Suzhou Dongshan Precision Manufacturing Co., Ltd.
Annual Report 2023
April 18, 2024
Annual Report 2023
Section I Important Note, Table of Contents and DefinitionsThe Board of Directors, the Board of Supervisors, directors, supervisors and senior executives ofthe Company hereby warrant that the information contained in this Annual Report is true, accurateand complete and this Annual Report is free from any misrepresentation, misleading statement ormaterial omission, and agree to assume joint and several liabilities for this Annual Report.YUAN Yonggang, Principal of the Company, CFO WANG Xu and Accounting Supervisor ZHUDeguang hereby represent that the financial statements contained in this Annual Report are true,accurate and complete.All directors of the Company attended the meeting of the Board of Directors reviewing thisReport.The Company has fully disclosed the potential risks associated with the concentration ofcustomers, rapid upgrading and iteration of industrial technologies, fluctuations in exchange rates,etc. in this Report. Please see “XI. Prospects for Future Development of the Company” under“Section III. Management’s Discussion and Analysis”.According to the profit distribution proposal approved by the Board of Directors, the Companywill distribute a cash dividend of RMB 2.5 (inclusive of tax) per 10 shares to all shareholders onthe basis of 1,701,276,209 shares (excluding the treasury shares), and will not distribute anybonus shares or transfer any capital reserve to the share capital.
Note:
This document is a translated version of the Chinese Annual Report 2023 ("2023 年年度报告"). In case of anydiscrepancies, the Annual Report 2023 published in the Chinese version shall prevail. The full Chinese AnnualReport 2023 is available at www.cninfo.com.cn.
Table of Contents
Section I Important Note, Table of Contents and Definitions ...... 2
Section II Company Profile and Financial Highlights ...... 8
Section III Management’s Discussion and Analysis ...... 12
Section IV Corporate Governance ...... 35
Section V Environmental and Social Responsibilities ...... 49
Section VI Significant Matters ...... 53
Section VII Changes in Shares and Shareholders ...... 62
Section VIII Preferred Shares ...... 67
Section IX Bonds ...... 68
Section X Financial Report ...... 69
List of References
1. Financial statements signed and chopped by Mr. YUAN Yonggang, legal representative, Mr.WANG Xu, CFO, and Mr. ZHU Deguang, Accounting Supervisor of the Company;
2. Originals of all documents of the Company publicly disclosed during the reporting period andrelated announcements;
3. Original of the Annual Report 2023 stamped with the seal and signed by the legalrepresentative of the Company; and
4. Place keeping such documents for inspection: Securities Department of the Company atBuilding 12#, Yunhe Town Headquarters Industrial Park, 99 East Taihu Road, Wuzhong District,Suzhou.
Definitions
| Term | means | Definition |
| Company, we or DSBJ | means | Suzhou Dongshan Precision Manufacturing Co., Ltd. |
| Printed circuit board (PCB) | means | one of our three major business segments, including research and development (R&D), design, manufacturing and sale of FPCs, rigid PCBs, rigid-flex PCBs and other products. |
| Photoelectric display | means | one of our three major business segments, including R&D, design, manufacturing and sale of LED devices, touch panels, liquid crystal display modules and other products. |
| Precision manufacturing | means | one of our three major business segments, including design, manufacturing and sale of precision metal structural components and assemblies and other products. |
| Yongchuang Tech | means | Suzhou Yongchuang Metal Science and Technology Co., Ltd., a wholly owned subsidiary of the Company. |
| Hong Kong Dongshan | means | Hong Kong Dongshan Precision Union Optoelectronic Co., Limited, a wholly owned subsidiary of the Company. |
| Dragon Holdings | means | Dragon Electronix Holdings Inc., a wholly owned subsidiary of Hong Kong Dongshan. |
| MFLEX | means | Multi-Fineline Electronix, Inc., a wholly owned subsidiary of Dragon Holdings. |
| MFLEX Suzhou | means | MFLEX Suzhou Co., Ltd., a wholly owned subsidiary of MFLEX. |
| MFLEX Yancheng | means | MFLEX Yancheng Co., Ltd., a wholly owned subsidiary of MFLEX. |
| Hong Kong Dongshan Holding | means | Hong Kong Dongshan Holding Limited, a wholly owned subsidiary of the Company. |
| Multek Group | means | Multek Group (Hong Kong) Limited, a wholly owned subsidiary of Hong Kong Dongshan Holding. |
| Multek Industries | means | Multek Industries Limited, a wholly owned subsidiary of Multek Group. |
| Multek Electronics | means | Multek Electronics Limited, a wholly owned subsidiary of Multek Group. |
| Multek Zhuhai | means | Multek Zhuhai Limited, a wholly owned subsidiary of Multek Group. |
| Multek China | means | Multek China Ltd., a wholly owned subsidiary of Multek Group. |
| Yancheng Dongshan | means | Yancheng Dongshan Precision Manufacturing Co., Ltd., a wholly owned subsidiary of the Company. |
| Mutto Optronics | means | Mutto Optronics Technology Co., Ltd., a wholly owned subsidiary of the Company |
| RF Top Electronic | means | Suzhou RF Top Electronic Communication Co., Ltd., a controlled subsidiary of the Company |
| Suzhou JDI | means | Suzhou JDI Electronics Inc. |
| Aranda | means | Aranda Tooling, Inc., AutoTech Production Services, Inc. and Autotech Production de Mexico S. de R. L. de C.V. |
| JDI | means | Japan Display Inc. |
| 5G | means | the 5th generation mobile communication technology. |
| AI | means | artificial intelligence, the simulation of human intelligence using computer programs. |
| AR | means | augmented reality, a technology that combines and integrates the virtual world on screen with the real world, based on precise calculation of position and angle of camera images and image analysis technology. |
| VR | means | virtual reality, a computer-simulated 3D virtual world with scenes and objects that appear to be real. |
| IoT | means | Internet of Things, a system of interrelated computing devices, mechanical and digital machines, that has a unique identifier (UID) and is capable of transmitting data over the network. |
| PCB | means | printed circuit board, a finished product with insulated substrates and conductors as materials, designed and made into printed circuits, printed components or a combination of conductive patterns according to the pre-designed circuit schematic diagram. |
| FPC | means | flexible printed circuit. |
| LED or LED device | means | light-emitting diode, a conductor diode that emits incoherent light when current flows through it, and the recombination of electrons and electron holes in the semiconductor produces radiation, for the purpose of this Report, including LED particles, LED light bars, LED |
| backlight modules, LED lighting devices and other LED products. | ||
| Mini LED | means | sub-millimeter light emitting diode, an LED device with a grain size of about 50-200μm. |
| LCM | means | LCD module or LCD display module, formed by assembling LCD display device with the relevant connectors, control, driver and other peripheral circuits, PCB circuit board, backlight source, structural components and other components. |
| Touch panel | means | a device under the protection of transparent glass that detects touches using sensors, and processes and transmits the relevant information. |
| AOA | means | the Articles of Association of Suzhou Dongshan Precision Manufacturing Co., Ltd. |
| CSRC | means | the China Securities Regulatory Commission. |
| SZSE | means | the Shenzhen Stock Exchange. |
| Reporting period | means | the period from January 1, 2023 to December 31, 2023. |
| RMB and RMB0’000 | means | Renminbi and ten thousand Yuan respectively. |
Section II Company Profile and Financial HighlightsI. Company Profile
| Stock short name | DSBJ | Stock code | 002384 |
| Original stock short name (if any) | None | ||
| Stock exchange | Shenzhen Stock Exchange | ||
| Chinese name | 苏州东山精密制造股份有限公司 | ||
| Chinese short name | 东山精密 | ||
| English name (if any) | Suzhou Dongshan Precision Manufacturing Co., Ltd. | ||
| English short name (if any) | DSBJ | ||
| Legal representative | YUAN Yonggang | ||
| Registered address | No. 88 Tangdong Road, Wuzhong Economic Development Zone, Suzhou | ||
| Postal code of the registered address | 215124 | ||
| History of changes in the registered address | Our registered address was at Shangwan Village, Dongshan, Wuzhong District, Suzhou, Jiangsu when we were reorganized from Suzhou Dongshan Sheet Metal Co., Ltd. into Suzhou Dongshan Precision Manufacturing Co., Ltd. in 2007, and was changed into No. 88 Tangdong Road, Wuzhong Economic Development Zone, Suzhou on December 27, 2019. | ||
| Office address | Building 12#, Yunhe Town Headquarters Industrial Park, 99 East Taihu Road, Wuzhong District, Suzhou | ||
| Postal code of office address | 215128 | ||
| Company website | www.dsbj.com | ||
| dsbj@dsbj.com | |||
II. Contact Person and Contact Information
| Board Secretary | Securities Affairs Representative | |
| Name | MAO Xiaoyan | ZHOU Hao |
| Address | Building 12#, Yunhe Town Headquarters Industrial Park, 99 East Taihu Road, Wuzhong District, Suzhou, Jiangsu | Building 12#, Yunhe Town Headquarters Industrial Park, 99 East Taihu Road, Wuzhong District, Suzhou, Jiangsu |
| Telephone | 0512-80190019 | 0512-80190019 |
| Facsimile | 0512-80190029 | 0512-80190029 |
| maoxy@dsbj.com | hao.zhou@dsbj.com |
III. Media for Information Disclosure and Place for Keeping Annual Report
| Website of the stock exchange disclosing the Company’s annual report | www.szse.cn |
| Media and website disclosing the Company’s annual report | The Securities Times, the China Securities Journal, the Shanghai Securities News, the Securities Daily and www.cninfo.com.cn |
| Place for keeping the Company’s annual report | Securities Department of the Company |
IV. Changes in Registration Particulars
| Organization code | 91320500703719732P |
| Changes in primary business since the listing of the Company (if any) | Since our IPO and listing, we have strategically included PCB, photoelectric display and other electronic businesses in our industrial mix. We focus on the R&D and manufacturing of technologically advanced core components for the intelligently interconnected world, and the provision of comprehensive intelligent interconnection solutions to customers throughout the world. |
| Changes in controlling shareholder (if any) | None |
V. Other Related Information
Accounting firm engaged by the Company:
| Name of accounting firm | Pan-China Certified Public Accountants LLP |
| Office address of accounting firm | 31/F, Block B, China Resources Building, No. 1366 Qianjiang Road, Jianggan District, Hangzhou, Zhejiang |
| Name of accountants signing this report | ZHANG Yang and FU Zhenlong |
Sponsor engaged by the Company that performs the duties of ongoing supervision over the Company during the reporting period:
□ Applicable ? N/A
Financial advisor engaged by the Company that performs the duties of ongoing supervision over the Company during the reportingperiod:
