims administrative penalties or
minority shareholders of Liu Meng Other other related losses due to employee social insurance and March 14
From March 15 Proper
the Company commitments housing provident fund matters I will bear all the costs to 2016
2016 until
ensure that no additional expenses or losses are incurred by fulfillment
performance
CJN and its subsidiaries and that there will be no significant
adverse impact on the production operations financial
condition and profitability of CJN and its subsidiaries.The Company undertakes that the Prospectus has no false
record misleading statement or material omissions and shall
bear individual and joint and several liabilities for the
truthfulness accuracy and completeness of these contents.The Company solemnly undertakes: 1. If this Prospectus
Commitment made to contains any false statements misleading statements or
minority shareholders of Kunming Chuan Jin Nuo Other material omissions that have a major and substantial impact March 14
From March 15 Proper
the Company Chemical Co. Ltd. commitments on judging whether the Company meets the issuance 2016
2016 until performance
conditions stipulated by law the Company will repurchase fulfillment
all the new shares issued at the initial public offering at the
secondary market price of the Company’s shares. 2. If
investors incur loss in securities issue and trade due to false
records misleading statements or material omissions in the
Prospectus the Company will compensate investors for their
80Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Commitment reason Committer Commitmenttype Commitment content
Commitment
date Commitment term
Performance
status
losses according to law.Chen Yong; Feng Fajun;
Chen Zhilong; He I commit that the prospectus of CJN does not contain false
Guozhong; Hong Hua; Li records misleading statements or significant omissions and
Commitment made to Xuecao; Liu Mingyi; Sun I bear individual and joint legal responsibility for its From March 15
minority shareholders of Weicheng; Wang Other truthfulness accuracy and completeness. I commit that if March 14 Proper
the Company Jianhua; Wang Zongbo; vommitments the prospectus of CJN contains false records misleading 2016
2016 until performance
Wei Jiagui; Zeng statements or significant omissions resulting in losses to fulfillment
Runguo; Zhang Hejin; investors in securities trading I will compensate the
Zhu Jinyu; Zi Hongyun; investors’ losses in accordance with the law.Liu Meng
In addition to the aforementioned lock-up period during the
term of office the shares transferred each year shall not
exceed 25% of the total number of shares directly or
indirectly held in the Company. No transfer of the shares
directly or indirectly held in the Company shall be made
within six months from the date of submitting the
resignation. If within six months after the Company’s
Liu Meng; Wei Jiagui; listing the closing price of the Company’s shares remains
Commitment made to Liu Mingyi; Zi Hongyun; below the issue price for 20 consecutive trading days or if
minority shareholders of Zeng Runguo; Chen Other the closing price at the end of the six-month period is below March 14
From March 15
vommitments the issue price (if after the Company’s listing actions such 2016 2016 until
Proper
the Company Yong; Hong Hua; Feng performance
Fajun; Zhang Hejin as the distribution of dividends bonus shares capitalization
fulfillment
of reserves issuance of new shares or rights issues occur
the issue price will be adjusted according to the sequence of
such actions) the lock-up period for the shares held by me
will automatically be extended by six months based on the
original lock-up period. If I reduce my holdings of the
Company’s shares within two years after the expiration of
the aforementioned lock-up period the transfer price shall
not be lower than the issue price.“1. I commit not to transfer benefits to other units orCommitment on individuals without compensation or on unfair terms nor to
Liu Meng Wei Jiagui the dilution of
adopt other methods that harm the Company’s interests; 2. I
immediate commit to restraining my personal consumption behavior
Commitment made to Huang Hai Tang Jiapu returns and related to my position; 3. I commit not to use the Company’s From October 28
minority shareholders of Li Xiaojun Long Chao compensation assets for investment or consumption activities unrelated to October 28 2022 until Proper
the Company Liu Hailan Li Lei the performance of my duties; 4. I commit that the 2022 performanceHuang Qiuhan Zhou measures forprivate compensation system formulated by the Board of Directors
fulfilled
Yongxiang Zhang Hejin placement of or the Remuneration and Assessment Committee will be
shares in 2022 linked to the implementation of the Company’scompensation and return measures; 5. If the Company
implements a new equity incentive plan in the future I
81Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Commitment reason Committer Commitment Commitment content Commitmenttype date Commitment term
Performance
status
commit that the exercise conditions of the proposed equity
incentive plan will be linked to the implementation of the
Company’s compensation and return measures; 6. I commit
to issuing a supplementary commitment if before the
completion of the Company’s current issuance the China
Securities Regulatory Commission (CSRC) introduces new
regulatory provisions regarding compensation and return
measures and the above commitments do not meet the
CSRC’s requirements. In such a case I will comply with the
latest regulations issued by the CSRC and provide a
supplementary commitment; if any violation of the above
commitments causes losses to the Company or investors Iwill bear the corresponding legal responsibility.”“1. I will not interfere with the Company’s businessmanagement activities beyond my authority nor will I
encroach upon the Company’s interests; 2. From the date of
this commitment until the completion of the Company’s
current issuance if the China Securities Regulatory
Commission (CSRC) the Shenzhen Stock Exchange or
other supervisory department introduce new regulatory
Commitment on provisions regarding compensation and return measures and
the dilution of the above commitments do not meet such provisions I
immediate commit to providing a supplementary commitment in
Commitment made to returns and accordance with the latest regulations of the supervisory From October 28
minority shareholders of Liu Meng compensation department; 3. I commit to effectively fulfilling the October 28 Proper
the Company measures for Company’s established compensation and return measures 2022
2022 until performance
private and any related commitments I have made regarding such
fulfilled
placement of measures. If I violate these commitments and cause losses to
shares in 2022 the Company or investors I am willing to bear thecompensation responsibility for the Company or investors in
accordance with the law. If I violate the above commitments
or refuse to fulfill them I agree that the China Securities
Regulatory Commission (CSRC) the Shenzhen Stock
Exchange and other supervisory department may impose
relevant penalties or take appropriate regulatory measures
against me in accordance with the provisions or rules theyhave established or published.”
Whether the commitment
has been fulfilled on time Yes
If the commitment has
not been fulfilled within
the deadline a detailed Not applicable
explanation of the
reasons for non-
82Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Commitment reason Committer Commitmenttype Commitment content
Commitment Performance
date Commitment term status
fulfilment and the next
steps to be taken shall be
provided
83Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
2. If the Company has made a profit forecast for any assets or projects and is still within the
forecast period during the Reporting Period the Company shall provide an explanation
regarding whether the asset or project has met the original profit forecast along with the
reasons
□ Applicable□Not applicable
3. Performance commitments involving the Company
□ Applicable□Not applicable
II. Non-operating funds occupied by controlling shareholders and other related parties
□ Applicable□Not applicable
The Company has no non-operating funds occupied by controlling shareholders and other related
parties during the Reporting Period.III. Violation of external guarantees
□ Applicable□Not applicable
The Company did not engage in any violations related to external guarantees during the Reporting
Period.IV. Explanation of the Board of Directors on the latest “Non-standard Audit Report”
□ Applicable□Not applicable
V. Explanation of the Board of Directors the Audit Committee and Independent Directors (if
any) on the “Non-standard Audit Report” for the Reporting Period
□ Applicable□Not applicable
VI. Description of changes during the Reporting Period in accounting policies and accounting
estimates or corrections of significant accounting errors by the Board of Directors
□ Applicable□Not applicable
VII. Explanation on changes in the scope of consolidated financial statements compared to the
previous year’s financial statement
□Applicable □ Not applicable
In 2025 the scope of the Company’s consolidated financial statements includes 11 entities
consisting of the Company itself and ten subsidiary companies. Compared to 2024 there were
changes in the consolidation scope:
Name of subsidiaries Shareholding Reasons for changes
Chuan Jin Nuo International Co. Ltd. 100% Newly established
Chuan Jin Nuo Middle East International Holding Co. Ltd. 60% Newly established
Egypt Chuan Jin Nuo Chemical Co. Ltd. 60.04% Newly established
Yunnan Xinshenghai International Trade Co. Ltd. 100% Newly established
VIII. Appointment and dismissal of the accounting firm
Currently Appointed Accounting Firms
Name of the domestic accounting firm ShineWing Certified Public Accountants LLP
Remuneration for the domestic accounting firm (Unit: 100
84Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
RMB10000)
Consecutive years of audit services of the domestic accounting
firm 16
Name of certified accountant of the domestic accounting firm Peng Rang and Li Qiuxia
Consecutive years of audit services of the certified accountant
from the domestic accounting firm Five years
Whether the accounting firm was replaced
□Yes□No
Appointment of internal control auditing accounting firm financial consultant or sponsor
□Applicable □ Not applicable
In the year the Company engaged ShineWing Certified Public Accountants LLP as the internal
control auditing accounting firm with a fee of RMB200000.IX. Risk of delisting after the disclosure of the annual report
□ Applicable□Not applicable
X. Bankruptcy and restructuring
□ Applicable□Not applicable
The Company has not experienced any bankruptcy or restructuring issues during the Reporting
Period.
85Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
XI. Major lawsuits or arbitration
□Applicable □ Not applicable
Lawsuit Whether to Litigation Litigation
Basic information on litigation (arbitration) amount form into (arbitration) Trial results and influences of (arbitration) execution Disclosure Disclosure
(RMB10000) estimated Progress lawsuit (arbitration) of judgments date indexliabilities
Guangxi Chuan Jin Nuo New Energy Co. Ltd.(hereinafter referred to as “Guangxi Chuan Jin Nuo The effective judgment result is During the ReportingNew Energy”) filed a lawsuit against Zhongke Lithium the termination of the Period ZhongKe
Battery New Energy Co. Ltd. (hereinafter referred to Purchasing Contract signed by Lithium Battery
as “Zhongke Lithium Battery”) for a sales contract An effective both parties. Zhongke Lithium performed part of its
dispute requesting the termination of the Purchasing 6156.42 No legal document Battery is required to return
repayment obligations.Contract signed by both parties the return of the has been RMB15.4 million in payment The Company has
payment of RMB32.2 million the payment of obtained. compensate for losses applied for the
corresponding funds occupation interest and amounting to RMB4.29 resumption of execution
compensation for the economic losses of approximately million and pay a preservation and actively taken
RMB28.5 million suffered by Guangxi Chuan Jin Nuo insurance fee of RMB40000. measures to recover the
New Energy. debt.Due to purchasing contract disputes Guangxi Chuan Effective judgment result: Xin After the judgmentJin Nuo New Energy filed a lawsuit against Xiaoxian
Xin Battery Co. Ltd. (“Xin Battery”) Wang Yijun and Battery is to pay RMB1.27
became effective as the
Sheng Daling in the Gangkou District People's Court of million for goods and overdue
counterpart failed to
Fangchenggang City demanding Xin Battery pay An effective payment losses. Wang Yijun
fulfill it according to the
judgment the Company
RMB1.27 million for goods and approximately 133.1 No legal document and Sheng Daling within the
RMB61000 for overdue losses (temporarily calculated has been unfulfilled capital contribution
applied to the court for
compulsory execution
up to June 3 2025). Wang Yijun and Sheng Daling obtained. scope are to bear during the Reporting
within the unfulfilled capital contribution scope are to supplementary compensation
bear supplementary compensation responsibilities for responsibilities for Xin
Period. The court filed
Xin Battery’s debt. Battery’s debt.the case in January
2026.
Due to purchasing contract disputes Guangxi Chuan
Jin Nuo New Energy filed a lawsuit against Hubei As of the disclosure date
Qianyuan New Material Co. Ltd. (“Hubei Qianyuan”) Effective judgment result: The of this announcement
Fan Li Hubei Zhaoteng New Material Technology Co. As of the Lithium Carbonate Purchase the Company has
Ltd. (“Hubei Zhaoteng”) Lu Yufeng and Li Huaiyu in disclosure date and Sale Contract signed applied for compulsory
the Gangkou District People’s Court of Fangchenggang of this between both parties is execution but the court
City. They demanded the cancellation of the Lithium 2148 No announcement terminated. Hubei Qianyuan is has not yet filed theCarbonate Purchase and Sale Contract signed between the effective to return RMB19.08 million to case.Guangxi Chuan Jin Nuo New Energy and Hubei legal Guangxi Chuan Jin Nuo New
Qianyuan with Hubei Qianyuan returning RMB19.08 documents have Energy compensate for losses
million in payment and compensating for losses of been obtained. of RMB2.4 million and Fan Li
RMB2.4 million. Fan Li and Hubei Zhaoteng bear joint bears joint responsibility.liability for Hubei Qianyuan’s aforementioned debts. Li
Huaiyu is to bear supplementary liabilities within the
86Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Lawsuit Whether toform into Litigation Trial results and influences of LitigationBasic information on litigation (arbitration) amount (arbitration) (arbitration) execution Disclosure Disclosure
(RMB10000) estimated Progress lawsuit (arbitration) of judgments date indexliabilities
unpaid capital contribution of RMB2.5 million for
Hubei Zhaoteng. Lu Yufeng is to bear supplementary
liabilities on the total unpaid capital contribution of
RMB10 million for Fan Li and Li Huaiyu to Hubei
Zhaoteng.
87Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
XII. Penalties and remediation
□ Applicable□Not applicable
There were no penalties or remediation cases during the Reporting Period.XIII. Integrity of the company controlling shareholders and de facto controllers
□Applicable □ Not applicable
During the Reporting Period the Company and its controlling shareholders and de facto controllers
strictly abide by the Company Law Securities Law and other laws and regulations and regulatory
requirements adhere to the principles of honesty and credit and maintain good standing without
any cases of integrity violations.XIV. Material related-party transactions
1. Related party transactions in daily operations
□ Applicable□Not applicable
The Company did not have any related party transactions in its daily operations during the
Reporting Period.
2. Related party transactions in asset or share acquisitions or sales
□ Applicable□Not applicable
The Company did not have any related party transactions in asset or share acquisitions or sales
during the Reporting Period.
3. Related party transactions for joint external investments
□ Applicable□Not applicable
The Company had no related party transaction of joint external investments in the Reporting Period.
4. Related party debts and credits
□ Applicable□Not applicable
There were no related party debts or credits during the Reporting Period.
5. Transactions with financial companies having related party relationships
□ Applicable□Not applicable
There were no deposits loans credit extensions or other financial services between the Company
and any financial company with related party relationships.
6. Transactions between the Company’s controlling financial company and related parties
□ Applicable□Not applicable
There were no deposits loans credit extensions or other financial services between the Company’s
controlling financial company and related parties.
7. Other material related-party transactions
□Applicable □ Not applicable
On June 3 2021 the Company held the 7th meeting of the 4th Board of Directors and the 6th
88Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
meeting of the 4th Board of Supervisors. Subsequently on June 21 2021 the Company convened
the 2021 Second Extraordinary Board of Shareholders which reviewed and approved the proposals
including the Proposal on Holding Subsidiaries Applying for Aggregate Credit Line of Banks
Which Are Guaranteed by the Company’s Controlling Shareholder the Proposal on Holding
Subsidiaries Applying for Aggregate Credit Line of Banks Which Are Guaranteed by the Company
and the Proposal on Holding Subsidiaries Applying for Aggregate Credit Line of Banks Which Are
Guaranteed by the Pledge of Assets. It was agreed that the Company’s holding subsidiary Guangxi
Chuan Jin Nuo Chemical would apply to the Fangchenggang Branch China Construction Bank
Corporation for a comprehensive credit line not exceeding RMB450 million. The Company and its
controlling shareholder Mr. Liu Meng would jointly guarantee the comprehensive credit line with
Guangxi Chuan Jin Nuo Chemical’s own assets (land use rights and fixed assets) pledged as
collateral for the credit line. The Company’s controlling shareholder and de facto controller Mr.Liu Meng provided joint and several liability guarantee for the above-mentioned comprehensive
credit line of the holding subsidiary resolving the issue of the holding subsidiary needing a
guarantee for its application for the bank’s comprehensive credit line. This supported the
development of the Company. Furthermore this guarantee was provided without any guarantee fees
reflecting the controlling shareholder’s support for the Company. It aligns with the interests of the
Company and all its shareholders and will not have an adverse impact on the Company’s operating
performance.Major related party transaction temporary report disclosure website inquiries
Temporary Name of temporary
Name of temporary announcement announcement announcement disclosure
disclosure date website
Announcement on the Holding Subsidiary’s Proposal to Apply for a
Comprehensive Credit Line from the Bank with Asset Pledge and the
Provision of Guarantees by the Company and the Controlling June 4 2021 CNINFO (www.cninfo.com.cn)
Shareholder and Related Party Transaction.XV. Significant contracts and the performance
1. Custody contracting and leasing matters
(1) Custody matters
□ Applicable□Not applicable
There were no custody matters during the Reporting Period.
(2) Contracting matters
□ Applicable□Not applicable
There were no contracting matters during the Reporting Period.
(3) Leases
□ Applicable□Not applicable
No such cases in the Reporting Period.
89Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
2. Major guarantees
□Applicable □ Not applicable
Unit: RMB10000
External guarantees of the Company and its subsidiaries (excluding guarantees to subsidiaries)
Obligor Guarantee limit Guarantee Actual
Actual Collateral Counterguarantee Type of guarantee guarantee (if Guarantee Fulfilled
Guarantee
disclosure date limit occurrence date amount (If Any) any) period (Yes/No)
for a related
party or not
Guarantees to subsidiaries by the Company
Guarantee limit Guarantee Actual Actual CounterObligor disclosure date limit occurrence date guarantee Type of guarantee
Collateral Guarantee Fulfilled For a Related
amount (If Any)
guarantee (if
any) period (Yes/No) Party or not
Guangxi Chuan Jin Mortgage joint
Nuo Chemical Co. June 4 2021 45000 June 23 2021 12500 and several Assets No Yes
Ltd. liability guarantee
Guangxi Chuan Jin
Nuo Chemical Co. November 19 2021 5000 January 30 0 Joint and several
Ltd. 2023 liability guarantee
Yes No
Guangxi Chuan Jin
Nuo Chemical Co. January 22 2024 5000 January 19 Joint and several
Ltd. 2024
0 liability guarantee Yes No
Guangxi Chuan Jin
Nuo Chemical Co. May 31 2023 12000 April 14 2023 5000 Joint and several
Ltd. liability guarantee
No No
Guangxi Chuan Jin
Nuo New Energy Co. July 20 2023 10000 June 19 2023 0 Joint and several No No
Ltd. liability guarantee
Guangxi Chuan Jin
Nuo Chemical Co. April 24 2024 15000 April 23 2024 0 Joint and several
Ltd. liability guarantee
No No
Guangxi Chuan Jin
Nuo Chemical Co. September 25 2024 20000 September 24 0 Joint and several
Ltd. 2024 liability guarantee
Yes No
Guangxi Chuan Jin
Nuo Chemical Co. December 10 2024 5000 December 92024 5000
Joint and several
Ltd. liability guarantee
No No
Guangxi Chuan Jin
Nuo Chemical Co. December 10 2024 5000 December 10 5000 Joint and several
Ltd. 2024 liability guarantee
No No
Guangxi Chuan Jin
Nuo Chemical Co. February 27 2025 8300 February 26 0 Joint and several
Ltd. 2025 liability guarantee
No No
Guangxi Chuan Jin May 9 2025 24000 May 8 2025 5000 Joint and several No No
90Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Nuo Chemical Co. liability guarantee
Ltd.Guangxi Chuan Jin
Nuo Chemical Co. June 10 2025 24000 June 9 2025 19741.08 Joint and several
Ltd. liability guarantee
No No
Guangxi Chuan Jin
Nuo Chemical Co. September 27 2025 6000 September 27 5000 Joint and several No No
Ltd. 2025 liability guarantee
Guangxi Chuan Jin
Nuo Chemical Co. December 5 2025 20000 December 5 Joint and several
Ltd. 2025
5000 liability guarantee No No
Total approved guarantee amount for Total actual amount of guarantees
subsidiaries during the Reporting Period (B1) 80000 provided to subsidiaries during the 94777.83Reporting Period (B2)
Total approved guarantee limit for subsidiaries at Total actual guarantee balance of
the end of the Reporting Period (B3) 180300 subsidiaries at the end of the 62241.08Reporting Period (B4)
Guarantee information for subsidiary-to-subsidiary guarantees
Guarantee limit Guarantee Actual Actual CounterObligor disclosure date limit occurrence date guarantee Type of guarantee
Collateral guarantee (if Guarantee Fulfilled For a Related
amount (If Any) any) period (Yes/No) Party or not
Total guarantee amount of the Company (i.e. sum of the first three items above)
Total approved guarantee limit during the Total actual amount of guarantees
Reporting Period (A1+B1+C1) 80000 incurred during the Reporting Period 94777.83(A2+B2+C2)
Total approved guarantee limit at the end of the Total actual guarantee balance at the
Reporting Period (A3+B3+C3) 180300 end of the Reporting Period 62241.08(A4+B4+C4)
Total guarantee balance (A4+B4+C4) as % of the Company’s net assets 21.33%
Including:
Balance of guarantees provided for shareholders de facto 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
Total of the three amounts above (D+E+F) 0
Statement on the assumption of guarantee liabilities and/or on the existence of
the proof of the possibility for assumption of joint and several liabilities for
liquidation for any unexpired guarantee contract in the Reporting Period (if Not applicable
any)
Statement on any external guarantee provided in violation of the relevant
prescribed procedures (if any) Not applicable
Statement on any guarantee provided in composite manners
91Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
1. On June 3 2021 the Company held the 7th meeting of the 4th Board of Directors and the 6th meeting of the 4th Board of Supervisors.
Subsequently on June 21 2021 the Company convened the 2021 Second Extraordinary General Meeting of Shareholders which reviewed and
approved the proposals including the Proposal on Holding Subsidiaries Applying for Aggregate Credit Line of Banks Which Are Guaranteed by
the Company’s Controlling Shareholder the Proposal on Holding Subsidiaries Applying for Aggregate Credit Line of Banks Which Are
Guaranteed by the Company and the Proposal on Holding Subsidiaries Applying for Aggregate Credit Line of Banks Which Are Guaranteed by
the Pledge of Assets. It was agreed that the Company’s holding subsidiary Guangxi Chuan Jin Nuo Chemical would apply to the
Fangchenggang Branch China Construction Bank Corporation for a comprehensive credit line not exceeding RMB450 million. The Company
and its controlling shareholder Mr. Liu Meng would jointly guarantee the comprehensive credit line with Guangxi Chuan Jin Nuo Chemical’s
own assets (land use rights and fixed assets) pledged as collateral for the credit line.
92Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
3. Entrusting others for cash asset management
(1) Entrusted financial management situation
□ Applicable□Not applicable
The Company did not employ any entrusted financial management services in the Reporting Period.
(2) Entrusted loan situation
□ Applicable□Not applicable
There were no entrusted loans during the Reporting Period
4. Other significant contracts
□ Applicable□Not applicable
The Company did not have any other significant contracts during the Reporting Period.XVI. Use of raised funds
□ Applicable□Not applicable
1. Overall use of raised funds
□Applicable □ Not applicable
Unit: RMB10000
Raised
funds
Raised usage Amountof raised Use and Raisedfunds Cumulative ratio by
Year of Fundraising Securities Total Net used raised the end of funds Cumulative Proportion Unused destination
funds
fundraising method listing raised proceeds in the funds used the during raised of raised raised of unused
remaining
date funds (1) unusedcurrent (2) Reporting the funds funds funds raised
period Period Reporting funds
for over
two years
(3) = Period
(2)/(1)
Issuing Raised
2023 stocks to July 28specific 2023 71099.99 69506 0 24991.45 35.96% 44514.55 44514.55 64.04% 46096.08 funds 0
objects accounts
Total -- -- 71099.99 69506 0 24991.45 35.96% 44514.55 44514.55 64.04% 46096.08 -- 0
Explanation of overall use of raised funds:
(1) Supplement working capital
The net proceeds through the private placement of stock was RMB695.06 million which is lower
than the intended amount of RMB1.5 billion as outlined in the Plan of Kunming Chuan Jin Nuo
Chemical Co. Ltd. to Issue Stocks to Specific Objects in 2022 and the Prospectus for Issuing
Shares to Specific Objects and Listing to Raise Funds on the ChiNext Board. On July 31 2023 the
Company held the 32nd Meeting of the 4th Board of Directors and the 21st Meeting of the 4th
Board of Supervisors during which the Proposal Regarding the Adjustment of the Intended Amount
of Funds to Be Invested in Fundraising Projects was reviewed and approved. The raised funds to be
invested in the Supplement Working Capital project as outlined in the Plan of Kunming Chuan Jin
Nuo Chemical Co. Ltd. to Issue Stocks to Specific Objects in 2022 and the Prospectus for Issuing
Shares to Specific Objects and Listing to Raise Funds on the ChiNext Board was adjusted from
RMB330 million to RMB205 million. The Company’s independent directors issued their clear
agreement on this adjustment. The sponsor institutions Century Securities Co. Ltd. issued the
Verification Opinion on the Adjustment of the Intended Amount of Funds to be Invested in
93Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Fundraising Projects for Kunming Chuan Jin Nuo Chemical Co. Ltd. and provided a verification
opinion with no objections to this matter. On August 1 2023 the Company used RMB205 million
to supplement working capital.
(2) Replacement of pre-invested funds with self-raised funds for fundraising projects
The 32nd Meeting of the 4th Board of Directors and the 21st Meeting of the 4th Board of
Supervisors reviewed and approved the Proposal on the Use of Raised Funds to Replace Pre-
invested Raised Projects and Self-raised Funds That Have Paid Issuance Fees. The Company’s
independent directors issued their clear agreement on this proposal. ShineWing Certified Public
Accountants LLP audited the pre-investment situation of the Company’s fundraising projects and
issued the Assurance Report on the Use of Raised Funds to Replace Pre-invested Raised Projects
and Paid Issuance Fees by Kunming Chuan Jin Nuo Chemical Co. Ltd. with report number:
XYZH/2023KMAA2F0047. The sponsor institutions Century Securities Co. Ltd. issued the
Review Opinions of Century Securities Co. Ltd. on the Use of Raised Funds to Replace Pre-
invested Raised Projects and Self-raised Funds That Have Paid Issuance Fees by Kunming Chuan
Jin Nuo Chemical Co. Ltd. and provided a verification opinion with no objections to this matter.On August 24 2023 the Company replaced funds in the amount of RMB44914522.58 originally
invested in the fundraising project with self-raised funds.
(3) Fees exchange gain or loss interest income and cash management income
On July 31 2023 the 32nd Meeting of the 4th Board of Directors and the 21st Meeting of the 4th
Board of Directors reviewed and approved the Proposal on Using Part of the Temporarily Idle
Raised Funds for Cash Management. It was agreed that the total amount used for cash management
would not exceed RMB400 million and this would be done without affecting the construction of
fundraising projects and the normal use of raised funds. The approved amount would be used on a
rolling basis within a 12-month period from the date of the Board’s approval. After the expiration
on June 20 2024 the 7th Meeting of the 5th Board of Directors and the 6th Meeting of the 5th
Board of Supervisors were held during which the Proposal on Using Part of the Temporarily Idle
Raised Funds for Cash Management was reviewed and approved again. It was agreed that the total
amount used for cash management would not exceed RMB400 million and this amount would be
used on a rolling basis within a 12-month period from the date of the Board’s approval. As of
December 31 2025 a total fees expenditure of RMB2160.90 occurred an exchange gain or loss of
RMB81760.00 was obtained and interest income and cash management income totaled
RMB15735790.64.
(4) Change in use of raised funds
On June 24 2025 the Company held the fifteenth meeting of the fifth Board of Directors and the
twelfth meeting of the fifth Board of Supervisors and approved the Proposal on Changing the Use
of Raised Funds and the Company was agreed to reallocate all unutilized fundraising funds fromthe “50000 tons/year battery-grade iron phosphate - precursor material of lithium iron phosphatecathode material and supporting 600000 tons/year sulfuric acid production project” and the“100000 tons/year battery-grade lithium iron phosphate cathode material project (Phase I) ofGuangxi Chuan Jin Nuo New Energy Co. Ltd.” to the “Chuan Jin Nuo (Egypt) Suez PhosphorusChemical Project”. This involves investment in the projects in Egypt with an annual production of
800000 tons of sulfuric acid 300000 tons of wet phosphoric acid for industrial use 150000 tons
of 52% phosphoric acid 300000 tons of monoammonium phosphate and 20000 tons of sodium
fluorosilicate. Additionally the investment entity implementation method and location will also be
changed. On July 11 2025 the Company held the second extraordinary Board of Shareholders in
2025 and approved it.
94Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
2. Status of raised funds committed projects
□Applicable □ Not applicable
Unit: RMB10000
Committed Has theproject Amount Cumulative
Investment
progress Date when Returns Cumulative Whether Is there
Financing Securities fundedproject and been Adjusted
invested investment by the end the project achieved returns by the any
project listing excess Project nature changed
Committed investment during by the endinvestment the of the of the
reaches the in the the end of expected significant
name date (including (1) Reporting expected Reporting the benefits change inproceeds
allocation partial
Reporting Reporting Period (3) operational Period Reporting are project
changes) Period Period (2) = (2)/(1) state Period obtained feasibility
Committed investment projects
50000
tons/year
battery-
grade iron
phosphate -
precursor
material of
Private lithium iron
Placement July 28 phosphate Production
of Shares 2023 cathode and Yes 45000 5500 0 4491.45 81.66%
July 12 Not Not Not
material construction 2025 applicable applicable applicable
No
in 2022 and
supporting
600000
tons/year
sulfuric
acid
production
project
100000
tons/year
battery-
grade
Private lithium iron
Placement July 28 phosphate Production
of Shares 2023 cathode and Yes 72000 43506 0 0 0.00%
July 12 Not Not Not
construction 2025 applicable applicable applicable
No
in 2022 material
project
(Phase I) of
Guangxi
Chuan Jin
95Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Nuo New
Energy
Co. Ltd.Private
Placement July 28 Supplement Supplementing
of Shares 2023 working working No 33000 20500 0 20500 100.00%
August 1 Not Not Not
capital capital 2023 applicable applicable applicable
No
in 2022
Subtotal of committed investment projects -- 150000 69506 0 24991.45 -- -- -- --
Use of excess proceeds
No oversubscribed funds.Repayment of bank loans (if any) -- 0 0 0 0 0.00% -- -- -- -- --
Supplement working capital (if any) -- 0 0 0 0 0.00% -- -- -- -- --
Subtotal of investment of excessive raised funds -- 0 0 0 0 -- -- 0 0 -- --
Total -- 150000 69506 0 24991.45 -- -- 0 0 -- --
Explanation by
project for delays in
progress and failure to
achieve expected
returns (including Due to the changes in the competitive landscape and market conditions of the new energy market the Company has proactively controlled the progress of industrial
reasons for selecting construction after careful judgment
“Not applicable”under “Whether theexpected benefits areobtained”)
Explanation of
significant changes in Not applicable
project feasibility
Amount use and
progress of excess Not applicable
proceeds
There were instances
of unauthorized
changes to the use of
raised funds or Not applicable
violations involving
the misuse of funds
raised.Applicable
Occurred during the Reporting Period
Change of the On June 24 2025 the Company held the fifteenth meeting of the fifth Board of Directors and the twelfth meeting of the fifth Board of Supervisors and approved the Proposallocations of projects on Changing the Use of Raised Funds and the Company was agreed to reallocate all unutilized fundraising funds from the “50000 tons/year battery-grade iron phosphate -funded by the raised precursor material of lithium iron phosphate cathode material and supporting 600000 tons/year sulfuric acid production project” and the “100000 tons/year battery-gradefunds lithium iron phosphate cathode material project (Phase I) of Guangxi Chuan Jin Nuo New Energy Co. Ltd.” to the “Chuan Jin Nuo (Egypt) Suez Phosphorus ChemicalProject”. This involves investment in the projects in Egypt with an annual production of 800000 tons of sulfuric acid 300000 tons of wet phosphoric acid for industrial use
150000 tons of 52% phosphoric acid 300000 tons of monoammonium phosphate and 20000 tons of sodium fluorosilicate. Additionally the investment entity
96Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
implementation method and location will also be changed. On July 11 2025 the Company held the second extraordinary Board of Shareholders in 2025 and approved it.Applicable
Occurred during the Reporting Period
Adjustments to the On June 24 2025 the Company held the fifteenth meeting of the fifth Board of Directors and the twelfth meeting of the fifth Board of Supervisors and approved the Proposalway of on Changing the Use of Raised Funds and the Company was agreed to reallocate all unutilized fundraising funds from the “50000 tons/year battery-grade iron phosphate -implementation of precursor material of lithium iron phosphate cathode material and supporting 600000 tons/year sulfuric acid production project” and the “100000 tons/year battery-graderaised funds lithium iron phosphate cathode material project (Phase I) of Guangxi Chuan Jin Nuo New Energy Co. Ltd.” to the “Chuan Jin Nuo (Egypt) Suez Phosphorus Chemicalinvestment projects Project”. This involves investment in the projects in Egypt with an annual production of 800000 tons of sulfuric acid 300000 tons of wet phosphoric acid for industrial use
150000 tons of 52% phosphoric acid 300000 tons of monoammonium phosphate and 20000 tons of sodium fluorosilicate. Additionally the investment entity
implementation method and location will also be changed. On July 11 2025 the Company held the second extraordinary Board of Shareholders in 2025 and approved it.Applicable
50000 tonnes/year Battery-grade Lithium Iron Phosphate Precursor Material (Iron Phosphate) and Supporting 600000 tonnes/year Sulfuric Acid Production Project: At the
Advance investments 32nd Meeting of the 4th Board of Directors and the 21st Meeting of the 4th Board of Supervisors the Proposal on the Use of Raised Funds to Replace Pre-invested Raised
in promised projects Projects and Self-raised Funds That Have Paid Issuance Fees was reviewed and approved. The Company’s independent directors issued their clear agreement on this
funded with raised proposal. ShineWing Certified Public Accountants LLP audited the pre-investment situation of the Company’s fundraising projects and issued the Assurance Report on the
funds and subsequent Use of Raised Funds to Replace Pre-invested Raised Projects and Paid Issuance Fees by Kunming Chuan Jin Nuo Chemical Co. Ltd. with report number:
swaps XYZH/2023KMAA2F0047. The sponsor institutions Century Securities Co. Ltd. issued the Review Opinions of Century Securities Co. Ltd. on the Use of Raised Funds to
Replace Pre-invested Raised Projects and Self-raised Funds That Have Paid Issuance Fees by Kunming Chuan Jin Nuo Chemical Co. Ltd. and confirmed no objections to
the matter. On August 24 2023 the Company completed the replacement of RMB44914500 of pre-invested funds for fundraising projects with self-raised funds.Use of idle raised
funds for temporarily
supplementing the Not applicable
working capital
The amount of and Applicable
the reasons for the
positive closing
balance of the raised The project is still under construction
funds after project
implementation
Use and destination of The unused raised funds amount to RMB460960800 of which RMB409650600 is deposited in the Company’s raised funds supervision account and RMB51310200 is
unused raised funds temporarily deposited in the general deposit account of Chuan Jin Nuo ME International Holding Ltd. due to overseas remittance timing issues (to be credited to the raisedfunds supervision account of Suez Canal Bank opened by Egypt Chuan Jin Nuo Chemical Co. Ltd. on January 6 2026).Problems such as in
the use of the raised
funds and the Not applicable
disclosure of the use
3. Change of projects funded by raised funds
□Applicable □ Not applicable
Unit: RMB10000
Financing Fundraising Project upon Corresponding Total Actual Actual Investment Date when Returns Whether Is there any
project method change originally committed proposed investment cumulative progress by the project achieved in the significant
97Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
name project(s) investment in the investment by the end of the reaches the the expected change in
of raised Reporting the end of the Reporting expected Reporting benefits project
funds upon Period Reporting Period (3) = operational Period are feasibility
change (1) Period (2) (2)/(1) state obtained upon change
50000 tons/year
battery-grade iron
phosphate - precursor
material of lithium iron
phosphate cathode
2022 Chuan Jin material and
Issuance of Issuance of Nuo (Egypt) supporting 600000
shares to shares to Suez tons/year sulfuric acid 44514.55 0 0 0.00% July 12 2028 0 N/A No
specific specific Phosphorus production project
targets objects Chemical 100000 tons/yearProject battery-grade lithium
iron phosphate cathode
material project (Phase
I) of Guangxi Chuan
Jin Nuo New Energy
Co. Ltd.Total -- -- -- 44514.55 0 0 -- -- 0 -- --
Reason for change: The Company’s original fundraising project products were battery-grade lithium iron phosphate cathode materials mainly used
in fields such as new energy vehicles. Later due to changes in the competitive landscape and market conditions of the new energy market the
Company has proactively controlled the progress of project construction after careful judgment. Moreover lithium iron phosphate is a newly
deployed industry for the Company lacking a competitive advantage compared to the Company’s traditional phosphate chemical products.Therefore to improve the efficiency of using raised funds the Company intends to reallocate the funds to the Chuan Jin Nuo (Egypt) Suez
Explanation of change reasons decision- Phosphorus Chemical Project for the construction of projects in Egypt with an annual production of 800000 tons of sulfuric acid 300000 tons of
making procedures and disclosure (by wet phosphoric acid for industrial use 150000 tons of 52% phosphoric acid 300000 tons of monoammonium phosphate and 20000 tons of
project) sodium fluorosilicate. The original fundraising project will be constructed by the Company using its own funds based on market conditions andoperating status.Decision-making procedure and information disclosure: The Company convened the fifteenth board meeting of the fifth board and the twelfth
meeting of the fifth Board of Supervisors on June 24 2025 and convened the second interim shareholders meeting of 2025 on July 11 2025 to
review and approve the Proposal on Changing the Use of Raised Funds. For details please refer to the Announcement on Changing the Use of
Raised Funds (Announcement No.: 2025-038) published by the Company on the ChiNext information disclosure platform CNINFO designated by
the China Securities Regulatory Commission.Failure to achieve planned progress or
expected returns and cause(s) (by project) Not applicable
Explanation of any significant changes in
project feasibility upon change Not applicable
98Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
4. Verification opinions of intermediary institutions on the deposit and use of raised funds
□Applicable □ Not applicable
1. ShineWing Certified Public Accountants LLP: We believe that the annual report on the
placement management and use of the raised funds by the Company has been prepared in
accordance with the relevant regulations of the Shenzhen Stock Exchange and accurately reflects
the actual placement management and use of CJN’s raised funds for 2025 in all material aspects.