□ Applicable ? N/A
VI. Key Accounting Data and Financial Indicators
Did the Company need to retrospectively adjust or restate any accounting data of prior years?? Yes □NoReason for retrospective adjustment or re-statement:
Changes in accounting policies
| 2023 | 2022 | Y/Y % change | 2021 | |||
| Before adjustment | After adjustment | After adjustment | Before adjustment | After adjustment | ||
| Operating revenue (RMB) | 33,651,205,468.80 | 31,580,146,732.58 | 31,580,146,732.58 | 6.56% | 31,793,147,908.12 | 31,793,147,908.12 |
| Net profit attributable to shareholders of the Listed Company (RMB) | 1,964,525,269.65 | 2,367,519,530.91 | 2,368,347,970.02 | -17.05% | 1,862,481,138.84 | 1,862,481,138.84 |
| Net profit attributable to shareholders of the Listed Company after deduction of non-recurring gain or loss (RMB) | 1,614,534,226.22 | 2,125,754,423.71 | 2,126,582,862.82 | -24.08% | 1,576,650,669.18 | 1,576,650,669.18 |
| Net cash flow from operating activities (RMB) | 5,172,419,470.20 | 4,629,884,011.38 | 4,629,884,011.38 | 11.72% | 3,209,544,484.21 | 3,209,544,484.21 |
| Basic earnings per share (RMB/share) | 1.15 | 1.39 | 1.39 | -17.27% | 1.09 | 1.09 |
| Diluted earnings per share (RMB/share) | 1.15 | 1.39 | 1.39 | -17.27% | 1.09 | 1.09 |
| Weighted average return on net assets | 11.38% | 15.33% | 15.33% | -3.95% | 13.46% | 13.46% |
| December 31, 2023 | December 31, 2022 | Y/Y % change | December 31, 2021 | |||
| Before adjustment | After adjustment | After adjustment | Before adjustment | After adjustment | ||
| Total assets (RMB) | 44,371,719,028.28 | 40,531,361,181.17 | 40,802,606,803.61 | 8.75% | 37,951,408,787.25 | 37,951,408,787.25 |
| Net assets attributable to shareholders of the Listed Company (RMB) | 18,143,026,745.54 | 16,359,429,480.45 | 16,378,630,871.35 | 10.77% | 14,576,500,325.15 | 14,576,500,325.15 |
Reason for changes in accounting policies and correction of accounting errors:
Since January 1, 2023, we have applied the provisions contained in the Interpretation of the China Accounting Standards forBusiness Enterprises (“CASBE”) No. 16 issued by the Ministry of Finance, regarding the “accounting treatment of deferred taxesrelated to assets and liabilities arising from single transactions to which the initial recognition exemption does not apply”, andadjusted the single transactions to which such provisions apply that occurred during the period from the beginning of the earliestperiod in which we applied such provisions in the presentation of financial statements for the first time, till the date of initialapplication of such provisions as follows: with respect to the taxable temporary difference and deductible temporary differencesarising from lease liabilities and right-of-use assets, provisions related to retirement obligations and corresponding assetsrecognized in connection with the single transactions to which such provisions apply, at the beginning of the earliest period inwhich we applied such provisions in the presentation of financial statements for the first time, the cumulative effect is treated as anadjustment to the opening retained earnings and other related financial statement items for that period in accordance with suchprovisions and the provisions of CASBE No. 18 “Income Tax”.Whether the lower of the net profit before and after the deduction of non-recurring gain or loss in the past three accounting yearshas been negative and the most recent annual auditor’s report indicates that the Company’s ability to continue as a going concernis uncertain?
□ Yes ? No
Whether the lower of net profit before and after the deduction of non-recurring gain or loss is negative?
□ Yes ? No
VII. Differences in Accounting Data under the Chinese Accounting Standards forBusiness Enterprises (the “CASBEs”) and Overseas Accounting Standards
1. Differences in net profit and net assets disclosed in the financial report prepared under the CASBEsand the International Financial Reporting Standards (IFRS)
□ Applicable ? N/A
There was no difference in net profit and net assets disclosed in the financial report for the reporting period prepared under theCASBEs and the IFRS.
2. Differences in net profit and net assets disclosed in the financial report prepared under the CASBEsand overseas accounting standards
□ Applicable ? N/A
There was no difference in net profit and net assets disclosed in the financial report for the reporting period prepared under theCASBEs and overseas accounting standards.VIII. Key Financial Indicators by Quarter
In RMB
| First quarter | Second quarter | Third quarter | Fourth quarter | |
| Operating revenue | 6,511,602,610.15 | 7,155,485,214.91 | 8,833,566,429.51 | 11,150,551,214.23 |
| Net profit attributable to shareholders of the Listed Company | 471,650,134.12 | 352,898,518.86 | 508,139,505.69 | 631,837,110.98 |
| Net profit attributable to shareholders of the Listed Company after deduction of non-recurring gain or loss | 280,096,313.63 | 297,524,494.89 | 459,019,794.35 | 577,893,623.35 |
| Net cash flows from operating activities | 1,799,383,005.75 | 814,517,830.27 | 1,089,030,694.96 | 1,469,487,939.22 |
Whether there’s any material difference between the financial metrics or aggregate amounts thereof set out above and thecorresponding financial metrics set out in any quarterly report or semi-annual report of the Company already disclosed?
□ Yes ? No
IX. Items and Amounts of Non-recurring Gains or Losses
? Applicable □ N/A
In RMB
| Items | 2023 | 2022 | 2021 | Remark |
| Gain or loss on disposal of non-current assets (including allowance for impairment of assets that has been written off) | -26,367,874.21 | -14,220,918.02 | 13,783,433.93 | |
| Government grants recognized in profit or loss (excluding the government grants that are closely related to the business of the Company, conform to the applicable polices of the country, are provided in accordance with the established standards, and continuously affect the Company’s profit or loss) | 249,253,139.50 | 317,926,133.80 | 268,965,326.25 | |
| Gain or loss on changes in fair value of financial assets and financial liabilities held by non-financial entities, and gain or loss | 14,283,973.00 | -63,657,229.48 | 17,766,609.82 |
| on disposal of financial assets and financial liabilities, except for effective hedges held in the ordinary course of business | ||||
| Fund occupation fees received from non-financial entities and recorded in profit or loss | 19,777,467.66 | |||
| Gain or loss on assets under entrusted investment or management | 10,408,683.62 | 11,913,618.63 | ||
| Reversal of impairment loss on accounts receivable assessed for impairment individually | 1,250,000.00 | 9,500,583.33 | 22,451,468.46 | |
| Other non-operating revenues and expenses | -398,583.47 | 3,073,832.45 | -1,909,316.59 | Investment income on business combinations involving entities not under common control |
| Other gain or loss within the meaning of non-recurring gain or loss | 134,812,863.84 | 956,961.84 | 722,866.99 | |
| Less: Effect on income tax | 22,244,723.86 | 21,900,816.79 | 65,906,713.13 | |
| Effect on minority interests (exclusive of tax) | 597,751.37 | 322,123.55 | 1,734,292.36 | |
| Total | 349,991,043.43 | 241,765,107.20 | 285,830,469.66 | -- |
Other items of gain or loss within the meaning of non-recurring gains or losses:
□ Applicable ? N/A
We do not have any other item of gain or loss within the meaning of non-recurring gains or losses.Classification of any item of non-recurring gain or loss defined by the Explanatory Announcement No. 1 on InformationDisclosure by Companies Publicly Offering Securities - Non-recurring Gain or Loss as recurring gain or loss:
□ Applicable ? N/A
We have not classified any item of non-recurring gain or loss defined by the Explanatory Announcement No. 1 on InformationDisclosure by Companies Publicly Offering Securities - Non-recurring Gain or Loss as recurring gain or loss.
Section III Management’s Discussion and AnalysisI. Situations of our industry during the Reporting Period
1. PCBs
Our printed circuit board (PCB) products include FPCs, which are important components for the PCB industry, and account forover 20% of PCB products. As substrates carrying electronic components and key connectors, the manufacturing quality of PCBsnot only directly affects the reliability of electronic products, but also affects the overall competitiveness of system products, andtherefore are referred to as the “mother of electronic system products”.PCBs are widely used in consumer electronics, new energy vehicles, communication equipment, industrial control, medical andother fields throughout the world. Along with intensive research and development (R&D) and continuous technology upgrading,PCB products are developing towards high density, small aperture and large capacity, and becoming lighter and thinner. Thefunctional innovations of smart phones, including the continuous growth of foldable phones, drive the rapid increase in the use ofFPCs per unit. Along with the application of artificial intelligence-generated content (AIGC) on mobile phones and computers, theyear 2024 is expected to become the first year for AI phones and AI PCs. The new smart eyeglass-type products launched by theleading manufacturers will drive the maturity of the metaverse industry. In addition, the new energy vehicle industry also enters amarket-driven rapid growth period. According to a report released by the CITIC Securities Research Institute and the datapublished by the China Association of Automobile Manufacturers, the total global sales volume of electric vehicles is expected toreach 24.70 million units by 2025, representing a compounded annual growth rate (CAGR) of 32.20% between 2022 and 2025,where the total sales volume of new energy vehicles in China will reach 15.60 million units by 2025; and by 2030, the total salesvolume of new energy vehicles is expected to reach 46.70 million units in the world, and 23.20 million units in China. Thegrowing demands of these industries are expected to start a new innovation cycle in the PCB industry.
2. Precision components
Our precision component products mainly are precision metal structural components, including heat dissipaters for new energyvehicles, battery casings, domain control casings, body in white, battery structural components, as well as base station antennas,filters and other structural components and assemblies for mobile communication. Our precision components are primarily used innew energy vehicles, communication equipment, and other fields having strict requirements for the processing precision andproduction quality of structural components. In recent years, driven by the demands for green and low-carbon transition, the globalnew energy vehicle industry has been growing rapidly, bringing new development opportunities for manufacturers of precisionmetal structural components.
3. Touch panel modules
Our touch panel modules are widely used in laptop, tablet, smart watch, on-board display and other fields, which develop alongwith the development of the relevant downstream industries.
(1) Consumer electronics
As consumers have formed a habit of touch operation, all major laptop brands have launched laptops with touch panels. Theemergence of convertible laptops, 2 in 1 laptops and other innovative products will continuously increase the penetration oflaptops with touch panels, and further drive the market demands for touch panel module products.
(2) Automobile
On-board displays mainly include central control displays, dashboards, and emerging head-up displays (HUD), electronic rearview
mirrors, passenger/rear seat displays, which are key interactive hardware for automotive intelligentization. New energy vehiclemanufacturers actively strive to improve their brand competencies through intelligentization, driving the rapid development of on-board display modules. According to the CITIC Securities Research Institute, the global on-board display market size is expectedto reach USD 13.84 billion by 2025, representing a CAGR of 19.96% between 2022 and 2025. With the advancement of newenergy vehicles, automotive intelligence is on the rise, leading to a trend of larger screens, multiple displays, and higherresolutions in on-board displays.
4. LED display devices
Our LED device products mainly include small-pitch LEDs, Mini LEDs and other products packaged in granule form. Along withthe development of Mini LED technology, LED display technology is continuously expanding into emerging applications, withproducts entering display screen, XR virtual shooting, outdoor naked-eye 3D, all-in-one conference equipment, mobile phones,tablets and other fields. As leading terminal manufacturers continuously launch new Mini LED products, the Mini LED marketsize will grow continuously.II. Situations of our Primary Business during the Reporting Period
(I) During the reporting period, our primary business has not undergone any material change.We focus on the R&D and manufacturing of core components for the intelligently interconnected world, and the provision ofcomprehensive intelligent interconnection solutions to customers all over the world. We are primarily engaged in the R&D,manufacturing and sale of PCBs, precision components, touch panel modules and LED display devices, which are widely used inconsumer electronics, new energy vehicles, communication equipment, industrial equipment, AI, medical appliances and otherfields.(II) During the reporting period, our main business model has not undergone any material change.We leverage our complete business chain to provide our customers with comprehensive, one-stop, industrial-leading services,continuously increase the depth of cooperation and adhesion with our customers, and maintain long-term, stable cooperation withpremium customers taking the lead in the global consumer electronics, new energy vehicle and communication equipmentindustries.We manufacture main products based on market demands, and adopt the production model that determines production accordingto sales, under which we develop production plans and deliver products taking into account the purchase orders placed bycustomers, the product quantities demanded by the customers under such purchase orders, as well as our production capacity andsupply of raw materials.
(1) Our main products and their applications
| No. | Product category | Product name | Product features | Application scenarios |
| 1 | PCBs | FPC | FPCs are printed circuit boards made of flexible substrates, composed of metal conductor foils, adhesives and insulating base films, which are light, thin, bendable and suitable for three-dimensional assembly, and optimal for electronic products with requirements for miniaturization, lightweight, and mobility. | Consumer electronics, new energy vehicles, communication equipment, industrial equipment, AI, servers, medical devices, etc. |
| Rigid PCB | Rigid circuit boards are classified into single-layer boards, double-layer boards, ordinary multi-layer boards, high-layer boards, HDI boards and ELIC boards. Ordinary multi-layer boards typically have four or more layers; high-layer boards typically have more than 18 layers; HDI boards refer to high-density interconnect boards, which are capable of high-density wiring; ELIC boards refer to Every Layer Interconnection |
| boards, which are high-end products in HDI boards. Generally, the more layers a PCB has, the better it is for achieving fast signal transmission and improving data processing performance. | ||||
| Rigid-flex PCB | Rigid-flex PCBs combine FPCs and rigid PCBs through lamination and other processes according to the relevant process requirements, and have the features of both FPCs and rigid PCBs. Rigid-flex PCBs can be used in products with special requirements. As they have both flexible area and rigid areas, they can save internal space, reduce volume, and greatly improve the performance of the finished products. | |||
| 2 | Precision components | Precision metal products | Precision metal components are formed through die casting, stamping, panel beating, precision machining and other processes to meet the customers’ demand for precision, including functional structural components for new energy vehicles, base station antennas and filters for mobile communication, etc. | New energy vehicles, energy storage, communication equipment, etc. |
| 3 | Touch panel modules | Touch panel | Touch panels and LCMs are important components for display modules of smart phones, tablets and other consumer electronic products. We are able to provide customers with touch panels, and LCMs as separate components, or complete touch display modules. | Smart phones, tablets, smart watches, etc. |
| LCM | ||||
| On-board display module | On-board display modules are used in display devices for vehicles. They are typically assemblies integrating display screen and control circuits, and used to display various information and images inside vehicles. | Automotive dashboards, rearview mirrors, central control screens, etc. | ||
| 4 | LED display devices | LED display devices are products formed by packaging LED chips and brackets with epoxy resin or organic silicon. Our LED display devices include 0606, 0808, 1010, 1515, 2121, 1921, 2525, 2727, and other models. | Indoor and outdoor small-pitch, high-definition displays, and other professional display and commercial fields | |
(2) Applications of our products in new energy vehicles
| ? Cold plates (automatic drive and central control) ? Heat dissipation modules | ? HUDs, dashboards, and central control displays ? Passenger/rear seat entertainment displays, and multi-connected displays ? Streaming electronic | ? Body in white ? Seat framework assembly | ? Automotive electronics (BMS, MCU, ECU, etc.) |
| rearview mirrors, and armrest displays | |||
| ? Electric drive and electric control casings ? Domain control casings | ? Rigid PCBs and rigid-flex PCBs for central control system/GPS ? Rigid PCBs and rigid-flex PCBs for information & entertainment systems/ Internet of Vehicles | ||
| ? Camera brackets and assemblies ? Rigid PCBs and rigid-flex PCBs for cameras | ? Casings and rigid PCBs for laser radars and millimeter wave radars ? Rigid PCBs for advanced driving assistance system and central computing unit | ? Cell casings ? Battery pack trays and assemblies ? Rigid PCBs and CCS for battery packs | ? Charging station framework and casing assemblies |
(3) Situations of our industry
In the field of PCB, according to the research data published by Prismark, in terms of sales revenues in 2023, we are rankedsecond in the field of FPC and third in the field of PCB in the world. We have strong technology R&D, quality control, and smartfactory management capabilities in the PCB industry, and are able to provide customers with high-quality products and services.Our major PCB customers are well-known global consumer electronics and new energy vehicle manufacturers, so we have a goodcustomer base, and strong competitiveness.In the field of precision components, we are one of the largest specialized precision component suppliers in China, providestructural components for new energy vehicles, communication equipment and other fields, and mainly serve well-known globalnew energy vehicle and communication equipment manufacturers. We have strong competencies in the industry, and are one of thefew vendors able to provide the new energy vehicle manufacturers with PCBs (including FPCs), on-board displays, functional andstructural components, and other products and integrated solutions. In the future, we will leverage our advantages in the coverageof multiple industry chains and the provision of integrated solutions to further improve customer adhesion.In the field of touch panel modules and LED display devices, we are one of the largest touch panel modules and LED displaydevice manufacturers in China. Our successful acquisition of Suzhou JDI in January 2023 will further expand our on-board displaymodule business, and enhance our overall competence in the field of touch panel modules.
III. Core Competencies of DSBJ(I) Advantage in customers: Premium domestic and foreign customer baseOur products find favor with top customers in different areas throughout the world and have a premium customer base, which hasa good demonstration effect, and will help us further enhance our capability to develop new customers, and acquire larger marketshares in the future competition. Our customers come from consumer electronics, new energy vehicles, communication equipmentand other industries. Such diversified customer base enables us to fend off the impact of seasonal and cyclical fluctuations ofdifferent industries, and improve our core competencies while maintaining stable growth of business.(II) Advantage in products: Wide range of products and integrated industry chainIn recent years, we have continuously improved our industrial and product mix through acquisitions and internal development,broken development bottlenecks, and introduced superior businesses to build up new growth drivers. At present, our productofferings cover three business segments, namely PCB, photoelectric display and precision manufacturing. We are able to provideconsumer electronics and new energy vehicle manufacturers with a variety of basic and core components for intelligentinterconnection. In the field of PCB, we have grown into a leading company in the industry. We actively leverage the synergisticeffect of all business segments in R&D, technology, supply chain, products, marketing and other areas, through the integration of
internal resources and coordinated development, gradually achieve the synergy advantage of a vertically integrated industry chain,and strive to provide comprehensive, one-stop and technologically advanced integrated product solutions to our customers, andsatisfy their customization requirements to the maximum extent.(III) Advantage in technology: Stick to the principle that technological innovation capability is the primary production factorWe attach great importance to technological innovation in our business development, and drive our development throughinnovation. Through participation in the preliminary development projects of the industry-leading customers, we keep in step withthe development of cutting-edging technologies, and have built a complete open R&D system and efficient R&D mechanisms, anda global R&D team with outstanding professional level, rich industrial experience and strong innovation capabilities. Throughcontinuous funding for R&D of new materials, new technologies and new production processes, we have vigorously exploredfrontier production technologies for core components in the field of intelligent interconnection, and laid solid foundations forserving emerging businesses, such as AR/VR, IoT, Mini LED and new energy vehicles. While improving product technologies, weattach great importance to the innovation and upgrading of production technologies, and have gained certain effects in theintegrated development of informatization and industrialization. By promoting the integrated development of informatization andindustrialization, we have vigorously implemented intelligent manufacturing and built smart factories.(IV) Advantage in management: Advanced concept, complete system and efficient executionWe advocate the corporate spirit of “openness, inclusion and pragmatism”, stick to the management principle of “overall planning,the delegation of powers in business operation, support by the platform and centralized supervision”, give full play to the initiativeand creativity of all organizations, and have built a scientific and efficient management system. Our management team haspractical experience in the management of the advanced manufacturing industry, has wide global visions, is able to make accuratestrategic judgments and decisions on the trends of industry and opportunities for development, and has strong cohesion andexecutive ability. We are practical and keep forging ahead in day-to-day management and operation, make periodic benchmarkinganalyses to compare our performance against historic data, budget targets and the results of outstanding peers, and effectivelyimprove our operational quality and efficiency by setting examples and objectives, identifying breakthrough points, focusing onimplementation and reviewing what has been done, to lay solid foundations for our sustainable high-quality development.(V) Advantage in scale: Promote development in reliance on advantage in scale and increase benefits based on synergistic effectOur customers are well-known domestic and international hi-tech companies that have high purchase quantities, strictrequirements for the delivery of products, and high requirements for the scale of production and production efficiency of suppliers.Through years of development and accumulation, we have grown into a supplier of core components for intelligentinterconnection with relatively strong overall capabilities in China. Our large scale of production can satisfy the purchase demandsof major downstream customers, creating a big advantage in scale. Our advantage in scale provides us with strong bargainingpower in the purchase of raw materials, resulting in the reduction of the unit production costs. On the other hand, through effectiveintegration of internal resources, we can reduce operating costs, thereby increasing our superiority over our competitors, furtherconsolidating and enhancing our position in the industry, and improving our core competencies.(VI) Advantage in internationalization: Promote the establishment of a “dual circulation” development patternWe closely follow the national development strategies, actively take part in global economic competitions, and continuouslyenhance the integration of high-quality resources of the industry. After the completion of two overseas acquisitions, we havesuccessfully entered the PCB industry that has broader prospects for development, optimized our industrial structure, and laid solidfoundations for our high-quality development. We have achieved growth in both scale of operation and results of operationsthrough such lead-forward development. In recent years, we have established operating entities with different functions in NorthAmerica, Europe, Southeast Asia and other countries and regions. In 2022, in order to implement our new-round developmentstrategy and grasp the development opportunities brought about by the new energy vehicle industry, we established the “two-