2. Century Securities Co. Ltd.: CJN’s 2025 annual fund raising and utilization are in compliance
and relevant information disclosure obligations have been fulfilled. The specific use of the raised
funds is consistent with the Company’s disclosures.XVII. Explanation of other Significant Matters
□Applicable □ Not applicable
1. On February 18 2025 the Company held the twelfth meeting of the fifth Board of Directors
where it reviewed and approved the Proposal to Sign a “Project Investment Agreement” with the
People’s Government of Dongchuan District Kunming City by the Company. On the same day it
signed a Project Investment Agreement (hereinafter referred to as “the Agreement”) with thePeople’s Government of Dongchuan District (hereinafter referred to as “Dongchuan DistrictGovernment” or “Party A”). The Agreement stipulates that the Company will construct the Heliwan
Industrial Waste Disposal Project (hereinafter referred to as “the project” or “Heliwan Slag Field”)
in the Sifangdi Area of Dongchuan District Kunming City with a total investment of about
RMB350 million. The main construction contents of the project include: Pollutant-blocking dams
slag-blocking dams liquid collection pools reservoir area anti-seepage flood discharge outside the
reservoir flood discharge inside the reservoir environmental protection power supply water return
and re-spray systems duty room ground scale room greening and other facilities. For details
please refer to the Company’s disclosure of the Announcement on Signing the Project Investment
Agreement with the People’s Government of Dongchuan District Kunming City (Announcement
No.: 2025-005).
2. On April 17 2025 and May 8 2025 the Company held the fourteenth meeting of the fifth Board
of Directors and the first provisional shareholders’ meeting of 2025 where it reviewed and
approved the Proposal on Investing in Constructing the Chuan Jin Nuo (Egypt) Suez Phosphorus
Chemical Project agreeing to construct projects in Egypt with an annual production of 800000
tons of sulfuric acid 300000 tons of wet phosphoric acid for industrial use 150000 tons of 52%
phosphoric acid 300000 tons of monoammonium phosphate and 20000 tons of sodium
fluorosilicate (hereinafter referred to as the “Phosphorus Chemical Project”). For details please
refer to the Announcement on Investing in the Construction of the Chuan Jin Nuo (Egypt) Suez
Phosphorus Chemical Project (Announcement No.: 2025-024) published by the Company on the
ChiNext Information Disclosure Platform CNINFO of China Securities Regulatory Commission on
April 18 2025. On June 24 2025 the Company held the fifteenth meeting of the fifth Board of
Directors and the twelfth meeting of the fifth Board of Supervisors where it reviewed and approved
the Proposal on Changing the Use of Raised Funds. In order to fully utilize the raised funds
effectively and after comprehensively considering the current implementation of the fundraising
projects and the market environment the Company agreed to change the fundraising project fromthe “50000 tons/year battery-grade iron phosphate - precursor material of lithium iron phosphatecathode material and supporting 600000 tons/year sulfuric acid production project 100000
tons/year battery-grade lithium iron phosphate cathode material project (Phase I) of Guangxi ChuanJin Nuo New Energy Co. Ltd.” to the “Chuan Jin Nuo (Egypt) Suez Phosphorus Chemical Project”.For details please refer to the Announcement on Changing the Use of Raised Funds
99Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
(Announcement No.: 2025-038) published by the Company on the ChiNext Information Disclosure
Platform - CNINFO of China Securities Regulatory Commission on June 25 2025. This matter was
reviewed and approved by the second provisional Board of Shareholders of 2025 held on July 11
2025.
3. To promote the implementation of the Chuan Jin Nuo (Egypt) Suez Phosphorus Chemical Project
the Company will establish a wholly-owned subsidiary Chuan Jin Nuo International Co. Ltd. in
Hong Kong. Along with Shunlong Energy (Hong Kong) Co. Ltd. a wholly-owned subsidiary of
Kunming Shunlong Energy Co. Ltd. established in Hong Kong and Shunlong Energy International
Co. Ltd. a wholly-owned subsidiary of Sino Choice International Limited established in Hong
Kong and the overseas enterprise Midgulf International Ltd. jointly established Chuan Jin Nuo
Middle East International Holdings Limited in the UAE (where Chuan Jin Nuo International Co.Ltd. holds 60% Shun Long Energy (Hong Kong) Co. Limited holds 15% Shunlong Energy
International Limited holds 15% Midgulf International Ltd. holds 10%). Subsequently Chuan Jin
Nuo International Co. Ltd. and Chuan Jin Nuo Middle East International Holding Co. Ltd. jointly
established Egypt Chuan Jin Nuo Chemical Co. Ltd. in Suez Governorate Egypt (where Chuan Jin
Nuo International Co. Ltd. holds 0.1% Chuan Jin Nuo Middle East International Holdings Limited
holds 99.9%) to manage project implementation. Through the above equity arrangement the
Company ultimately holds 60.04% of the project company; simultaneously to ensure the
procurement work of the Egypt project the Company established Yunnan Xinshenghai
International Trade Co. Ltd. in Kunming.XVIII. Significant matters of the Company’s subsidiaries
□ Applicable□Not applicable
100Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Section VI Share Changes and Shareholder Information
I. Share changes
1. Share changes
Unit: share
Before change Change (increase decrease) After change
Shares as
Quantity Proportion New shares dividend Capitalization ofissued converted reserves Others Subtotal Quantity Proportion
from profit
I. Shares with limited circulation 57506301 20.92% 0 0 0 0 0 57506301 20.92%
1. State-held shares
2. Shares held by state-owned legal
person
3. Shares held by other domestic
investors 57506301 20.92% 0 0 0 0 0 57506301 20.92%
Among which: Shares held by
domestic legal person
Shares held by domestic natural
person 57506301 20.92% 0 0 0 0 0 57506301 20.92%
4. Shares held by other foreign
investors
Among which: Shares held by
foreign legal person
Shares held by foreign natural
person
II. Unrestricted shares 217361222 79.08% 0 0 0 0 0 217361222 79.08%
1. RMB ordinary shares 217361222 79.08% 0 0 0 0 0 217361222 79.08%
2. Domestically listed foreign-
invested shares
3. Overseas listed foreign-invested
shares
4. Other
III. Total shares 274867523 100.00% 0 0 0 0 0 274867523 100.00%
Reasons for share changes
□ Applicable□Not applicable
Approval of share changes
101Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
□ Applicable□Not applicable
Transfer of share ownership
□ Applicable□Not applicable
Effects of share changes on the basic earnings per share (EPS) 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
Other disclosable contents that the Company deemed necessary or were required by securities regulation institute
□ Applicable□Not applicable
102Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
2. Changes in restricted shares
□√Applicable □Not applicable
Unit: share
Opening New RestrictedName of the restricted shares Closing
shareholders restricted shares in the released in the restricted
Restricted Date of being released from
shares shares reasons restrictioncurrent period current period
The restricted shares at the end
Senior of the period are senior
Liu Meng 54273376 0 0 54273376 management management lock-up shares
lock-up shares with 25% unlocked annually as
required
The restricted shares at the end
Senior of the period are senior
Wei Jiagui 3184568 0 0 3184568 management management lock-up shares
lock-up shares with 25% unlocked annually as
required
The restricted shares at the end
Senior of the period are senior
Hong Hua 48357 0 0 48357 management management lock-up shares
lock-up shares with 25% unlocked annually as
required
Total 57506301 0 0 57506301 -- --
II. Securities issuance and listing information
1. Securities issuance (excluding preferred shares) during the Reporting Period
□ Applicable□Not applicable
2. Changes in the total number of shares and shareholder structure as well as changes in the
Company’s asset and liability structure
□ Applicable□Not applicable
3. Existing internal employee shares
□ Applicable□Not applicable
103Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
III. Shareholders and de facto controller
1. Number of shareholders and shareholding status
Unit: share
Total number
of ordinary Total number ofpreferred Total number of preferred
Total
shareholders at shareholders with shareholders with restored
number of
Total number of ordinary the end of the voting rights at the end of shareholders
shareholders at the end of 32498 previous 56287 restored voting holding
the Reporting Period month prior to rights at the end of
0 the previous month prior 0 special 0
the disclosure the Reporting
to the disclosure date of
Period (if any) the annual report (if any)
voting
date of the (refer to Note 9) rights (if
annual report (refer to Note 9) any)
Shareholding of Shareholders Holding More Than 5% or the Top Ten Shareholders (Excluding Shares Lent via Stock Borrowing and Lending)
Number of shares Changes in Pledged marked or frozen status
Name of the shareholders Shareholder Shareholding held at the end of shareholding during
Shares with
Limited Shares with no circulationtype percentage (%) the Reporting the Reporting Circulation Held restrictions held Share status QuantityPeriod Period
Liu Meng Domesticindividual 26.33% 72364501.00 0.00 54273376.00 18091125.00 N/A 0
Liu Mingyi Domesticindividual 1.40% 3850596.00 -227776.00 0.00 3850596.00 N/A 0
Domestic
Kunming Shunlong non-state-
Energy Co. Ltd. owned legal 1.28% 3528581.00 0.00 0.00 3528581.00 N/A 0
person
Domestic
Wei Jiagui natural 1.18% 3246091.00 -1000000.00 3184568.00 61523.00 N/A 0
person
Qin Yong Domesticindividual 0.70% 1924800.00 1924800.00 0.00 1924800.00 N/A 0
Tang Jiapu Domesticindividual 0.67% 1849386.00 -956600.00 0.00 1849386.00 N/A 0
Lyu Liangfeng Domesticindividual 0.65% 1782319.00 -20700.00 0.00 1782319.00 N/A 0
Hong Kong Securities
Clearing Company Overseaslegal entity 0.51% 1389106.00 1348483.00 0.00 1389106.00 N/A 0Limited
BARCLAYS BANK Foreign legal
PLC entity 0.47% 1290966.00 800001.00 0.00 1290966.00 N/A 0
Jiangsu Xiaxi Flowers Domestic
and Trees Market non-state- 0.46% 1270000.00 290000.00 0.00 1270000.00 N/A 0
Management Co. Ltd. owned legal
104Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
person
A strategic investor or ordinary legal
person becomes the top 10 shareholders Not applicable
due to rights issue (if any) (see Note 4)
Explanations on the connected
relationship or concerted action among Not applicable
the shareholders mentioned above
Description of the above shareholders
involved in proxy/trustee voting rights Not applicable
and waiver of voting rights
Special explanation on whether the top
10 shareholders have special accounts of Not applicable
repurchase (if any) (see Note 10)
Shareholdings of Top Ten Unlimited Shareholders (Excluding Shares Lent trough Refinancing and Senior Management Lock-up Shares)
Name of the shareholders Number of shares with no circulation restrictions at the end of the Reporting Period Share typeShare type Quantity
Liu Meng 18091125.00 RMB ordinary shares 18091125.00
Liu Mingyi 3850596.00 RMB ordinary shares 3850596.00
Kunming Shunlong Energy Co. Ltd. 3528581.00 RMB ordinary shares 3528581.00
Qin Yong 1924800.00 RMB ordinary shares 1924800.00
Tang Jiapu 1849386.00 RMB ordinary shares 1849386.00
Lyu Liangfeng 1782319.00 RMB ordinary shares 1782319.00
Hong Kong Securities Clearing Company
Limited 1389106.00 RMB ordinary shares 1389106.00
BARCLAYS BANK PLC 1290966.00 RMB ordinary shares 1290966.00
Jiangsu Xiaxi Flowers and Trees Market
Management Co. Ltd. 1270000.00 RMB ordinary shares 1270000.00
Chen Chaohai 1069850.00 RMB ordinary shares 1069850.00
Explanation on the affiliation or
concerted action among the top 10
shareholders of floating stocks not
subject to selling restrictions and among Not applicable
these shareholders and the top 10
shareholders
Qin Yong holds 1200000 shares of the Company through customer credit transaction guaranteed securities account at Zheshang Securities Co.Participation in margin trading and Ltd.; Lyu Liangfeng holds 788079 shares of the Company through customer credit transaction guaranteed securities account at China CICC Wealth
securities lending (if any) (see Note 5) Management Securities Company Limited; Chen Chaohai holds 569700 shares of the Company through customer credit transaction guaranteed
securities account at Yintai Securities Co. Ltd.Participation of shareholders with a shareholding bigger than 5% the top 10 shareholders and the top 10 shareholders of non-restricted tradable
shares in the lending of shares through refinancing
□ Applicable□Not applicable
Changes occurred in the top 10 shareholders and the top 10 shareholders of unrestricted tradable shares compared with the previous period due
105Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
to shares loan through refinancing/return
□Applicable□Not applicable
The Company has voting right differentiation arrangements or not
□ Applicable□Not applicable
The Company’s top 10 ordinary shareholders and top 10 shareholders with no circulation restrictions engaged in repurchase transactions during
the Reporting Period or not
□Yes□No
The Company’s top 10 ordinary shareholders and top 10 shareholders with no circulation restrictions did not engage in repurchase transactions
during the Reporting Period
106Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
2. Situation of the Company’s controlling shareholder
Controlling shareholder nature: Individual shareholder
Controlling shareholder type: Individual
Controlling shareholder name Nationality Has he/she obtained the right of residence inother countries or regions
Liu Meng China No
Main occupation and position Chairman
Equity interests in other domestic and foreign listed companies held by
the controlling shareholder during the Reporting Period None
Changes in the controlling shareholder during the Reporting Period
□ Applicable□Not applicable
There were no changes in the controlling shareholder during the Reporting Period
3. The Company’s de facto controller and the persons acting in concert
De facto controller type: Domestic individual
De facto controller type: Individual
Name of the de facto controller Relationship with de Has he/she obtained the right offacto controller Nationality residence in other countries or regions
Liu Meng Same person China No
Main occupations and positions The Chairman of the Board
Domestic and overseas listed companies in which
he/she had a controlling interest during the past None
10 years
Changes in the de facto controller during the Reporting Period
□ Applicable□Not applicable
The de facto controller did not change during the Reporting Period.Property rights and control relationship diagram between the Company and the de facto controller
刘甍 Liu Meng
昆明川金诺化工股份有限公司 Kunming Chuan Jin Nuo Chemical Co. Ltd.The de facto controller controls the Company through trusts or other asset management methods
□ Applicable□Not applicable
4. The controlling shareholder or the largest shareholder and their persons acting in concert
have pledged shares amounting to 80% of their holdings in the Company
□ Applicable□Not applicable
107Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
5. Other corporate shareholders holding more than 10%
□ Applicable□Not applicable
6. Shareholding restrictions and reduction of shares by controlling shareholders de facto
controllers restructuring parties and other subject of commitment
□ Applicable□Not applicable
IV. Specific implementation of share repurchase during the Reporting Period
Progress on the implementation of the share repurchase
□ Applicable□Not applicable
Progress of implementation on reducing the holding of repurchased shares through call auction
□ Applicable□Not applicable
V. Preferred shares information
□ Applicable□Not applicable
There were no preferred shares during the Reporting Period.
108Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Section VII Bond Information
□ Applicable□Not applicable
109Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Section VIII Financial Statements
I. Auditor’s report
Type of the audit opinion Standard unreserved opinion
Signing date of the Auditor’s Report March 18 2026
The name of the audit institutions ShineWing Certified Public Accountants LLP
Document No. of the Auditor’s Report XYZH/2026KMAA2B0011
Name of the Certified Accountant Peng Rang and Li Qiuxia
Main body of the Auditor’s Report
i. Audit opinion
We have audited the financial statements of Kunming Chuan Jin Nuo Chemical Co. Ltd.(hereinafter referred to as “CJN”) including the consolidated and parent company balance sheets as
of December 31 2025 the consolidated and parent company income statements the consolidated
and parent company cash flow statements the consolidated and parent company statements of
changes in shareholders’ equity for the year 2025 and the accompanying notes to the financial
statements.In our opinion the accompanying financial statements have been prepared in accordance with the
Accounting Standards for Business Enterprises in all material respects and fairly present the
consolidated and parent company financial position of CJN as of December 31 2025 as well as the
consolidated and parent company operating results and cash flows for the year 2025.ii. Basis for forming the audit opinion
We conducted our audit in accordance with the Auditing Standards for Certified Public Accountantsof China. Our responsibilities under those standards are further described in the “Responsibilities ofthe Certified Accountants for the Audit of the Financial Statements” section of our report.According to the independence standards for Certified Public Accountant (CPA) of China and the
code of ethics for Chinese CPAs applicable to financial statement audits of public interest entities
we are independent from CJN and have fulfilled other responsibilities relating to independence and
professional ethics. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.iii. Key audit matters
Key audit matters are those matters that in our professional judgment were of most significance in
our audit of the financial statements of the current period. These matters were addressed in the
context of our audit of the financial statements as a whole and in forming our opinion thereon and
we do not provide a separate opinion on these matters.
1. Revenue Recognition
Key audit issues Response in audit
In 2025 CJN’s operating revenue was Response in audit:
RMB4074660400 an increase of 1. Understand and test the key internal controls of the sales and collection cycle and
27.04% compared to the 2024 operating assess the effectiveness of the internal controls;
revenue. CJN recognizes income upon 2. Select samples to examine sales contracts identify contract terms and conditions
fulfilling its contractual performance related to the transfer of control over goods and performance obligations and evaluate
obligations that is when the customer whether the Company’s income recognition principles methods and timing comply with
obtains control of the relevant goods or the requirements of the Accounting Standards for Business Enterprises;
services. As income is one of CJN's key 3. Conduct cross-referencing and analysis with contract liabilities accounts receivable
performance indicators there is an and performance costs examine the subsequent collection of accounts receivable and
inherent risk that the management may assess the accuracy of the Company’s income recognition;
manipulate the timing of income 4. Select samples from income transactions recorded in the current year verify invoices
110Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
recognition to achieve specific targets or sales contracts and delivery orders and assess whether the related income recognition
expectations. Therefore we have complies with the Company's income recognition accounting policy;
identified income recognition as a key 5. Select samples from the customers recorded this year and send confirmation letters
audit matter. regarding their transaction amounts and outstanding balances to assess the accuracy of
income recognition;
6. For income transactions recorded before and after the balance sheet date select
samples and verify the delivery notes shipping documents customer confirmation
information and other supporting documents to assess whether the income has been
recorded in the appropriate accounting period.iv. Other information
The management of CJN(hereinafter referred to as “the management”) is responsible for the other
information. Other information includes the information covered in CJN’s 2025 Annual Report
excluding the financial statements and our audit report.Our opinion on the financial statements does not cover the other information and we do not express
any form of assurance conclusion thereon.In connection with our audit of the financial statements our responsibility is to read the other
information and in doing so consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the audit or otherwise appears to be
materially misstated.If based on the work we have performed we conclude that there is a material misstatement of the
other information we are required to report that fact. We have nothing to report in this regard.v. Responsibilities of the management and the governance members for financial statements
The Management is responsible for the preparation and fair presentation of these financial
statements in accordance with the Accounting Standards for Business Enterprises and for designing
implementing and maintaining such internal control as the Management determines is necessary to
enable the preparation of financial statements that are free from material misstatement whether due
to fraud or error.When preparing the financial statements the management is responsible for assessing CJN’s ability
to continue as a going concern disclosing matters related to going concern (if applicable) and
applying the going concern assumption unless management intends to liquidate CJN cease
operations or has no realistic alternative but to do so.The governance members is responsible for overseeing the financial statement process of CJN.vi. Responsibilities of the certified accountants for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether these financial statements as a
whole are free from material misstatement whether due to fraud or error and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance but is not a
guarantee that an audit conducted in accordance with auditing standards will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if individually or in the aggregate they could reasonably be expected to
influence the economic decisions of users taken on the basis of these financial statements.As part of an audit in accordance with the Auditing Standards we exercise professional judgment
and maintain professional skepticism throughout the audit. Meanwhile we also accomplish the
following tasks:
(1) Identify and assess the risks of material misstatement of the financial statements whether due to
fraud or error design and perform audit procedures responsive to those risks and obtain audit
111Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
evidence that is sufficient and appropriate to provide a basis for audit opinions. As fraud may
involve collusion forgery intentional omissions misrepresentations or the override of internal
control the risk of failing to identify a material misstatement by virtue of fraud is higher than that
by virtue of error.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the Management.
(4) Conclude on the appropriateness of the Management’s application of the going concern
assumption. At the same time based on the audit evidence obtained a conclusion is reached on
whether there is any material uncertainty regarding events or conditions that may cast significant
doubt on CJN’s ability to continue as a going concern. If we conclude that a material uncertainty
exists we are required to draw attention in our auditor’s report to the related disclosures in these
financial statements or; and if such disclosures are inadequate we shall express non-unqualified
opinions. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However future events or conditions may result in CJN being unable to continue as a going
concern.
(5) Evaluate the overall presentation structure and content of the financial statements and whether
the financial statements represent the underlying transactions and events in a manner that achieves
fair presentation.