wheel drive” strategy, and decided to focus our efforts on the two core fields, namely consumer electronics and new energyvehicles. In order to actively respond to the demands of customers, we have accelerated the development of overseas productionbases. In 2023, our Mexico production base successfully went into production, and our Thai production base commencedconstruction. These actions will further improve our global operating capabilities, promote the establishment of a “dual circulation”development pattern, and enable us to actively cope with the complicated competition environment.IV. Analysis of Primary business
1. Overview
During the reporting period, under the leadership of our Board of Directors, with joint efforts of our management and allemployees, we further focused on the “two-wheel drive” strategy, and achieved stable growth of our core business. In 2023, weovercame a variety of unfavorable factors, such as imbalance between supply and demand in the photoelectric display market,declining demands in the communication equipment industry, and adjustment of supply chain strategies by certain overseascustomers, and earned a total operating revenue of RMB33.651 billion, an increase of 6.56% compared to the previous year; ofwhich, the sales revenue of the PCB segment was RMB23.261 billion, an increase of 6.61% compared to the previous year, andthe sales revenue of the new energy vehicle segment increased 168.39% compared to the previous year, showing a strongmomentum of growth. In 2023, our LED segment recorded a temporary loss due to the production capacity utilization ratio andselling prices of LED and other photoelectric display devices and modules falling short of expectations. However, in reliance onthe stable operating revenue and profit contributed by our core business, and the strong resilience and competencies demonstratedby our PCB business in the context of a sluggish consumer electronics market, and by further promoting integrated development ofinformatization and industrialization, we still earned a net profit of RMB1.965 billion attributable to the shareholders of the ListedCompany, representing a decrease of 17.05% compared to the previous year. During the reporting period, we continued toimplement the prudent financial strategy, and further enhanced management of net working capital, and recorded a cash flow ofRMB5.172 billion from operating activities, representing an increase of 11.72% compared to the previous year. Below is asummary of our main business activities in 2023:
(1) Focus on core fields and products, and further enhance business cooperation with major customers of the industryIn the field of PCB, we enhanced our efforts to improve customer satisfaction, increased our funding for R&D and technologyinnovation, actively promoted integrated development of informatization and industrialization and construction of smart factories,and vigorously improved our core competencies, resulting in a growth of both operating revenue and profit in the context of asluggish market. On the other hand, we accelerated the development and deployment of the component production lines for newenergy vehicles, and made steady progress in the investment in new production bases, validation by new customers, and massproduction of new products, among others. In addition, through optimizing the internal allocation of resources, we continuouslyenhanced internal integration and coordination, and taking into account the requirements of the new energy vehicle industry forproducts with high quality and high reliability, and the requirements of the consumer electronics industry for rapid response andrapid iteration, fully leveraged our advantages and capabilities, further enhanced business cooperation with major customers of theindustry, and actively satisfied customer demands. In 2023, we advanced our global deployment through acquisition and self-construction. A number of our overseas production bases have commenced construction or gone into production, which willprovide a guarantee of production capacity for our strategy to focus on core fields and products.
(2) Continuously optimize the organization structure and talent training system, and create a sound corporate cultureImplementation of strategies requires the support of organization, while building of organizational capability is the key to theimplementation of strategies. During the reporting period, we further adjusted and optimized the organization structure of ourheadquarters and business units, and accelerated the close-down, suspension, merger, transfer or otherwise adjustment of the
production bases managed by certain business units, to improve our organizational efficiency in an all-round way. In addition, werecruited research, applied, professional and technical talents from all over the world, enhanced the training of young and reservetalents, and continuously improved the density and quality of talents. We further optimized our talent pipeline training andemployee development plans, employee incentives and other related management mechanisms, and used our digital humanresources platform system to build a more flexible organization system, and provide organizational and personnel guarantees forthe fulfillment of our strategic objectives. We also intensively integrated officers’ leading roles, engineer culture, employee careand other cultures with our corporate culture of openness, inclusion, pragmatism and enterprising, to create a sound workingenvironment.
(3) Improve the management system and tools, and increase the management efficiencyOur headquarters continuously improved our management system, maintained a balance between delegation of powers andsupervision, between platform support and collaboration, and between management and control on the one hand and enabling onthe other hand, further enhanced system governance and data governance, refined a number of normative documents, increased ourmanagement efficiency in an all-round way, and built a management ecosystem with defined roles and duties, reasonable divisionof work and efficient collaboration. In addition, we gave full play to the digital management tools, to provide efficient andaccurate management decision-making in our business management. In 2023, we integrated the ERP management system of allsubsidiaries, and built a functional information management platform for the financial, human resources, procurement and otherfunctional departments of the headquarters that connects with the headquarters and all business units. The business units built orupgraded their production management system, to ensure services, supervision and alert covering the entire production process.We also introduced AI technologies on a trial basis, which produced good effects in defect detection, behavior management,intelligent files and advanced planning and scheduling (APS), and realized data analysis, risk alert and resources coordinationcovering the entire process from the warehousing of raw materials to the dispatch of products, thereby ensuring the delivery ofhigh-quality products on schedule.
(4) Continue to adhere to the moderate financial strategy, to support the fulfillment of our strategic objectivesWe adhered to the “cash-first” strategy. During the reporting period, our net cash flows from operating activities reachedRMB5.172 billion, hitting a record high, which provided a solid capital guarantee for the optimization of our industrialdeployment. In addition, by reference to the target capital structure conforming to our current situations, we further reducedfinancial leverage, lowered the debt to asset ratio to a certain extent, and significantly improved the debt structure, by increasingthe proportion of long-term borrowings (including those due within one year) to the total interest-bearing liabilities to over 60%for the first time in our history, indicating that we had a more reasonable debt maturity structure. In addition, we further enhancedthe rolling budget management, significantly increased the predictability of business operations, and gradually establishedcomprehensive and systemic budget-related performance appraisal mechanisms. In the risk management related to foreignexchange rates and commodities, we adhered to the risk neutrality principle, and hedged market fluctuation risks using effectivehedging tools. Finally, we vigorously explored a financial management system in line with our global deployment, andcontinuously enhanced the training and awareness of compliance of our overseas officers, to ensure that our financial risks wereunder control.
2. Revenue and costs
(1) Components of operating revenue
In RMB
| 2023 | 2022 | Y/Y % change | |||
| Amount | % of operating revenue | Amount | % of operating revenue | ||
| Total operating revenue | 33,651,205,468.80 | 100% | 31,580,146,732.58 | 100% | 6.56% |
| By segment | |||||
| Computer, communication and other | 33,475,973,831.47 | 99.48% | 31,450,821,150.93 | 99.59% | 6.44% |
| electronics | |||||
| Others | 175,231,637.33 | 0.52% | 129,325,581.65 | 0.41% | 35.50% |
| By product | |||||
| PCBs | 23,261,396,022.09 | 69.13% | 21,819,200,095.46 | 69.09% | 6.61% |
| LED display devices | 1,190,456,597.34 | 3.54% | 1,682,433,257.88 | 5.33% | -29.24% |
| Touch panels and LCMs | 4,861,904,092.14 | 14.45% | 3,402,832,979.40 | 10.78% | 42.88% |
| Precision components | 4,162,217,119.90 | 12.37% | 4,546,354,818.19 | 14.40% | -8.45% |
| Other businesses | 175,231,637.33 | 0.52% | 129,325,581.65 | 0.41% | 35.50% |
| By region | |||||
| Domestic market | 5,649,268,947.33 | 16.79% | 5,622,124,424.21 | 17.80% | 0.48% |
| Overseas market | 28,001,936,521.47 | 83.21% | 25,958,022,308.37 | 82.20% | 7.87% |
| By sales model | |||||
| Direct sales | 33,651,205,468.80 | 100.00% | 31,580,146,732.58 | 100.00% | 6.56% |
Note: In 2023, our revenue from the new energy vehicle business was about RMB6.361 billion, an increase of 168.39% comparedto the previous year.
(2) Segments, products, regions or sales models representing more than 10% of operating revenue or profit? Applicable □ N/A
In RMB
| Operating revenue | Operating cost | Gross margin | Y/Y % change in operating revenue | Y/Y % change in operating cost | Y/Y % change in gross margin | |
| By segment | ||||||
| Computer, communication and other electronics | 33,475,973,831.47 | 28,425,160,342.65 | 15.09% | 6.44% | 9.49% | -2.37% |
| By product | ||||||
| PCBs | 23,261,396,022.09 | 18,425,150,842.03 | 20.79% | 6.61% | 6.90% | -0.22% |
| LED display devices | 1,190,456,597.34 | 1,507,938,317.36 | -26.67% | -29.24% | -1.71% | -35.48% |
| Touch panels and LCMs | 4,861,904,092.14 | 4,775,718,915.14 | 1.77% | 42.88% | 42.20% | 0.47% |
| Precision components | 4,162,217,119.90 | 3,716,352,268.12 | 10.71% | -8.45% | -3.04% | -4.98% |
| By region | ||||||
| Domestic market | 5,649,268,947.33 | 5,395,391,756.69 | 4.49% | 0.48% | 9.62% | -7.96% |
| Overseas market | 28,001,936,521.47 | 23,146,249,286.05 | 17.34% | 7.87% | 9.70% | -1.38% |
| By sales model | ||||||
| Direct sales | 33,651,205,468.80 | 28,541,641,042.74 | 15.18% | 6.56% | 9.69% | -2.42% |
1. The sales revenue of LED display devices decreased by 29.24% compared to the previous year, primarily due to the decliningdemands on the LED display market. The gross margin of LED display devices decreased by 35.48% compared to the previousyear, primarily due to declining market demands, decrease in output, inadequate production capacity utilization ratio, rising unitfixed costs, and declining unit selling prices caused by fiercer market competition in 2023.
2. The gross margin of sales on the domestic market decreased by 7.96% compared to the previous year, primarily due to adecrease in the gross margin of LED display devices.In case of any adjustment to the statistic scale for primary business data, the primary business data of the most recent reportingperiod as adjusted according to the statistic scale applied at the end of the reporting period:
□ Applicable ? N/A
(3) Whether the Company’s revenue from the sale of tangible goods is higher than the revenue from labor services?? Yes □ No
| Segment | Item | Unit | 2023 | 2022 | Y/Y % change |
| PCBs | Sales volume | m2 | 3,978,943.86 | 3,480,443.01 | 14.32% |
| Output | m2 | 3,952,946.76 | 3,478,056.19 | 13.65% |
| Inventories | m2 | 108,882.00 | 134,879.10 | -19.27% | |
| LCMs | Sales volume | PC | 11,373,591.00 | 10,577,698.00 | 7.52% |
| Output | PC | 11,318,183.00 | 10,566,760.00 | 7.11% | |
| Inventories | PC | 3,820,609.00 | 3,876,017.00 | -1.43% | |
| LED display devices | Sales volume | PC | 139,815,431,644.00 | 174,462,497,331.00 | -19.86% |
| Output | PC | 133,986,681,041.00 | 168,183,812,209.00 | -20.33% | |
| Inventories | PC | 19,701,743,832.00 | 25,530,494,435.00 | -22.83% | |
| Precision components | Sales volume | PC | 106,339,767.00 | 100,447,048.00 | 5.87% |
| Output | PC | 106,794,715.00 | 118,717,426.00 | -10.04% | |
| Inventories | PC | 30,807,396.00 | 30,352,448.00 | 1.50% |
Analysis of changes in the relevant data over 30% compared to the previous year:
? Applicable □ N/A
1. The sales volume and output of LED display devices decreased by 19.86% and 20.33% respectively compared to the previousyear, primarily due to the declining demands on the small-pitch LED display market. The inventories of LED display devicesdecreased by 22.83% compared to the previous year, primarily due to an increase in inventory turnover rate resulting from ourimprovement of inventory management.
(4) Performance of material sales contracts and material purchase contracts by the Company as of the end of thereporting period
□ Applicable ? N/A
(5) Components of operating costs
In RMB
| Category of products | Item | 2023 | 2022 | Y/Y % change | ||
| Amount | % of operating costs | Amount | % of operating costs | |||
| Computer, communication and other electronics | Direct material costs | 21,024,091,679.66 | 73.96% | 19,293,122,426.37 | 74.15% | 8.97% |
| Direct labor costs | 1,967,953,288.58 | 6.92% | 1,784,170,333.27 | 6.86% | 10.30% | |
| Manufacturing and other costs | 5,433,115,374.42 | 19.11% | 4,943,386,573.60 | 19.00% | 9.91% | |
(6) Changes in the scope of consolidation during the reporting period
? Yes □ No
1. Subsidiaries newly included in the scope of consolidation
| Company name | Method of acquisition of shares | Date of acquisition of shares | Registered capital | Percentage of capital contribution |
| Aranda | Acquisition | February 1, 2023 | 100.00% | |
| Suzhou JDI Electronics Inc. | Acquisition | February 1, 2023 | RMB1,043,692,731 | 100.00% |
| Suzhou Dongdi Holding Limited | Established | February 13, 2023 | RMB10,000,000 | 100.00% |
| Hong Kong Dongdi Holding Limited | Established | July 28, 2023 | HKD10,000 | 100.00% |
| Multek Zhuhai Enterprise Management Co., LTD | Established | April 27, 2023 | RMB1,000,000 | 100.00% |
| Multi-Fineline Electronics (Thailand) Co., Ltd. | Established | June 30, 2023 | USD50,000,000 | 100.00% |
2. Subsidiaries removed from the scope of consolidation
| Company name | Method of disposal of shares | Date of disposal of shares | Net assets at the date of disposal (RMB) | Net profit from January 1, 2023 to the date of |
| disposal (RMB) | ||||
| Zhuhai Dii Information Technology Consulting Co., Ltd. | Deregistration | September 7, 2023 | ||
| Hainan Chengjia Technology Consulting Co., Ltd. | Deregistration | November 1, 2023 | -206,048.28 | 12,320,966.42 |
| Suzhou Yuanshi Electronic Technology Co., Ltd. | Deregistration | August 4, 2023 | -12,592,979.40 | -468,295.88 |
| DSBJ Norway AS | Deregistration | December 27, 2023 | 345,205.52 | 18,211,422.23 |
(7) Material changes or adjustments in respect of business, products or services of the Company during the reportingperiod
□ Applicable ? N/A
(8) Major customers and suppliers
Major customers of the Company:
| Aggregate sales revenue from top 5 customers (RMB) | 24,734,549,479.35 |
| Proportion of aggregate sales revenue from top 5 customers to annual sales revenue | 73.50% |
| Proportion of aggregate sales revenue from related parties among top 5 customers to annual sales revenue | 0.00% |
Particulars of top 5 customers:
| No. | Name of customer | Sales revenue (RMB) | % of annual sales revenue |
| 1 | Customer 1 | 18,781,202,461.72 | 55.81% |
| 2 | Customer 2 | 2,521,127,522.26 | 7.49% |
| 3 | Customer 3 | 1,514,071,372.55 | 4.50% |
| 4 | Customer 4 | 1,166,354,975.61 | 3.47% |
| 5 | Customer 5 | 751,793,147.21 | 2.23% |
| Total | -- | 24,734,549,479.35 | 73.50% |
Other information of major customers:
□ Applicable ? N/A
Major suppliers of the Company:
| Aggregate purchase amount from top 5 suppliers (RMB) | 5,975,433,472.01 |
| Proportion of aggregate purchase amount from top 5 suppliers to annual purchase cost | 25.82% |
| Proportion of aggregate purchase amount from related parties among top 5 suppliers to annual purchase cost | 0.00% |
Particulars of top 5 suppliers:
| No | Name of supplier | Purchase amount (RMB) | % of annual purchase cost |
| 1 | Supplier 1 | 2,034,482,529.18 | 8.79% |
| 2 | Supplier 2 | 1,162,381,570.97 | 5.02% |
| 3 | Supplier 3 | 1,048,230,389.79 | 4.53% |
| 4 | Supplier 4 | 871,822,590.04 | 3.77% |
| 5 | Supplier 5 | 858,516,392.03 | 3.71% |
| Total | -- | 5,975,433,472.01 | 25.82% |
3. Expenses
In RMB
| 2023 | 2022 | Y/Y % change | Reason of material changes | |
| Selling expenses | 362,094,101.76 | 352,993,453.50 | 2.58% | |
| Administrative expenses | 957,323,918.86 | 815,662,486.89 | 17.37% |
| Financial expenses | 189,131,736.69 | 199,633,104.49 | -5.26% | |
| R&D expenses | 1,161,190,274.48 | 940,085,451.98 | 23.52% |
4. R&D expenses
? Applicable □ N/A
| Description of major R&D project | Purpose | Progress | Expected effect on the future development of the Company |
| Development of the new-type press-fit technology for super-efficient FPCs | To improve the efficiency of the press-fit process for multi-layer boards and overlay films. | Completed | The technology and market competitiveness of the relevant products will be improved. |
| Optimization of the drying system on the development line and etching line | To optimize the distribution of air flow and temperature at the drying section of the manufacturing process based on simulation. | Completed | The technology and market competitiveness of the relevant products will be improved. |
| Research and development of a new-type fluoro resin FPC | To develop fluorine materials, and build fluororesin FPC processing capability. | Completed | The technology and market competitiveness of the relevant products will be improved. |
| Simulation and design of 56/112 Gbps transmission line | To improve high-speed product design capability and efficiency, and reach the leading level of the industry | Completed | The technology and market competitiveness of the relevant products will be improved. |
| Development of LCM three-side sealing technology | To narrow the frames of LCMs and connect LCMs with the enclosures more closely, to produce a better sealing effect. | Completed | The technology and market competitiveness of the relevant products will be improved. |
| Optimization of the structure of the energy storage cabinet | To optimize the structure of the energy storage cabinet, improve the manufacturability, and reduce costs. | Completed | The technology and market competitiveness of the relevant products will be improved. |
| Development of the process technology for producing buried resistance using thin film buried resistance foil TCR? | To provide the customers with buried resistance solutions. | Completed | The technology and market competitiveness of the relevant products will be improved. |
| Research and development of 21KW outdoor charging stations | To provide the customers with outdoor charging station solutions. | Completed | The technology and market competitiveness of the relevant products will be improved. |
| Reduction of the length of through-hole back drilling stubs | To simplify the process by eliminating the back drilling step. | In progress | The technology and market competitiveness of the relevant products will be improved. |
| Embedded vertical components | To provide the customers with buried components solutions. | In progress | The technology and market competitiveness of the relevant products will be improved. |
Particulars of R&D personnel:
| 2023 | 2022 | Y/Y % change | |
| Number of R&D personnel | 4,148 | 3,944 | 5.17% |
| Ratio of R&D personnel to the total number of employees | 18.39% | 18.76% | -0.37% |
| Education background of R&D personnel | |||
| Undergraduate | 1,639 | 1,856 | -11.69% |
| Master | 84 | 55 | 52.73% |
| Age of R&D personnel | |||
| Below 30 | 1,085 | 1,950 | -44.36% |
| 30-40 | 1,996 | 552 | 261.59% |
Particulars of R&D expenses:
| 2023 | 2022 | Y/Y % change | |
| Amount of R&D expenses (RMB) | 1,161,190,274.48 | 940,085,451.98 | 23.52% |
| Ratio of R&D expenses to operating revenue | 3.45% | 2.98% | 0.47% |
| Amount of R&D expenses capitalized | 0.00 | 0.00 |
| (RMB) | |||
| Ratio of capitalized R&D expenses to total R&D expenses | 0.00% | 0.00% |
5. Cash flows
In RMB
| Item | 2023 | 2022 | Y/Y % change |
| Cash provided by operating activities | 34,941,233,653.10 | 32,948,819,791.38 | 6.05% |
| Cash used in operating activities | 29,768,814,182.90 | 28,318,935,780.00 | 5.12% |
| Net cash flows from operating activities | 5,172,419,470.20 | 4,629,884,011.38 | 11.72% |
| Cash provided by investing activities | 1,064,753,668.60 | 679,476,885.00 | 56.70% |
| Cash used in investing activities | 5,903,655,994.11 | 4,438,468,040.34 | 33.01% |
| Net cash flows from investing activities | -4,838,902,325.51 | -3,758,991,155.34 | 28.73% |
| Cash provided by financing activities | 14,694,460,630.69 | 12,967,955,013.11 | 13.31% |
| Cash used in financing activities | 14,937,008,144.70 | 12,464,334,940.01 | 19.84% |
| Net cash flows from financing activities | -242,547,514.01 | 503,620,073.10 | -148.16% |
| Net increase in cash and cash equivalents | 187,460,195.61 | 1,517,725,695.91 | -87.65% |
1. The cash provided by investing activities increased by 56.70% compared to the previous year, primarily due to an increase inthe wealth management products becoming mature during the reporting period and corresponding interest received.