(6) Obtain sufficient and appropriate audit evidence regarding the financial information of CJN’s
entities or business activities to express an audit opinion on the financial statements. We are
responsible for the direction supervision and performance of the group audit. We remain solely
responsible for our audit opinion.We communicate with those charged with the governance members regarding among other matters
the planned scope and timing of the audit and significant audit findings including any significant
deficiencies in internal control that we identify during our audit.We have also provided those charged with the governance members with a statement on observing
the professional ethics related to independence and communicated with those charged with
governance on all the relationships and other matters that might be reasonably deemed to affect our
independence and relevant preventative measures (if applicable).From the matters communicated with those charged with the governance members we determine
those matters that were of most significance in the audit of the financial statements of the current
period and are therefore the key audit matters. We describe these matters in our auditor’s report
unless law or regulation precludes public disclosure about the matter or when in extremely rare
circumstances we determine that a matter should not be communicated in our audit report because
the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.ShineWing Certified Public Accountants LLP
Chinese Certified Accountant: Peng Rang (project partner)
Chinese Certified Accountant: Li Qiuxia
112Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Beijing China
March 18 2026
113Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
II. Financial statements
Currency unit for the financial statements and the notes thereto: RMB
1. Consolidated balance sheet
Prepared by: Kunming Chuan Jin Nuo Chemical Co. Ltd.December 31 2025
Unit: RMB
Item Closing balance Opening balance
Current assets:
Monetary funds 880337677.42 736429466.16
Settlement reserve
Placements with banks and non-bank
financial institutions
Financial assets held for trading
Derivative financial assets 4329785.08
Notes receivable 129417984.60 115148915.93
Accounts receivable 120242318.52 143689250.29
Receivables financing 90300965.46 73237761.38
Prepayments 75475199.37 26733757.41
Premiums receivable
Reinsurance receivable
Receivable reinsurance contract reserve
Other receivables 27872559.68 20591018.12
Including: Interest receivable
Dividend receivable
Financial assets held under resale
agreements
Inventories 856727721.33 678193678.14
Including: Data resources
Contract assets
Assets held for sale
Non-current assets due within one year
Other current assets 26520137.53 18895065.82
Total current assets 2211224348.99 1812918913.25
Non-current liabilities:
Loans and advances to customers
Debt investment
Other debt investments
Long-term receivables
Long-term equity investments
Investments in other equity instruments
Other non-current financial assets
Investment properties
Fixed assets 1352145779.54 1389503456.07
Construction in progress 205874302.13 186814695.26
Productive biological assets
Oil and gas assets
Right-of-use assets 12272022.73 533401.28
Intangible assets 186983638.21 166581024.22
Including: Data resources
Development expenses
Including: Data resources
Goodwill
114Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Item Closing balance Opening balance
Long-term amortized expenses
Deferred tax assets 3024537.81 844627.31
Other non-current assets 371551471.07 51957207.09
Total non-current assets 2131851751.49 1796234411.23
Total assets 4343076100.48 3609153324.48
Current liabilities:
Short-term loans 537457449.83 340736998.42
Borrowings from the central bank
Loans from other banks and financial
institutions
Held-for-trading financial liabilities
Derivative financial liabilities 1050954.68
Notes payable 5000000.00
Accounts payable 220186306.77 196746861.33
Receipts in advance 74505.00 96443.78
Contract liabilities 37031414.06 32084741.04
Financial assets sold under repurchase
agreements
Customer deposits and deposits from other
banks and financial institutions
Payable for acting trading of securities
Payable for underwriting of securities
Accrued staff costs 34792494.09 29653787.54
Taxes payable 40407479.93 12872270.63
Other payables 8115034.25 6419936.17
Including: Interest payable
Dividends payable
Fees and commissions payable
Reinsurance payable
Liabilities held for sale
Current portion of non-current liabilities 217726380.04 227740157.71
Other current liabilities 73070554.59 57824676.16
Total current liabilities 1173861618.56 905226827.46
Non-current liabilities
Insurance contract reserve
Long-term loans 78062610.42 102118708.32
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities 2825860.91 501785.73
Long-term payables 75519278.16
Long-term employee benefits payable
Projected liabilities
Deferred income
Deferred tax liabilities 11586287.41 6741334.46
Other non-current liabilities
Total non-current liabilities 167994036.90 109361828.51
Total liabilities 1341855655.46 1014588655.97
Owners’ equity:
Share capital 274867523.00 274867523.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 1282067110.26 1282067110.26
Less: Treasury stock
Other comprehensive income 3641855.73 -1029646.03
115Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Item Closing balance Opening balance
Special reserves 1975492.11 496474.63
Surplus reserves 119791586.05 92691401.81
General risk reserves
Retained earnings 1235962617.80 891709910.57
Total owner’s equity attributable to the
parent company 2918306184.95 2540802774.24
Equity of non-controlling interests 82914260.07 53761894.27
Total owner’s equity 3001220445.02 2594564668.51
Total liabilities and owner’s equity 4343076100.48 3609153324.48
Legal representative: Liu Meng; The person responsible for accounting: Huang Hai; Head of the
accounting agencies: Wang Shiya
2. Parent company balance sheet
Unit: RMB
Item Closing balance Opening balance
Current assets:
Monetary funds 573456700.40 317468843.52
Financial assets held for trading
Derivative financial assets 1528041.88
Notes receivable 2139209.92
Accounts receivable 82347820.11 61483678.52
Receivables financing 74838256.11 54882656.47
Prepayments 31356205.36 10797940.41
Other receivables 442375504.39 851145331.71
Including: Interest receivable
Dividend receivable
Inventories 260606374.09 211744936.82
Including: Data resources
Contract assets
Assets held for sale
Non-current assets due within one year
Other current assets 4524736.62 1792441.44
Total current assets 1471033638.96 1511455038.81
Non-current assets:
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments 687483448.00 559610000.00
Other equity instruments investment
Other non-current financial assets
Investment properties
Fixed assets 376068374.04 427432450.42
Construction in progress 85621034.13 20146563.04
Productive biological assets
Oil and gas assets
Right-of-use assets 499712.72 533401.28
Intangible assets 74546833.83 51412991.91
Including: Data resources
Development expenses
Including: Data resources
Goodwill
Long-term amortized expenses
Deferred tax assets 651098.19 603021.17
Other non-current assets 138323745.77 18163636.89
116Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Item Closing balance Opening balance
Total non-current assets 1363194246.68 1077902064.71
Total assets 2834227885.64 2589357103.52
Current liabilities:
Short-term loans 59556359.72 6944480.75
Held-for-trading financial liabilities
Derivative financial liabilities 715907.68
Notes payable
Accounts payable 92403831.31 78010915.78
Receipts in advance 74505.00 96443.78
Contract liabilities 13552263.89 14482886.43
Payroll payable 18393874.62 14910849.39
Taxes payable 10946771.74 8881954.12
Other payables 4692183.53 1058237.27
Including: Interest payable
Dividends payable
Liabilities held for sale
Current portion of non-current liabilities 30320809.97 77609532.70
Other current liabilities 355948.80 826863.08
Total current liabilities 230296548.58 203538070.98
Non-current liabilities:
Long-term loans 58041221.53 32034222.21
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities 475118.69 501785.73
Long-term payables
Long-term employee benefits payable
Projected liabilities
Deferred income
Deferred tax liabilities 113733.12 128882.00
Other non-current liabilities
Total non-current liabilities 58630073.34 32664889.94
Total liabilities 288926621.92 236202960.92
Owners’ equity:
Share capital 274867523.00 274867523.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 1308235141.40 1308235141.40
Less: Treasury stock
Other comprehensive income 1528041.88 -715907.68
Special reserves 1925923.67 564337.58
Surplus reserves 119791586.05 92691401.81
Retained earnings 838953047.72 677511646.49
Total owner’s equity 2545301263.72 2353154142.60
Total liabilities and owner’s equity 2834227885.64 2589357103.52
3. Consolidated income statement
Unit: RMB
Item 2025 2024
I. Revenue 4074660364.42 3207476951.57
Including: Operating revenue 4074660364.42 3207476951.57
Interest income
Insurance premium income
117Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Item 2025 2024
Fees and commission income
II. Total operating cost 3545269481.89 2984544082.18
Including: Operating cost 3341222576.13 2779975186.64
Interest expense
Transaction fee and commission expense
Surrenders
Net insurance claims paid
Net amount provided as insurance contract
reserve
Expense on policy dividends
Reinsurance premium expense
Taxes and surcharges 19871890.97 9316574.67
Selling expenses 30127307.53 25770734.74
Management expenses 125893242.81 112173236.88
R&D expense 18638565.20 50541802.40
Financial expenses 9515899.25 6766546.85
Including: Interest expense 18732533.79 21401932.73
Interest income 9354932.83 11358421.03
Add: Other income 14997046.16 16441343.33
Return on investment (“-” for loss) 43493.53 -374818.94
Including: Share of profits of associates
and joint ventures
Income from the derecognition of
financial assets at amortized cost
Exchange gain (“-” for loss)
Net gain on exposure hedges* (“-” for
loss)
Gain on fair value changes(“-” for loss)
Credit impairment losses (“-” for loss) -3053418.39 -15924022.64
Asset impairment loss (“-” for loss) -2062941.05 -7916311.75
Return on disposal of assets (“-” for loss) 2386.93 22.74
III. Operating profit (“-” for loss) 539317449.71 215159082.13
Plus: Non-operating income 4366125.71 2500302.94
Less: Non-operating expenses 2943306.00 864853.75
IV. Total profit (“-” for total loss) 540740269.42 216794531.32
Less: Income tax expenses 64890833.30 31401111.45
V. Net profit (“-” for net loss) 475849436.12 185393419.87
i. Classification by operation continuity
1. Net profits from continuing operations
(“-” for net loss) 475849436.12 185393419.87
2. Net profits from discontinuing
operations (“-” for net loss)
ii. Classification by ownership
1. Net profit attributable to equity holders
of the parent company 453813148.37 176055944.37
2. Profit and loss of minority shareholders 22036287.75 9337475.50
VI. Other comprehensive after-tax net
income 4855304.04 -1216759.27
Attributable to owners of the parent
company 4671501.76 -1195450.62
i. Other comprehensive income that will
not be reclassified to profit or loss
1. Changes caused by re-measurements on
defined benefit schemes
2. Other comprehensive income that will
not be reclassified to profit or loss under
the equity method
3. Changes in the fair value of investments
in other equity instruments
4. Changes in the fair value arising from
118Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Item 2025 2024
changes in own credit risk
5. Other
ii. Other comprehensive income that will
be reclassified to profit or loss 4671501.76 -1195450.62
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 5181243.04 -1195450.62
6. Differences arising from the translation
of foreign currency-denominated financial -509741.28
statements
7. Others
Other comprehensive income attributable
to minority shareholders after tax net 183802.28 -21308.65
VII. Total comprehensive income 480704740.16 184176660.60
Attributable to owners of the parent
company 458484650.13 174860493.75
Attributable to non-controlling interests 22220090.03 9316166.85
VIII. Earnings per share:
i. Basic earnings per share 1.6510 0.6405
ii. Diluted earnings per share 1.6510 0.6405
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 in the previous
period being RMB0.00.Legal representative: Liu Meng; The person responsible for accounting: Huang Hai; Head of the
accounting agencies: Wang Shiya
4. Income statement of the parent company
Unit: RMB
Item 2025 2024
I. Operating income 1512138943.83 1330848938.69
Less: Cost of sales 1258372291.66 1159765505.85
Taxes and surcharges 4134319.73 4305131.61
Selling expenses 10097959.37 10611239.64
Management expenses 69743114.83 59943926.45
R&D expense 10248527.23 14831871.12
Financial expenses 1731616.93 -37514.24
Including: Interest expense 4334189.29 4636103.48
Interest income 2726264.48 2205713.25
Add: Other income 8256448.86 5646094.01
Return on investment (“-” for loss) 131406885.40 455154.71
Including: Investment income from
associates and joint ventures
Income from derecognition of financial
assets measured by amortized cost (“-” for
loss)
Net gain on exposure hedges* (“-” for
loss)
Gain on fair value changes(“-” for loss)
Credit impairment losses (“-” for loss) -228102.06 357384.30
119Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Item 2025 2024
Asset impairment loss (“-” for loss) -2060967.05
Return on disposal of assets (“-” for loss) -1099.00 22.74
II. Operating profit (“-” for loss) 295184280.23 87887434.02
Plus: Non-operating income 1867675.32 588944.62
Less: Non-operating expenses 1113508.11 454185.08
III. Total profit (“-” for loss) 295938447.44 88022193.56
Less: Income tax expenses 24936605.07 14298703.42
IV. Net profit (“-” for Net Loss) 271001842.37 73723490.14i. Net profit from continuing operations (“-” for net loss) 271001842.37 73723490.14
ii. Net profits from discontinuing
operations (“-” for net loss)
V. Other comprehensive income net of
tax 2243949.56 -881712.27
i. Other comprehensive income that will
not be reclassified to profit or loss
1. Changes caused by re-measurements on
defined benefit schemes
2. Other comprehensive income that will
not be reclassified to profit or loss under
the equity method
3. Changes in the fair value of investments
in other equity instruments
4. Changes in the fair value arising from
changes in own credit risk
5. Other
ii. Other comprehensive income that will
be reclassified to profit or loss 2243949.56 -881712.27
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 2243949.56 -881712.27
6. Differences arising from the translation
of foreign currency-denominated financial
statements
7. Others
VI. Total comprehensive income 273245791.93 72841777.87
VII. Earnings per share:
i. Basic earnings per share
ii. Diluted earnings per share
5. Consolidated cash flow statement
Unit: RMB
Item 2025 2024
I. Cash Flows from operating activities:
Proceeds from sale of commodities and
rendering of services 4042826314.24 3116931606.24
Net increase in customer deposits and
deposits from other banks and financial
institutions
Net increase in borrowings from the
central bank
Net increase in loans from banks and other
financial institutions
120Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Item 2025 2024
Premiums received on original insurance
contracts
Net proceeds from reinsurance
Net increase in deposits and investments
of policy holders
Cash received from interest fee and
commission
Net increase in loans from other banks and
financial institutions
Net increase in proceeds from repurchase
transactions
Net proceeds from acting trading of
securities
Taxes and levies rebates
Other cash received relating to operating
activities 61831082.59 71375583.53
Subtotal of cash inflows from operating
activities 4104657396.83 3188307189.77
Payments for commodities and services 3324547600.91 2710896061.07
Net increase in loans and advances to
customers
Net increase in deposits in the central bank
and other banks and financial institutions
Payments for claims on original insurance
contracts
Net increase in loans to other banks and
financial institutions
Payments made for interest fee and
commission
Cash paid for policy dividend
Cash paid to and for employees 241982950.88 221625415.96
Taxes paid 158361510.49 55041703.02
Other cash paid relating to operating
activities 81868651.24 57932194.13
Subtotal of cash outflows from operating
activities 3806760713.52 3045495374.18
Cash flows from operating activities 297896683.31 142811815.59
II. Cash flows from investing activities:
Cash received from returns of investments
Cash received from investment income 310885.40 552654.71
Net proceeds from the disposal of fixed
assets intangible assets and other long- 54850.00 1950.00
lived assets
Net proceeds from the disposal of
subsidiaries and other business units 1000000.00
Cash generated from other investing
activities 405317500.00 102000000.00
Subtotal of cash inflows from investing
activities 406683235.40 102554604.71
Cash paid for acquisition and construction
of fixed assets intangible assets and other 220393378.50 71125668.69
long-term assets
Cash paid for investment 7723787.63
Net increase in pledge loans
Net cash from acquisition of subsidiaries
and other business entities
Other cash paid relating to investing
activities 47829780.63 412000000.00
Subtotal of cash outflows from investing
activities 268223159.13 490849456.32
Net cash flows from investing activities 138460076.27 -388294851.61
III. Cash flows from financing activities:
121Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Item 2025 2024
Capital contributions received 15828300.00
Including: Cash received by subsidiaries
from capital contributions of minority 15828300.00
shareholders
Borrowings raised 681000000.00 528000000.00
Cash generated from other financing
activities 92634340.71 25334381.27
Subtotal of cash inflows from financing
activities 789462640.71 553334381.27
Cash paid for debt repayment 640750000.00 606666475.92
Cash paid for distribution of dividend
profit or payment of interest 109721832.51 51632865.21
Including: Dividends paid by subsidiaries
to non-controlling interests 8904000.00
Other cash paid relating to financing
activities 6107847.34 50000.00
Subtotal of cash outflows from financing
activities 756579679.85 658349341.13
Net cash flows from financing activities 32882960.86 -105014959.86
IV. Effect of foreign exchange rates
changes on cash and cash equivalents 5540291.99 4594982.11
V. Net increase in cash and cash
equivalents 474780012.43 -345903013.77
Add: Opening balance of cash and cash
equivalents 378787894.98 724690908.75
VI. Closing balance of cash and cash
equivalents 853567907.41 378787894.98
6. Cash flow statement of the parent company
Unit: RMB
Item 2025 2024
I. Cash flows from operating activities:
Proceeds from sale of commodities and
rendering of services 1345693154.05 1198579472.85
Taxes and levies rebates
Other cash received relating to operating
activities 30862037.92 12851615.25
Subtotal of cash inflows from operating
activities 1376555191.97 1211431088.10
Payments for commodities and services 1118500427.09 958860477.92
Cash paid to and for employees 122594675.71 112003213.10
Taxes paid 40802622.54 20316269.29
Other cash paid relating to operating
activities 38925303.87 22785164.98
Subtotal of cash outflows from operating
activities 1320823029.21 1113965125.29
Cash flows from operating activities 55732162.76 97465962.81
II. Cash flows from investing activities:
Cash received from returns of investments
Cash received from investment income 131406885.40 552654.71
Net proceeds from the disposal of fixed
assets intangible assets and other long- 350.00 1950.00
lived assets
Net proceeds from the disposal of
subsidiaries and other business units 1000000.00
Cash generated from other investing
activities 571729597.40 318211283.39
Subtotal of cash inflows from investing
activities 704136832.80 318765888.10
Cash paid for acquisition and construction
of fixed assets intangible assets and other 153637130.06 19728970.63
122Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Item 2025 2024
long-term assets
Cash paid for investment 127873448.00
Net cash from acquisition of subsidiaries
and other business entities
Other cash paid relating to investing
activities 121940148.57 268300000.00
Subtotal of cash outflows from investing
activities 403450726.63 288028970.63
Net cash flows from investing activities 300686106.17 30736917.47
III. Cash flows from financing activities:
Capital contributions received
Borrowings raised 154000000.00 33500000.00
Cash generated from other financing
activities 2200000.00 1939209.92
Subtotal of cash inflows from financing
activities 156200000.00 35439209.92
Cash paid for debt repayment 120750000.00 63500000.00
Cash paid for distribution of dividend
profit or payment of interest 86792977.88 34908178.80
Other cash paid relating to financing
activities 50000.00 50000.00
Subtotal of cash outflows from financing
activities 207592977.88 98458178.80
Net cash flows from financing activities -51392977.88 -63018968.88
IV. Effect of Foreign Exchange Rates
Changes on Cash and Cash Equivalents 895904.83 1915163.24
V. Net increase in cash and cash
equivalents 305921195.88 67099074.64
Add: Opening balance of cash and cash
equivalents 265281506.58 198182431.94
VI. Closing balance of cash and cash
equivalents 571202702.46 265281506.58
123Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
7. Consolidated statements of changes in owners’ equity
Amount during the current period
Unit: RMB
2025
Equity attributable to owners of the parent company Equity of
Item Other equity instruments Less: Other General non- Total owners’
Share capital Preferred Perpetual Others Capital reserves Treasury comprehensive
Specific Surplus Retained
reserve reserves risk earnings Others Subtotal controlling equityshares bonds stock income reserves interests
I. Closing balance
of the last year 274867523.00 1282067110.26 -1029646.03 496474.63 92691401.81 891709910.57 2540802774.24 53761894.27 2594564668.51
Add:
Adjustments for
changed
accounting
policies
Adjustments for
corrections of
previous errors
Others
II. Opening
balance of the 274867523.00 1282067110.26 -1029646.03 496474.63 92691401.81 891709910.57 2540802774.24 53761894.27 2594564668.51
year
III.Increase/Decrease
in the current 4671501.76 1479017.48 27100184.24 344252707.23 377503410.71 29152365.80 406655776.51
period (“-” for
reduction)
i. Total
comprehensive 4671501.76 453813148.37 458484650.13 22220090.03 480704740.16
income
ii. Capital
increased and
reduced by 15828300.00 15828300.00
owners
1. Ordinary
shares increased 15828300.00 15828300.00
by shareholders
2. Capital
increased by
holders of other
equity
instruments
3. Share-based
payment
recognized in
owner’s equity
4. Others
124Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
2025
Equity attributable to owners of the parent company Equity of
Item Other equity instruments Less: Other Specific Surplus General Retained non- Total owners’Share capital Preferred Perpetual Others Capital reserves Treasury comprehensive reserve reserves risk earnings Others Subtotal controlling equityshares bonds stock income reserves interests
iii. Profit
distribution 27100184.24 -109560441.14 -82460256.90 -8904000.00 -91364256.90
1. Appropriation
to surplus 27100184.24 -27100184.24
reserves
2. Appropriation
to general reserve
3. Appropriation
to owners (or -82460256.90 -82460256.90 -8904000.00 -91364256.90
shareholders)
4. Other
iv. Transfers
within owners’
equity
1. Increase in
capital (or share
capital) from
capital reserves
2. Increase in
capital (or share
capital) from
surplus reserves
3. Loss offset by
surplus reserves
4. Changes in
defined benefit
pension schemes
transferred to
retained earnings
5. Other
comprehensive
income
transferred to
retained earnings
6. Other
v. Specific
reserve 1479017.48 1479017.48 7975.77 1486993.25
1. Increase in the
current period 17040607.69 17040607.69 608136.59 17648744.28
2. Use in the
current period 15561590.21 15561590.21 600160.82 16161751.03
vi. Others
IV. Closing
balance of the 274867523.00 1282067110.26 3641855.73 1975492.11 119791586.05 1235962617.80 2918306184.95 82914260.07 3001220445.02
current period
125Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Amount of the previous period
Unit: RMB
2024
Equity attributable to owners of the parent company Equity of
Item Other equity instruments Less: Other
Share capital Preferred Perpetual Capital reserves Treasury comprehensive Specific Surplus
General
risk Retained
non- Total owners’
shares bonds Others stock income reserve reserves reserves earnings
Others Subtotal controlling equity
interests
I. Closing balance
of the last year 274867523.00 1282067110.26 165804.59 3122709.16 87895018.27 750685777.27 2398803942.55 44617111.00 2443421053.55
Plus: Changes in
accounting
policies
Adjustments for
corrections of
previous errors
Others
II. Opening
balance of the 274867523.00 1282067110.26 165804.59 3122709.16 87895018.27 750685777.27 2398803942.55 44617111.00 2443421053.55
year
III.Increase/Decrease
in the current -1195450.62 -2626234.53 4796383.54 141024133.30 141998831.69 9144783.27 151143614.96
period (“-” for
reduction)
i. Total
comprehensive -1195450.62 176055944.37 174860493.75 9316166.85 184176660.60
income
ii. Capital
increase and
reduction by
owners
1. Ordinary share
increase by
owners
2. Capital
increase by other
equity
instruments
holders
3. Share-based
payment
recognized in
owner’s equity
4. Others
126Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
2024
Equity attributable to owners of the parent company Equity of
Item Other equity instruments Less: Other Specific Surplus General Retained non- Total owners’Share capital Preferred Perpetual Others Capital reserves Treasury comprehensive reserve reserves risk earnings Others Subtotal controlling equityshares bonds stock income reserves interests
iii. Profit
distribution 4796383.54 -35031811.07 -30235427.53 -30235427.53
1. Withdrawal of
surplus reserve 4796383.54 -4796383.54
2. Appropriated
to general reserve
3. Distributed to
owners (or -30235427.53 -30235427.53 -30235427.53
shareholders)
4. Others
iv. Transfers
within owners’
equity
1. Increase in
capital (or share
capital) from
capital reserves
2. Increase in
capital (or share
capital) from
surplus reserves
3. Loss offset by
surplus reserves
4. Changes in
defined benefit
pension schemes
transferred to
retained earnings
5. Other
comprehensive
income
transferred to
retained earnings
6. Other
v. Specific
reserve -2626234.53 -2626234.53 -171383.58 -2797618.11
1. Increase in the
current period 15723267.64 15723267.64 527216.84 16250484.48
2. Use in the
current period 18349502.17 18349502.17 698600.42 19048102.59
vi. Others
IV. Closing
balance of the 274867523.00 1282067110.26 -1029646.03 496474.63 92691401.81 891709910.57 2540802774.24 53761894.27 2594564668.51
current period
127Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
8. Statements of changes in owners’ equity of the parent company
Amount during the current period
Unit: RMB
2025
Item Other equity instruments Less: OtherShare capital Preferred Perpetual Others Capital reserves Treasury comprehensive
Specific
reserve Surplus reserve
Retained Total owners’
shares bonds stock income earnings
Others equity
I. Closing balance of
the last year 274867523.00 1308235141.40 -715907.68 564337.58 92691401.81 677511646.49 2353154142.60
Add: Adjustments
for changed
accounting policies
Adjustments for
corrections of
previous errors
Others
II. Opening balance
of the year 274867523.00 1308235141.40 -715907.68 564337.58 92691401.81 677511646.49 2353154142.60
III.Increase/Decrease in
the current period 2243949.56 1361586.09 27100184.24 161441401.23 192147121.12
(“-” for reduction)
i. Total
comprehensive 2243949.56 271001842.37 273245791.93
income
ii. Capital increase
and reduction by
owners
1. Ordinary share
increase by owners
2. Capital increase
by other equity
instruments holders
3. Share-based
payment recognized
in owner’s equity
4. Others
iii. Profit
distribution 27100184.24
-
109560441.14-82460256.90
1. Appropriation to
surplus reserves 27100184.24 -27100184.24
2. Appropriation of
128Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
2025
Item Other equity instruments Less: OtherShare capital Preferred Perpetual Others Capital reserves Treasury comprehensive
Specific Surplus reserve Retained Total owners’
shares bonds stock income reserve earnings
Others equity
profit to owners (or
shareholders)
3. Others -82460256.90 -82460256.90
iv. Transfers within
owners’ equity
1. Increase in capital
(or share capital)
from capital reserves
2. Increase in capital
(or share capital)
from surplus
reserves
3. Loss offset by
surplus reserves
4. Changes in
defined benefit
pension schemes
transferred to
retained earnings
5. Other
comprehensive
income transferred
to retained earnings
6. Other
v. Specific reserve 1361586.09 1361586.09
1. Increase in the
current period 8086697.88 8086697.88
2. Use in the current
period 6725111.79 6725111.79
vi. Others
IV. Closing balance
of the current period 274867523.00 1308235141.40 1528041.88 1925923.67 119791586.05 838953047.72 2545301263.72
129Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Amount of the previous period
Unit: RMB
2024
Item Other equity instruments Less: OtherShare capital Preferred Perpetual Others Capital reserves Treasury comprehensive
Specific Surplus Retained Total owners’
shares bonds stock income reserve reserve earnings
Others equity
I. Closing balance
of the last year 274867523.00 1308235141.40 165804.59 667203.00 87895018.27 638819967.42 2310650657.68
Plus: Changes in
accounting
policies
Adjustments for
corrections of
previous errors
Others
II. Opening
balance of the 274867523.00 1308235141.40 165804.59 667203.00 87895018.27 638819967.42 2310650657.68
year
III.Increase/Decrease
in the current -881712.27 -102865.42 4796383.54 38691679.07 42503484.92
period (“-” for
reduction)
i. Total
comprehensive -881712.27 73723490.14 72841777.87
income
ii. Capital
increase and
reduction by
owners
1. Ordinary share
increase by
owners
2. Capital
increase by other
equity
instruments
holders
3. Share-based
payment
recognized in
owner’s equity
4. Others
130Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
2024
Item Other equity instruments Less: OtherShare capital Preferred Perpetual Capital reserves Treasury comprehensive Specific Surplus Retained Others Total owners’
shares bonds Others stock income reserve reserve earnings equity
iii. Profit
distribution 4796383.54 -35031811.07 -30235427.53
1. Withdrawal of
surplus reserve 4796383.54 -4796383.54
2. Appropriation
of profit to
owners (or
shareholders)
3. Others -30235427.53 -30235427.53
iv. Transfers
within owners’
equity
1. Increase in
capital (or share
capital) from
capital reserves
2. Increase in
capital (or share
capital) from
surplus reserves
3. Loss offset by
surplus reserves
4. Changes in
defined benefit
pension schemes
transferred to
retained earnings
5. Other
comprehensive
income
transferred to
retained earnings
6. Other
v. Specific
reserve -102865.42 -102865.42
1. Increase in the
current period 7960781.16 7960781.16
2. Use in the
current period 8063646.58 8063646.58
vi. Others
IV. Closing 274867523.00 1308235141.40 -715907.68 564337.58 92691401.81 677511646.49 2353154142.60
131Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
2024
Item Other equity instruments Less: OtherShare capital Preferred Perpetual Others Capital reserves Treasury comprehensive
Specific Surplus Retained
reserve reserve earnings Others
Total owners’
shares bonds stock income equity
balance of the
current period
132Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
III. Basic information of the Company
Kunming Chuan Jin Nuo Chemical Co. Ltd. (hereinafter referred to as the “Company” or “theGroup” which includes its subsidiaries) was established on June 2 2005. The registered address is
in the Sifangdi Industrial Park Tongdu Town Dongchuan District Kunming City. The
headquarters office is located on the 55th floor of the 1st office building (Twin Stars Tian Shu) in
the Qicai Yunnan First City Wulong subdistrict’s administrative agency Chenggong District
Kunming City Yunnan Province. The Company’s RMB ordinary A-shares have been listed on the
Shenzhen Stock Exchange.The Company was originally named Kunming Chuan Jin Nuo Chemical Co. Ltd. It was jointly
established by Liu Meng Liu Mingyi Chen Zeming and Wei Jiagui. On June 2 2005 the
Company obtained the Business License for Legal Entities (No. 5302002520475) issued by the
Administration for Industry and Commerce of Dongchuan District Kunming City Yunnan
Province. The original registered capital was RMB1000000.00 and the paid-in capital was also
RMB1000000.00.In May 2007 the Company increased its registered capital (paid-in capital) by RMB9000000.00
according to the resolution of the shareholders’ meeting bringing the registered capital and paid-in
capital to RMB10000000.00.In accordance with the resolution of the shareholders’ meeting on November 12 2010 and the
amended Articles of Association the Company increased its registered capital (paid-in capital) by
RMB10500000.00 bringing the updated registered capital (paid-in capital) to RMB20500000.00.The capital increase was registered with the industry and commerce authorities on November 19
2010.
In accordance with the resolution of the shareholders’ meeting on November 24 2010 and the
amended Articles of Association the Company increased its registered capital (paid-in capital) by
RMB269500.00 bringing the updated registered capital (paid-in capital) to RMB20769500.00.The capital increase was registered with the industry and commerce authorities on December 1
2010.
In July 2011 based on the Agreement on the Conversion of Kunming Chuan Jin Nuo Chemical Co.Ltd. to a Joint-Stock Company by Converting Its Net Asset Value into Shares signed by Liu Meng
Wei Jiagui and 30 other shareholders of Kunming Chuan Jin Nuo Chemical Co. Ltd. and the
provisions of the Company’s Articles of Association Kunming Chuan Jin Nuo Chemical Co. Ltd.was converted into a joint-stock company with Liu Meng and the 30 shareholders as the promoters.The net audited assets of Kunming Chuan Jin Nuo Chemical Co. Ltd. as of March 31 2011
amounting to RMB127626391.54 were converted into shares. The Company’s registered capital
(share capital) was set at RMB65000000.00. This change was registered with the industry and
commerce authorities on September 15 2011.In accordance with the resolution of the Company’s Board of Shareholders on December 28 2011
and the amended Articles of Association the Company introduced Shenzhen Haotian Equity
Investment Fund Management Co. Ltd. as an investor to increase the Company’s capital by
RMB5010000.00. After the capital increase the Company’s registered capital (share capital) was
raised to RMB70010000.00. The capital increase was registered with the industry and commerce
authorities on December 28 2011.In accordance with the resolution of the Company’s 2012 Fourth Extraordinary General Meeting
held on September 22 2012 the approval of the China Securities Regulatory Commission (CSRC)
in the Approval of Kunming Chuan Jin Nuo Chemical Co. Ltd.’s Initial Public Offering of Shares
(Z.J.X.K. [2016] No. 92) and the prospectus the Company publicly issued 23.35 million RMB
133Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
ordinary shares to the public for the first time. The par value of each share was RMB1 and the issue
price was RMB10.25 per share. The registered capital increased by RMB23350000.00 bringing
the updated registered capital (share capital) to RMB93360000.00. The capital increase was
registered with the industry and commerce authorities on May 12 2016.In accordance with the resolution of the Company’s 2018 First Extraordinary Board of Shareholders
and the approval of the China Securities Regulatory Commission (CSRC) in the Approval of
Kunming Chuan Jin Nuo Chemical Co. Ltd.’s Non-public Issuance of Shares (Z.J.X.K. [2019] No.
468) the Company issued 7166122 RMB ordinary shares (A-shares) in a non-public offering. The
par value of each share was RMB1 and the issue price was RMB21.49 per share. The registered
capital increased by RMB7166122.00 bringing the updated registered capital (share capital) to
RMB100526122.00. The capital increase was registered with the industry and commerce
authorities on May 17 2019.On March 20 2020 the Company held the 2019 Annual Board of Shareholders and made a
resolution to issue 3 additional shares for every 10 shares held by all shareholders using the capital
reserve. A total of 30157836 shares were issued. After the capital increase the Company’s total
share capital was RMB130683958. The Company completed the registration of the capital
increase with the industry and commerce authorities on July 24 2020.With the approval of the China Securities Regulatory Commission (CSRC) in document Z.J.X.K.[2020] No. 2260 the Company publicly issued 3.68 million convertible corporate bonds on October
16 2020 with a par value of RMB100 per bond for a total issuance amount of RMB368 million.
The bonds were listed and began trading on the SZSE on November 5 2020 under the bond name
“Jinnuo Convertible Bonds” and the bond code “123069.” The conversion period for the bonds is
from April 22 2021 to October 15 2026. From June to November 2021 the Company’s issued
convertible bonds were converted into shares in three tranches totaling 19110108 shares. After the
conversion the Company’s total share capital became RMB149794066. The Company completed
the registration of the capital increase with the industry and commerce authorities on December 9
2021.
On April 20 2022 the Company held the 2021 Annual Board of Shareholders and made a
resolution to issue five additional shares for every ten shares held by all shareholders using the
capital reserve. A total of 74897033 shares were issued. After the capital increase the Company’s
total share capital was 224691099 shares. The Company completed the registration of the capital
increase with the industry and commerce authorities on June 16 2022.With the approval of the China Securities Regulatory Commission (CSRC) in document Z.J.X.K.[2023] No. 1055 the Company non-publicly issued 50176424 RMB ordinary shares (A-shares) in
July 2023 and listed the shares for trading on the Shenzhen Stock Exchange’s ChiNext Board on
July 28 2023. After this non-public issuance of shares the Company’s total share capital was
changed to 274867523 shares. The Company completed the registration of the capital increase
with the industry and commerce authorities on September 22 2023.Registered capital of the Company: RMB274867523;
Unified social credit code: 91530100778560690W
Legal representative: Liu Meng
The controlling shareholder of the Company is the largest shareholder Liu Meng.The Company belongs to the chemical raw materials and chemical products manufacturing industry.It is primarily engaged in the research development production and sales of phosphate chemical
134Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
products as well as the research development production and sales of new energy materials. Main
products include feed grade dicalcium phosphate (Type I and Type III) feed grade monocalcium
phosphate triple superphosphate purified phosphoric acid and lithium iron phosphate.These financial statements were approved for issuance by the Board of Directors of the Company
on March 18 2026.IV Basis for preparation of financial statements
1. Basis of preparation
The Group’s financial statements were prepared in accordance with the Accounting Standards for
Business Enterprises promulgated by the Ministry of Finance as well as guidelines on accounting
standards for business enterprises announcements on interpreting the accounting standards for
business enterprises and other related regulations (hereinafter collectively referred to as the
“Accounting Standards for Business Enterprises”) as well as the disclosure regulations of the
General Provisions on Financial Reporting No. 15 for Companies Publicly Issuing Securities
(revised in 2023) by the China Securities Regulatory Commission (hereinafter referred to as the
“CSRC”).
2. Continued operations
The Group has assessed its ability to continue as a going concern for the 12 months starting from
December 31 2025 and has found no significant matters or circumstances that would raise doubts
about its ability to continue as a going concern. The financial statements are based on the going
concern.V. Significant accounting policies and estimates
Specific accounting policies and accounting estimates indicators:
Specific accounting policies and accounting estimates: The Group has established specific
accounting policies and estimates based on its actual production and operational characteristics.These include provisions for bad debts on receivables provisions for inventory impairment
depreciation of fixed assets amortization of intangible assets capitalization conditions for research
and development expenses income recognition and measurement recognition and measurement of
financial assets and financial liabilities and recognition and measurement of long-term assets.
1. Statement of compliance with the Accounting Standards for Business Enterprises
These financial statements comply with the requirements of the Accounting Standards for Business
Enterprises and truthfully accurately and completely reflect the financial position of the Company
and the Group as of December 31 2025 as well as the operating results cash flows and other
related information for the year 2025.
2. Accounting period
The Group’s accounting period runs from January 1 to December 31 of the Gregorian calendar year.
3. Operating cycle
The Company regards 12 months as a business cycle which is used as the liquidity classification
standard for assets and liabilities.
4. Bookkeeping base currency
The bookkeeping base currency of the Company is RMB.
135Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
5. Methods for determining materiality standards and selection criteria:
□Applicable □ Not applicable
Item Significance criteria
The amount of bad debt provision recovered or reversed during The amount of bad debt provision recovered or reversed exceeds
the year is significant RMB500000
The significant accounts receivable and other receivables written
off during the year The written-off amount exceeds RMB500000
Other accounts receivable in which single amount is significant Individual book balance exceeding RMB500000 and with
and bad debt provision shall be made individually special credit risk
Changes in major projects under construction in the current year The amount incurred during the current period or the closingbalance exceeds RMB1000000
Accounts payable with the account aging over one year or
overdue The closing balance exceeds RMB500000
Significant other accounts payable with an aging of more than one
year The closing balance exceeds RMB500000.Significant contingencies/Subsequent events The amount involved exceeds RMB1000000
6. Accounting treatment methods for business combination involving entities under and not
under common control
(1) Business combination under common control
A business combination involving entities under common control is a business combination in
which all of the combining enterprises are ultimately controlled by the same party or parties both
before and after the combination and that control is not transitory.As the acquirer the Group measures the assets and liabilities obtained in a business combination
under common control at their carrying amounts in the final consolidated financial statements of the
ultimate controlling party on the acquisition date. The difference between the carrying amount of
the net assets acquired and the carrying amount of the consideration paid for the business
combination under common control is adjusted against the capital reserve. If the capital reserve is
insufficient the remaining amount is adjusted against retained earnings.
(2) Business combination not under common control
A business combination involving entities not under common control is a business combination in
which all of the combining enterprises are not ultimately controlled by the same party or parties
both before and after the combination.As the acquirer the Group measures the identifiable assets liabilities and contingent liabilities of
the acquiree at their fair values on the acquisition date in a business combination not under common
control. If the acquisition cost exceeds the fair value of the identifiable net assets acquired in the
business combination the excess is recognized as goodwill. If the acquisition cost is less than the
fair value of the identifiable net assets acquired the fair values of the identifiable assets liabilities
and contingent liabilities as well as the acquisition cost are reviewed. If after the review the
acquisition cost remains less than the fair value of the identifiable net assets acquired the difference
is recognized as non-operating income in the current period of the consolidation.
7. Criteria for determining control and methods for preparing consolidated Financial
Statements
The scope of consolidation for the Group’s consolidated financial statements is determined based
on control and includes the Company and all subsidiaries controlled by the Company. The Group
assesses control based on whether it has power over the investee has exposure or rights to variable
returns from its involvement with the investee and has the ability to use its power over the investee
to affect the amount of the investor’s returns.
136Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
When preparing the consolidated financial statements if the accounting policies or accounting
periods of the subsidiary and the Company are inconsistent necessary adjustments are made to the
subsidiary’s financial statements in accordance with the Company’s accounting policies or
accounting periods.The impact of internal transactions between the Company and its subsidiaries as well as between
subsidiaries and each other was offset in consolidation. The portion of the subsidiary’s equity that
does not belong to the parent company as well as the portion of the current period’s net loss other
comprehensive income and total comprehensive income attributable to the minority shareholdersare separately presented in the consolidated financial statements under the items “MinorityInterests” “Minority Interest Profit or Loss” “Other Comprehensive Income Attributable toMinority Shareholders” and “Total Comprehensive Income Attributable to Minority Shareholders.”
For a subsidiary acquired in a business combination under common control its operating results and
cash flows are included in the consolidated financial statements from the beginning of the period in
which the combination occurs. When preparing comparative consolidated financial statements
adjustments are made to the relevant items of the previous year’s financial statements assuming
that the reporting entity formed after the combination has existed continuously since the point when
the ultimate controlling party began controlling the entity.For a subsidiary acquired in a business combination not under common control its operating results
and cash flows are included in the consolidated financial statements from the date the Group obtains
control. When preparing the consolidated financial statements the subsidiary’s financial statements
are adjusted based on the fair values of identifiable assets liabilities and contingent liabilities
determined on the acquisition date.When the Group loses control over an investee due to the disposal of a portion of its equity
investment or other reasons the remaining equity interest is remeasured at its fair value on the date
control is lost when preparing the consolidated financial statements. The difference between the
consideration received from the disposal of equity plus the fair value of the remaining equity
interest and the share of the net assets of the former subsidiary attributable to the original
ownership percentage—calculated continuously from the acquisition date or consolidation date—is
recognized in the investment gains or losses for the period in which control is lost while also
reducing goodwill. Other comprehensive income related to the original subsidiary’s equity
investment is reclassified to investment gains or losses in the period when control is lost.
8. Classification of joint operation arrangements and accounting methods for joint operations
The Group’s joint arrangements include joint operations and joint ventures. A joint operation is a
joint arrangement whereby the party to joint arrangement has rights to the assets and obligations
for the liabilities related to the arrangement. A joint venture is a joint arrangement whereby the
party to joint arrangement has rights to the net assets of the arrangement.For joint operations the Group as a joint operator recognizes the assets and liabilities it holds
separately as well as the assets and liabilities it holds according to its share. The Group also
recognizes the related income and expenses either separately or according to its share based on the
relevant agreements. In transactions involving the purchase or sale of assets that do not constitute a
business in a joint operation only the portion of the resulting profit or loss that is attributable to the
other participants in the joint operation is recognized.
9. Recognition criteria of cash and cash equivalents
The “cash” in the Group’s cash flow statement refers to cash on hand and deposits that are available
for immediate payment. Cash equivalents in the cash flow statement refer to investments with an
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original maturity of three months or less which are highly liquid easily convertible into a known
amount of cash and subject to an insignificant risk of value changes.