2. The net cash flows from financing activities decreased by 148.16% compared to the previous year, primarily due to the steadygrowth of net cash provided by operating activities and a decrease in net cash provided by bank loans during the reporting period.
3. The net increase in cash and cash equivalents decreased by 87.65% compared to the previous year, primarily due to a significantincrease in the capital expenditures on additional PCB production capacity and new energy business compared to the previous year,and increase in cash used in investing activities in connection with the acquisition of Suzhou JDI and Aranda for the purpose ofimproving our industrial deployment.V. Analysis of Non-primary Business
□ Applicable ? N/A
VI. Analysis of Assets and Liabilities
1. Material changes in the components of assets
In RMB
| December 31, 2023 | January 1, 2023 | Y/Y % change | Reason for significant change | |||
| Amount | % of total assets | Amount | % of total assets | |||
| Cash and bank balances | 7,190,036,231.06 | 16.20% | 7,131,202,817.72 | 17.48% | -1.28% | |
| Accounts receivable | 7,713,164,772.05 | 17.38% | 7,006,411,466.74 | 17.17% | 0.21% | |
| Inventories | 6,293,879,276.54 | 14.18% | 6,165,738,409.09 | 15.11% | -0.93% | |
| Investment properties | 1,038,840.26 | 0.00% | 1,296,551.42 | 0.00% | 0.00% | |
| Long-term equity investment | 155,406,879.89 | 0.35% | 139,767,215.41 | 0.34% | 0.01% | |
| Fixed assets | 12,415,251,689.80 | 27.98% | 10,673,700,468.47 | 26.16% | 1.82% | |
| Construction in progress | 1,842,525,188.54 | 4.15% | 1,813,183,815.67 | 4.44% | -0.29% | |
| Right-of-use assets | 1,252,668,050.83 | 2.82% | 951,068,254.01 | 2.33% | 0.49% | |
| Short-term borrowings | 5,156,100,217.01 | 11.62% | 7,794,409,944.68 | 19.10% | -7.48% | Primarily due to our efforts to optimize the debt structure in order to mitigate debt risks. |
| Contract liabilities | 28,982,676.07 | 0.07% | 26,193,456.12 | 0.06% | 0.01% | |
| Long-term borrowings | 4,706,280,338.76 | 10.61% | 3,197,821,643.49 | 7.84% | 2.77% | Primarily due to additional loans obtained for our acquisition, fixed assets and other projects, and our efforts to optimize the debt maturity structure. |
| Lease liabilities | 1,842,799,193.80 | 4.15% | 1,647,319,046.20 | 4.04% | 0.11% |
Analysis of the high proportion of overseas assets:
? Applicable □ N/A
In RMB
| Assets | Method of acquisition | Amount | Location | Mode of operation | Controls for guaranteeing the security of assets | Income | Proportion of overseas assets to net assets | Whether it involves risk of material impairment loss |
| Dragon Holdings | Established | 25,712,962,545.42 | Hong Kong, China | R&D and sales | Its manufacturing entity is located in China | 669,556,434.20 | 35.93% | No |
| Multek Group | Established | 4,158,208.897.11 | Hong Kong, China | R&D and sales | Its manufacturing entity is located in China | 95,917.983.30 | 11.43% | No |
2. Assets and liabilities at fair value
? Applicable □ N/A
In RMB
| Items | Opening balance | Gain or loss on changes in fair value | Aggregate changes in fair value recorded in equity | Impairment loss recognized in the current period | Amount acquired in the current period | Amount sold in the current period | Other changes | Closing balance |
| Financial assets | ||||||||
| 1. Financial assets held for trading (excluding derivative financial assets) | 359,139,037.24 | 3,944,665.68 | -508,364,940.64 | 720,272,169.56 | 527,548,893.23 | 47,442,038.61 | ||
| 2. Derivative financial assets | 159,865,619.03 | -9,375,883.80 | -131,384,014.73 | 373,366,920.00 | 365,552,455.00 | 26,920,185.50 | ||
| 4. Investment in other equity instruments | 56,779,147.66 | 15,000,000.00 | 71,779,147.66 | |||||
| Subtotal of financial assets | 575,783,803.93 | -5,431,218.12 | -631,934,490.37 | 735,272,169.56 | 527,548,893.23 | 146,141,371.77 | ||
| Total | 575,783,803.93 | -5,431,218.12 | -631,934,490.37 | 735,272,169.56 | 527,548,893.23 | 146,141,371.77 | ||
| Financial liabilities | 91,517,116.89 | 4,309,561.55 | 8,553,306.86 | 70,827,000.00 | 71,032,909.07 | 104,174,076.23 | ||
3. Encumbrances on assets as of the end of the reporting period
| Items | Closing carrying value (RMB) | Type of encumbrance | Reason for restriction |
| Cash and bank balances | 1,315,351,783.39 | Pledge | Security deposit for notes, etc. |
| Notes receivable | 130,000,000.00 | Pledge | Discounted and not mature |
| Accounts receivable | 96,168,092.66 | Pledge | Factoring |
| Accounts receivable financing | 172,685,965.02 | Pledge | Pledge of notes |
| Fixed assets | 418,641,701.59 | Mortgage | Security for loans, sales and leaseback |
| Right-of-use assets | 1,252,668,050.83 | Mortgage | Finance lease |
| Total | 3,385,515,593.49 |
VII. Analysis of Investments
1. Overview
? Applicable □ N/A
| Amount of investment in 2023 (RMB) | Amount of investment in 2022 (RMB) | Y/Y % change |
| 2,016,314,450.00 | 3,151,530,715.00 | -36.02% |
2. Major equity investments acquired during the reporting period
□ Applicable ? N/A
3. Major non-equity investments that have not yet been completed in the current period
□ Applicable ? N/A
4. Investment in financial assets
(1) Investment in securities
□ Applicable ? N/A
We have not invested in any securities during the reporting period.
(2) Investment in derivatives
? Applicable □ N/A
1) Investment in derivatives for hedging purposes during the reporting period? Applicable □ N/A
In RMB0’000
| Type of investment in derivatives | Initial investment amount | Opening balance | Gain or loss on changes in fair value | Aggregate changes in fair value recorded in equity | Amount acquired in the current period | Amount sold in the current period | Closing balance | % of net assets at the end of the reporting period |
| Commodity futures | 187.3 | 7,604.46 | 1,554.25 | 0 | 37,336.69 | 36,555.25 | 9,940.16 | 0.55% |
| Total | 187.3 | 7,604.46 | 1,554.25 | 0 | 37,336.69 | 36,555.25 | 9,940.16 | 0.55% |
| Hedge accounting policies and principles adopted for the reporting period and significant changes in such policies and principles compared to the previous reporting period | None | |||||||
| Actual profit or loss for the reporting period | The loss on commodity futures transactions recorded in profit or loss was RMB15,542,500. | |||||||
| Effect of hedging | We conduct hedging transactions for the purpose of leveraging the hedging function of futures, mitigating the effect of market price fluctuations of raw materials and products on our production and operating costs, and prices of our main products, enhancing our overall risk resistance capacity, and improving our financial soundness. | |||||||
| Source of funds for investment in derivatives | Self-owned funds | |||||||
| Analysis of risks associated with the derivatives held in the current period (including without limitation market risk, liquidity risk, | Refer to the Announcement of Commodity Futures Hedging Transactions disclosed by us for the relevant risk analysis and controls. | |||||||
| credit risk, operational risk and legal risk) and related risk control measures | |
| Changes in the market price or fair value of the derivatives held in the current period (in the analysis of the fair value of derivatives, the specific approaches, assumptions and parameters used shall be disclosed) | We are mainly engaged in hedging transactions with mainstream products on major domestic futures markets. The derivatives traded by us have a transparent and active market, and their transaction prices and settlement prices can fully reflect their fair value. |
| Litigations involved (if applicable) | None |
| Disclosure date of the announcement of the board of directors approving the investment in derivatives (if any) | December 31, 2022 |
| Special opinion issued by the independent directors regarding the Company’s investment in derivatives and related risk control measures | The hedging transactions conducted by the Company with commodity futures can leverage the hedging function of futures, mitigate the effect of market price fluctuations of raw materials and products on the production and operating costs and the prices of main products of the Company, enhance its overall risk resistance capacity and improve its financial soundness. The relevant transactions have been considered and decided in accordance with the provisions of the applicable laws, regulations and normative documents and the relevant policies of the Company, and will not prejudice the interests of the Company and its shareholders. Therefore, we consent to the conduct of the hedging transactions by the Company with commodity futures. |
5. Use of offering proceeds
? Applicable □ N/A
(1) Summary of use of offering proceeds
? Applicable □ N/A
In RMB0’000
| Year of offering | Method of offering | Total offering proceeds | Net offering proceeds | Total amount of offering proceeds used in the current period | Aggregate amount of offering proceeds already used | Total amount of offering proceeds the purpose of which was changed in the current period | Aggregate amount of offering proceeds the purpose of which has been changed | Percentage of offering proceeds the purpose of which has been changed | Total amount of unused offering proceeds | Purpose and whereabouts of unused offering proceeds | Total amount of offering proceeds that has remained unused for more than two years |
| 2020 | Private placement | 289,225.58 | 286,395.39 | 49,252.37 | 261,135.36 | 0 | 61,565.47 | 21.29% | 26,730.68 | To be invested in the relevant projects | 0 |
| Total | -- | 289,225.58 | 286,395.39 | 49,252.37 | 261,135.36 | 0 | 61,565.47 | 21.29% | 26,730.68 | -- | 0 |
| Description of the overall use of offering proceeds | |||||||||||
| With the approval of the CSRC under the Reply on Approval of Private Placement of Shares by Suzhou Dongshan Precision Manufacturing Co., Ltd. (Zheng Jian Xu Ke [2020] No. 980), we privately offered 103,294,850 RMB-denominated ordinary A-shares at the offer price of RMB28.00 per share to specified investors through the lead underwriter Tianfeng Securities Co., Ltd., and raised RMB2,892,255,800 in total, and after deduction of the underwriter’s fee and sponsor’s fee totaling RMB22,169,800 (exclusive of tax), the balance of the offering proceeds, RMB2?868?755?800, was remitted to our supervisory account of offering proceeds by Tianfeng Securities Co., Ltd. on July 13, | |||||||||||
2020. After the deduction of the accountant’s fee, attorney’s fee, legal information disclosure fee and other external costs directly relating tothe offering of equity securities, totaling RMB6,132,100 (exclusive of tax), the amount of net offering proceeds was RMB2?863?953?900(exclusive of tax). Pan-China Certified Public Accountants LLP verified the receipt of such offering proceeds, and issued the CapitalVerification Report (PCCPA Capital Verification [2020] No. 5-9).
(2) Committed investment projects using offering proceeds
? Applicable □ N/A
In RMB0’000
| Committed investment project and use of over-raised funds | Whether the project has been changed or partially changed | Total committed investment amount | Total investment amount as adjusted (1) | Amount invested in the current period | Aggregate amount already invested as of the end of the reporting period (2) | Progress of investment as of the end of the reporting period (3) =(2)/(1) | Date that the project is ready for its intended use | Income earned in the current period | Whether the project has produced the desired result | Whether there’s any significant change in the feasibility of the project |
| Committed investment project | ||||||||||
| 400,000 m2 fine line FPC production and assembly capacity expansion project | No | 80,338.48 | 80,338.48 | 79,798.34 | 99.33% | January 5, 2022 | 26,790.14 | Yes | No | |
| Multek 5G high-speed high-frequency and high-density PCB technology upgrading project | No | 65,958.46 | 65,958.46 | 7,647.99 | 39,689.71 | 60.17% | 4,856.72 | No | No | |
| Multek PCB production line technology upgrading project | No | 72,805.89 | 72,805.89 | 6,167.3 | 71,858.33 | 98.70% | April 19, 2023 | 9,418.2 | Yes | No |
| FPC for new energy application and assembly project of MFLEX Yancheng | Yes | 61,565.47 | 35,437.08 | 61,368.3 | 99.68% | August 24, 2023 | 2,739.23 | Yes | No | |
| Wireless module production and construction project of Yancheng Dongshan Communication Technology Co., Ltd. | Yes | 70,122.75 | 8,557.28 | 8,420.68 | 98.40% | N/A | Yes | |||
| Subtotal | -- | 289,225.58 | 289,225.58 | 49,252.37 | 261,135.36 | -- | -- | 43,804.29 | -- | -- |
| Use of over-raised funds | ||||||||||
| None | ||||||||||
| Total | -- | 289,225.58 | 289,225.58 | 49,252.37 | 261,135.36 | -- | -- | 43,804.29 | -- | -- |
| Failure to meet the scheduled progress and produce the desired result and reason thereof (please describe on a project-by-project basis, including the reason for selecting | Due to the construction of the 5G network falling short of expectations, the changes in the macro-economic environment in recent years and other unfavorable factors, the “Multek 5G high-speed high-frequency and high-density PCB technology upgrading project” has proceeded slowly and produced relatively poor results. In recent years, the digital economy has developed vigorously in China, and become a main driving force for building the new development pattern and new competitive advantages of the country. As the key to leading the development of new-generation information technology and new-type infrastructure, 5G is an important engine driving the development of digital economy, and provides enormous potential for pushing society into the era of intelligent interconnection. We believe that the prospects of the 5G market are promising in the long run, and will adjust and advance the relevant investment projects taking into account the changes in market demands. Therefore, according to the market conditions and the progress of the construction and funding of the investment project, we plan to extend the date that the project is ready for its intended use to October 31, 2024, without changing the use of offering proceeds and amount of offering proceeds to be invested in the project. Such extension has been approved at the 33rd meeting of the 5th Board of Directors and the 20th meeting of the 5th Board of Supervisors held on April 19, 2023. | |||||||||
| N/A in the column “whether the project has produced the desired result”) | |
| Reason for significant change in the feasibility of the project | Due to the bottleneck in the development of 5G communication, weak downstream demands and other unfavorable factors, the progress of the “Wireless module production and construction project of Yancheng Dongshan Communication Technology Co., Ltd.” fell short of expectations. In light of the rapid development of the new energy vehicle market and rising demands of the on-board FPC market, as a component supplier for the international leading new energy vehicle manufacturers, we need to further improvement our industrial deployment, capability to serve the downstream customers, and overall competencies. Therefore, in order to ensure the efficient use of offering proceeds, we have decided to change the “wireless module production and construction project of Yancheng Dongshan Communication Technology Co., Ltd.” into the “FPC for new energy application and assembly project of MFLEX Yancheng”. |
| Amount and use of over-raised offering proceeds and progress of use thereof | N/A |
| Change in the place of the committed investment project | N/A |
| Adjustment of the method of implementation of the committed investment project | N/A |
| Funds pre-invested in the investment project and replacement thereof | Applicable |
| At the 3rd meeting of the 5th Board of Directors, the Proposal for Replacing the Self-raised Funds Pre-invested in the Committed Investment Projects with the Idle Offering Proceeds was considered and adopted, approving the replacement of the funds of RMB 399,591,400 pre-invested in the committed investment projects with the offering proceeds. The replacement was completed in 2020. | |
| Temporary replenishment of working capital with the idle offering proceeds | Applicable |
| At the 2nd meeting of the 6th Board of Directors held on June 12, 2023, the Proposal for Temporary Replenishment of Working Capital with the Idle Offering Proceeds was considered and adopted, approving the temporary replenishment of working capital with the idle offering proceeds up to RMB250 million. As of December 31, 2023, we used the idle offering proceeds of RMB230 million to temporarily replenish the working capital. | |
| Amount of surplus offering proceeds and reason thereof | Applicable |
| The “400,000 m2 fine line FPC production and assembly capacity expansion project”, the “Multek PCB production line technology upgrading project” and the “FPC for new energy application and assembly project of MFLEX Yancheng” have been completed with the investment as committed. RMB6,651,800, or 0.23%, of the offering proceedings designated for these projects were left unused. Such surplus was achieved because we followed the principle of reasonableness, economy and effectiveness, used the offering proceeds prudently, enhanced control, supervision and management of all kinds of expenses, reasonably allocated and optimized all kinds of resources, and reasonably reduced the relevant costs and expenses. In addition, we earned certain interest income from the offering proceeds. | |
| Purpose and whereabouts of unused offering proceeds | As of December 31, 2023, the amount of unused offering proceeds was RMB267,306,800, of which, RMB230?000?000 was used to temporarily replenish the working capital, RMB30,655,000 was deposited in the dedicated account of offering proceeds, and the surplus offering proceeds of RMB6,651,800 after the completion of projects was used to permanently replenish the working capital. |
| Adjustment of the method of implementation of the committed investment project | None |
(3) Changes in the committed investment projects using offering proceeds
? Applicable □ N/A
In RMB0’000
| New project | Original committed project | Amount of offering proceeds to be invested in the new project (1) | Amount invested in the current period | Aggregate amount already invested as of the end of the reporting period (2) | Progress of investment as of the end of the reporting period (3) =(2)/(1) | Date that the project is ready for its intended use | Income earned in the current period | Whether the project has produced the desired result | Whether there’s any significant change in the feasibility of the project |
| FPC for new energy application and assembly | Wireless module production and | 61,565.47 | 35,437.08 | 61,368.3 | 99.68% | August 24, 2023 | 2,739.23 | Yes | No |
| project of MFLEX Yancheng | construction project of Yancheng Dongshan Communication Technology Co., Ltd. | ||||||||
| Total | -- | 61,565.47 | 35,437.08 | 61,368.3 | -- | -- | 2,739.23 | -- | -- |
| Reason for change, decision-making procedures and information disclosure (please describe on a project-by-project basis) | Due to the bottleneck in the development of 5G communication, weak downstream demands and other unfavorable factors, the progress of the “wireless module production and construction project of Yancheng Dongshan Communication Technology Co., Ltd.” fell short of expectations. In light of the rapid development of the new energy vehicle market and rising demands of the on-board FPC market, as a component supplier for the international leading new energy vehicle manufacturers, we need to further improvement our industrial deployment, capability to serve the downstream customers, and overall competencies. Therefore, in order to ensure the efficient use of offering proceeds, we have decided to change the “wireless module production and construction project of Yancheng Dongshan Communication Technology Co., Ltd.” into the “FPC for new energy application and assembly project of MFLEX Yancheng”. Such change in the use of offering proceeds was approved at the 19th meeting of the 5th Board of Directors and the 13th meeting of the 5th Board of Supervisors held on February 17, 2022, and the first extraordinary general meeting in 2022 held on March 8, 2022, and disclosed on www.cninfo.com.cn, and our designated newspapers for information disclosure. | ||||||||
| Failure to meet the scheduled progress and produce the desired result and reason thereof (please describe on a project-by-project basis) | None | ||||||||
| Reason for significant change in the feasibility of the project | None | ||||||||
VIII. Sale of Material Assets and Equities
1. Sale of material assets
□ Applicable ? N/A
No material asset has been sold during the reporting period.