10. Conversion of transactions denominated in foreign currency and foreign currency
financial statement conversion
(1) Foreign currency business
Foreign currency transactions of the Group are initially recognized by converting the foreign
currency amount into the bookkeeping base currency using the spot exchange rate on the transaction
date. At the balance sheet date foreign currency monetary items are translated into the bookkeeping
base currency using the spot exchange rate at the balance sheet date. The resulting translation
differences except for exchange differences arising from foreign currency borrowings specifically
for the acquisition or production of qualifying assets which are capitalized are directly recognized
in the profit and loss for the current period. For foreign currency non-monetary items measured at
historical cost the spot exchange rate at the transaction date is used for translation and their
bookkeeping base currency amounts remain unchanged. For foreign currency non-monetary items
measured at fair value the spot exchange rate at the fair value determination date is used for
translation. The difference between the translated bookkeeping base currency amount and the
original bookkeeping base currency amount is treated as a fair value change (including exchange
rate changes) and recognized in the profit and loss for the current period. For capital contributions
from investors in foreign currency the spot exchange rate at the transaction date is used for
translation. No foreign currency capital translation difference arises between the foreign currency
capital and the corresponding monetary items’ bookkeeping base currency amounts.
(2) Conversion of foreign currency statement
When the Group prepares consolidated financial statements the financial statements of overseas
operations are translated into RMB. Among them: The asset and liability items in the foreign
currency balance sheet are converted at the spot exchange rate on the balance sheet date; items of
owner’s equity except for “undistributed profits” are converted at the spot exchange rate at the
time of transaction; income and expense items in the income statement are converted at the average
exchange rate during the transaction period. The converted differences arising from the above
translation of foreign currency financial statements are presented in other comprehensive income
items. Foreign currency cash flows are converted at the average exchange rate during the
transaction period. The impact of exchange rate changes on cash is presented separately in the cash
flow statement.
11. Financial instruments
* Recognition and derecognition of financial instruments
The Group recognizes a financial asset or financial liability when it becomes a party to a financial
instrument contract.A financial asset (or part of a financial asset or part of a group of similar financial assets) should be
derecognized from the balance sheet if the following conditions are met: (1) The right to receive the
cash flows of the financial asset has expired; (2) The right to receive the cash flows of the financial
asset has been transferred or under a “pass-through arrangement” the obligation to transfer the
received cash flows in full to a third party has been assumed; and the risks and rewards of
ownership of the financial asset have been substantially transferred or although the risks and
rewards of ownership have not been substantially transferred or retained control over the financial
asset has been relinquished.
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If the obligation of financial liabilities has been assumed revoked or terminated financial
liabilities shall be derecognized. If the current financial liabilities are replaced with other financial
liabilities under substantially different terms by the same creditor or almost all current liabilities
terms are substantially revised such replacement or revision shall be taken as the derecognition of
original liabilities and recognition of new liabilities and the differences are included in profit and
loss for the current period.A regular way purchase or sale of financial assets is recognized and derecognized using trading day
accounting. Trading day refers to the day when the Group promises to purchase or sell financial
assets.* Classification and measurement method of financial assets
At initial recognition the Group classifies financial assets based on its business model for managing
financial assets and the contractual cash flow characteristics of the financial assets into the
following categories: financial assets measured at amortized cost financial assets measured at fair
value through other comprehensive income and financial assets measured at fair value through
profit and loss for the current period. When and only when the Group changes its business model of
managing financial assets all relevant financial assets affected will be re-classified.When assessing the business model the Group considers factors such as how the business evaluates
and reports the financial asset performance to key management personnel the risks that affect the
performance of financial assets and how they are managed as well as the manner in which the
relevant business managers are compensated. When assessing whether the objective is to collect
contractual cash flows the Group analyzes and evaluates factors such as the reasons for the sale of
the c before its maturity the timing frequency and value of such sales.When assessing the contractual cash flow characteristics the Group determines whether the
contractual cash flows consist solely of payments of principal and interest on the outstanding
principal including evaluating whether there are significant differences compared to the benchmark
cash flows when assessing the time value of money and assessing whether the fair value of early
repayment features is very small for financial assets with early repayment characteristics.Financial assets are measured at fair value on initial recognition except for accounts receivable or
notes receivable arising from the sale of goods or rendering of services that do not contain
significant financing components or do not take into account a financing component that is not
more than one year which are measured initially at the transaction price.For financial assets at fair value through profit and loss for the current period transaction costs are
directly included in the profit and loss for the current period. For other types of financial assets
related transaction costs are included in their initial recognized amounts.* The subsequent measurement of financial assets depends on their categories:
(1) Financial assets measured at the amortized cost
A financial asset is classified as amortized cost if it meets the following conditions: a) The business
model for managing the financial asset is aimed at collecting contractual cash flows. b) The contract
terms of such financial asset stipulate that the cash flow generated on a specific date is only the
payment of the principal and the interest based on the unpaid principal amount. Such financial
assets use the effective interest method to recognize interest income. Gains or losses arising from
derecognition modification or impairment are included in the profit and loss for the current period
The financial assets classified under this category by the Group mainly include: monetary funds
accounts receivable notes receivable and other receivables.
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(2) Debt instrument investments measured at fair value through other comprehensive income
(FVOCI)
A financial asset is classified as fair value through other comprehensive income if it meets the
following conditions: a) The business model of the Group for managing the financial asset is both
to collect contractual cash flows and to sell the financial asset. b) The contract terms of such
financial asset stipulate that the cash flow generated on a specific date is only the payment of the
principal and the interest based on the unpaid principal amount. Interest income on these financial
assets is recognized using the effective interest method. Changes in fair value are recognized in
other comprehensive income except for interest income impairment losses and exchange
differences which are recognized in profit and loss for the current period. When a financial asset is
derecognized the cumulative gain or loss previously recognized in other comprehensive income is
reclassified from other comprehensive income to profit and loss for the current period. The financial
assets classified under this category by the Group mainly include receivables financing.
(3) Financial assets at fair value through profit and loss for the current period
Except for financial assets classified as measured at amortized cost and those classified or
designated as measured at fair value through other comprehensive income the Group classifies
financial assets as measured at fair value through profit and loss for the current period. These
financial assets are subsequently measured at fair value and except for those related to hedge
accounting all fair value changes are recognized in the profit and loss for the current period. The
financial assets classified under this category by the Group mainly include: trading financial assets
and derivative financial assets.* Classification recognition basis and measurement method of financial liabilities
Except for financial liabilities arising from issued financial guarantee contracts loan commitments
with below-market interest rates and financial liabilities resulting from the failure to meet the
derecognition conditions or continuing involvement in transferred financial assets the Group
classifies its financial liabilities at initial recognition as either: Financial liabilities at fair value
through profit and loss for the current period or financial liabilities at amortized cost. For financial
liabilities at fair value through profit and loss for the current period relevant transaction expenses
shall be directly included in profit and loss for the current period; relevant transaction expenses of
financial liabilities measured at amortized cost shall be included in the initial recognition amount.* The subsequent measurement of financial liabilities depends on their categories:
(1) Financial liabilities measured at the amortized cost
Financial liabilities measured at amortized cost are subsequently measured using the effective
interest method based on their amortized cost.
(2) Financial liabilities measured at fair value through the profit and loss for the current period
Financial liabilities at fair value through profit and loss for the current period (including derivative
financial liabilities) include trading financial liabilities and financial liabilities that are initially
designated as fair value through profit and loss for the current period. Trading financial liabilities
(including derivative instruments classified as financial liabilities) are subsequently measured at fair
value with all fair value changes recognized in profit and loss for the current period except for
those related to hedge accounting. For financial liabilities designated as at fair value through profit
and loss for the current period they are subsequently measured at fair value. Except for fair value
changes arising from changes in the Group’s own credit risk which are recognized in other
comprehensive income all other fair value changes are recognized in the profit and loss for the
140Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
current period. If fair value changes arising from changes in the Group’s own credit risk are
recognized in other comprehensive income and cause or exacerbate an accounting mismatch in
profit and loss for the current period the Group will recognize all fair value changes (including the
effect of changes in its own credit risk) in the profit and loss for the current period.* Impairment of financial instruments
The Group performs impairment testing and recognizes loss allowances on financial assets
measured at amortized cost debt investments measured at fair value through other comprehensive
income contract assets lease receivables loan commitments and financial guarantee contracts
based on expected credit losses.
(1) Measurement of expected credit loss
Expected credit loss refers to the probability-weighted estimate of credit losses of financial
instruments with the risk of default as the weight. Credit loss refers to the difference between all
contractual cash flow receivable by the Group under contracts which are discounted according to
the original actual rate of interest and all the cash flow expected to be received namely the present
value of all cash short.The expected credit loss during the whole duration refers to the expected credit loss caused by all
possible events of default of financial instruments during the whole expected duration. The
expected credit loss in the next 12 months refers to the expected credit loss caused by the events of
default of financial instruments within 12 months after the balance sheet data (which is the expected
duration if the expected duration of financial instruments is less than 12 months) which is a part of
the expected credit loss during the whole duration.For receivables such as accounts receivable notes receivable receivables financing and contract
assets arising from the Group’s ordinary operating activities (such as the sale of goods or provision
of services) that do not contain a significant financing component the Group applies the simplified
approach and measures the loss allowance based on the expected credit losses over the entire
lifetime of the receivables.For lease receivables receivables that contain a significant financing component and contract
assets the Group chooses to apply the simplified approach and measures the loss allowance based
on the expected credit losses over the entire lifetime of the assets.The Group recognizes accounts receivable with an amount exceeding RMB500000 and with
special credit risks as individually significant receivables. The Group performs individual
impairment testing for accounts receivable that are individually significant in amount.For financial assets other than those mentioned above that use the simplified approach (such as debt
investments other receivables and other receivables) as well as loan commitments and financial
guarantee contracts the Group applies the general approach (three-stage approach) to recognize
expected credit losses. At each balance sheet date the Group assesses whether there has been a
significant increase in credit risk since initial recognition. If the credit risk has not significantly
increased since initial recognition the asset is in Stage 1. The Group measures the loss allowance
based on the expected credit losses over the next 12 months and calculates interest income based on
the book balance and the effective interest rate. If the credit risk has significantly increased since
initial recognition but no credit impairment has occurred the asset is in Stage 2. The Group
measures the loss allowance based on the expected credit losses over the entire lifetime of the asset
and calculates interest income based on the book balance and the effective interest rate. If credit
impairment has occurred since initial recognition the asset is in Stage 3. The Group measures the
loss allowance based on the expected credit losses over the entire lifetime of the asset and calculates
141Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
interest income based on the amortized cost and the effective interest rate.For financial instruments that have only low credit risk at the balance sheet date the Group assumes
that their credit risk has not significantly increased since initial recognition. For disclosures
regarding the criteria for assessing significant increases in credit risk the definition of assets with
credit impairment and other related information please refer to Note 10 Section 1.When the Group applies the expected credit loss model to assess the impairment of financial
instruments and contract assets it infers the expected changes in the debtor’s credit risk based on
historical repayment data along with factors such as economic policies macroeconomic indicators
and industry risks. Different estimates may affect the recognition of impairment allowances and the
impairment allowances recognized may not be equal to the actual impairment losses that occur in
the future.
(2) Categories of portfolio for which impairment provisions are made based on credit risk
characteristics and the criteria for determination.The Group assesses the expected credit losses of financial instruments on both an individual and a
portfolio basis. When assessing on a portfolio basis the Group classifies financial instruments into
different groups based on common credit risk characteristics. The common credit risk
characteristics used by the Group include: the type of financial instrument credit risk ratings the
geographic location of the debtor the industry of the debtor overdue information and the aging of
receivables.a) Accounts receivable (and contract assets) portfolio categories and determination basis
The Group groups receivables (and contract assets) based on the aging of accounts receivables
nature of the amounts credit risk exposure historical repayment experience and other relevant
factors. For accounts receivables (and contract assets) the Group considers aging to be the main
factor influencing credit risk. Therefore the Group evaluates the expected credit losses based on
aging portfolios. The aging of receivables is determined based on the invoice date.b) Notes receivables portfolio categories and determination basis
The Group classifies notes receivables into different portfolios based on the credit risk of the
acceptor and determines the expected credit loss accounting estimation policy as follows: a. Bank
acceptance bills: The Group evaluates these as having lower credit risk and does not recognize
expected credit losses. b. Commercial acceptance bills: The Group follows the same policy as for
receivables to determine the expected loss rate and recognizes the loss allowance consistent with
the grouping of accounts receivables.c) Other receivables portfolio categories and determination basis
Other receivables mainly include receivables for deposits guarantee funds and employee advances.
(3) Individual impairment provision judgment criteria for individual impairment provision of bad
debts
If a customer’s credit risk characteristics are significantly different from those of other customers in
the portfolio or if there is a significant change in the customer’s credit risk characteristics such as
the customer experiencing severe financial difficulties and the expected credit loss rate for
receivables from that customer is significantly higher than the expected credit loss rate for their
aging or overdue period the Group will recognize an impairment allowance for the receivables
from that customer on an individual basis.
(4) Write-off of impairment provision
142Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
When the Group no longer reasonably expects to recover all or part of the contractual cash flows of
a financial asset the Group directly reduces the book balance of the financial asset. If recovered
written-down financial assets will be recognized as the profit or loss of the period of collection.The criteria and measurement methods for the recognition of financial asset transfers.For financial asset transfer transactions the Group derecognizes the financial asset if it has
transferred almost all the risks and rewards of ownership to the transferee. If the Group retains
almost all the risks and rewards of ownership it does not derecognize the financial asset. If the
Group neither transfers nor retains almost all the risks and rewards of ownership but has
relinquished control over the financial asset the financial asset is derecognized and the resulting
asset and liability are recognized. If control over the financial asset is not relinquished the Group
recognizes the financial asset according to the extent of its continued involvement in the transferred
financial asset and accordingly recognizes the relevant liability.If the entire financial asset transfer meets the derecognition conditions the difference between the
carrying amount of the transferred financial asset at the derecognition date and the consideration
received for the transfer along with the corresponding portion of the cumulative fair value changes
previously recognized in other comprehensive income (for financial assets that meet the following
conditions: a) the Group’s business model for managing the financial asset is both to collect
contractual cash flows and to sell the financial asset; b) the contract terms of the financial asset
specify that the cash flows generated on a specific date are solely payments of principal and interest
based on the unpaid principal) is recognized in profit and loss for the current period.If the transfer of a financial asset is partial and meets the derecognition conditions the carrying
amount of the transferred financial asset is allocated between the derecognized and non-
derecognized portions based on their relative fair values. The difference between the amount
allocated to the derecognized portion and the consideration received for the transfer along with the
corresponding portion of the cumulative fair value changes previously recognized in other
comprehensive income (for financial assets that meet the following conditions: a) the Group’s
business model for managing the financial asset is both to collect contractual cash flows and to sell
the financial asset; b) the contract terms of the financial asset specify that the cash flows generated
on a specific date are solely payments of principal and interest based on the unpaid principal) is
recognized in profit and loss for the current period.If continuing involvement is provided by way of financial guarantee for the transferred financial
assets the assets resulting from the continuing involvement are recognized at the lower of the
carrying value of the financial assets and the financial guarantee amount. The financial guarantee
amount refers to the maximum amount of the consideration received that will be required to be
repaid.* Distinction between financial liabilities and equity instruments and related handling methods
The Group distinguishes between financial liabilities and equity instruments based on the following
principles: (1) If the Group cannot unconditionally avoid fulfilling a contractual obligation by
delivering cash or other financial assets then the contractual obligation meets the definition of a
financial liability. Part of financial instruments that do not explicitly contain terms and conditions of
obligations of payment of cash or other financial assets may indirectly form contractual obligations
through other terms and conditions. (2) If a financial instrument is to be settled using or may be
settled using the Group’s own equity instruments it is necessary to consider whether the Group’s
own equity instruments used for settlement are a substitute for cash or other financial assets or if
they are intended to provide the holder of the instrument with residual equity in the assets of the
issuer after all liabilities are deducted. In the former case the instrument is a financial liability of
143Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
the issuer. In the latter case the instrument is an equity instrument of the issuer. In certain cases a
financial instrument contract stipulates that the Group must settle or may settle the financial
instrument using its own equity instruments. If the amount of the contractual right or obligation is
equal to the number of equity instruments to be acquired or delivered multiplied by their fair value
at settlement the contract is classified as a financial liability regardless of whether the amount of
the contractual right or obligation is fixed or varies entirely or partially based on changes in
variables other than the market price of the Group’s own equity instruments (such as interest rates
the price of a commodity or the price of a financial instrument).When classifying financial instruments (or their components) in the consolidated financial
statements the Group considers all the terms and conditions agreed upon between the Group
members and the holders of the financial instruments. If as a whole the Group has an obligation to
settle the instrument by delivering cash other financial assets or in other ways that cause the
instrument to be classified as a financial liability then the instrument should be classified as a
financial liability.The Group classifies these financial instruments or their components as financial assets financial
liabilities or equity instruments based on the contractual terms of the issued preferred shares and
perpetual bonds and the economic substance they reflect in conjunction with the definitions of
financial assets financial liabilities and equity instruments at initial recognition.For financial instruments or their components classified as financial liabilities related interest
dividends (or shares) gains or losses and gains or losses arising from redemption or refinancing are
recognized in profit and loss for the current period.For financial instruments or their components classified as equity instruments any changes in
equity including issuance (including refinancing) repurchase sale or cancellation are treated as
changes in equity by the Group and the fair value changes of the equity instruments are not
recognized.Derivative financial instruments
The Group uses derivative financial instruments such as foreign exchange forward contracts
commodity forward contracts and interest rate swaps to hedge against currency risk commodity
price risk and interest rate risk respectively. Derivate financial instruments are initially measured
at fair value on the date of entering into the derivate transaction contract and subsequently
measured at its fair value. Derivative financial instrument with positive fair value is recognized as
an asset. And derivative financial instrument with negative fair value is recognized as a liability.Except for those related to hedge accounting gains or losses arising from changes in the fair value
of derivative instruments are directly recognized in profit and loss for the current period.Financial guarantee contracts
A financial guarantee contract refers to a contract in which the Group agrees to pay a specified
amount to the contract holder suffering a loss if a particular debtor fails to pay its debt according to
the terms of the debt instrument at maturity. Financial guarantee contracts are initially measured at
fair value. Except for financial guarantee contracts that are designated as financial liabilities
measured at fair value through profit and loss for the current period the remaining financial
guarantee contracts are subsequently measured at the higher of: The expected credit loss allowance
determined as of the balance sheet date and the initial recognition amount minus the cumulative
amortization amount determined in accordance with the income recognition principle.Convertible bonds
144Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
When the Group issues convertible bonds it determines whether the bonds include both debt and
equity components based on the terms of the contract.For convertible bonds that contain both debt and equity components the debt and equity
components are separated at initial recognition and accounted for separately. The fair value of the
debt component is determined first and used as its initial recognition amount. The initial recognition
amount of the equity component is then determined by subtracting the debt component’s initial
recognition amount from the total issue price of the convertible bonds. Transaction costs are
allocated between the debt and equity components based on their relative fair values. The debt
component is presented as a liability and subsequently measured at amortized cost until it is
extinguished converted or redeemed. The equity component is presented as equity and is not
subsequently measured.If the issued convertible bonds only include the debt component and embedded derivatives such as
share conversion rights that meet the characteristics of embedded derivatives they are separated
from the convertible bonds as a whole and treated as a separate derivative financial instrument
initially recognized at its fair value. The portion of the issue price that exceeds the initial
recognition of the derivative financial instrument is recognized as a debt instrument. Transaction
costs are allocated proportionally based on the issue price of the debt instrument and derivative
financial instrument at initial recognition. Transaction costs related to the debt instrument are
recognized as liabilities while transaction costs related to the derivative financial instrument are
recognized in profit and loss for the current period.Offset of financial assets and financial liabilities
The Group’s financial assets and financial liabilities are presented separately in the balance sheet
and are not offset against each other. However when the following conditions are met they are
presented at their net amount in the balance sheet: (1) The Group has a legal right to offset the
recognized amounts and this legal right is currently enforceable; (2) The Group intends to settle on
a net basis or to simultaneously realize the financial asset and settle the financial liability.
12. Inventory
The Group’s inventory mainly includes materials in transit raw materials work in progress
finished goods packaging materials and goods in transit.Inventories are initially measured at cost. The cost of inventory includes purchase costs processing
costs and other costs. The Group uses a perpetual inventory system. When inventory is used or
issued the weighted average method is applied to determine its actual cost. Low-value consumables
and packaging materials are amortized using the write-off method.On the balance sheet date inventories are measured at the lower of cost and net realizable value. If
the cost of inventory exceeds its net realizable value an inventory impairment provision is
recognized and the provision is recorded in the profit and loss for the current period. Net realizable
value refers to the estimated selling price of inventory in the ordinary course of business less the
estimated costs to complete the product estimated selling expenses and related taxes.The Group recognizes inventory impairment provisions for raw materials work in progress and
finished goods on an individual inventory item basis. When determining the net realizable value for
goods directly held for sale such as finished goods work in progress and materials intended for
sale the net realizable value is determined by subtracting estimated sales expenses and related taxes
from the estimated selling price of the inventory. For materials held for production the net
realizable value is determined by subtracting the estimated costs to be incurred until completion
estimated sales expenses and related taxes from the estimated selling price of the finished products
145Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
to be produced.
13. Contract assets and contract liabilities
* Contract assets
A contract asset refers to the right of the Group to receive consideration for goods transferred to the
customer where the right depends on factors other than the passage of time. The method for
determining the expected credit loss of contract assets and the accounting treatment are detailed in
the above Note 3 Section 11 regarding the impairment of financial assets.* Contract liabilities
Contract liabilities reflect the Group’s obligation to transfer goods to customers for consideration
already received or receivable from the customer.Contract assets and contract liabilities under the same contract are presented at a net amount.
14. Assets related to contract costs
* Method for determining the amount of assets related to contract costs
The assets related to contract costs in the Group include contract fulfillment costs and contract
acquisition costs. Based on their liquidity contract fulfillment costs are separately reported under
inventory and other non-current assets while contract acquisition costs are separately reported
under other current assets and other non-current assets.Contract fulfillment costs which are costs incurred by the Group to fulfill a contract and do not fall
within the scope of related accounting standards for inventory fixed assets or intangible assets are
recognized as an asset if they meet the following conditions: The cost is directly related to a current
or expected contract including direct labor direct materials manufacturing expenses (or similar
costs) costs explicitly borne by the customer and other costs incurred solely because of the
contract; The cost increases the Group’s future resources used to fulfill its performance obligations;
The cost is expected to be recoverable.Contract acquisition costs refer to the incremental costs incurred by the Group to obtain a contract
which are expected to be recoverable. These costs are recognized as an asset as contract acquisition
costs. If the amortization period of the asset does not exceed one year the Group chooses to apply
the simplified approach by recognizing the cost in profit and loss for the current period in which it
is incurred. Incremental costs refer to costs that would not have been incurred if the contract had not
been obtained such as sales commissions. The Group recognizes other expenses incurred to obtain
a contract excluding expected recoverable incremental costs (such as travel expenses that would be
incurred regardless of whether the contract is obtained) in profit and loss for the current period
when they are incurred except for costs explicitly borne by the customer.* Amortization of the assets related to contract costs
The Group amortizes assets related to contract costs on the same basis as the income recognition for
the associated goods with the amortization recognized in profit and loss for the current period.* Impairment of the assets related to contract costs
If the carrying amount of the assets related to contract costs exceeds the difference between the
following two amounts the Group will recognize an impairment provision for the excess and
recognize it as an impairment loss: a) The expected remaining consideration the enterprise expects
to receive from the transfer of goods related to the asset; b) The estimated costs to be incurred for
transferring the related goods. After the impairment provision is made if the factors of impairment
146Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
in previous periods change so that the difference between the above two items is higher than the
book value of the assets the original impairment provision of the assets shall be reversed and
included in the profit and loss for the current period but the book value of the assets after the
reversal shall not exceed the book value of the assets on the reversal date assuming that the
impairment provision is not made.
15. Long-term equity investments
The Group’s long-term equity investments include investments in subsidiaries investments in
associates and equity investments in joint ventures.
(1) Judgment of Significant Influence and Joint Control
The Group’s equity investments in which it has significant influence over the investee are classified
as investments in associates. Significant influence refers to the power of the Group to participate in
the decision-making of the investee’s financial and operating policies but without the ability to
control or jointly control the formulation of these policies with other parties. When the Company
directly or indirectly through its subsidiaries holds more than 20% but less than 50% of the voting
power in an investee it is generally considered to have significant influence over the investee
unless there is clear evidence that the Group cannot participate in the investee’s operational
decision-making or exert control over the investee. If the Group holds less than 20% of the voting
power in an investee but the Group has representatives on the investee’s board of directors or
similar authorities participates in the decision-making process of the investee’s financial and
operating policies engages in significant transactions with the investee sends management
personnel to the investee or provides key technical information to the investee the Group considers
it to have significant influence over the investee.The Group’s equity investments in which it shares joint control over the investee with other joint
venture partners and has rights to the net assets of the investee are classified as investments in joint
ventures. The common control means the Company controls some arrangement together with other
participants based on the relevant agreement and the decisions about the activities of such
arrangement cannot be made without the consensus of participants sharing the control power. The
Group’s judgment of joint control is based on the fact that all parties or a group of parties
collectively control the arrangement and decisions regarding the relevant activities of the
arrangement must require the unanimous consent of the parties that collectively control the
arrangement.
(2) Accounting treatment method
The Group measures its acquired long-term equity investments at initial recognition based on the
initial investment cost.For long-term equity investments acquired through a business combination under common control
the initial investment cost is determined as the share of the acquiree’s net assets at their carrying
amount in the ultimate controlling party’s consolidated financial statements as of the acquisition
date. If the acquiree’s net assets at the acquisition date have a negative value the initial investment
cost is determined to be zero.For long-term equity investments acquired through a business combination not under common
control the initial investment cost is determined based on the acquisition cost. In the case of a
business combination not under common control achieved through multiple transactions which is
not considered a package deal the initial investment cost is determined by the sum of the carrying
amount of the originally held equity investment and the additional investment costs.
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Except for long-term equity investments formed through business combinations long-term equity
investments obtained by paying cash are initially measured at the actual purchase price paid plus
directly attributable costs taxes and other necessary expenses. Long-term equity investments
obtained by issuing equity securities are initially measured at the fair value of the equity securities
issued. Long-term equity investments obtained through debt restructuring where assets are used to
settle debts are initially measured at the fair value of the waived claims plus taxes and other costs
directly attributable to the investment. Long-term equity investments obtained through the exchange
of non-monetary assets are initially measured at the fair value or carrying amount of the exchanged
assets plus related taxes and fees.The Company accounts for its investments in subsidiaries using the cost method in its individual
financial statements. When using the cost method long-term equity investments are measured at the
initial investment cost. When making additional investments the carrying amount of the long-term
equity investment is increased by the fair value of the additional investment paid and any related
transaction costs incurred. Cash dividends or profits declared and distributed by the investee are
recognized as investment income for the current period based on the amount the Company is
entitled to receive.The Group accounts for its investments in joint ventures and associates using the equity method.When using the equity method if the initial investment cost of the long-term equity investment is
greater than the share of the investee’s identifiable net assets at fair value at the time of investment
the carrying amount of the long-term equity investment is not adjusted. If the initial investment cost
is less than the share of the investee’s identifiable net assets at fair value at the time of investment
the difference is added to the carrying amount of the long-term equity investment and is recognized
in profit and loss for the current period in which the investment is acquired.For long-term equity investments accounted for using the equity method the carrying amount of the
investment is adjusted accordingly to increase or decrease based on changes in the equity of the
investee during the holding period. When recognizing the share of the investee’s net profit or loss
the fair value of the investee’s identifiable assets at the time of acquiring the investment is used as
the basis. The recognition is in accordance with the Group’s accounting policies and accounting
periods. Additionally any unrealized internal transaction gains or losses arising from transactions
between the Group and its associates or joint ventures that do not constitute business transactions
are eliminated based on the Group’s share. If the internal transaction losses relate to asset
impairment losses they are fully recognized. The net profit of the investee is then adjusted
accordingly. The Group recognizes the net loss of the investee limited to the carrying amount of
the long-term equity investment and other long-term interests that essentially constitute net
investments in the investee which are reduced to zero except when the Group has an obligation to
bear additional losses.
16. Fixed assets
(1) Conditions for recognition
The Group’s fixed assets are tangible assets held for the purpose of producing goods providing
services leasing or operating and managing with a useful life of more than one year.Fixed assets are recognized when it is probable that the related economic benefits will flow into the
Group and the cost can be reliably measured. The Group’s fixed assets include buildings and
structures machinery and equipment transportation equipment electronic equipment and others.
(2) Depreciation method
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Category Depreciation method Useful life Salvage value (%) Annual deprecation (%)
Properties and buildings Straight-linedepreciation method 20 5% 4.75%
Machinery and Straight-line
equipment depreciation method 10 5% 9.50%
Transportation vehicle Average method ofuseful life 5 5% 19.00%
Electronic equipment Straight-line
and others depreciation method 3 5% 31.67%
Except for fixed assets that are still in use after full depreciation has been provided and land that is
separately recognized the Group depreciates all fixed assets. The straight-line method is used for
depreciation.At the end of each fiscal year the Group reviews the estimated useful life expected residual value
and depreciation method of its fixed assets. If any changes occur they are treated as changes in
accounting estimates.
17. Construction in progress
The cost of construction in progress is determined based on actual project expenditures including
all necessary project expenditures incurred during construction borrowing costs to be capitalized
before the project reaches its predetermined usable state and other related expenses etc.Construction in progress is transferred to fixed assets at its estimated value based on the project
budget costs or actual construction costs starting from the date it reaches the intended usable state.Depreciation begins in the following month. After the completion settlement procedures are
completed any differences in the original value of the fixed assets are adjusted.Construction in progress is transferred to fixed assets upon reaching the predetermined usable state
with the criteria as follows:
Item Standard for transferring fixed assets
Properties and The main construction and supporting projects have been substantially completed and the construction projects
buildings meet the intended design requirements and have passed acceptance.
(1) Production projects: The relevant equipment and supporting facilities have been installed the equipment has
been commissioned and it is capable of operating normally and stably for a period of time. The production
Machinery equipment can consistently produce qualified products for a period and the equipment has been accepted by the
and relevant departments and handed over for production. (2) R&D projects: The relevant equipment and supporting
equipment facilities have been installed the physical properties meet the design requirements and they satisfy the R&D usage
requirements. The equipment has been accepted by the relevant departments and handed over for research and
development.
18. Borrowing costs
The Group capitalizes borrowing costs directly attributable to the acquisition construction or
production of qualifying assets as part of the cost of those assets. Other borrowing costs are
recognized as expenses in the profit and loss for the current period. The Group capitalizes
borrowing costs related to assets that require more than one year of acquisition or production
activities to reach the intended usable or saleable state including fixed assets investment properties
and inventory. Capitalization begins when asset expenditures and borrowing costs have been
incurred and necessary acquisition or production activities have started to bring the asset to its
intended usable or saleable state. Capitalization stops when the asset that qualifies for capitalization
reaches its intended usable or saleable state and any subsequent borrowing costs are recognized in
profit and loss for the current period. If an asset that meets the capitalization conditions experiences
an abnormal interruption during acquisition or production and the interruption lasts for more than
three consecutive months the capitalization of borrowing costs is suspended until the acquisition or
production activities of the asset resume.
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For each accounting period during the capitalization period the Group recognizes the capitalized
amount of borrowing costs as follows: For specifically borrowed funds the capitalized amount is
determined based on the actual interest expenses incurred during the period after deducting any
interest income earned from unused borrowed funds deposited in the bank or investment income
from temporary investments. For general borrowings the capitalized amount is determined by
multiplying the weighted average of asset expenditures exceeding the specific borrowing portion by
the capitalization rate for the general borrowings where the capitalization rate is calculated based
on the weighted average interest rate of general borrowings.
19. Intangible assets
(1) Useful life and its determination basis estimation amortization method or review procedure
The Group’s intangible assets include land use rights computer software etc. and are measured at
their actual cost at the time of acquisition. For purchased intangible assets the actual cost is
determined based on the amount actually paid and other related expenses. For intangible assets
contributed by investors the actual cost is determined according to the value stipulated in the
investment contract or agreement. However if the value agreed upon in the contract or agreement is
not fair the actual cost is determined based on fair value.
(2) Useful life and the basis for its determination estimation amortization methods or review
procedures
Land use rights are amortized evenly over the duration of the granted term starting from the date of
transfer. Computer software is amortized on a straight-line basis over the shortest of the estimated
useful life the contractually specified benefit period or the legally stipulated effective period.The amortization amount shall be included in the underlying asset costs and the profit and loss for
the current period according to the beneficiary object. The estimated useful life and amortization
method of intangible assets with a finite useful life are reviewed at the end of each fiscal year. If
any changes occur they are treated as changes in accounting estimates.
(3) The scope of R&D expenditure collection and the related accounting treatment
The Group’s research and development expenses include the following: employee compensation for
R&D personnel direct costs depreciation and amortization expenses external research and
development fees and other related expenses.The Group classifies its internal research and development project expenditures into expenditure on
the research phase and expenditure on the development phase based on the nature of the
expenditures and the degree of uncertainty in whether the R&D activities will result in an intangible
asset. Research phase expenditures are recognized in profit and loss for the current period when
incurred. Expenditures in the development phase are capitalized when all of the following
conditions are met: The Group assesses the technical feasibility of completing the intangible asset
to make it available for use or sale; The Group has the intention to complete the intangible asset and
use or sell it; The intangible asset is expected to generate economic benefits for the Group; The
Group has sufficient technical financial and other resources to support the completion of the
intangible asset development and has the ability to use or sell the intangible asset; The expenditures
attributable to the development phase of the intangible asset can be reliably measured. Development
phase expenditures not meeting these capitalization criteria are recognized in profit and loss for the
current period when incurred.
20. Long-term asset impairment
The Group reviews long-term equity investments fixed assets construction in progress right-of-
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use assets intangible assets with finite useful lives and other related items at each balance sheet
date. If there are indications of impairment the Group performs an impairment test.Impairment of non-current assets excluding financial assets and goodwill (excluding goodwill)
For non-current assets excluding financial assets and goodwill the recoverable amount is
determined as the higher of the asset’s fair value less costs to sell and the present value of the
asset’s expected future cash flows. If the carrying amount of the asset exceeds its recoverable
amount after the impairment test the difference is recognized as an impairment loss.The Group estimates the recoverable amount based on individual assets. If it is difficult to estimate
the recoverable amount of an individual asset the recoverable amount is determined based on the
asset group to which the asset belongs. The identification of the asset portfolio is based on whether
the main cash flow arising from the asset portfolio is independent of that of other assets or asset
portfolios.The net amount after deducting disposal costs from fair value is determined by referencing the sales
agreement price of similar assets in orderly transactions or observable market prices on the
measurement date minus any incremental costs directly attributable to the disposal of the asset.When determining the present value of expected future cash flows the management estimates the
future cash flows generated by the asset during its continued use and eventual disposal and selects
an appropriate discount rate to determine the present value of the future cash flows.Once the impairment loss of the above assets is recognized it shall not be reversed in subsequent
accounting periods.
21. Employee remuneration
(1) Accounting treatment of short-term compensation
Short-term employee benefits mainly include wages bonuses employee welfare social insurance
premiums housing provident fund allowances and subsidies. During the accounting period in
which the employee provides services the actual short-term employee benefits incurred are
recognized as liabilities and are accounted for in profit and loss for the current period or capitalized
into the cost of related assets depending on the beneficiary.
(2) Accounting treatment of the welfare after demission
Post-employment benefits mainly include basic pension insurance premiums unemployment
insurance premiums etc. These are classified as defined contribution plans based on the risks and
obligations undertaken by the Company. For defined contribution plans the contributions made to a
separate entity for the services provided by employees during the accounting period are recognized
as liabilities at the balance sheet date. These contributions are then accounted for in profit and loss
for the current period or capitalized into the cost of related assets depending on the beneficiary.
(3) Accounting treatment of the demission welfare
Termination benefits refer to compensation provided by the Company when it terminates the labor
relationship with an employee before the expiration of the employee’s labor contract or when it
offers compensation to encourage employees to voluntarily accept redundancy. The liability arising
from the compensation for the termination of the labor relationship is recognized at the earlier of the
point when the Company cannot unilaterally withdraw the termination plan or redundancy proposal
or when the costs related to the restructuring involving the payment of termination benefits are
recognized and is included in profit and loss for the current period.
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22. Estimated liabilities
When a contingent liability related to pending litigation arbitration warranty-type guarantees or
other contingent matters meets the following conditions the Group recognizes it as a liability: The
obligation is a present obligation of the Group; It is probable that the settlement of the obligation
will result in an outflow of economic benefits from the Group; The amount of the obligation can be
reliably measured.The accrued liabilities are initially measured in accordance with the best estimates of the necessary
expenses for the fulfillment of current obligations and the factors related to contingencies like risks
uncertainties and time value of currency are taken into account. The Group reviews the current best
estimate of the provisions for contingent liabilities at the balance sheet date and adjusts the carrying
amount of the provision as necessary. Provisions expected to be paid within one year from the
balance sheet date are reported as current liabilities.
23. Revenue
Accounting policies adopted for the recognition and measurement of revenue disclosed by type of
business
(1) General principles
The Group recognizes income upon fulfilling its performance obligations under the contract that is
when the customer obtains control of the relevant goods or services. The control of the relevant
goods or services refers to the ability to direct the use of the goods or the provision of the services
and to obtain almost all of the economic benefits from them.A performance obligation refers to the promise in the contract by the Group to transfer distinct
goods to the customer. The Group’s performance obligations are recognized as being satisfied over
time if they meet one of the following conditions; otherwise they are recognized as being satisfied
at a point in time: a) The customer simultaneously receives and consumes the economic benefits
provided by the Group’s performance; b) The customer has control over the work-in-progress goods
during the Group’s performance; c) The goods produced during the Group’s performance have no
alternative use and the Group has the right to receive payment for the performance completed to
date throughout the contract period.For performance obligations satisfied at a point in time the Group recognizes income when the
customer obtains control of the relevant goods. In determining whether the customer has obtained
control of the goods the Group considers the following indicators: a) The Group has the right to
receive payment for the goods meaning the customer has an obligation to pay for the goods; b) The
Group has transferred legal ownership of the goods to the customer meaning the customer has legal
ownership of the goods; c) The Group has physically transferred the goods to the customer
meaning the customer has physical possession of the goods; d) The Group has transferred the
significant risks and rewards of ownership of the goods to the customer meaning the customer has
assumed the major risks and rewards of ownership of the goods; e) The customer has accepted the
goods; f) Other signs indicating that the customer has obtained control of the goods.The transaction price is the amount of consideration that the Group expects to be entitled to receive
for transferring goods or services to the customer excluding amounts collected on behalf of third
parties and amounts expected to be refunded to the customer.
(2) Specific method
The Group’s operating income mainly consists of sales of goods.
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a) Sales of goods income
The Group primarily engages in the production and sale of phosphate chemical products and the
specific income recognition principles are as follows:
(1) Domestic sales - transfer of control of goods at a point in time
Income from domestic sales is recognized when the Group delivers the goods to the customer or
when the carrier has delivered the goods to the customer’s designated destination and handed over
the delivery rights to the customer and the Group has obtained the current right to request payment
and it is highly probable that the consideration will be collected i.e. when the customer obtains
control of the relevant goods.
(2) Overseas sales - transfer of control of goods at a point in time
Income from overseas sales is recognized when the goods are shipped and leave the port of
shipment the customs declaration and bill of lading are obtained and the Group has obtained the
current right to request payment and it is highly probable that the consideration will be collected
i.e. when the customer obtains control of the relevant goods.Differences in methods for the recognition and measurement of revenue caused by different
business models for the same type of businessThe Company is required to comply with the disclosure requirements related to “ChemicalIndustry-related Business” in the Guidelines No. 3 of Shenzhen Stock Exchange for Self-regulation
of Listed Companies– Industry-specific Information Disclosure.
24. Government grants
The government subsidies are recognized when they meet the conditions attached and can be
received. Government grants in the form of monetary assets are measured at the actual amount
received. For grants allocated based on a fixed amount or for which there is clear evidence at the
year-end indicating that the relevant conditions of the fiscal support policy have been met and it is
expected that the financial support will be received the grant is measured at the amount receivable.For government grants in the form of non-monetary assets they are measured at fair value. If the
fair value cannot be reliably determined the grant is measured at its nominal amount (RMB1).The Group’s government grants include asset-related government grants and income-related
government grants. Among these asset-related government grants refer to government grants
obtained by the Group that are used for the acquisition construction or other methods of forming
long-term assets. Income-related government grants refer to government grants other than those
related to assets. If the government document does not explicitly specify the grant recipient the
Group will make a judgment based on the above classification principles. If it is difficult to
distinguish the grant will be classified as an income-related government grant.Asset-related government grants are recognized as deferred income. The deferred income related to
asset-related government grants is recognized in profit and loss for the current period over the
useful life of the related asset using the straight-line method. If relevant assets are sold transferred
written off or damaged before the end of their useful lives the Company should transfer the balance
of retained deferred returns into the profit or loss for the current period of assets disposal.Income-related government grants that are used to compensate for future costs expenses or losses
are recognized as deferred income. The deferred income is then recognized in profit and loss for the
current period when the related costs expenses or losses are recognized. Those used to compensate
for incurred related costs or losses are directly included in the profit and loss for the current period.
153Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Government grants related to the Company’s routine activities are recognized in other income based
on the nature of economic operations. Government subsidies that are unrelated to the ordinary
course of business are included in non-operating income and expenses.When the Group receives policy-based interest subsidy loans the accounting treatment is
distinguished based on whether the subsidy funds are paid to the lending bank by the government or
directly paid to the Group. The accounting treatment is as follows:(1) When the government pays
the interest subsidy funds to the lending bank and the lending bank provides the loan to the Group
at the policy-based preferential interest rate the Group recognizes the actual amount received as the
loan’s carrying value. The Group calculates the related borrowing costs based on the loan principal
and the preferential interest rate (or recognizes the loan’s fair value as the carrying value and
calculates the borrowing costs using the effective interest rate method. Any difference between the
actual amount received and the fair value of the loan is recognized as deferred income). Deferred
income is amortized using the effective interest method over the term of the loan offsetting the
related borrowing costs. (2) When the government directly allocates interest subsidy funds to the
Group the Group offsets the corresponding interest subsidy against the related borrowing costs.
25. Deferred tax assets and deferred tax liabilities
The Group recognizes deferred tax assets and deferred tax liabilities based on the temporary
differences between the tax bases of assets and liabilities and their carrying amounts as well as the
differences between the tax bases and carrying amounts of items that are not recognized as assets
and liabilities but whose tax bases can be determined according to tax law. These temporary
differences give rise to the recognition of deferred tax.The Group recognizes deferred tax liabilities for all taxable temporary differences except in the
following cases: (1) The temporary difference arises from the initial recognition of goodwill or from
the initial recognition of an asset or liability in a transaction that is not a business combination and
does not affect accounting profit or taxable income (or deductible losses); (2) Taxable temporary
differences related to investments in subsidiaries associates and joint ventures where the Group
can control the timing of the reversal of the temporary differences and it is probable that these
temporary differences will not reverse in the foreseeable future.The Group recognizes deferred tax assets for deductible temporary differences deductible losses
and tax credits to the extent that it is probable that sufficient taxable income will be available in the
future to offset these differences except in the following cases: (1) The temporary difference arises
from the initial recognition of an asset or liability in a transaction that is not a business combination
and does not affect accounting profit or taxable income (or deductible losses); (2) Deductible
temporary differences related to investments in subsidiaries associates and joint ventures where
the following conditions are not met: the temporary differences are likely to reverse in the
foreseeable future and it is probable that sufficient taxable income will be available in the future to
offset the deductible temporary differences.The Group recognizes deferred tax assets for all unused deductible losses to the extent that it is
probable that sufficient taxable income will be available to offset the deductible losses. The
management exercises significant judgment in estimating the timing and amount of future taxable
income taking into account tax planning strategies to determine the amount of deferred tax assets
to be recognized. As a result there is inherent uncertainty.At the balance sheet date deferred tax assets and deferred tax liabilities are measured using the
applicable tax rates expected to apply when the asset is recovered or the liability is settled.
154Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
26. Leases
(1) Identification of leases
On the commencement date of the contract the Group assesses whether the contract is a lease or
contains a lease. If a party to the contract transfers 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 a lease or includes a lease.If a contract contains multiple single leases at the same time the Group will split the contract and
conduct accounting treatment of each single lease respectively. If a contract contains both lease and
non-lease parts at the same time the Group will split the lease and non-lease parts for accounting
treatment. Each lease component is accounted for in accordance with the lease accounting standards
while non-lease components are accounted for according to other applicable Accounting Standards
for Business Enterprises.
(2) The Group as lessee
* Lease confirmation
Except for short-term leases and leases of low-value assets at the commencement date of the lease
the Group recognizes a right-of-use asset and a lease liability.A right-of-use asset refers to the right of the Group as the lessee to use the leased asset during the
lease term initially measured at cost. The cost of the right-of-use asset includes: a) The initial
measurement amount of the lease liability; b) Lease payments made before or at the commencement
date of the lease less any lease incentives already received; c) Initial direct costs incurred; d)
Estimated costs to be incurred for the dismantling and removal of the leased asset restoring the
location of the leased asset or returning the leased asset to the condition required by the lease terms
(excluding costs incurred for the production of inventory). The Group remeasures the lease liability
in accordance with the relevant provisions of the lease accounting standards and adjusts the
carrying amount of the right-of-use asset accordingly.The Group depreciates the right-of-use asset using the straight-line method based on the expected
consumption pattern of the economic benefits related to the right-of-use asset. If it is reasonably
certain that ownership of the leased asset will be obtained at the end of the lease term depreciation
is recognized over the remaining useful life of the leased asset. If it is not reasonably certain that
ownership will be obtained at the end of the lease term depreciation is recognized over the shorter
of the lease term and the remaining useful life of the leased asset. The accrued depreciation amount
is included in the cost of related assets or profit and loss for the current period according to the use
of the right-of-use assets.The Group initially measures the lease obligation at the present value of the lease payments
outstanding at the commencement date of the lease term. Lease payments include: a) Fixed
payments and substantially fixed payments less any lease incentives received; b) Variable lease
payments dependent on an index or rate; c) The purchase price of the purchase option when the
Group reasonably determines that it will exercise the purchase option; d) The payments required to
be made when exercising the termination option reflecting the Group’s decision to exercise the
option to terminate the lease; e) The expected payments to be made based on the guaranteed
residual value provided by the Group.When calculating the present value of lease payments the Group uses the interest rate implicit in
the lease as the discount rate. If the Group is unable to determine the implicit interest rate the
incremental borrowing rate is used as the discount rate. The Group calculates the interest expenses
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of the lease obligations during each period of the lease term at a fixed periodic interest rate and
includes them (except those that shall be capitalized) in profit and loss for the current period.After the lease commencement date the Group recognizes interest on the lease liability which
increases the carrying amount of the lease liability. When lease payments are made the carrying
amount of the lease liability is reduced. When there is a change in the substantial fixed payment
amount the estimated payable amount of the guaranteed residual value the index or rate used to
determine lease payments or the assessment results or actual exercise of purchase options renewal
options or termination options the Group remeasures the lease liability at the present value of the
revised lease payments.* Short-term leases and leases of low-value assets
For short-term leases with a lease term not exceeding 12 months and low-value asset leases with
lower value when single leased assets are brand new assets the Group chooses not to recognize
right-of-use assets and lease liabilities. The Group recognizes lease payments for short-term leases
and leases of low-value assets in each period of the lease term using the straight-line method or
another systematic and reasonable method and includes them in the cost of the related assets or in
profit and loss for the current period.
(3) The Group as the lessor
When the Group acts as the lessor if a lease essentially transfers almost all the risks and rewards
associated with the ownership of the leased asset the Group classifies the lease as a finance lease.Otherwise the lease is classified as an operating lease.* Finance lease
On the commencement date of the lease term the Group recognizes the finance lease receivables
for the finance lease and derecognizes the leased asset of the finance lease. It recognizes the net
investment in the lease as the entry value of the finance lease when initially measuring the finance
lease receivable.The net investment in lease is the sum of the present value of the unguaranteed residual value and
the unpaid lease receipts on the start date of the lease term discounted according to the interest rate
implicit in lease. The Group calculates and recognizes interest income for each period of the lease
term based on a fixed periodic interest rate. Variable lease payments not included in the
measurement of the net lease investment acquired by the Group are recognized in profit and loss for
the current period in which they are incurred.* Operating leases
The Group recognizes lease receipts from operating leases as rental income on a straight-line basis
during each period of the lease term.Initial direct costs incurred by the Group in relation to operating leases are capitalized as part of the
cost of the leased asset and are amortized over the lease term on the same basis as rental income is
recognized in profit and loss for the current period. Variable lease payments made by the Group in
relation to operating leases that are not included in the lease receivable are included in profit and
loss for the current period when they are actually incurred.If an operating lease changes the Group will regard it as a new lease for accounting treatment from
the effective date of the change. The advance receipt or the lease receivable related to the lease prior
to the change is recognized as the payment receivable of the new lease.
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27. Held for sale
The Group classifies a non-current asset or disposal group as held for sale when it is mainly
recovered through sale (including exchanges of non-monetary assets with commercial substance
the same hereafter) rather than through continued use and its carrying amount is expected to be
recovered.The Group classifies a non-current asset or disposal group as held for sale when it meets the
following conditions: a) It is available for immediate sale in its present condition in accordance
with the usual practices for sales of such assets or disposal groups; b) The sale is highly probable
with a decision made on a sale plan and a firm commitment from a buyer and the sale is expected
to be completed within one year. The sale requires approval from the relevant authorities or
supervisory department as stipulated by the applicable regulations. The Group reduces the carrying
amount of non-current assets or disposal groups (excluding financial assets deferred tax assets
investment properties measured at fair value and assets arising from employee compensation) to
the fair value less costs to sell if the carrying amount exceeds the net amount of fair value less costs
to sell. The amount of the reduction is recognized as an impairment loss and recorded in profit and
loss for the current period. At the same time an impairment provision for assets held for sale is
recognized.When the Group loses control over an investee due to the sale of an investment in a subsidiary
regardless of whether the Group retains a partial equity investment after the sale if the investment
in the subsidiary to be sold meets the criteria for classification as held for sale the entire investment
in the subsidiary is classified as held for sale in the individual financial statements of the parent
company. In the consolidated financial statements all assets and liabilities of the subsidiary are
classified as held for sale. If after subsequent balance sheet dates the fair value less costs to sell of
non-current assets held for sale increases the previously recognized impairment loss is reversed.The amount of the reversal is transferred from the impairment loss recognized for assets classified
as held for sale and the reversal amount is recognized in profit and loss for the current period.Impairment losses recognized before an asset is classified as held for sale will not be reversed.Non-current assets held for sale or non-current assets in the disposal group are not subject to
depreciation or amortization. Interest and other expenses of liabilities in the disposal group held for
sale shall still be recognized.When derecognizing non-current assets or disposal groups classified as held for sale any
unrecognized gains or losses are recognized in profit and loss for the current period.
28. Discontinued operations
Discontinued operation refers to a component of the Group that meets one of the following
conditions can be distinguished separately and has either been disposed of or classified as held for
sale: (1) The component represents a major separate business or a major geographical area of
operation; (2) The component is part of a plan to dispose of a major separate business or a major
geographical area of operation; (3) The component is a subsidiary acquired specifically for resale.In the income statement the Group adds “Net Profit from Continuing Operations” and “Net Profitfrom Discontinued Operations” under the “Net Profit” section reflecting the after-tax net amounts
for the profits and losses related to continuing operations and discontinued operations respectively.The profits and losses related to discontinued operations should be reported as discontinued
operations. The reported discontinued operations profits and losses include the entire Reporting
Period not just the period after the operations are classified as discontinued.
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29. Fair value measurement
The Group measures derivative financial instruments at fair value on each balance sheet date. Fair
value refers to the price that market participants will receive when selling an asset or need to pay
when transferring a liability in an orderly transaction on the measurement date.The assets and liabilities measured or disclosed at fair value in the financial statements are in line
with the lowest level of the input value that is important to fair value measurement as a whole to
determine the level of fair value. The first level of the input value means an unadjusted quoted price
in an active market for the same assets and liabilities available on the measurement date. The
second level of the input value is the directly or indirectly observable input value of related assets
and liabilities except for the first level of the input value. The third level of the input value is the
unobservable input value of related assets and liabilities.On each balance sheet date the Group re-assesses the assets and liabilities that are continuously
measured at fair value in the financial statements so as to determine whether the conversion occurs
at different levels of the fair value measurement.For financial instruments traded in active markets the Group determines their fair value based on
quoted prices in those markets. For financial instruments not traded in active markets the Group
uses valuation techniques to determine their fair value with the primary valuation model being the
discounted cash flow model. The inputs for valuation techniques mainly include: for debt
instruments the risk-free interest rate credit spread and liquidity premium; for equity instruments
the valuation multiple and liquidity discount.The fair value of Level 3 inputs is determined based on the Group’s assessment models such as the
discounted cash flow model. The Group also considers the initial transaction price recent
transactions of identical or similar financial instruments or transactions of comparable financial
instruments with unrelated third parties. At the balance sheet date third-level financial assets
measured at fair value use significant unobservable inputs such as discount rates in the valuation.However their fair value is not significantly sensitive to reasonable changes in these significant
unobservable inputs.
30. Other significant accounting policies and accounting estimates
Hedge accounting:
For the hedge accounting method the Group’s hedging is primarily for cash flow hedges.At the inception of the hedge relationship the Group formally designates the hedge relationship and
prepares formal written documentation regarding the hedge relationship risk management
objectives and risk management strategies. The documentation specifies the hedging instrument
the hedged item the nature of the hedged risk and the Group’s method for assessing hedge
effectiveness. Hedge effectiveness refers to the extent to which the change in the fair value or cash
flows of the hedging instrument offsets the change in the fair value or cash flows of the hedged item
caused by the hedged risk. Such hedging relationships are continuously assessed to ensure they
meet the hedge effectiveness requirements at both the initial designation date and throughout the
subsequent periods.If the hedging instrument expires is sold the contract is terminated or is exercised (with extensions
or replacements that are part of the hedging strategy not considered as expiration or termination) or
if the risk management objectives change causing the hedge relationship to no longer meet the risk
management objectives or if the hedge no longer satisfies the other conditions for hedge accounting
the Group will discontinue hedge accounting.
158Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
If a hedging relationship no longer meets the hedge effectiveness requirements due to changes in
the hedge ratio but the risk management objective for the hedging relationship remains unchanged
the Group will rebalance the hedging relationship.When the conditions for hedge accounting are met the following treatment is applied:
a) Cash flow hedges
The portion of the gains or losses on the hedging instrument that is considered effective is
recognized directly in other comprehensive income while the portion that is considered ineffective
is recognized in profit and loss for the current period.If the expected transaction being hedged is subsequently recognized as a non-financial asset or non-
financial liability or if the expected transaction forming a commitment for a fair value hedge of a
non-financial asset or non-financial liability is recognized the amount of the cash flow hedge
reserve previously recognized in other comprehensive income is reclassified and included in the
initial carrying amount of the asset or liability. For the remaining cash flow hedges when the
hedged expected cash flows impact profit or loss in the same period such as when the expected
sales occur the cash flow hedge reserve recognized in other comprehensive income is reclassified
and recognized in profit and loss for the current period.When the Group discontinues hedge accounting for cash flow hedges if the expected future cash
flows of the hedged item are still expected to occur the amount previously recognized in other
comprehensive income is not reclassified until the expected transaction actually occurs or the
commitment is fulfilled. If the expected future cash flows of the hedged item are no longer expected
to occur the accumulated cash flow hedge reserve should be reclassified from other comprehensive
income to profit and loss for the current period.
31. 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 2025
□ Applicable□Not applicable
VI. Taxation
1. Main taxes and tax rate
Category of taxes Tax basis Tax rate
Value added tax Value added 13%/9%/6%
City maintenance & construction Amount of turnover tax
tax payable 7 %/ 5 %
Enterprise income tax Income tax payable 25%/22.5%/16.5%/15%/9%/8.25%
Educational surcharge Amount of turnover taxpayable 3%
Local educational surcharge Amount of turnover taxpayable 2%
Disclosure of information on taxable entities with different corporate income tax rates
Taxpayer Enterprise income tax rate
159Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Taxpayer Enterprise income tax rate
Kunming Chuan Jin Nuo Chemical Co. Ltd. 15%
Kunming Jingcui Engineering Technology Co. Ltd. 25%
Guangxi Chuan Jin Nuo Chemical Co. Ltd. 9%
Kunming Heliwan Industrial Solid Waste Treatment Co. Ltd. 25%
Guangxi Chuan Jin Nuo New Energy Co. Ltd. 25%
Yunnan Xinshenghai International Trade Co. Ltd. 25%
Yingkou Chuan Xin Nuo High Technology Co. Ltd. 25%
Chuan Jin Nuo Hong Kong Co. Ltd. 8.25 %/16.5 %
Chuan Jin Nuo International Co. Ltd. 8.25 %/16.5 %
Egypt Chuan Jin Nuo Chemical Co. Ltd. 22.5%
Chuan Jin Nuo Middle East International Holding Co. Ltd. 22.5%
2. Tax benefits
1) According to the Ministry of Finance and the State Taxation Administration’s C.S. [2001] No.
121 Notice on Exemption of Value-Added Tax for Feed Products the Company’s product feed
grade dicalcium phosphate is exempt from value-added tax and enjoys the VAT exemption policy.
2) According to the Ministry of Finance and the State Taxation Administration’s G.S.H. [2007] No.
10 Notice on VAT Policy for Feed Grade Monocalcium Phosphate Products the Company’s
product Feed grade monocalcium phosphate is exempt from value-added tax and enjoys the VAT
exemption policy.
3) According to the S.W.H. [2016] No. 31 the State Council Tariff and Tax Commission’s Notice on
2017 Tariff Adjustment Plan the customs duty on goods exported by the Group is adjusted to a zero
tariff rate.
4) The Company and its subsidiary Guangxi Chuan Jin Nuo Chemical meet the criteria for tax
incentives under the Western Development Policy and pay corporate income tax at a preferential
rate of 15%.
5) According to the stipulations of Guizhengfa [2020] No. 42 Notice of the People’s Government of
Guangxi Zhuang Autonomous Region on Promoting High-level Opening and High-quality
Development of the Beibu Gulf Economic Zone in the New Era Guangxi Chuan Jin Nuo Chemical
which is newly registered and established in the economic zone is recognized as a high-tech
enterprise or an enterprise eligible for national preferential tax policies for the development of the
western region. From the tax year when the first main business income is obtained (i.e. starting
from 2021) the local share portion of corporate income tax (i.e. 6%) is exempted for five years.
6) According to the Ministry of Finance and the State Taxation Administration’s [2023] No. 43
Announcement on VAT Policy for Advanced Manufacturing Enterprises the Company and its
subsidiary Guangxi Chuan Jin Nuo Chemical meet the conditions for advanced manufacturing and
from January 1 2023 to December 31 2027 will be eligible to offset VAT payable by 5% of the
current deductible input VAT.VII. Notes to main items of consolidated financial statements
1. Monetary funds
Unit: RMB
Item Closing balance Opening balance
Bank deposits 853567907.41 378787894.98
Other monetary funds 26769770.01 357641571.18
Total 880337677.42 736429466.16
Including: Total funds deposited outside China 92148242.90
Other notes:
160Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.For details on the Company’s restricted bank deposits refer to Note “VII 16. Assets withownership or usage rights restricted.”
2. Derivative financial assets
Unit: RMB
Item Closing balance Opening balance
Hedging instruments - forward foreign exchange contracts 4329785.08
Total 4329785.08
Other notes:
3. Notes receivable
(1) Notes receivable listed by category
Unit: RMB
Item Closing balance Opening balance
Banker’s acceptance 129417984.60 115148915.93
Total 129417984.60 115148915.93
(2) Disclosure by withdrawal methods for bad debts
Unit: RMB
Closing balance Opening balance
Category Book balance Bad debt provisionProvision Carrying
Book balance Bad debt provision
Amount Proportion Amount percentage amount Amount Proportion Amount
Provision Book value
percentage
Including:
Notes
receivable
of bad
debt 129417984.60 100.00% 129417984.60 115148915.93 100.00% 115148915.93
provision
by
portfolio
Where:
Bank
acceptance 129417984.60 100.00% 129417984.60 115148915.93 100.00% 115148915.93
bill
Total 129417984.60 100.00% 129417984.60 115148915.93 100.00% 115148915.93
Bad debt provision by portfolio: 0
Unit: RMB
Name Closing balanceBook balance Bad debt provision Provision percentage
Bank acceptance bill 115148915.93
Total 115148915.93
Notes to the determination basis for the group:
If adopting the general mode of expected credit loss to withdraw bad debt provision of notes
receivable:
□ Applicable□Not applicable
(3) Bad debt provision withdrawal reversed or recovered in the current period
□ Applicable□Not applicable
161Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
(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 Derecognized amount at the end of the Non-derecognized amount at the end ofReporting Period the Reporting Period
Banker’s acceptance 117411304.07
Total 117411304.07
4. Accounts receivable
(1) Disclosure by aging
Unit: RMB
Aging Closing book balance Opening book balance
Within one year (inclusive) 121353997.01 144491865.32
Among which: Within six months 121353997.01 144017461.17
Six months to one year 474404.15
One to two years 203722.96 1370000.00
Two to three years 1320000.00
Above three years 1202840.16
Three to four years 804.33
Over five years 1202035.83
Total 122877719.97 147064705.48
(2) Disclosure by withdrawal methods for bad debts
Unit: RMB
Closing balance Opening balance
Category Book balance Bad debt provision Carrying Book balance Bad debt provision
Amount Proportion Amount Provision Provision Book valuepercentage amount Amount Proportion Amount percentage
Including:
Accounts
receivable
of bad
debt 122877719.97 100.00% 2635401.45 2.14% 120242318.52 147064705.48 100.00% 3375455.19 2.30% 143689250.29
provision
by
portfolio
Where:
Incl.:
Aging 122877719.97 100.00% 2635401.45 2.14% 120242318.52 147064705.48 100.00% 3375455.19 2.30% 143689250.29
portfolio
Total 122877719.97 100.00% 2635401.45 2.14% 120242318.52 147064705.48 100.00% 3375455.19 2.30% 143689250.29
Unit: RMB
Name Closing balanceBook balance Bad debt provision Provision percentage
Within six months 121353997.01 1213539.97 1.00%
Six months to one year 10.00%
One to two years 203722.96 101861.48 50.00%
More than two years 1320000.00 1320000.00 100.00%
Total 122877719.97 2635401.45
Notes to the determination basis for the group:
If adopting the general mode of expected credit loss to withdraw bad debt provision of accounts
receivable:
□ Applicable□Not applicable
162Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
(3) Bad debt provision withdrawal reversed or recovered in the current period
Withdrawal of bad debt provision in the current period:
Unit: RMB
Change in the current period
Category Opening balance Provision Reversed orrecovered Write-offs Others
Closing balance
Bad debt
provision 3375455.19 3013826.98 2568696.57 1185184.15 2635401.45
Total 3375455.19 3013826.98 2568696.57 1185184.15 2635401.45
Including: Significant amount of bad debt provision recovered or reclassified in the current period:
Unit: RMB
Name of the entity Amount recovered Reason for Recovery Basis for determining the bad debt provisionor reclassified reclassification method percentage and its reasonableness
Midgulf International Ltd. 510271.30 Payment Bankrecovered transfer Provision based on aging analysis
Total 510271.30
(4) Accounts receivable written-off in the current period
Unit: RMB
Item Written-off amount
Written-off accounts receivable 1185184.15
(5) Top 5 of the closing balance of the accounts receivable and the contract assets collected
according to arrears party
Unit: RMB
Closing
Proportion balance of
to total bad debt
Closing closing provision of
Name of the entity Closing balance of balance of Closing balance of accounts
balance of accounts
accounts receivable contract receivable and contract assets accounts receivable
assets receivable andand impairment
contract provision for
assets contract
assets
Yunnan Yuneng New
Energy Battery Material 15790016.85 15790016.85 12.85% 157900.17
Co. Ltd.Siam Java Trading Co.Ltd 13837872.69 13837872.69 11.26% 138378.73
Guangxi Shidai Xinneng
Lithium Battery Material 10011563.60 10011563.60 8.15% 100115.64
Technology Co. Ltd.Chongqing Chuandong
Chemical (Group) Co. 7456624.88 7456624.88 6.07% 74566.25
Ltd.NUTRECO
NEDERLAND B.V. 5706141.50 5706141.50 4.64% 57061.42
Total 52802219.52 52802219.52 42.97% 528022.21
Note: As of the disclosure date of this Report all the above amounts have been fully recovered.
163Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
5. Receivables financing
(1) Receivables financing listed by category
Unit: RMB
Item Closing balance Opening balance
Bank acceptance bill 90300965.46 73237761.38
Total 90300965.46 73237761.38
(2) Disclosure by withdrawal methods for bad debts
Unit: RMB
Closing balance Opening balance
Category Book balance Bad debt provision Carrying Book balance Bad debt provision
Amount Proportion Amount Provisionpercentage amount Amount Proportion Amount
Provision Book value
percentage
Including:
Bad debt
provision by 90300965.46 100.00% 90300965.46 73237761.38 100.00% 73237761.38
portfolio
Where:
Of which:
Accounts
receivable for
which bad
debt
provisions are 90300965.46 100.00% 90300965.46 73237761.38 100.00% 73237761.38
made based
on expected
credit risk
combinations
Total 90300965.46 100.00% 90300965.46 73237761.38 100.00% 73237761.38
Bad debt provision by portfolio: 0
Unit: RMB
Name Closing balanceBook balance Bad debt provision Provision percentage
Bank acceptance bill 90300965.46
Total 90300965.46
(3) Receivables financing 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 Derecognized amount at the end of the Non-derecognized amount at the end ofReporting Period the Reporting Period
Bank acceptance bill 204354828.10
Total 204354828.10
6. Other receivables
Unit: RMB
Item Closing balance Opening balance
Other receivables 27872559.68 20591018.12
Total 27872559.68 20591018.12
(1) Other receivables
1) Other receivables classified by nature
Unit: RMB
164Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Nature Closing book balance Opening book balance
Trading funds 31433714.07 34461437.41
Margin and deposit 16206714.48 2808925.00
Advances on behalf of others 1368398.31 1327386.23
Payment for equity transfer 1000000.00
Reserve fund 275638.11
Others 1300.00 4800.00
Total 49010126.86 39878186.75
2) Disclosure by aging
Unit: RMB
Aging Closing book balance Opening book balance
Within one year (inclusive) 15909087.79 3098524.34
One to two years 351400.00 35605588.00
Two to three years 32333714.07 157551.00
Over three years 415925.00 1016523.41
Three to four years 140825.00 260600.00
Four to five years 258400.00 16800.00
Over five years 16700.00 739123.41
Total 49010126.86 39878186.75
3) Disclosure by withdrawal methods for bad debts
□Applicable □ Not applicable
Unit: RMB
Closing balance Opening balance
Category Book balance Bad debt provision Carrying Book balance Bad debt provision
Provision amount Book valueAmount Proportion Amount percentage Amount Proportion Amount
Provision
percentage
Bad debt
provision
by single 18297500.00 37.33% 17297500.00 94.53% 1000000.00 17061437.41 42.78% 17061437.41 100.00%
item
Where:
For
individually
significant
amounts
the bad
debt 18297500.00 37.33% 17297500.00 94.53% 1000000.00 16912847.27 42.41% 16912847.27 100.00%
provision is
made on an
individual
basis
148590.140.37%148590.14100.00%
Bad debt
provision 30712626.86 62.67% 3840067.18 12.50% 26872559.68 22816749.34 57.22% 2225731.22 9.75% 20591018.12
by portfolio
Where:
Aging
portfolio 30712626.86 62.67% 3840067.18 12.50% 26872559.68 22816749.34 57.22% 2225731.22 9.75% 20591018.12
Total 49010126.86 100.00% 21137567.18 27872559.68 39878186.75 100.00% 19287168.63 20591018.12
Bad debt provision separately accrued: 17297500.00
Unit: RMB
Opening balance Closing balance
Name
Book balance Bad debt Book balance Bad debt Provision Reasons for theprovision provision percentage provision
Hubei Qianyuan 16297500.00 16297500.00 16297500.00 16297500.00 100.00% Irrecoverable as
165Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
New Material projected
Co. Ltd.Kunming
Xunhechuan 615347.27 615347.27 Irrecoverable as
Mining Co. Ltd. projected
Xiamen
Xiangbo Partial recovery
Technology Co. 2000000.00 1000000.00 50.00% expected
Ltd.Miscellaneous 148590.14 148590.14 Irrecoverable ascustomers projected
Total 17061437.41 17061437.41 18297500.00 17297500.00
Withdrawal of bad debt provision by group: 3840067.18
Unit: RMB
Closing balance
Name
Book balance Bad debt provision Provision percentage
Within one year (inclusive) 15909087.79 795454.37 5.00%
One to two years 351400.00 35140.00 10.00%
Two to three years 14036214.07 2807242.81 20.00%
Three to four years 140825.00 56330.00 40.00%
Four to five years 258400.00 129200.00 50.00%
Over five years 16700.00 16700.00 100.00%
Total 30712626.86 3840067.18
Notes to the determination basis for the group:
Withdrawal of bad debt provision by adopting the general mode of expected credit loss:
Unit: RMB
Phase I Phase II Phase III
Expected credit loss Expected credit loss
Bad debt provision Expected credit loss for during the whole during the whole Total
the next 12 months outstanding maturity outstanding maturity(without credit (with credit impairment
impairment loss) loss)
Balance as of January 1
20252225731.2217061437.4119287168.63
Balance as of January 1
2025 in the current
period
--Transfer to stage III -200000.00 200000.00
Provision in the current
period 2118499.43 800000.00 2918499.43
Reclassification in the
current period 304163.47 6047.98 310211.45
Write-off in the current
period 757889.43 757889.43
Balance on December
3120253840067.1817297500.0021137567.18
Basis of classification of stages and bad debt provision percentage
Changes of book balance with significant amount changed of loss provision in the current period
□Applicable □ Not applicable
There was a significant change in the book balance of other receivables affecting the loss provision
this year with an addition of RMB9131940.11 causing the book balance to increase by 23%
correspondingly leading to an increase in the expected credit loss for the entire term.
166Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
4) Bad debt provision withdrawal reversed or recovered in the current period
Withdrawal of bad debt provision in the current period:
Unit: RMB
Change in the current period
Category Opening balance Closing balance
Provision Reversed or Charged-recovered off/Verification Others
Bad debt
provision 19287168.63 2918499.43 310211.45 757889.43 21137567.18
Total 19287168.63 2918499.43 310211.45 757889.43 21137567.18
5) Other receivables with actual verification during the current period
Unit: RMB
Item Written-off amount
Other receivables with actual verification 757889.43
Including: Write-off of significant other receivables:
Unit: RMB
Name of the Nature of other Written-off Reasons for Write-off procedures Whether the accounts arise
entity receivables amount write-off performed from related party transactions
Long-term
Kunming outstanding Execute internal
Xunhechuan Trading funds 609299.29 accounts that approval process for No
Mining Co. Ltd. cannot be bad debt write-off
recovered
Total 609299.29
Notes to the write-off of other receivables:
6) Top 5 of the closing balance of the other receivables collected according to the arrears
party
Unit: RMB
Name of the entity Nature Closing
Proportion to total
Aging closing balance of Closing balance ofbalance other receivables % bad debt provision
Hubei Qianyuan New Material Two to
Co. Ltd. Trading funds 16297500.00 three years 33.25% 16297500.00
ZhongKe Lithium Battery
New Energy Co. Ltd. Trading funds 13136214.07
Two to
three years 26.80% 2627242.81
ELSEWEDY FOR
INDUSTRIAL Margin and 11778589.48 Within one 24.03% 588929.45
DEVELOPMENT deposit year
Within one
Huitong Logistics Margin and 2200000.00 year two(Fangchenggang) Co. Ltd deposit to three 4.49% 245000.00
years
Xiamen Xiangbo Technology
Co. Ltd. Trading funds 2000000.00
Two to
three years 4.08% 1000000.00
Total 45412303.55 92.65% 20758672.26
7. Prepayments
(1) Prepayments listed by aging analysis
Unit: RMB
Aging Closing balance Opening balance
167Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Amount Proportion Amount Proportion
Within one year 74866329.11 99.19% 26143494.38 97.80%
One to two years 84385.24 0.11% 40932.19 0.15%
Two to three years 35932.18 0.05% 489784.60 1.83%
Over three years 488552.84 0.65% 59546.24 0.22%
Total 75475199.37 26733757.41
Notes to the reasons for the prepayments aging over one year with significant amount but failed
settled in time:
(2) Top 5 prepayment in closing balance collected according to the prepayment target
Name of the entity Closing balance The proportion (%) of the year-end balance ofprepayments to the total balance
Nanning Customs District P.R. China 8805910.71 11.67
Yunnan Chihong Zn & Ge Co. Ltd. 7207587.26 9.55
Guangxi Jinchuan Nonferrous Metals Co. Ltd. 5178841.78 6.86
MISR PHOSPHATE COMPANY 4644809.51 6.15
Guangzhou Sales Branch of PetroChina Fuel Oil
Company Limited 4568713.60 6.05
Total 30405862.86 40.28
Other notes:
8. Inventory
Whether the Company needs to comply with the disclosure requirements for the real estate industry
No
(1) Category of inventory
Unit: RMB
Closing balance Opening balance
Falling price Falling price
reserves or reserves or
Item provision for provision for
Book balance impairment on Book value Book balance impairment on Book value
contract contract
performance performance
cost cost
Raw materials 266023512.81 2898402.19 263125110.62 290134422.75 2896428.19 287237994.56
Work-in-process 166180209.13 702345.54 165477863.59 173649904.29 702345.54 172947558.75
Commodities in
stock 391750296.27 15739321.12 376010975.15 168892715.01 13678354.07 155214360.94
Contract
performance 8908588.92 8908588.92 4114968.56 4114968.56
costs
Shipped
commodities 5627139.76 5627139.76 12041426.52 12041426.52
Packaging
material 5081972.54 5081972.54 5627996.70 5627996.70
Materials in
transit 32496070.75 32496070.75 41009372.11 41009372.11
Total 876067790.18 19340068.85 856727721.33 695470805.94 17277127.80 678193678.14
(2) Falling price reserves of inventory and impairment reserves for contract performance
costs
Unit: RMB
Item Opening balance Increase amount of the currentperiod Decrease in the current period Closing balance
168Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Accrual Others Reclassificationor charge-off Others
Raw materials 2896428.19 1974.00 2898402.19
Work-in-process 702345.54 702345.54
Commodities in
stock 13678354.07 2060967.05 15739321.12
Total 17277127.80 2062941.05 19340068.85
Criteria for setting aside provision for inventories impairment by portfolio
Basis for provision
Item for inventory write- Basis for recognition of net realizable value
down
For materials that can be directly sold their net realizable value is determined based on the
Raw Book cost exceeds net estimated selling price of the inventory less estimated sales expenses and related taxes.materials realizable value For materials that need to be processed their net realizable value is determined based onthe estimated selling price of the finished products less the costs to be incurred until
completion estimated sales expenses and related taxes.Work-in- Book cost exceeds net The net realizable value of the inventory is determined based on the estimated selling price
process realizable value of the finished products less the costs to be incurred until completion estimated salesexpenses and related taxes.Commodities Book cost exceeds net The net realizable value of the inventory is determined based on the estimated selling
in stock realizable value price less estimated sales expenses and related taxes.
(3) Notes to the Closing balance of inventories including capitalized borrowing expense
The closing balance of inventory does not include the amount of capitalized borrowing costs.
(4) Amortization amount of contract performance cost during the current period
The opening balance of contract performance cost was RMB4114968.56 with an occurrence of
RMB178443887.26 during the current period. Amortization based on product sales amounts to
RMB173650266.90 with an ending balance of RMB8908588.92.
9. Other current assets
Unit: RMB
Item Closing balance Opening balance
Value-added tax input tax to be deducted 17859221.19 15663707.80
Amortization of low-value consumables 8556116.36 3231358.02
Prepaid income tax 104799.98
Total 26520137.53 18895065.82
Other notes:
10. Fixed assets
Unit: RMB
Item Closing balance Opening balance
Fixed assets 1352145779.54 1389503456.07
Total 1352145779.54 1389503456.07
(1) List of fixed assets
Unit: RMB
Item Properties and Machinery and Transportation
Electronic
buildings equipment vehicle equipment and Totalothers
I. Original carrying
value:
169Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Electronic
Item Properties and Machinery and Transportationbuildings equipment vehicle equipment and Totalothers
1. Opening balance 999561827.89 1131063307.13 28776923.52 18130159.43 2177532217.97
2. Increase in the
current period 38620760.13 57290728.15 6581392.30 1613935.87 104106816.45
(1) Purchase 5999994.89 6581392.30 1495460.65 14076847.84
(2) Transfer-in of
construction in progress 38620760.13 51290733.26 118475.22 90029968.61
(3) Increase for
business combination
3. Decrease in the
current period 1450084.94 751071.71 6307508.22 8508664.87
(1) Disposal or write-
off 1450084.94 751071.71 6307508.22 8508664.87
4. Closing balance 1038182588.02 1186903950.34 34607244.11 13436587.08 2273130369.55
II. Accumulated
Depreciation
1. Opening balance 172162888.94 580145315.52 18748654.89 13286397.76 784343257.11
2. Increase in the
current period 48828241.65 85208320.19 4153810.49 2137368.20 140327740.53
(1) Provision 48828241.65 85208320.19 4153810.49 2137368.20 140327740.53
3. Decrease in the
current period 891613.77 543195.11 5937103.54 7371912.42
(1) Disposal or write-
off 891613.77 543195.11 5937103.54 7371912.42
4. Closing balance 220991130.59 664462021.94 22359270.27 9486662.42 917299085.22
III. Provision for
impairment
1. Opening balance 3685504.79 3685504.79
2. Increase in the
current period
(1) Provision
3. Decrease in the
current period
(1) Disposal or write-
off
4. Closing balance 3685504.79 3685504.79
IV. Carrying value
1. Closing book value 817191457.43 518756423.61 12247973.84 3949924.66 1352145779.54
2. Opening book value 827398938.95 547232486.82 10028268.63 4843761.67 1389503456.07
(2) List of temporarily idle fixed assets
Unit: RMB
Provision for
Item Original carrying Accumulatedvalue depreciation impairment Carrying amount Noteslosses
Properties and 25749527.97 6296919.72 19452608.25 Idle out of productionbuildings and not in use
Machinery 18609265.72 9012597.13 3685504.79 5911163.80 Discontinued and unusedproduction
Transportation tools 7320.52 7320.52 Discontinued and unusedproduction
Electronic devices and
others 54395.96 10637.52 43758.44
Discontinued and unused
production
170Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
(3) Fixed assets failed to accomplish certification of property
Unit: RMB
Item Carrying amount Reason
Phosphoric Acid Concentration Plant 11318195.48 Completion settlement not yet handled
Main Sodium Fluorosilicate Plant 7632589.49 Completion settlement not yet handled
Phase II Shift Building 4603950.64 Completion settlement not yet handled
Phase II Comprehensive Building 4262833.27 Completion settlement not yet handled
110KV Substation 3519832.50 Completion settlement not yet handled
Comprehensive Building of Phosphoric Acid
Workshop 2894684.27 Completion settlement not yet handled
Comprehensive Building of Boiler Thermal
Power Workshop 1595628.32 Completion settlement not yet handled
Other notes:
(4) Impairment test of fixed assets
□ Applicable□Not applicable
11. Construction in progress
Unit: RMB
Item Closing balance Opening balance
Construction in progress 197565349.04 182720961.41
Construction materials 8308953.09 4093733.85
Total 205874302.13 186814695.26
(1) List of construction in progress
Unit: RMB
Closing balance Opening balance
Provision Provision
Item Book balance for Carrying Book balance forimpairment amount impairment Book value
losses losses
100000 tonnes/year battery-
grade lithium iron phosphate
precursor material (iron 81541753.58 81541753.58 108061460.35 108061460.35
phosphate) project
100000 tonnes/year battery-
grade lithium iron phosphate 15459121.86 15459121.86 14931800.13 14931800.13
project
1 million tonnes per year
phosphogypsum harmless 27503116.94 27503116.94 6773938.62 6773938.62
treatment and renovation project.The 300000 tonnes per year
building gypsum powder project
using semi-hydrated 3987508.82 3987508.82 3942225.80 3942225.80
phosphogypsum for
comprehensive utilization.The 100000 tonnes per year
sulfuric acid plant air pollution
control and environmental 48774151.34 48774151.34 3079429.57 3079429.57
improvement and equipment
upgrade project.The semi-hydrated
phosphogypsum-based cement 2195328.90 2195328.90 2195328.90 2195328.90
retardant project.New raw and auxiliary material
warehouse food-grade purified 5126072.30 5126072.30
phosphoric acid warehouse
Phosphoric acid capacity 35952003.61 35952003.61
171Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Closing balance Opening balance
Provision Provision
Item Book balance for Carrying forimpairment amount Book balance impairment Book value
losses losses
expansion and technological
upgrading
Others 12978295.30 12978295.30 7784774.43 7784774.43
Total 197565349.04 197565349.04 182720961.41 182720961.41
172Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
(2) Changes in significant construction in progress during the current period
Unit: RMB
Other ProportionAmount of of Of which:
Increase transfer into decreased accumulated Accumulated Amount of
Capitalization
Item Budget Opening amount of the fixed assets in amount Closing investment Project amount of interest
rate of Source
balance interests for ofcurrent period the current for the balance in progress interest capitalization
period current constructions capitalization in the current
the current Fund
period to budget period
period
100000
tonnes/year
battery-grade
lithium iron Self-
phosphate 800000000.00 108061460.35 9476003.82 35995710.59 81541753.58 14.69% 14.69% raised
precursor funds
material (iron
phosphate)
project
Phosphoric acid
capacity
expansion and 63627500.00 35952003.61 8816737.49 44768741.10 70.36% 100.00% Others
technological
upgrading
100000 Raised
tonnes/year funds
battery-grade
lithium iron 1300865100.00 14931800.13 557594.89 30273.16 15459121.86 1.19% 1.19%
and
self-
phosphate raised
project funds
1 million tonnes
per year
phosphogypsum Self-
harmless 39445000.00 6773938.62 20729178.32 27503116.94 69.73% 69.73% raised
treatment and funds
renovation
project
The 300000
tonnes per year
building gypsum Self-
powder project 33582600.00 3942225.80 45283.02 3987508.82 11.87% 11.87% raised
using semi- funds
hydrated
phosphogypsum
173Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Other ProportionAmount of of Of which: Capitalization
Opening Increase transfer into
decreased accumulated Accumulated Amount of
Item Budget amount Closing
rate of Source
balance amount of the fixed assets in for the balance investment
Project amount of interest
current period the current in progress interest capitalization
interests for of
period current constructions capitalization in the current
the current Fund
period period periodto budget
for
comprehensive
utilization
The 100000
tonnes per year
sulfuric acid
plant air
pollution control Self-
and 59300000.00 3079429.57 45694721.77 48774151.34 82.25% 82.25% raised
environmental funds
improvement
and equipment
upgrade project
The semi-
hydrated Self-
phosphogypsum- 12400000.00 2195328.90 2195328.90 17.70% 17.70% raised
based cement funds
retardant project
New raw and
auxiliary
material
warehouse Self-
food-grade 12350000.00 5126072.30 5126072.30 41.51% 41.51% raised
purified funds
phosphoric acid
warehouse
Total 2321570200.00 174936186.98 90445591.61 80794724.85 184587053.74
174Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
(3) Impairment test of construction in progress
□ Applicable□Not applicable
(4) Engineering materials
Unit: RMB
Closing balance Opening balance
Item Provision for Provision for
Book balance impairment Carrying amount Book balance impairment Book value
losses losses
Special
equipment 1947776.25 1947776.25 947368.89 947368.89
Special
materials 6361176.84 6361176.84 3146364.96 3146364.96
Total 8308953.09 8308953.09 4093733.85 4093733.85
Other notes:
12. Right-of-use assets
(1) List of right-of-use assets
Unit: RMB
Item Properties and buildings Machinery andequipment Total
I. Original carrying value
1. Opening balance 668155.43 668155.43
2. Increase in the current period 17026735.79 17026735.79
3. Decrease in the current period
4. Closing balance 668155.43 17026735.79 17694891.22
II. Accumulated depreciation
1. Opening balance 134754.15 134754.15
2. Increase in the current period 33688.56 5254425.78 5288114.34
(1) Provision 33688.56 5254425.78 5288114.34
3. Decrease in the current period
(1) Disposal
4. Closing balance 168442.71 5254425.78 5422868.49
III. Provision for impairment
1. Opening balance
2. Increase in the current period
(1) Provision
3. Decrease in the current period
(1) Disposal
4. Closing balance
IV. Carrying value
1. Closing book value 499712.72 11772310.01 12272022.73
2. Opening book value 533401.28 533401.28
(2) Impairment test of right-of-use assets
□ Applicable□Not applicable
175Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Other notes:
13. Intangible assets
(1) List of intangible assets
Unit: RMB
Item Land use right Patent right Unpatentedtechnology Computer software Total
I. Original carrying
value
1. Opening balance 181314064.23 3067659.32 184381723.55
2. Increase in the
current period 24115737.60 44247.79 24159985.39
(1) Purchase 24115737.60 44247.79 24159985.39
(2) Internal R&D
(3) Increase for
business
combination
3. Decrease in the
current period
(1) Disposal
4. Closing balance 205429801.83 3111907.11 208541708.94
II. Accumulated
amortization
1. Opening balance 15645811.79 2154887.54 17800699.33
2. Increase in the
current period 3517001.52 240369.88 3757371.40
(1) Provision 3517001.52 240369.88 3757371.40
3. Decrease in the
current period
(1) Disposal
4. Closing balance 19162813.31 2395257.42 21558070.73
III. Provision for
impairment
1. Opening balance
2. Increase in the
current period
(1) Provision
3. Decrease in the
current period
(1) Disposal
4. Closing balance
IV. Carrying value
1. Closing book
value 186266988.52 716649.69 186983638.21
2. Opening book
value 165668252.44 912771.78 166581024.22
The proportion of intangible assets formed through the Company’s internal research and
development at the end of the current period is 0.00% of the total intangible assets balance.
(2) Data resources recognized as intangible assets
□ Applicable□Not applicable
176Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
(3) Land use right failed to accomplish certification of property
Unit: RMB
Item Carrying amount Reason
Land use right 17450936.76 Awaiting processing of the new land useright certificate
Other notes:
(4) Impairment test of intangible assets
□ Applicable□Not applicable
14. Deferred income tax assets/deferred income tax liabilities
(1) Deferred income tax assets had not been off-set
Unit: RMB
Closing balance Opening balance
Item Deductible temporary Deductible temporary
differences Deferred tax assets differences Deferred tax assets
Provision for
impairment of assets 7036602.48 1055593.67 6175629.51 765537.15
Deductible losses 27312.97 6145.42
Lease liabilities 12344068.99 1851610.35 527267.73 79090.16
Others 741255.80 111188.37
Total 20149240.24 3024537.81 6702897.24 844627.31
(2) Deferred income tax liabilities had not been off-set
Unit: RMB
Closing balance Opening balance
Item Taxable temporary Deferred income tax Taxable temporary Deferred income tax
differences liabilities difference liabilities
One-time pre-tax deduction of
fixed assets 64937848.69 9745484.00 73797506.13 6661324.28
Right-of-use assets 12272022.73 1840803.41 533401.27 80010.18
Total 77209871.42 11586287.41 74330907.40 6741334.46
(3) List of unrecognized deferred income tax assets
Unit: RMB
Item Closing balance Opening balance
Deductible temporary differences 39173010.34 37449626.90
Deductible losses 31595501.00 21631195.15
Total 70768511.34 59080822.05
(4) Deductible losses of unrecognized deferred income tax assets will due in the following
years
Unit: RMB
Year Closing amount Opening amount Notes
20252759410.80
20262634035.162634035.16
20272850729.682850729.68
20281204078.321204078.32
202912182941.1912182941.19
203012723716.65
Total 31595501.00 21631195.15
177Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Other notes:
15. Other non-current assets
Unit: RMB
Closing balance Opening balance
Item Provision for Provision for
Book balance impairment Carrying amount Book balance impairment Book value
losses losses
Egypt project 226033985.27 226033985.27
Phosphogypsum
residue field 120160108.88 120160108.88 23500000.00 23500000.00
project
100000
tonnes/year
battery-grade
lithium iron 2326900.00 2326900.00 2824900.00 2824900.00
phosphate
project
Others 23030476.92 23030476.92 25632307.09 25632307.09
Total 371551471.07 371551471.07 51957207.09 51957207.09
Other notes:
16. Assets with restricted ownership or right of use
Unit: RMB
Period-end Period-beginning
Item Book balance Book value Type of Restrictionrestriction details Book balance Book value
Type of Restriction
restriction details
Letters of credit Term deposits
Monetary margin Term
letter of credit
funds 26769770.01 26769770.01 Frozen exchange lock- 357641571.18 357641571.18 Deposits
margin and
in frozen Frozen foreign
margin etc. exchange lock-in margin etc.Bank Bank
Endorsed acceptance bills acceptance bills
or that have been
Endorsed that have been
Notes 117411304.07 117411304.07 Discounted endorsed or
or endorsed or
receivable Not Yet discounted but
80577966.22 80577966.22 Discounted discounted but
Matured not yet
Not Yet not yet
derecognized at Matured derecognized at
year-end year-end.Intangible Long-term Long-term
assets 77987315.66 66289218.31 Mortgage loans secured 77987315.66 67848964.62 Mortgage loans securedby mortgages by mortgages
Total 222168389.74 210470292.39 516206853.06 506068502.02
Other notes:
17. Short-term loans
(1) Category of short-term loans
Unit: RMB
Item Closing balance Opening balance
Pledge loans 47303755.64 25507297.04
Mortgage loans 15000000.00
Guaranteed loan 415200000.00 310000000.00
Unsecured loan 59500113.66 5000000.00
Plus: Accrued interest 453580.53 229701.38
Total 537457449.83 340736998.42
178Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Notes to the classification of short-term loans:
* The Company signed a credit agreement with China Merchants Bank in 2024 stipulating a
credit period of 12 months from April 26 2024 to April 25 2025 with China Merchants Bank
providing a credit limit of RMB50 million. In 2025 the Company borrowed RMB50 million from
the Kunming Branch of China Merchants Bank Co. Ltd. As of December 31 2025 the outstanding
loan principal is RMB50 million.* The Company signed a credit agreement with China CITIC Bank in 2025 stipulating a credit
period of ten months from February 10 2025 to December 10 2025 with China CITIC Bank
providing a credit limit of RMB70 million. In 2025 the Company borrowed RMB9.5 million from
Kunming Branch of China CITIC Bank Corporation Limited. As of December 31 2025 the
outstanding loan principal was RMB9.5 million.* Guangxi Chuan Jin Nuo signed a credit agreement with Fangchenggang Rural Credit Union in
2024 stipulating a credit period of 36 months from December 9 2024 to December 8 2027 with
Fangchenggang Rural Credit Union providing a revolving credit limit of RMB50 million
guaranteed by Kunming Chuan Jin Nuo Chemical Co. Ltd. Guangxi Chuan Jin Nuo borrowed
RMB100 million from Fangchenggang Rural Credit Union in 2025 and RMB50 million of the
principal loan has been repaid in the current period. As of December 31 2025 the outstanding loan
principal was RMB50 million.* In 2025 Guangxi Chuan Jin Nuo signed a credit agreement with Nanning Minzhu Sub-branch
China Guangfa Bank Co. Ltd. stipulating a credit period of 36 months from January 5 2025 to
September 4 2025 with Nanning Minzhu Sub-branch China Guangfa Bank Co. Ltd. providing a
credit limit of RMB50 million guaranteed by Kunming Chuan Jin Nuo Chemical Co. Ltd. In 2025
Guangxi Chuan Jin Nuo borrowed RMB50million from Nanning Minzhu Sub-branch China
Guangfa Bank Co. Ltd. As of December 31 2025 the outstanding loan principal was RMB50
million.* Guangxi Chuan Jin Nuo signed a credit agreement with Nanning Branch of China Guangfa
Bank Co. Ltd. in 2025 stipulating a credit period from May 8 2025 to May 6 2026 with Nanning
Branch of China Guangfa Bank Co. Ltd. providing a credit limit of RMB240 million guaranteed
by Kunming Chuan Jin Nuo Chemical Co. Ltd. Guangxi Chuan Jin Nuo borrowed RMB50 million
from China Guangfa Bank Co. Ltd. Nanning in 2025. As of December 31 2025 the outstanding
loan principal was RMB50 million.* On April 14 2025 Guangxi Chuan Jin Nuo signed a guarantee loan contract with Nanning
Qingxiu Sub-branch Shanghai Pudong Development Bank Co. Ltd. with a loan amount of
RMB50 million and a term from April 14 2025 to April 14 2026. The principal is repaid in full at
maturity guaranteed by Kunming Chuan Jin Nuo Chemical Co. Ltd. As of December 31 2025 the
outstanding loan principal was RMB50 million.* In 2025 Guangxi Chuan Jin Nuo signed a credit agreement with Nanning Guiya Sub-branch of
the Bank of Communications agreeing on a credit period of one month from September 19 2025
to October 19 2025. Nanning Guiya Sub-branch of the Bank of Communications provided the
enterprise with a credit limit of RMB50 million guaranteed by Kunming Chuan Jin Nuo Chemical
Co. Ltd. In 2025 Guangxi Chuan Jin Nuo borrowed RMB50 million from Nanning Guiya Sub-
branch of the Bank of Communications. As of December 31 2025 the loan principal of RMB50
million has not yet been repaid.* Guangxi Chuan Jin Nuo Chemical signed a guarantee loan agreement with Qinzhou Sub-
branch Industrial Bank Co. Ltd. on August 15 2025 with a loan amount of RMB30 million. The
loan term is from August 15 2025 to August 14 2026 with repayment in a lump sum at maturity
179Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
guaranteed by Kunming Chuan Jin Nuo Chemical Co. Ltd.. As of December 31 2025 the
outstanding loan principal was RMB30 million.* On August 15 2025 Guangxi Chuan Jin Nuo signed a trust receipt agreement with Qinzhou
Sub-branch Industrial Bank Co. Ltd. with a loan amount of RMB32 million and a loan term from
October 21 2025 to April 20 2026 guaranteed by Kunming Chuan Jin Nuo Chemical Co. Ltd. As
of December 31 2025 the outstanding loan principal was RMB32 million.* On October 28 2025 Guangxi Chuan Jin Nuo signed a Cross-border Financing Risk
Cooperation Participation Agreement with Fangchenggang Branch China Construction Bank
Corporation and Tokyo Sub-branch China Construction Bank Corporation. Tokyo Sub-branch
China Construction Bank Corporation provided cross-border financing for Guangxi Chuan Jin Nuo
with a principal of RMB15 million and a financing period from October 28 2025 to October 28
2026 with principal and interest paid in full at maturity. The guarantee method is third-party
guarantee and real estate mortgage guaranteed by Kunming Chuan Jin Nuo Chemical Co. Ltd. and
Liu Meng. Guangxi Chuan Jin Nuo mortgaged land use rights (certificate number: Gui (2020)
Fangchenggang City Real Estate No. 0015838). As of December 31 2025 the outstanding loan
principal was RMB15 million.* On December 8 2025 Guangxi Chuan Jin Nuo signed a working capital loan contract with
Fangcheng Sub-branch of Guangxi Beibu Gulf Bank with a loan amount of RMB50 million and a
loan period from December 8 2025 to August 8 2026 with a lump sum repayment at maturity
guaranteed by Kunming Chuan Jin Nuo Chemical Co. Ltd. As of December 31 2025 the
outstanding loan principal was RMB50 million.* On September 19 2025 Guangxi Chuan Jin Nuo opened a domestic letter of credit with
Industrial Bank Co. Ltd. with Guangxi Zhiyuan Industrial Co. Ltd. as the beneficiary. The
expiration date is September 19 2026. As of December 31 2025 the amount under the letter of
credit that has not yet matured is RMB3.2 million.* On December 11 2025 Guangxi Chuan Jin Nuo signed a working capital loan contract with
Qinzhou Sub-branch Industrial Bank Co. Ltd. with a loan amount of RMB50 million and a loan
term from December 12 2025 to November 12 2026 guaranteed by Kunming Chuan Jin Nuo
Chemical Co. Ltd. As of December 31 2025 the outstanding loan principal was RMB50 million.* At the end of the period Guangxi Chuan Jin Nuo had discounted yet-to-mature bank
acceptance notes receivable not accepted by the “6+9” banks reclassified to short-term loans. As of
December 31 2025 the balance was RMB47303755.64.
18. Derivative financial liabilities
Unit: RMB
Item Closing balance Opening balance
Hedging instruments - forward foreign
exchange contracts 1050954.68
Total 1050954.68
19. Notes payable
Unit: RMB
Category Closing balance Opening balance
Bank acceptance bill 5000000.00
Total 5000000.00
180Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
20. Accounts payable
(1) List of accounts payable
Unit: RMB
Item Closing balance Opening balance
Materials and equipment procurement
payments 122252596.78 108139663.73
Project payments 69395895.79 47555392.56
Transportation expenses 19069071.74 31621448.17
Electricity charge 7649273.97 6283218.59
Others 1819468.49 3147138.28
Total 220186306.77 196746861.33
(2) Accounts payable with the account aging over one year or overdue
Unit: RMB
Item Closing balance Reason for non-repayment or carry-over
Sichuan Zhensheng Qianli Construction
Co. Ltd. 3930776.31 Not yet settled
Fangchenggang Minglonghui Concrete
Co. Ltd. 2470738.08 Not yet settled
Fangchenggang Dongwan Traffic
Commodity Concrete Co. Ltd. 1468703.27 Not yet settled
Guangxi Zhanbang New Materials Co.Ltd. 1425759.67 Not yet settled
Qinyang Zhongnan Anti-corrosion &
Insulation Co. Ltd. 823871.62 Not yet settled
Shenzhen Sanding Lithium Technology
Co. Ltd. 800633.63 Not yet settled
Yunnan Jinti Fluoroplastic Anticorrosive
Equipment Technology Co. Ltd. 705770.39 Not yet settled
Sichuan Jiangnan FRP Co. Ltd. 668664.16 Not yet settled
Yunnan Pengfeng Anti-corrosion &
Insulation Engineering Co. Ltd. 628488.45 Not yet settled
Sichuan Chengwang Construction
Engineering Co. Ltd. 514008.05 Not yet settled
Total 13437413.63
Other notes:
(3) Are there any overdue payments to SMEs
Is it a large enterprise
□Yes□No
21. Other payables
Unit: RMB
Item Closing balance Opening balance
Other payables 8115034.25 6419936.17
Total 8115034.25 6419936.17
(1) Other payables
1) Other payables listed by nature of account
Unit: RMB
Item Closing balance Opening balance
181Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Performance bond 2946450.00 1815700.00
Trading funds 848000.00 848000.00
Interest-free loan funds for government
support projects 400000.00 400000.00
Advance payment 797453.46 789674.45
Other amounts 3123130.79 2566561.72
Total 8115034.25 6419936.17
2) Significant other accounts payable aging over one year or overdue
Unit: RMB
Item Closing balance Reason for non-repayment or carry-over
Rongxing Electromechanical Business
Department Guandu District Kunming 506650.00 Not yet settled
City
Guangxi Qilin Trading Co. Ltd. 500000.00 Not yet settled
Guangxi Hengmeida Trading Co. Ltd. 500000.00 Not yet settled
Natural person with the surname Zhang 848000.00 Not yet settled
Total 2354650.00
Other notes:
22. Advances from customers
(1) List of advances from customers
Unit: RMB
Item Closing balance Opening balance
Advances on sales 74505.00 96443.78
Total 74505.00 96443.78
23. Contract liabilities
Unit: RMB
Item Closing balance Opening balance
Advances on sales 37031414.06 32084741.04
Total 37031414.06 32084741.04
24. Payroll payable
(1) List of payroll payable
Unit: RMB
Item Opening balance Increase in the current Decrease in the currentperiod period Closing balance
I. Short-term
remuneration 29653787.54 234267900.12 229129193.57 34792494.09
II. Post-employment
benefits-defined 16794085.22 16794085.22
contribution Plan
III. Termination benefits 772034.14 772034.14
Total 29653787.54 251834019.48 246695312.93 34792494.09
(2) List of short-term salary
Unit: RMB
Item Opening balance Increase in the current Decrease in the currentperiod period Closing balance
182Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
1. Salary bonus
allowance subsidy 28695105.45 200221341.40 195155579.69 33760867.16
2. Employee welfare 413759.41 13743743.32 13704854.02 452648.71
3. Social insurance 10826617.97 10826617.97
Including: Medical
insurance premiums 9718844.24 9718844.24
Work injury insurance
premiums 1102527.53 1102527.53
Maternity insurance
premiums 5246.20 5246.20
4. Housing fund 5125112.00 5125112.00
5. Labor-union
expenditure and
employee education 544922.68 4351085.43 4317029.89 578978.22
budget
Total 29653787.54 234267900.12 229129193.57 34792494.09
(3) List of defined contribution plans
Unit: RMB
Item Opening balance Increase in the current Decrease in the currentperiod period Closing balance
1. Basic endowment
insurance 16179413.20 16179413.20
2. Unemployment
insurance premiums 614672.02 614672.02
Total 16794085.22 16794085.22
Other notes:
25. Taxes payable
Unit: RMB
Item Closing balance Opening balance
VAT 9426467.91 3406919.06
Corporate income tax 27048416.22 6772411.67
Personal income tax 500223.06 711790.41
City maintenance & construction tax 638119.21 95061.71
Real estate tax 874777.38 790274.23
Stamp duty 728935.67 554700.00
Land use tax 509030.63 393463.49
Educational fee 273479.69 56567.74
Environmental protection tax 47483.56 53370.49
Local education surcharge 182319.81 37711.83
Water resource tax 44198.00
Renewable energy fund 126444.39
National major water conservancy
construction fund 7486.84
Others 97.56
Total 40407479.93 12872270.63
Other notes:
26. Non-current liabilities due within one year
Unit: RMB
Item Closing balance Opening balance
Long-term loans matured within one year 120263000.00 227500000.00
Long-term payables due within one year 87829390.07
183Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Lease liabilities matured within one year 9518208.08 25482.00
Plus: Interest payable due within one year 115781.89 214675.71
Total 217726380.04 227740157.71
Other notes:
27. Other current liabilities
Unit: RMB
Item Closing balance Opening balance
Bank acceptance bills endorsed but not
derecognized 70107548.43 55070669.18
Deferred output VAT 2963006.16 2754006.98
Total 73070554.59 57824676.16
28. Long-term loans
(1) Category of long-term loans
Unit: RMB
Item Closing balance Opening balance
Mortgaged borrowings 20000000.00 70000000.00
Unsecured loan 57987000.00 32000000.00
Plus: Interest payable on long-term loans 75610.42 118708.32
Total 78062610.42 102118708.32
* On December 12 2025 the Company signed a working capital loan contract with Kunming
Branch of Industrial Bank Co. Ltd. The loan for daily working capital turnover amounts to
RMB10 million with a loan period from December 12 2025 to December 12 2028. As of
December 31 2025 the outstanding loan principal is RMB10 million of which RMB463000 is
expected to be repaid within one year.* In 2025 the Company borrowed RMB84.5 million from Kunming Dongchuan District Sub-
branch Agricultural Bank of China Limited. RMB30.25 million has already been repaid in the
current period. A principal of RMB28 million borrowed in 2022 was repaid the current period and
RMB11.5 million borrowed in 2023 was repaid the current period. As of December 31 2025
RMB78.25 million of the loan remains unpaid of which RMB29.8 million is expected to be repaid
within one year.* Guangxi Chuan Jin Nuo Chemical Co. Ltd. signed a fixed asset loan agreement with
Fangchenggang Branch China Construction Bank on July 1 2021 for the construction of the wet-
process phosphoric acid purification and fine phosphate project including but not limited to the
replacement of fixed asset loans from Guangxi Beibu Gulf Bank. The loan amount is RMB250
million with an interest rate of LPR plus basis points and the loan term is six years The Company
uses the land use rights (certificate No.: Gui (2020) Fangchenggang City Real Estate No. 0015838)
as collateral with CJN and the Company’s de facto controller Liu Meng providing a guarantee. As
of December 31 2025 the outstanding loan principal is RMB70 million of which RMB50 million
is expected to be repaid within one year.* In 2025 Guangxi Chuan Jin Nuo Chemical Co. Ltd. signed a working capital loan contract
with the Fangchenggang Branch China Construction Bank to pay for the cost of purchasing
phosphate concentrates industrial sulfuric acid and other raw materials. The loan amount is
RMB50 million with a loan period from July 10 2025 to August 10 2026. As of December 31
2025 the outstanding loan amount is RMB40 million with all the principal expected to be repaid
within one year.
184Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
29. Lease liabilities
Unit: RMB
Item Closing balance Opening balance
Lease payments 12761371.25 741666.67
Unrecognized financing expense -417302.26 -214398.94
Reclassified to non-current liabilities due
within one year -9518208.08 -25482.00
Total 2825860.91 501785.73
Other notes:
30. Long-term payables
Unit: RMB
Item Closing balance Opening balance
Long-term payables 75519278.16
Total 75519278.16
(1) Long-term payables listed by nature
Unit: RMB
Item Closing balance Opening balance
Payment in installments for the Egypt project land 59639461.76
Loan and interest from partners in the Egypt project 15879816.40
Other notes:
31. Share capital
Unit: RMB
Change this time (+ -)
Shares as
Opening balance Newshares dividend Capitalization of Others Subtotal Closing balance
issued converted reservesfrom profit
Total shares 274867523.00 274867523.00
Other notes:
32. Capital reserves
Unit: RMB
Item Opening balance Increase in the Decrease in thecurrent period current period Closing balance
Capital premium (Share premium) 1282067110.26 1282067110.26
Total 1282067110.26 1282067110.26
Other notes including notes to the changes in the current period and reasons for the changes:
33. Other comprehensive income
Unit: RMB
Item Opening Amount accounted for in the current period Closing
balance balance
185Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Less: Amount Less: Amount
recognized as recognized as
Amount other other
before comprehensive comprehensive
deducting income in the income in the
Less: Attributable Attributable
Income to the parent minority
income tax previous period previous period
for the and transferred and transferred
tax company shareholders
to profits and to retained expense after tax after taxcurrent period losses in the earnings in the
Reporting Reporting
Period Period
II. Other
Comprehensive
income that may
subsequently be -1029646.03 4855304.04 4671501.76 183802.28 3641855.73
reclassified to
profit or loss
Cash flow
hedging reserve -1029646.03 5380739.76 5181243.04 199496.72 4151597.01
Exchange
difference on
translation of
financial -525435.72 -509741.28 -15694.44 -509741.28
statements in
foreign currency
Total of other
comprehensive -1029646.03 4855304.04 4671501.76 183802.28 3641855.73
income
Other notes including the reclassification of effective portion of cash flow hedge reserves to adjust
the initial carrying amount of the hedged item:
34. Specific reserve
Unit: RMB
Item Opening balance Increase in the current Decrease in the currentperiod period Closing balance
Safety production fund 496474.63 17040607.69 15561590.21 1975492.11
Total 496474.63 17040607.69 15561590.21 1975492.11
Other notes including notes to the changes in the current period and reasons for the changes:
35. Surplus reserves
Unit: RMB
Item Opening balance Increase in the current Decrease in the currentperiod period Closing balance
Statutory surplus
reserves 92691401.81 27100184.24 119791586.05
Total 92691401.81 27100184.24 119791586.05
Notes to surplus reserves including notes to changes in the current period and reasons for such
change:
36. Undistributed profit
Unit: RMB
Item The current period The previous period
Undistributed profits at the end of the
previous period before the adjustment 891709910.57 750685777.27
Opening undistributed profits after the
adjustment 891709910.57 750685777.27
Plus: Net profit attributable to owners of
the parent company in the current period 453813148.37 176055944.37
Less: Appropriation of statutory surplus 27100184.24 4796383.54
186Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
reserves
Dividends on common shares payable 82460256.90 30235427.53
Undistributed profit at the end of the
period 1235962617.80 891709910.57
37. Operating revenue and cost of sales
Unit: RMB
Amount accounted for in the current period Amount incurred in the previous period
Item
Revenue Cost Revenue Cost
Main operations 4067704642.34 3341091135.03 3193159944.56 2768488873.61
Other operations 6955722.08 131441.10 14317007.01 11486313.03
Total 4074660364.42 3341222576.13 3207476951.57 2779975186.64
The lowest of the Company’s audited total profit net profit and net profit after the deduction of
non-recurring gains and losses during the Reporting Period was negative.□Yes□No
187Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Breakdown information of operating income and operating cost:
Unit: RMB
Classification Division 1 Division 2 Chuan Jin Nuo Hong Kong Others and offset Total
of contracts Operating Operating costs Operating Operating costs Operating Operating Operating Operating Operatingincome revenue revenue costs revenue costs revenue Operating cost
Business
type 1512138943.83 1258372291.66 2639514369.04 2159148468.39 14210467.52 13977509.04 91203415.97 90275692.96 4074660364.42 3341222576.13
Where:
Feed grade
phosphate 1032296282.47 854136258.89 1032296282.47 854136258.89
Phosphate
fertilizer 227044559.00 184202447.89 454631838.85 303278903.16 14210467.52 13977509.04 91016948.78 90275692.96 604869916.59 411183167.13
Phosphoric
acid 220739824.89 205490383.60 2124853295.53 1835093842.27 2345593120.42 2040584225.87
Others 32058277.47 14543201.28 60029234.66 20775722.96 186467.19 91901044.94 35318924.24
Classified by
operating 1512138943.83 1258372291.66 2639514369.04 2159148468.39 14210467.52 13977509.04 91203415.97 90275692.96 4074660364.42 3341222576.13
region
Specifically:
Northeast
China 2634225.75 2099499.05 40956706.43 36027063.12 43590932.18 38126562.17
North China 29815482.38 24845880.97 26529181.53 24688175.52 56344663.91 49534056.49
East China 108614573.83 90241785.21 234967037.15 217859480.35 343581610.98 308101265.56
South China 203177280.81 161313348.38 365037137.15 338007156.13 78330327.90 77402604.89 489884090.06 421917899.62
Central
China 52648424.31 43238862.65 69216031.15 62241021.75 121864455.46 105479884.40
Northwest
China 26567964.66 22067777.01 583479.56 543332.37 27151444.22 22611109.38
Southwest
China 490366128.41 412610071.64 129747539.37 85026130.45 620113667.78 497636202.09
International 598314863.68 501955066.75 1772477256.70 1394756108.70 14210467.52 13977509.04 12873088.07 12873088.07 2372129499.83 1897815596.42
Market or
customer 1512138943.83 1258372291.66 2639514369.04 2159148468.39 14210467.52 13977509.04 91203415.97 90275692.96 4074660364.42 3341222576.13
type
Specifically:
Phosphate
chemical 1480080666.36 1243829090.38 2579485134.38 2138372745.43 14210467.52 13977509.04 91016948.78 90275692.96 3982759319.48 3305903651.89
industry
Others 32058277.47 14543201.28 60029234.66 20775722.96 186467.19 91901044.94 35318924.24
Contract type 1512138943.83 1258372291.66 2639514369.04 2159148468.39 14210467.52 13977509.04 91203415.97 90275692.96 4074660364.42 3341222576.13
Specifically:
188Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Classification Division 1 Division 2 Chuan Jin Nuo Hong Kong Others and offset Total
of contracts Operating
income Operating costs
Operating Operating Operating Operating Operating Operating
revenue Operating costs revenue costs revenue costs revenue Operating cost
Product sales 1511333319.44 1258372291.66 2633177804.16 2159017027.29 14210467.52 13977509.04 91016948.78 90275692.96 4067704642.34 3341091135.03
Others 805624.39 6336564.88 131441.10 186467.19 6955722.08 131441.10
Classified by
the time of
goods 1512138943.83 1258372291.66 2639514369.04 2159148468.39 14210467.52 13977509.04 91203415.97 90275692.96 4074660364.42 3341222576.13
transfer
Specifically:
Recognized
at a point in 1512138943.83 1258372291.66 2639514369.04 2159148468.39 14210467.52 13977509.04 91203415.97 90275692.96 4074660364.42 3341222576.13
time
Income
recognition
at a certain
period
Classification
by contract 1512138943.83 1258372291.66 2639514369.04 2159148468.39 14210467.52 13977509.04 91203415.97 90275692.96 4074660364.42 3341222576.13
term
Specifically:
Within one
year 1512138943.83 1258372291.66 2639514369.04 2159148468.39 14210467.52 13977509.04 91203415.97 90275692.96 4074660364.42 3341222576.13
Over one
year
Classification
by sales 1512138943.83 1258372291.66 2639514369.04 2159148468.39 14210467.52 13977509.04 91203415.97 90275692.96 4074660364.42 3341222576.13
channel
Specifically:
Direct sales 783847112.38 667840511.92 706465690.38 630361753.65 1490312802.76 1298202265.57
Distribution 728291831.45 590531779.74 1933048678.66 1528786714.74 14210467.52 13977509.04 91203415.97 90275692.96 2584347561.66 2043020310.56
Total 1512138943.83 1258372291.66 2639514369.04 2159148468.39 14210467.52 13977509.04 91203415.97 90275692.96 4074660364.42 3341222576.13
189Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Information about performance obligations:
Types of
The nature of Whether or Company’s quality
Time for contract the Company’s not the share of assurance
Item fulfillment Important payment terms commitment to person is expected offered by the
obligations the transfer of primarily refunds to Company and
the goods responsible customers related
obligations
(1) 100% prepayment
before loading; (2) 30%
prepayment before loading
or 90% payment via an
irrevocable letter of credit
Overseas February 25 2026 with the remaining balance Product qualitypaid after receiving the bill Goods Yes None assurance
of lading; (3) Payment via
sight letter of credit after
shipment; (4) Payment by
wire transfer within 30 days
after the bill of lading date.
(1) Payment in advance
before goods are shipped;
(2) Payment within 3-10
working days after
Domestic February 25 2026 presenting the bill; (3) Goods Yes None Product quality
Payment by bank assurance
acceptance bill within 30
days after delivery and
receipt of the bill.Other descriptions
Information related to the transaction price allocated to the remaining performance obligations:
As of the end of the Reporting Period the revenue corresponding to signed contracts not yet
performed or not fully performed is RMB618080910.91 of which RMB618080910.91 is
expected to be recognized as revenue in 2026.
38. Taxes and surcharges
Unit: RMB
Item Amount accounted for in the currentperiod Amount incurred in the previous period
Real estate tax 4172667.61 4221966.99
Renewable energy fund 3589696.89
City maintenance & construction tax 3392975.58 644914.13
Urban land use tax 3122721.80 1839148.64
Stamp duty 2507501.96 1799584.57
Educational fee 1439555.94 385546.36
Local education surcharge 1062698.70 257030.90
Environmental protection tax 169309.34 156263.10
Vehicle and vessel tax 11589.32 12119.98
National major water conservancy
construction fund 212547.83
Water resource tax 190626.00
Total 19871890.97 9316574.67
Other notes:
39. Administrative expense
Unit: RMB
190Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Item Amount accounted for in the currentperiod Amount incurred in the previous period
Environmental protection expenses 48447284.50 50984085.46
Employee benefits 43868566.85 32318141.21
Depreciation and amortization 8947493.82 8064604.57
Intermediary service fees 8683616.33 5444727.57
Shutdown loss 3963057.49 5641030.07
Entertainment fees 3770323.03 2289106.76
Office expenses 2311277.04 2287591.10
Travel expenses 2020927.13 1053304.27
Vehicle usage fee 276415.16 335658.69
Disability allowance 207423.96 735263.94
Repair fee 106265.57 107017.30
Lease expense 56682.36 46960.32
Others 3233909.57 2865745.62
Total 125893242.81 112173236.88
Other notes:
40. Selling expense
Unit: RMB
Item Amount accounted for in the current Amount accounted for in the previousperiod period
Employee benefits 18436706.14 15087921.29
Business promotion expenses 1819073.37 1220093.70
Business service fee 1468601.12 2238192.33
Travel expenses 1056538.62 1416935.85
Entertainment fees 445201.46 578261.22
Depreciation charges 122792.48 110512.34
Warehousing and transfer fee 20401.50 21795.89
Others 6757992.84 5097022.12
Total 30127307.53 25770734.74
Other notes:
41. R&D expense
Unit: RMB
Item Amount accounted for in the currentperiod Amount incurred in the previous period
Material and service costs 8374072.74 29620495.63
Labor expense 6816443.23 10948201.87
Depreciation charges 2898081.57 6426041.20
Other expenses 549967.66 3547063.70
Total 18638565.20 50541802.40
Other notes:
42. Financial expenses
Unit: RMB
Item Amount accounted for in the currentperiod Amount incurred in the previous period
Interest expense 18732533.79 21401932.73
Less: Interest income 9354932.83 11358421.03
Add: Exchange loss -2458399.19 -5569303.27
Other expenses 2596697.48 2292338.42
191Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Total 9515899.25 6766546.85
Other notes:
43. Other income
Unit: RMB
Sources Amount accounted for in the current Amount accounted for in the previousperiod period
Government grants 11401629.93 8236537.78
VAT additional deduction 3595416.23 8204805.55
44. Investment income
Unit: RMB
Item Amount accounted for in the currentperiod Amount incurred in the previous period
Investment income from the disposal of
held-for-trading financial assets 310885.40 455154.71
6+9 bank bill discount fee -267391.87 -829973.65
Total 43493.53 -374818.94
Other notes:
45. Credit impairment loss
Unit: RMB
Item Amount accounted for in the currentperiod Amount incurred in the previous period
Bad debt loss of accounts receivable -445130.41 620004.12
Bad debt loss of other receivables -2608287.98 -16544026.76
Total -3053418.39 -15924022.64
Other notes:
46. Assets impairment loss
Unit: RMB
Item Amount accounted for in the currentperiod Amount incurred in the previous period
I. Inventory falling price loss and
impairment provision for contract -2062941.05 -4230806.96
performance costs
IV. Fixed assets impairment losses -3685504.79
Total -2062941.05 -7916311.75
Other notes:
47. Return on disposal of assets
Unit: RMB
Source of return on disposal of assets Amount accounted for in the currentperiod Amount incurred in the previous period
Return on disposal of non-current assets 2386.93 22.74
Including: Return on disposal of non-
current assets not classified as held-for- 2386.93 22.74
sale assets
Among them: Return on disposal of fixed
assets 2386.93 22.74
192Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
48. Non-operating revenue
Unit: RMB
Item Amount accounted for in the Amount incurred in the Amount recorded in the currentcurrent period previous period non-recurring gains and losses
Breach compensation income 800.00 14650.00 800.00
Others 4365325.71 2485652.94 4365325.71
Total 4366125.71 2500302.94 4366125.71
Other notes:
49. Non-operating expenditures
Unit: RMB
Item Amount accounted for in the Amount incurred in the Amount recorded in the currentcurrent period previous period non-recurring gains and losses
Fine and overdue payment
expenditure 1125256.82 405072.03 1125256.82
Losses from damage and scrap
of non-current assets 1125256.82 216781.72 959382.44
Expenditure on external
donations 130000.00 242000.00 130000.00
Others 728666.74 1000.00 728666.74
Total 2943306.00 864853.75 2943306.00
Other notes: Others mainly refer to the scrapping loss of waste materials.
50. Income tax expenses
(1) List of income tax expense
Unit: RMB
Item Amount accounted for in the currentperiod Amount incurred in the previous period
Income tax expenses of the Reporting
Period 62225790.85 9832975.47
Deferred income tax expenses 2665042.45 21568135.98
Total 64890833.30 31401111.45
(2) Adjustment process of accounting profit and income tax expense
Unit: RMB
Item Amount accounted for in the current period
Total profits 540740269.42
Income tax expenses calculated at legal/applicable tax rates 81111040.41
Impact of different tax rates applied by subsidiaries -24399924.75
Impact of income tax in the periods before adjustment 2339921.16
Impact of non-taxable income -37570.58
Impacts of non-deductible costs expenses and losses 597055.28
Impact of using deductible losses on the deferred tax assets not
recognized previously -87470.49
Impact of deductible temporary differences or deductible losses
of deferred tax assets not recognized in the current period 3723347.94
Changes in the balance of deferred income tax assets/liabilities at
the beginning of the period due to adjustment of tax rate 3680914.67
Impact of additional deduction of R&D expenses -2036480.34
Income tax expense 64890833.30
Other notes:
193Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
51. Other comprehensive income
See the related content of Note “VII. 33. Other comprehensive income”.
52. Items of cash flow statement
(1) Cash related to operating activities
Cash generated from other operating activities
Unit: RMB
Item Amount accounted for in the currentperiod Amount incurred in the previous period
Cash deposit 28727580.34 46386283.58
Trading funds 18361383.07 4982590.84
Subsidies 10584579.93 8236537.78
Bank interest 3537519.73 11358420.86
Compensation 416085.20 27742.00
Others 203934.32 384008.47
Total 61831082.59 71375583.53
Notes to other cash received related to operating activities:
Other cash paid related to operating activities
Unit: RMB
Item Amount accounted for in the currentperiod Amount incurred in the previous period
Cash deposit 42415011.05 26209180.90
Trading funds 10626965.48 3365464.70
Environmental protection expenditures 10548491.66 6414109.28
Office expenses 3426105.95 4176833.76
Technical service charges 2842073.46 2679583.11
Entertainment fees 2382206.76 2675662.33
Travel expenses 2194117.66 2885140.21
Business promotion and service expenses 1941791.90 2738882.27
Intermediary service fees 1933073.35 1965758.00
Bank fees 1457770.76 569502.84
Simplified treatment for short-term leases
and low-value asset leases 465465.60 86775.00
Donation 130000.00 242000.00
R&D expenses 111226.67 124081.06
Others 1394350.94 3799220.67
Total 81868651.24 57932194.13
Notes to other cash paid related to operating activities:
(2) Cash related to investing activities
Cash generated from other investing activities
Unit: RMB
Item Amount accounted for in the currentperiod Amount incurred in the previous period
Recovery of structured deposits and
financial funds 376000000.00 102000000.00
Recovery of initial investment in the
Sifangdi slag dump 23500000.00
Received financial management income 5817500.00
194Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Total 405317500.00 102000000.00
Cash generated from important investing activities
Unit: RMB
Item Amount accounted for in the currentperiod Amount incurred in the previous period
Recovery of structured deposits and
financial funds 376000000.00 102000000.00
Recovery of initial investment in the
Sifangdi slag dump 23500000.00
Received financial management income 5817500.00
Proceeds from disposal of subsidiaries 1000000.00
Total 406317500.00 102000000.00
Notes to other cash received related to investing activities:
Other cash paid related to investing activities
Unit: RMB
Item Amount accounted for in the currentperiod Amount incurred in the previous period
Payment of structured deposits and
financial funds 36000000.00 412000000.00
Deposit for land in Egypt project\ 11829780.63
Total 47829780.63 412000000.00
Cash used in significant investing activities
Unit: RMB
Item Amount accounted for in the currentperiod Amount incurred in the previous period
Payment of structured deposits and
financial funds 36000000.00 412000000.00
Purchase and construction of long-term
assets 220393378.50 71125668.69
Acquisition of subsidiaries and minority
shareholder equity 7723787.63
Total 256393378.50 490849456.32
Notes to other cash paid related to investing activities:
(3) Cash related to financing activities
Other cash received from financing-related activities:
Unit: RMB
Item Amount accounted for in the currentperiod Amount incurred in the previous period
Partner loans 15828300.00
Bills discounting 76806040.71 25334381.27
Total 92634340.71 25334381.27
Notes to other cash received related to financing activities:
Other cash paid related to financing activities
Unit: RMB
Notes to other cash paid related to financing activities:
195Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Changes in liabilities arising from financing activities
□Applicable □ Not applicable
Unit: RMB
Increase in the current period Decrease in the current period
Item Opening balance
Cash changes Non-cash Cash changes Non-cash
Closing balance
changes changes
Short-term loans 340736998.42 613306040.71 13497487.76 374878527.02 55204550.04 537457449.83
Non-current
liabilities due 227740157.71 217700898.04 227714675.71 217726380.04
within one year
Long-term loans 102118708.32 144500000.00 8221274.98 56514372.88 120263000.00 78062610.42
Lease liabilities 501785.73 17497970.63 4807847.34 10366048.11 2825860.91
Long-term
payables 15828300.00 59690978.16 75519278.16
Total 671097650.18 773634340.71 316608609.57 663915422.95 185833598.15 911591579.36
(4) Significant activities and financial impact that do not involve current cash receipts and
disbursements but affect the Company’s financial position or may affect the Company’s cash
flows in the future
Item Amount incurred in the current year
Endorsement and transfer of notes receivable 490913773.16
Including: Payment of goods 363178387.78
Purchase of long-term assets 127735385.38
Total 490913773.16
53. Supplementary information to cash flow statement
(1) Supplemental information for cash flow statement
Unit: RMB
Supplemental information Amount during the current period Amount of the previous period
1. Reconciliation of net profit to net cash
flows generated from operating activities:
Net profit 475849436.12 185393419.87
Plus: Provision for asset impairment 5116359.44 23840334.39
Depreciation of fixed assets depletion of
oil and gas assets depreciation of 135368329.21 142796860.01
productive biological assets
Depreciation of right-of-use assets 5119671.63 33688.56
Amortization of intangible assets 3757371.40 3775070.24
Amortization of long-term prepaid
expenses
Losses from disposal of fixed assets
intangible assets and other long-term -2386.93 -22.74
assets (“-” for gains)Losses on the retirement of fixed assets (“-” for gains) 959382.44 216781.72
Losses from fair value changes (“-” for
gains)
Financial expenses (“-” for gains) 12955823.12 21401932.73
Losses on investments (“-” for gains) -43493.53 374818.94Decrease in deferred income tax assets (“-” for increase) -2179910.50 22380836.36
Increase in deferred income tax liabilities
(“-” for reduction) 4844952.95 -812700.38
196Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Supplemental information Amount during the current period Amount of the previous period
Decrease in inventories (“-” for increase) -180596984.24 -214060417.22
Decrease in operating receivables (“-” for
increase) -234424773.20 -61433721.67
Increase in operating payables (“-” for
reduction) 71172905.40 18904934.78
Others
Net cash flows from operating activities 297896683.31 142811815.59
2. Significant investing and financing
activities without involvement of cash
receipts and payments
Debts converted to capital
Convertible corporate bonds due within
one year
Fixed asset acquired under finance leases
3. Net changes in cash and cash
equivalents:
Closing balance of cash 853567907.41 378787894.98
Less: Opening balance of cash 378787894.98 724690908.75
Plus: Closing balance of cash equivalents
Less: Opening balance of cash equivalents
Net increase in cash and cash equivalents 474780012.43 -345903013.77
(2) Cash and cash equivalents
Unit: RMB
Item Closing Openingbalance balance
I. Cash 853567907.41 378787894.98
Bank deposits on demand 853567907.41 378787894.98
III. Closing balance of cash and cash equivalents 853567907.41 378787894.98
Including: Cash and cash equivalents the use of which by the parent company or subsidiaries in
the group is restricted 460960827.42 114051326.32
(3) Presentation of cash and cash equivalents that are subject to certain restrictions on their
usage
Unit: RMB
Item Amount of the current period Amount of the previous period Reason for classifying the itemas cash and cash equivalents
Raised funds 460960827.42 114051326.32 Restricted in use but can bewithdrawn at any time
Total 460960827.42 114051326.32
(4) Monetary funds not classified as cash and cash equivalents
Unit: RMB
Reasons for not classifying the
Item Amount of the current period Amount of the previous period funds as cash and cash
equivalents
Time deposits 340000000.00 Cannot be withdrawn at anytime
Deposits for letter of credit 19442000.10 13270083.93 Cannot be withdrawn at anytime
Locked currency exchange
margin 2253997.94 4159826.86
Cannot be withdrawn at any
time
Business frozen funds 5073771.97 211660.39 Cannot be withdrawn at anytime
Total 26769770.01 357641571.18
197Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Other notes:
54. Foreign currency monetary items
(1) Foreign currency monetary items
Unit: RMB
Item Foreign currency balance at the Ending balance converted toend of the Reporting Period Exchange rate RMB
Monetary funds
Of which: USD 37750009.24 7.0288 265337264.95
EUR
HKD 145906.15 0.90322 131785.35
EGP 40081093.63 0.14729 5903544.28
Accounts receivable
Of which: USD 5553004.75 7.0288 39030959.79
EUR
HKD
Long-term loans
Of which: USD
EUR
HKD
Other receivables
Of which: USD 1675761.08 7.0288 11778589.48
Accounts payable
Of which: USD 3346348.07 7.0288 23520811.31
Long-term payables
Of which: USD 10744263.34 7.0288 75519278.16
Other notes:
(2) Notes to overseas entities including: for significant oversea entities main place of business
bookkeeping base currency and selection criteria shall be disclosed; if there are changes in
recording currency relevant reasons shall be disclosed.□Applicable □ Not applicable
Overseas entities Main place of Bookkeeping basebusiness currency Selection criteria
Chuan Jin Nuo Hong Kong Co. Ltd. Hong Kong USD Main settlement currency foroperating activities
Chuan Jin Nuo International Co. Ltd. Hong Kong USD Main settlement currency foroperating activities
Chuan Jin Nuo Middle East International UAE USD Main settlement currency forHolding Co. Ltd. operating activities
Egypt Chuan Jin Nuo Chemical Co. Ltd. Egypt USD Main settlement currency foroperating activities
55. Leases
(1) The Company as 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
198Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
□Applicable □ Not applicable
Item Amount incurred in the current year Amount incurred last year
Interest expenses on lease liabilities 268331.52 25650.18
Short-term lease expenses accounted for using simplified
treatment included in profit and loss for the current period 465465.60 86775.00
Total cash outflow related to leases 6573312.94 136775.00
Circumstances involving sale and leaseback transactions
(2) The Company was lessor:
Operating leases as a lessor
□ Applicable□Not applicable
Financial leases as a lessor
□ Applicable□Not applicable
Undiscounted lease receipts for each of the next five years
□ Applicable□Not applicable
Reconciliation statement of undiscounted lease receipts and net investment in leases
(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 Amount accounted for in the Amount incurred in the previouscurrent period period
Material and service costs 8374072.74 29620495.63
Labor expense 6816443.23 10948201.87
Depreciation charges 2898081.57 6426041.20
Other expenses 549967.66 3547063.70
Total 18638565.20 50541802.40
Including: Expensed R&D expenditure 18638565.20 50541802.40
IX. Change of consolidation scope
1. Subsidiaries established and acquired during the current period
Name of subsidiaries Shareholding Reasons for changes
Chuan Jin Nuo International Co. Ltd. 100% Newly established
Chuan Jin Nuo Middle East International Holding Co. Ltd. 60% Newly established
Egypt Chuan Jin Nuo Chemical Co. Ltd. 60.04% Newly established
Yunnan Xinshenghai International Trade Co. Ltd. 100% Newly established
X. Equity in other entities
1. Equity in subsidiary
(1) Compositions of the Group
199Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Shareholding percentage
Name of Main place of Registration Nature of (%) Way of
subsidiaries Registered capital business place business Directly Indirect gaining
Kunming Phosphorus
Jingcui chemical
Engineering RMB5000000.00 Kunming Kunming technology 100.00% Establishment
Technology research and
Co. Ltd. experimentaldevelopment
Guangxi Production
Chuan Jin and sales of
Nuo RMB Fangchenggang Fangchenggang chemical
Chemical 553960000.00 City Guangxi City Guangxi products
93.64% Establishment
Co. Ltd. fertilizersetc.Kunming
Heliwan
Industrial Dongchuan Dongchuan Solid waste
Solid Waste RMB 6000000.00 District District residue 100.00% Establishment
Treatment Kunming City Kunming City treatment
Co. Ltd.Guangxi Production
Chuan Jin
Nuo New RMB 2000000.00 Fangchenggang Fangchenggang
and sales of
Energy Co. City Guangxi City Guangxi
new energy 100.00% Establishment
batteries and
Ltd. materials
Yingkou Production
Chuan Xin and sales of
Nuo High RMB 75000000.00 Yingkou City Yingkou City new energy 100.00% Purchase
Technology batteries and
Co. Ltd. materials
Yunnan
Xinshenghai Sales of
International RMB 20000000.00 Kunming Kunming material 100.00% Establishment
Trade Co. equipment
Ltd.Chuan Jin Manufacture
Nuo Hong of chemicals
Kong Co. USD2000000.00 Hong Kong Hong Kong and 100.00% Establishment
Ltd. chemicalproducts
Chuan Jin
Nuo
International USD100000000.00 Hong Kong Hong Kong
Investment
holding 100.00% Establishment
Co. Ltd.Chuan Jin
Nuo Middle
East
International USD150000000.00 UAE UAE
Investment
holding 60.00% Establishment
Holding
Co. Ltd.Egypt
Chuan Jin Production
Nuo USD50000000.00 Egypt Egypt and sales of 60.04% Establishment
Chemical chemical
Co. Ltd. products
(2) Significant non-wholly-owned subsidiary
Unit: RMB
Shareholding The profit or loss Dividends declared to
Name of subsidiaries proportion of non- attributable to the non- be distributed to Minority Equity balancecontrolling controlling interests in minority shareholders in at the end of the period
interests the current period the current period
Guangxi Chuan Jin Nuo 6.36% 22153112.76 8904000.00 67218479.52
200Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Chemical Co. Ltd.Note to the difference between the shareholdings of the minority shareholders of subsidiaries and
the proportion of their voting rights:
Other notes:
(3) The main financial information of significant not wholly-owned subsidiary
Unit: RMB
Closing balance Opening balance
Name of
subsidiaries Current Non-current Current
Non- Total Current Non-current Current Non- Total
assets assets Total assets liabilities currentliabilities liabilities assets assets
Total assets liabilities currentliabilities liabilities
Guangxi
Chuan Jin
Nuo 102542 10223185 20477472 95700378 3383026 99083405 78196634 10465735 18285399 90651690 7669693 98321384
Chemical 8664.50 41.94 06.44 9.74 5.32 5.06 2.90 93.04 35.94 3.11 8.57 1.68
Co. Ltd.Unit: RMB
Amount accounted for in the current period Amount incurred in the previous period
Name of
Operating Total Cash flows of Operating Total
Cash flow
subsidiaries
income Net profit comprehensive operating
from
income activities income
Net profit comprehensive
income operatingactivities
Guangxi Chuan
Jin Nuo Chemical 2639514369.04 348324859.76 351461649.96 242642368.84 2068523172.40 146817960.90 146482913.90 18340110.52
Co. Ltd.Other notes:
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 and loss for the current period
□Applicable □ Not applicable
Unit: RMB
Accounting items Amount accounted for in the currentperiod Amount incurred in the previous period
Other income 11401629.93 8236537.78
Non-operating revenue
Other notes:
XII. Risks associated with financial instruments
1. Various types of risks arising from financial instruments
The Group faces various financial instrument risks in its daily activities mainly including market
201Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
risks (such as exchange rate risk interest rate risk and commodity price risk) credit risk and
liquidity risk. The risks related to these financial instruments and the risk management policies
adopted by the Group to mitigate these risks are described below. The management of the Group
manages and monitors these risk exposures to ensure that these risks are controlled within a limited
scope.* Management objectives and policies for various risks
The Group’s objective in engaging in the risk management is to achieve the proper balance between
the risks and benefits minimize the negative impact of these risks on the Company’s operating
results and maximize the profits of shareholders and other equity investors. Based on the risk
management goal the basic strategy of the Company’s risk management is determining and
analyzing the various risks faced by the Group setting up the bottom line of risk and conducting
appropriate risk management and timely supervising various risks in a reliable way and controlling
the risk within the range of limit.Market risk
(1) Exchange rate risk
The Group’s exposure to exchange rate risks mainly involves USD EGP and HKD. Except for
purchases and sales conducted by Chuan Jin Nuo International Co. Ltd. Chuan Jin Nuo Middle
East International Holding Co. Ltd. Egypt Chuan Jin Nuo Chemical Co. Ltd. and Chuan Jin Nuo
Hong Kong Co. Ltd. in USD EGP and HKD as well as some of the purchases and sales by
Kunming Chuan Jin Nuo Chemical Co. Ltd. and Guangxi Chuan Jin Nuo Chemical Co. Ltd. in
USD the Group’s other major business activities are settled in RMB. As of December 31 2025 the
Group’s assets and liabilities were mainly the balance in RMB except for the assets or liabilities of
a balance in foreign currency as listed below. The exchange rate risk arising from the foreign
currency balances of assets and liabilities may have an impact on the Company’s financial
performance.Item December 31 2025 December 31 2024
Monetary funds - USD 37750009.24 13096743.49
Monetary funds - EGP 40081093.63
Monetary funds - HKD 145906.15
Accounts receivable - USD 5553004.75 10086697.94
Other receivables - USD 1675761.08
Accounts payable - USD 3346348.07 936674.71
Long-term payables - USD 10744263.34
The Group closely monitors the impact of exchange rate fluctuations on its operations.
(2) Interest rate risk
The Group’s interest rate risk arises from bank loans. 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. To mitigate this risk the Group’s strategy is
as follows: If the country lowers interest rates in the future the Company will repay outstanding
loans ahead of schedule. If the country raises interest rates in the future the Company will not repay
the outstanding loans ahead of schedule.As of December 31 2025 the Company’s interest-bearing liabilities mainly consisted of loans
202Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
including short-term loans long-term loans and long-term payables totaling RMB703764800.00
of which RMB446014800.00 are fixed-rate loans and RMB257750000.00 are floating-rate loans.
(3) Price risk
Commodity price risk
The Group purchases and sells various products at market prices and is therefore exposed to the
impact of such price fluctuations.
(4) Credit risk
The Group shall manage the credit risk based on the specific Group Classification Credit risk
primarily arises from monetary funds notes receivable accounts receivable receivables financing
and other receivables.In order to reduce credit risk the Group has set up a specialized department to determine the credit
limit conduct credit approval and implement other monitoring procedures to ensure that necessary
measures are taken to recover overdue claims. In addition the Group reviews the recovery of each
single receivable on each balance sheet date to ensure that sufficient provision for bad debts is made
for the unrecoverable amount. Therefore the Group’s management believes that the Group’s credit
risk has been greatly reduced.The Group’s working capital is deposited in banks with a high credit rating so the credit risk of
working capital is low.The Group has adopted necessary policies to ensure that all customers have good credit records.Apart from the top 5 amounts of accounts receivable and contract assets the Group has no other
significant concentration of credit risk. The total amount owed by the top five accounts receivable
represents RMB52802219.52 accounting for 42.97% of the Group’s total accounts receivable.Criteria for significant increase in credit risk
At each balance sheet date the Group determines whether the credit risk of a financial instrument
has significantly increased since initial recognition by comparing the default probability over the
expected life of the instrument as determined at initial recognition with the default probability over
the expected life of the instrument as determined at the balance sheet date. However if the Group
determines that the financial instrument has only a low credit risk at the balance sheet date it can be
assumed that the credit risk of the financial instrument has not significantly increased since initial
recognition.The Group’s main criteria for determining a significant increase in credit risk are when the days
overdue exceed 30 days or when one or more of the following indicators experience significant
changes: the debtor’s operating environment internal and external credit ratings or a significant
adverse change in actual or expected operating results.Definition of a credit-impaired asset
When one or more events that the Company expects to have an adverse impact on the future cash
flows of financial assets occur the financial assets will become the financial assets that have
suffered credit impairment. The Group’s main criterion for determining credit impairment is when
the days overdue exceed 90 days. However in certain cases if internal or external information
indicates that considering any credit enhancements held the full contractual amount may not be
recoverable the Group will also consider the asset to be credit-impaired. A credit impairment of a
financial asset may be the result of a combination of events and may not necessarily be the result of
separately identifiable events.
203Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
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 Group 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.Credit risk exposure
As of December 31 2025 the maximum credit risk exposure that could potentially cause financial
loss to the Group primarily arises from the loss of financial assets due to the failure of the
counterparty to fulfill its obligations as well as the financial guarantees provided by the Group.The carrying amount of financial assets recognized in the consolidated balance sheet; for financial
instruments measured at fair value the book value reflects their risk exposure but not the maximum
risk exposure and the maximum risk exposure will change with the change of future fair value.* Liquidity risk
Liquidity risk refers to the risk that the Group is unable to fulfil its financial obligations on the due
date. The Group manages liquidity risk in the method of ensuring that there is sufficient liquidity to
fulfil debt obligations without causing unacceptable loss or damage to the Group’s reputation. The
Group regularly analyzes its debt structure and maturity schedule to ensure adequate liquidity and
sufficient funding. The Group’s management will monitor the use of bank loans and guarantee the
fulfillment of loan agreement. At the same time the Group engages in financing discussions with
financial institutions to maintain certain credit limits and reduce liquidity risk.The Group primarily relies on sales of goods and bank loans as its main sources of funding. As of
December 31 2025 the Group’s unused bank loan quota was RMB727773300 (December 31
2024: RMB610 million) of which the unused short-term bank loan quota was RMB502773300
(December 31 2024: RMB308 million).
The analysis of the financial assets and financial liabilities held by the Group based on the maturity
period of the undiscounted remaining contractual obligations is as follows:
Amount as at December 31 2025:
Item Within one year One to two years Two to fiveyears Over five years Total
Financial assets
Monetary funds 880337677.42 880337677.42
Notes receivable 129417984.6 129417984.60
Accounts receivable 120242318.52 120242318.52
Other receivables 27872559.68 27872559.68
Financial Liabilities -
Short-term loans 537457449.83 537457449.83
Notes payable 5000000.00 5000000.00
Accounts payable 220186306.77 220186306.77
Other payables 8115034.25 8115034.25
Payroll payable 34792494.09 34792494.09
Current portion of non-current
liabilities 217726380.06 217726380.06
Long-term loans 47310123.60. 30752486.82 78062610.42
Long-term payables 59639461.76 15879816.40 75519278.16
204Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
2. Sensitivity analysis
The Group adopts sensitivity analysis technology to analyze the possible impact of reasonable and
possible changes of risk variables on profit and loss for the current period or shareholders’ equity.As any risk variable rarely changes in isolation and the correlation between variables will have a
significant effect on the final impact amount of the change of a risk variable the following content
is based on the assumption that the change of each variable is independent.
3. Sensitivity analysis on foreign exchange risk
Assumption for the sensitivity of foreign exchange risk: All net investment hedging and cash flow
hedging of overseas operations are highly effective.On the basis of the above assumption under the condition that other variables remain unchanged
the impact of reasonable changes in the exchange rate on profit and loss for the current period and
equity after tax is as follows:
Item Exchange rate
20252024
fluctuations Impact on net profit Impact on Impact on net profit Impact onshareholders’ equity shareholders’ equity
All foreign Appreciation of 5%
currencies against RMB 18572692.38 18572692.38 7739713.74 7739713.74
All foreign Depreciation of 5%
currencies against RMB -18572692.38 -18572692.38 -7739713.74 -7739713.74
4. Sensitivity analysis on interest rate risk
Sensitivity analysis of interest rate risk is based on the following assumptions:
Changes in market interest rates affect the interest income or expense of financial instruments with
variable interest rates;
For financial instruments with fixed interest rates measured at fair value market interest rate
changes affect only their interest income or expense;
Changes in the fair values of derivative financial instruments and other financial assets and
liabilities are calculated at the market interest rate on the balance sheet date by discounted cash flow.On the basis of the above assumptions and under the condition that other variables remain
unchanged the impact of reasonable changes in the interest rate on profit and loss for the current
period and equity after tax is as follows:
Item Interest rate
20252024
fluctuations Impact on net profit Impact onshareholders’ equity Impact on net profit
Impact on
shareholders’ equity
Borrowings at
floating interest Up 1% -2190875.00 -2190875.00 -2800750.00 -2800750.00
rates
Borrowings at
floating interest Down 1% 2190875.00 2190875.00 2800750.00 2800750.00
rates
3. Financial assets
(1) Classification of transfer methods
□Applicable □ Not applicable
Unit: RMB
Transfer modality Nature of financial Amount of financial Derecognition Basis for determining
205Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
assets transferred assets transferred derecognition
Bank acceptance bills
Endorsement/discount under notes receivable Retained almost all risks
of bills that have not yet 117411304.07 Not derecognized and rewards including
matured related default risk
Bank acceptance bills
Endorsement/discount that have not yet Almost all risks and
of bills matured in receivables 204354828.10 Derecognition remuneration have been
financing transferred
Total 321766132.17
(2) Financial assets derecognized due to transfer
□Applicable □ Not applicable
Unit: RMB
Item Modality for the transfer of Amount of financial assets Gains or losses related tofinancial assets derecognized derecognition
Receivables financing Endorsement/discount of bills 204354828.10
Total 204354828.10
(3) Continued involvement in the transfer of assets financial assets
□ Applicable□Not applicable
Other descriptions
XIII. The disclosure of fair value
1. Ending fair value of assets and liabilities at fair value
Unit: RMB
Closing fair value
Item Level-1 fair value Level-2 fair value Level-3 fair value
measurement measurement measurement Total
I. Consistent fair value
measurement -- -- -- --
Total assets continuously
measured at fair value 4329785.08 90300965.46 94630750.54
II. Non-continuous fair value
measurement -- -- -- --
2. Continuous and non-continuous Level 2 fair value measurement items valuation
techniques used and the qualitative and quantitative information of important parameters
Derivative financial assets are forward foreign exchange contracts. The fair value at the balance
sheet date can be determined through a calculation based on the forward exchange rate provided by
the bank and the exchange rate at the balance sheet date.
3. Valuation technique adopted and nature and amount determination of important
parameters for consistent and inconsistent fair value measurement items at Level 3
Receivables financing refers to the accounts receivable in the form of undue bank acceptance bills.Since the credit risk adjustment factors are not directly observable from market inputs and the
remaining term is short the book balance is close to the fair value.
4. Fair value of financial asset and liabilities not measured at fair value
The Group’s financial assets and financial liabilities measured at amortized cost primarily include
monetary funds notes receivable accounts receivable other receivables short-term loans notes
206Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
payable accounts payable other payables and long-term loans. The carrying amounts of the
Group’s financial assets and financial liabilities that are not measured at fair value are close to their
fair values.XIV. Related party and related-party transactions
1. Subsidiaries of the CompanyThe details of the Company’s subsidiaries are provided in Note “10 Section 1. (1) Structure of theCorporate Group”.
2. List of related-party transactions
(1) Information on related-party guarantee
The Company as a guaranteed party
Unit: RMB
Guarantor Amount of guarantee Start date of guarantee Expiry date of guarantee Guarantee is completedY/N
Liu Meng/Kunming
Chuan Jin Nuo 366275000.00 June 23 2021 June 23 2027 No
Chemical Co. Ltd.Descriptions on related-party guarantees
On June 23 2021 the Company along with its controlling shareholder and de facto controller Liu
Meng signed a maximum guarantee contract with Fangchenggang Branch China Construction
Bank Corporation. The maximum guarantee liability is RMB366275000 which is used for China
Construction Bank Co. Ltd. Fangchenggang Branch’s provision of loans acceptance of
commercial bills issuance of letters of credit issuance of guarantees and other related services to
Guangxi Chuan Jin Nuo Chemical.
(2) Information on remuneration for key management personnel
Unit: RMB
Item Amount accounted for in the currentperiod Amount incurred in the previous period
Total remuneration 4245499.02 4795402.00
Note: The Company dissolved the Board of Supervisors in 2025 and the statistical scope of key
management personnel compensation refers to non-independent directors and senior management
personnel.XV. Share-based payment
1. The overall situation of share-based payments
□ Applicable□Not applicable
2. Equity-settled share-based payments
□ Applicable□Not applicable
3. Cash-settled share-based payments
□ Applicable□Not applicable
207Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
4. Share-based payment expenses in the current period
□ Applicable□Not applicable
5. Modification and termination of share-based payment
6. Others
XVI. Commitments and contingency
1. Significant commitments
Significant commitments on balance sheet date
(1) Commitment regarding share repurchase
If the Company’s prospectus for the initial public offering (IPO) and listing on the ChiNext Board
contains false records misleading statements or significant omissions that materially and
substantively affect the determination of whether the Company meets the legal conditions for
issuance the Company shall promptly convene a board meeting to review a plan for repurchasing
all newly issued shares from the IPO and the plan shall be implemented after being submitted to
and resolved by the Board of Shareholders. The Company will determine the repurchase price in
accordance with the relevant laws normative documents issued by the China Securities Regulatory
Commission (CSRC) the Shenzhen Stock Exchange and the Articles of Association and the
repurchase price shall not be lower than the market price at the time of repurchase.
(2) Commitment regarding compensation for losses due to false records misleading statements or
significant omissions
The Company confirms that its prospectus for the initial public offering (IPO) and listing on the
ChiNext Board does not contain false records misleading statements or significant omissions and
the Company assumes individual and joint legal responsibility for its truthfulness accuracy and
completeness. 1. If the prospectus contains false records misleading statements or significant
omissions that materially and substantively affect the determination of whether the Company meets
the legal conditions for issuance the Company will repurchase all newly issued shares from the IPO
at the secondary market price of the Company’s shares. 2. If investors incur loss in securities issue
and trade due to false records misleading statements or material omissions in the Prospectus the
Company will compensate investors for their losses according to law.
2. Contingency
(1) Significant contingency on balance sheet date
As of December 31 2025 the Company has no other significant contingent liabilities that need to
be disclosed.
(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.XVII. Events after balance sheet date
1. Distribution of profit
Amount to be distributed for every 10 shares (RMB) 4
Dividend shares to be distributed for every 10 shares (share) 0
Number of shares to be converted into share capital for every 10
shares (share) 0
208Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Amount to be distributed for every 10 shares after consideration
and approval (RMB) 4
Dividend shares to be distributed for every 10 shares after
consideration and approval 0
Number of shares to be converted into share capital for every 10
shares after consideration and approval (share) 0
On March 18 2026 the 19th meeting of the 5th Board of
Directors of the Company approved the Proposal Regarding the
Profit Distribution Plan for the Year 2025. The profit distribution
plan for 2025 is as follows: based on the total share capital of
274867523 shares a cash dividend of RMB4 per 10 shares
(including tax) will be distributed to all shareholders totaling
Distribution of profit RMB109947009.20. No bonus shares will be issued and nocapital reserves will be converted into share capital. This matter
is subject to approval by the Board of Shareholders.If there is any change in the total share capital between the
disclosure date of the profit distribution proposal and the equity
registration date for the distribution the total amount of cash
dividends will be adjusted according to the principle ofmaintaining the “fixed cash dividend distribution ratioXVIII. Other important matters
1. Division information
(1) Determination basis and accounting policies of reporting division
Based on the Group’s internal structure management requirements and internal reporting system
the Group’s business operations for the year mainly include the production sale and R&D of feed
additives and fertilizers in the Kunming region the production sale and R&D of phosphoric acid
and fertilizers by Guangxi Chuan Jin Nuo Chemical and sales by Chuan Jin Nuo Hong Kong.Accordingly these are divided into three reporting divisions: Kunming Chuan Jin Nuo Chemical
Co. Ltd. Guangxi Chuan Jin Nuo Chemical and Chuan Jin Nuo Hong Kong. The management of
the Group regularly evaluates the operational results of these reporting division to decide on the
allocation of resources and to assess their performance.Division reporting information is disclosed based on the accounting policies and measurement
bases used by each division in reporting to the management. These accounting policies and
measurement bases are consistent with the accounting policies and measurement bases used in
preparing the financial statements.
(2) The financial information of reporting division
Unit: RMB
Kunming Chuan Jin
Item Nuo Chemical Co. Guangxi Chuan Jin Chuan Jin NuoNuo Chemical Hong Kong Others and offset TotalLtd.Operating income 1512138943.83 2639514369.04 14210467.52 91203415.97 4074660364.42
Income from
foreign transactions 1433808618.50 2626641278.40 14210467.52 4074660364.42
Income from inter-
division 78330325.33 12873090.64 91203415.97
transactions
Operating costs and
expenses 1216954663.60 2252041509.51 14000748.70 -52345992.90 3535342914.71
Costs of external
sales 1180969686.77 2146275380.32 13977509.04 3341222576.13
Costs of inter-
division sales 77402604.89 12873088.07 90275692.96
Period expenses
and impairment -41417628.06 92893041.12 23239.66 -142621685.86 194120338.58
losses
209Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Operating Profit 295184280.23 387472859.53 209718.82 143549408.87 539317449.71
Total assets 2834227885.64 2047747206.44 356612.00 539255603.60 4343076100.48
Total liabilities 288926621.92 990834055.06 24424.16 -62070554.32 1341855655.46
Supplementary
information
Depreciation and
amortization 52801576.26 85818445.69 -5625350.29 144245372.24
expenses
Non-cash expenses
other than
depreciation and 2290168.11 514932.49 -2308871.91 5113972.51
amortization
Capital
expenditures 90138530.37 38087726.97 -6331287.07 134557544.41
2. Other significant transactions and events with influence on investors’ decision-making
XIX. Notes of main items in the financial statements of the parent company
1. Accounts receivable
(1) Disclosure by aging
Unit: RMB
Aging Closing book balance Opening book balance
Within one year (inclusive) 83179616.27 62042999.90
Above three years 1202840.16
Three to four years 804.33
Over five years 1202035.83
Total 83179616.27 63245840.06
(2) Disclosure by withdrawal methods for bad debts
Unit: RMB
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Category
Amount Proportio
Provision Carrying Provision
n Amount percentag amount Amount
Proportio
n Amount percentag
Book value
e e
Includin
g:
Account
s
receivabl
e of bad 83179616.2 100.00% 831796.1 1.00% 82347820.1 63245840.0 100.00% 1762161.5 2.79% 61483678.5debt 7 6 1 6 4 2
provisio
n by
portfolio
Where:
Aging 83179616.2 831796.1 82347820.1 57134940.0
portfolio 7 100.00% 6 1.00% 1 6 90.34%
1762161.53.08%55372778.542
Risk-free
portfolio 6110900.00 9.66% 6110900.00
Total 83179616.2 100.00% 831796.1 1.00% 82347820.1 63245840.0 100.00% 1762161.5 2.79% 61483678.57 6 1 6 4 2
Bad debt provision by portfolio: RMB831796.16
Unit: RMB
Closing balance
Name
Book balance Bad debt provision Provision percentage
Within six months 83179616.27 831796.16 1.00%
Total 83179616.27 831796.16
210Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Notes to the determination basis for the group:
If adopting the general mode of expected credit loss to withdraw bad debt provision of accounts
receivable:
□ Applicable□Not applicable
(3) Bad debt provision withdrawal reversed or recovered in the current period
Withdrawal of bad debt provision in the current period:
Unit: RMB
Change in the current period
Category Opening balance Closing balance
Provision Reversed orrecovered Write-offs Others
Bad debt
provision 1762161.54 849483.45 594664.68 1185184.15 831796.16
Total 1762161.54 849483.45 594664.68 1185184.15 831796.16
(4) Accounts receivable written-off in the current period
Unit: RMB
Item Written-off amount
Written-off accounts receivable 1185184.15
(5) Top 5 of the closing balance of the accounts receivable and the contract assets collected
according to arrears party
Unit: RMB
Closing balance of
Closing Closing balance of Proportion to total bad debt provisionClosing balance balance accounts closing balance of of accountsName of the entity of accounts of receivable and accounts receivable andreceivable contract contract assets receivable and impairmentassets contract assets provision for
contract assets
Yunnan Yuneng New Energy Battery
Material Co. Ltd. 15790016.85 15790016.85 18.98% 157900.17
SiamJavaTradingCo.Ltd 13837872.69 13837872.69 16.64% 138378.73
NUTRECONEDERLANDB.V. 5706141.50 5706141.50 6.86% 57061.42
Sichuan New Hope Animal Nutrition
Technology Co. Ltd. 4214544.45 4214544.45 5.07% 42145.44
SCANBIOCORPORATIONCO.LTD. 2828951.42 2828951.42 3.40% 28289.51
Total 42377526.91 42377526.91 50.95% 423775.27
2. Other receivables
Unit: RMB
211Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Item Closing balance Opening balance
Other receivables 442375504.39 851145331.71
Total 442375504.39 851145331.71
(1) Other receivables
1) Other receivables classified by nature
Unit: RMB
Nature Closing book balance Opening book balance
Transactions with subsidiaries 440344461.36 848945582.90
Equity payment 1000000.00
Trading funds 763937.41
Advances on behalf of others 803203.19 740775.78
Margin and deposit 1471600.00 451600.00
Reserve fund 271801.92
Total 442619264.55 852173698.01
2) Disclosure by aging
Unit: RMB
Aging Closing book balance Opening book balance
Within one year (inclusive) 91841453.35 210510494.30
One to two years 164492443.11 617353956.26
Two to three years 184031970.05 2018524.04
Over three years 2253398.04 22290723.41
Three to four years 2001798.04 21550000.00
Four to five years 250000.00 1600.00
Over five years 1600.00 739123.41
Total 442619264.55 852173698.01
3) Disclosure by withdrawal methods for bad debts
Unit: RMB
Closing balance Opening balance
Category Book balance Bad debt provision Carrying Book balance Bad debt provision Book value
Amount Proportion Amount Provision amount Amount Proportion Amount Provisionpercentage percentage
Bad debt
provision
by single 763937.41 0.09% 763937.41 100.00%
item
Where:
For
individually
significant
amounts
the bad
debt 615347.27 0.07% 615347.27 100.00%
provision is
made on an
individual
basis
For
amounts
that are not
individually
significant
but are
assessed on 148590.14 0.02% 148590.14 100.00%
an
individual
basis a
provision
for bad
212Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
debts is
made
Bad debt
provision 442619264.55 100.00% 243760.16 0.06% 442375504.39 851409760.60 99.91% 264428.89 0.03% 851145331.71
by portfolio
Where:
Aging
portfolio 2274803.19 0.51% 243760.16 10.72% 2031043.03 2464177.70 0.29% 264428.89 10.73% 2199748.81
Risk-free
portfolio 440344461.36 99.49% 440344461.36 848945582.90 99.62% 848945582.90
Total 442619264.55 100.00% 243760.16 0.06% 442375504.39 852173698.01 100.00% 1028366.30 0.12% 851145331.71
Bad debt provision separately accrued: 0
Unit: RMB
Opening balance Closing balance
Name
Book balance Bad debtprovision Book balance
Bad debt Provision Reasons for the
provision percentage provision
Kunming
Xunhechuan 615347.27 615347.27
Mining Co. Ltd.Total 615347.27 615347.27
Bad debt provision separately accrued: 0
Unit: RMB
Opening balance Closing balance
Name
Book balance Bad debtprovision Book balance
Bad debt Provision Reasons for the
provision percentage provision
Miscellaneous
customers 148590.14 148590.14
Total 148590.14 148590.14
Withdrawal of bad debt provision by group: 243760.16
Unit: RMB
Closing balance
Name
Book balance Bad debt provision Provision percentage
Within one year (inclusive) 1823203.19 91160.16 5.00%
One to two years 180000.00 18000.00 10.00%
Two to three years 20000.00 8000.00 40.00%
Four to five years 250000.00 125000.00 50.00%
Over five years 1600.00 1600.00 100.00%
Total 2274803.19 243760.16
Notes to the determination basis for the group:
Bad debt provision by portfolio: 0
Unit: RMB
Closing balance
Name
Book balance Bad debt provision Provision percentage
Within one year (inclusive) 90018250.16
One to two years 164312443.11
Two to three years 184031970.05
Three to four years 1981798.04
Total 440344461.36
Notes to the determination basis for the group:
213Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Withdrawal of bad debt provision by adopting the general mode of expected credit loss:
Unit: RMB
Phase I Phase II Phase III
Expected credit loss Expected credit loss
bad debt provision Expected credit loss for during the whole during the whole Total
the next 12 months outstanding maturity outstanding maturity(without credit (with credit impairment
impairment loss) loss)
Balance as of January 1
2025264428.89763937.411028366.30
Balance as of January 1
2025 in the current
period
Provision in the current
period 26440.36 26440.36
Reclassification in the
current period 47109.09 6047.98 53157.07
Write-off in the current
period 757889.43 757889.43
Balance on December
312025243760.16243760.16
Basis of classification of stages and bad debt provision percentage
Changes of book balance with significant amount changed of loss provision in the current period
□ Applicable□Not applicable
4) Bad debt provision withdrawal reversed or recovered in the current period
Withdrawal of bad debt provision in the current period:
Unit: RMB
Change in the current period
Category Opening balance Closing balance
Provision Reversed or Charged-recovered off/Verification Others
Bad debt
provision 1028366.30 26440.36 53157.07 757889.43 243760.16
Total 1028366.30 26440.36 53157.07 757889.43 243760.16
5) Other receivables with actual verification during the current period
Unit: RMB
Item Written-off amount
Other receivables with actual verification 757889.43
Including: Write-off of significant other receivables:
Unit: RMB
Write-off Whether the
Name of the entity Nature of other Written-off Amount Reasons for write- procedures accounts arise fromreceivables off performed related partytransactions
Kunming Long-term Execute internal
Xunhechuan Trading funds 609299.29 outstanding approval process
Mining Co. Ltd. accounts that for bad debt write-
No
cannot be recovered off
Total 609299.29
214Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Notes to the write-off of other receivables:
6) Top 5 of the closing balance of the other receivables collected according to the arrears
party
Unit: RMB
Proportion to total
Name of the entity Nature Closing balance Aging closing balance of Closing balance of
other receivables % bad debt provision
Guangxi Chuan Jin Within one year
Nuo New Energy Borrowings 287787873.13 one to two years 65.02%
Co. Ltd. two to three years
Guangxi Chuan Jin
Nuo Chemical Co. Borrowings 142574790.19 Within one year andone to two years 32.21%Ltd.Kunming Jingcui Within one year
Engineering one to two years
Technology Co. Borrowings 9981798.04 two to three years 2.26%
Ltd. and three to fouryears
Guizhou Jinlin
Chemical Co. Ltd. Margin and deposit 1000000.00 Within one year 0.23% 50000.00
Yunnan Chihong
Zn & Ge Co. Ltd. Margin and deposit 250000.00 Four to five years 0.06% 125000.00
Total 441594461.36 99.78% 175000.00
3. Long-term equity investments
Unit: RMB
Closing balance Opening balance
Item Provision for Provision for
Book balance impairment Carrying amount Book balance impairment Book value
losses losses
Investment in
subsidiaries 687483448.00 687483448.00 559610000.00 559610000.00
Total 687483448.00 687483448.00 559610000.00 559610000.00
(1) Investment to subsidiaries
Unit: RMB
Opening Increase/decrease for the current period Closing
Opening balance ofthe Withdrawal Closing
balance of
Investee balance Increase in the Reduced of balance the
(Book value) provisionfor investment investment impairment
Others (Book value) provisionfor
impairment provision impairment
Guangxi
Chuan Jin Nuo
Chemical Co. 548660000.00 548660000.00
Ltd.Kunming
Jingcui
Engineering 5000000.00 5000000.00
Technology
Co. Ltd.Kunming
Heliwan
Industrial Solid 3950000.00 3950000.00
Waste
Treatment Co.
215Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Opening Increase/decrease for the current period Closing
Opening balance ofthe Withdrawal Closing
balance of
Investee balance Increase in the Reduced of balance the
(Book value) provisionfor investment investment impairment
Others (Book value) provision
impairment provision
for
impairment
Ltd.Guangxi
Chuan Jin Nuo
New Energy 2000000.00 2000000.00
Co. Ltd.Chuan Jin Nuo
Hong Kong 144028.00 144028.00
Co. Ltd.Chuan Jin Nuo
International 127729420.00 127729420.00
Co. Ltd.Total 559610000.00 127873448.00 687483448.00
4. Operating revenue and cost of sales
Unit: RMB
Amount accounted for in the current period Amount incurred in the previous period
Item
Revenue Cost Revenue Cost
Main operations 1511333319.44 1258372291.66 1327825286.46 1159173308.57
Other operations 805624.39 3023652.23 592197.28
Total 1512138943.83 1258372291.66 1330848938.69 1159765505.85
Breakdown information of operating income and operating cost:
Unit: RMB
Classification of Division 1 Division 2
Kunming Chuan Jin Nuo Chemical
Co. Ltd. Total
contracts Operating Operating Operating Operating Operating Operating Operating
income costs revenue costs revenue Operating costs revenue cost
Business type 1512138943.83 1258372291.66
Where:
Feed grade
phosphate 1032296282.47 854136258.89
Phosphate
fertilizer 227044559.00 184202447.89
Phosphoric acid 220739824.89 205490383.60
Others 32058277.47 14543201.28
Classified by
operating region 1512138943.83 1258372291.66
Where:
Northeast China 2634225.75 2099499.05
North China 29815482.38 24845880.97
East China 108614573.83 90241785.21
South China 203177280.81 161313348.38
Central China 52648424.31 43238862.65
Northwest China 26567964.66 22067777.01
Southwest China 490366128.41 412610071.64
International 598314863.68 501955066.75
Market or
customer type 1512138943.83 1258372291.66
Where:
Phosphate
chemical 1480080666.36 1243829090.38
industry
Others 32058277.47 14543201.28
Contract type 1512138943.83 1258372291.66
Where:
216Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Division 1 Division 2 Kunming Chuan Jin Nuo ChemicalClassification of Co. Ltd. Total
contracts Operating Operating Operating Operating Operating Operating Operating
income costs revenue costs revenue Operating costs revenue cost
Product sales 1511333319.44 1258372291.66
Others 805624.39
Classified by the
time of goods 1512138943.83 1258372291.66
transfer
Where:
Recognition at a
certain point in 1512138943.83 1258372291.66
time
Recognition
within a certain
period of time
Classification by
contract term 1512138943.83 1258372291.66
Where:
Within one year 1512138943.83 1258372291.66
Over one year
Classification by
sales channel 1512138943.83 1258372291.66
Where:
Direct sales 783847112.38 667840511.92
Distribution 728291831.45 590531779.74
Total 1512138943.83 1258372291.66
Information about performance obligations:
The nature of
Time for the Whether or Company’s Types of quality
Item contract Important payment terms Company’s
not the share of assurance offered
fulfillment commitment person is expected by the Company
obligations to the transfer primarily refunds to and related
of the goods responsible customers obligations
1) 100% prepayment before loading;
February 2) Payment via sight letter of creditOverseas 26 2026 after shipment; 3) Payment by wire Goods Yes None
Product quality
transfer within 30 days after the bill assurance
of lading date.
1) Payment in advance before goods
are shipped; 2) Payment in full
Domestic February 26 within 3-10 working days after the Product quality2026 goods are delivered inspected and Goods Yes None assurance
accepted and after receiving the
invoice.Other descriptions
Information related to the transaction price allocated to the remaining performance obligations:
As of the end of the Reporting Period the amount of revenue corresponding to the performance
obligations that have been contracted but not yet fulfilled or not fully fulfilled was
RMB175440352.15 of which RMB175440352.15 is expected to be recognized as revenue in
2026.
5. Investment income
Unit: RMB
Item Amount accounted for in the currentperiod Amount incurred in the previous period
Long-term equity investment income by
cost method 131096000.00
217Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
Investment income from the disposal of
held-for-trading financial assets 310885.40 455154.71
Total 131406885.40 455154.71
XX. Supplementary materials
1. Items and amounts of non-recurring gains and losses
□Applicable □ Not applicable
Unit: RMB
Item Amount Description
Gains and losses on disposal of non-
current assets 2386.93
Government grants recorded in the profit
and loss for the current period (except for
those acquired in the ordinary course of
the Company’s business in line with
national policies and regulations or those 11406025.93
enjoyed according to established standards
and consistently affect the Company’s
gain or loss)
Gains or losses arising from changes in
fair value of financial assets and financial
liabilities held by non-financial enterprises
and gains or losses arising from the
disposal of financial assets and financial 310885.40
liabilities other than effective hedging
business related to the Company’s normal
operating business
Other non-operating income and expenses
other than the items above 1418423.71
Less: Income tax effects 1647832.93
Non-controlling interests effects (after tax) 337024.48
Total 11152864.56 --
Details of other profit and loss items in line with the definition of non-recurring gains and losses:
□ Applicable□Not applicable
There are no other profit and loss items in line with the definition of non-recurring gains and losses
in the Company.Explanation of situations where items listed as non-recurring profits and losses in the Explanatory
Notice of Information Disclosure by Companies Offering Securities to the Public No.1 - Non-
recurring Gains and Losses are classified as non-recurring gains and losses
□Applicable□Not applicable
218Full Text of 2025 Annual Report of Kunming Chuan Jin Nuo Chemical Co. Ltd.
2. Return on equity and earnings per share
Weighted average Earnings per share
Profit as of the Reporting Period return on equity (ROE) Basic earnings per share Diluted earnings per
(%) (RMB/share) share(RMB/share)
Net profits attributable to common shareholders of
the Company 16.67% 1.6510 1.6510
Net profits attributable to common shareholders of
the Company after deducting non-recurring gains 16.26% 1.6104 1.6104
and losses
3. Accounting data differences under PRC GAAP and those under the GAAP of a foreign
jurisdiction
(1) Differences between disclosed net profits and net assets in financial statement in
accordance with International Accounting Standards and Chinese Accounting Standards
□ Applicable□Not applicable
(2) Differences between disclosed net profits and net assets in financial statement in
accordance with Domestic Accounting Standards and Chinese Accounting Standards
□ Applicable□Not applicable
(3) Notes to reasons for the differences in accounting data under domestic and overseas
accounting standards; for any adjustment made to the differences in the data audited by
overseas audit institutions the name of such overseas institutions shall be specified.□ Applicable□Not applicable
219
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