2. Sale of material equities
□ Applicable ? N/A
IX. Analysis of Major Subsidiaries and Associates
? Applicable □ N/AMajor subsidiaries and associates representing more than 10% of the net profit of the Company:
In RMB
| Company name | Type of company | Primary business | Registered capital | Total assets | Net assets | Operating revenue | Operating profit | Net profit |
| Dragon Holdings | Subsidiary | Design, R&D, sale and after-sale services in respect of PCBs; investment holding | USD113,450,100 | 25,712,962,545.42 | 6,518,291,595.07 | 38,257,371,211.10 | 864,700,364.95 | 669,556,434.20 |
| Multek Group | Subsidiary | R&D, sale and after-sale services in respect of PCBs; investment holding | USD218,248,360.27 | 4,158,208,897.11 | 2,073,178,232.57 | 3,914,420,317.70 | 121,760,866.23 | 95,917,983.30 |
Subsidiaries acquired or disposed of during the reporting period:
? Applicable □ N/A
| Company name | Method of acquisition or disposal | Effect on overall production, operation and results |
| Aranda | Acquisition | No material effect on our operating results in the current period |
| Suzhou JDI Electronics Inc. | Acquisition | No material effect on our operating results in the current period |
| Suzhou Dongdi Holding Limited | Established | No material effect on our operating results in the current period |
| Hong Kong Dongdi Holding Limited | Established | No material effect on our operating results in the current period |
| Multek Zhuhai Enterprise Management Co., LTD | Established | No material effect on our operating results in the current period |
| Multi-Fineline Electronics (Thailand) Co., Ltd. | Established | No material effect on our operating results in the current period |
| Zhuhai Dii Information Technology Consulting Co., Ltd. | Deregistration | No material effect on our operating results in the current period |
| Hainan Chengjia Technology Consulting Co., Ltd. | Deregistration | No material effect on our operating results in the current period |
| Suzhou Yuanshi Electronic Technology Co., Ltd. | Deregistration | No material effect on our operating results in the current period |
| DSBJ Norway AS | Deregistration | No material effect on our operating results in the current period |
X. Structured Entities Controlled by the Company
□ Applicable ? N/A
XI. Prospects for Future Development of the Company
(I) Our development strategyOur strategy emphasizes high-quality development through systematic planning and a well-designed overarching strategy. We arecommitted to maintaining operational integrity while adapting to market changes, focusing on consumer electronics and newenergy vehicles. We aim to strengthen our business deployment by increasing R&D funding and leveraging internal resources andpotential to enhance our performance in the new energy sector. Our approach includes comprehensive budget management andprioritizing key customers and products. We adhere to prudent operations to sustain a healthy financial position. Additionally, weoptimize our organizational structure and enhance personnel training. We actively integrate information technology with industrialprocesses to drive the transformation from traditional manufacturing to intelligent manufacturing.(II) 2024 business plan
(1) Implement the “two-wheel drive” strategy, and promote R&D of, and increase funding for, frontier products;
(2) adhere to the business strategy of “increasing revenues, income and ROE”;
(3) Optimize the layout and improve the operating capability of the production bases;
(4) Maintain a healthy financial position, and continuously optimize the capital structure;
(5) Enhance system governance and data governance, and promote high-quality development of the Company;
(6) Continuously optimize the organization structure and personnel training; and
(7) Increase ESG values and sustainability, and actively pursue green and low-carbon development and sustainable development.(III) Main risk factors
1. Risk of concentration of customers
We have good customer resources. Our major customers are well-known domestic and international companies in the relevantindustries that are of sound credit and have established stable cooperation relationships with us. However, our top 5 customersconstitute a large proportion of our total sales revenue, which may further increase in the future. Any material adverse change inthe business situation of such major customers could have an adverse effect on our business.We will give full play to our advantages, make active deployment in the new energy and other emerging industries and strive todevelop new customers, in order to mitigate the adverse effect of the relative concentration of customers on us.
2. Risks brought by rapid technology upgrading of the industry
Our business covers PCB, photoelectric display, precision manufacturing and other technology-intensive industries, and ourproducts are widely applied in consumer electronics, new energy vehicles, communication equipment, industrial equipment, AI,medical appliances and other fields, all of which are characterized by rapid technology upgrading. If our R&D and manufacturing
capabilities fail to keep pace with the rapid technology upgrading of downstream products, our products and technologies maybecome obsolete.We will follow up on the new technologies and new processes of the industry from the strategic perspective, and strive to keep ourtechnologies and processes at the advanced level through continuous and effective R&D funding.
3. Risk of changes in the global trade environment
Our major customers include some well-known international companies, and our export sales have grown steadily for years.Though China has established good economic and trade cooperation relationships with major countries in the world, theincreasingly fierce regional frictions in recent years may cause uncertainties in the applicable trade policies, which could affect ourinternational trade.We will follow up on the development of international trade frictions, strenthen communication with our customers, and continueto foster our competencies and customer adhesion.
4. Risk of market exploitation
We are a strong R&D and manufacturing enterprise in the fields of PCB, photoelectric display and precision manufacturing. Dueto our stable product quality and efficient customer services, we have remarkable competencies, and are able to provide thedownstream enterprises with “one-stop” products and services, and satisfy their demands for systemic manufacturing solutions.However, our downstream industries are characterized by rapid upgrading and rapid changes in the preferences of consumers,among others. If our major customers are at a disadvantage in the market, or we are unable to satisfy the demands of customers orfail to acquire new customers, the sales and margin rate of our products may decrease.We will continue to increase R&D funding, optimize our product mix and process structure, enhance our competencies, andactively cope with market competition.
5. Environmental risk
In our production, the electroplating, etching and other processes produce waste water, waste gases and solid wastes, and thereforeare subject to strict requirements for environmental protection. We cannot exclude the possibility that environmental incidents mayhappen during our production due to negligence in management, force majeure or otherwise. If we meet with any environmentalincident, cause pollution to the environment or violate the applicable environmental protection laws and regulations, our reputationand operations could be adversely affected. Along with the vigorous development of a green and low-carbon circular economicdevelopment system and improvement of people’s living standard in China, and increasingly enhanced awareness ofenvironmental protection of people, the country attaches increasingly great importance to environmental protection. If the countryputs forward stricter environmental protection requirements, we may need to increase the funding for environmental protection,which would increase our environmental protection costs and in turn affect our results.We have set the building of an environment-friendly enterprise as a key goal of our sustainable development strategy, attachedgreat importance to and increased the funding for environmental protection in our production and operation, actively responded tothe requirements of the latest environmental protection laws and regulations, enhanced environmental protection training andemployees’ awareness of environmental protection, taken control measures at source, established and improved the environmentalmanagement system, and implemented the requirements related to environmental safety in all of our key business activities, toreduce the environmental risks.
6. Foreign exchange risk
Export sales constitute a large proportion of our total sales revenue. Because our day-to-day operation involves transactions inUSD and other foreign currencies, and our consolidated accounts are presented in RMB, the changes in the exchange rate betweenRMB and USD may cause foreign exchange risk to our future operations.
We will pay close attention to the changes in the relevant foreign exchange rates, strive to control the exposure to foreignexchange risk at a reasonable level, and hedge or otherwise reduce exposure to such risk.XII. Investigation, Research, Communication, Interview and Other Activities during theReporting Period? Applicable □ N/A
| Date | Place | Method of communication | Type of guests | Guests | Main topics of discussion and information provided | Particulars of the investigation and research activity available at |
| February 3, 2023 | Meeting room of the Company | On-site investigation | Institutional investors | Aegon-Industrial Fund and other 23 institutional investors | Development of our new energy business, and situations of our factories in different locations | www.cninfo.com.cn |
| April 27, 2023 | Online | Communication through the online platform | Others | Investors | PCB, LED and new energy business | www.cninfo.com.cn |
| August 31, 2023 | Online | Communication by telephone | Institutional investors | Haitong Securities and other 280 institutional investors | Interpretation of our semi- annual report | www.cninfo.com.cn |
| September 26, 2023 | Hong Kong, China | Others | Institutional investors | CoreView, Dantai, Dymon, etc. | Corporate governance, new energy, LED and other business segments | www.cninfo.com.cn |
| October 25, 2023 | Online | Communication by telephone | Institutional investors | Hua Chuang Securities and other 412 institutional investors | New energy and other business segments | www.cninfo.com.cn |
| October 25, 2023 | Shanghai, China | Others | Others | Investors | Our “two-wheel drive” strategy, mergers and acquisitions, and new energy business | www.cninfo.com.cn |
XIII. Implementation of the Action Plan to Improve the Quality and ReturnsWhether the Company has disclosed its action plan to improve the quality and returns??Yes ? NoI. Focus on the primary business, and adhere to the “two-wheel drive” strategyFor decades, we have focused on expanding and optimizing our primary business through internal development and acquisitions,and gradually formed three industrial segments, namely PCB, photoelectric display and precision manufacturing. Our products arewidely used in consumer electronics, new energy vehicles, communication equipment, industrial equipment, AI, servers, medicalappliances and other fields. In recent years, leveraging our technical advantages accumulated in the fields of consumer electronicsand communication equipment, we have actively explored the wholly new field of new energy vehicles with a view to makingcontributions to the green transition of the global energy structure, and built an industrial development pattern with consumerelectronics and new energy vehicle business at the core.In the field of consumer electronics, we have closely followed the steps of leading customers in strategic innovation, activelyexpanded global deployment while maintaining superior products, and through the improvement of technical capabilities,increased the application of our PCB products in emerging fields. In the field of new energy vehicles, in response to the demandsof our customers, we have actively promoted the construction of domestic and overseas production bases, completed theacquisition of Suzhou JDI and US Aranda, continuously expanded our production lines, and strived to provide the customers withone-stop products and services. Between January and September 2023, we recorded an operating revenue of RMB22.501 billionand a net profit of RMB1.333 billion attributable to the shareholders of the Listed Company, maintaining strong profitability; wealso continuously optimized the structure of our core business, recorded a sales revenue of about RMB4.5 billion from the newenergy business, and further increased the proportion of products with higher growth potentials in our operating revenues and
profits. In the future, in order to promote our long-term and high-quality development and implement our corporate strategy tofocus on the two key fields of consumer electronics and new energy vehicles, we will further increase the production capacity ofhigh-end PCB products and precision structural component products, strive to satisfy the customer demands for supply chainmanagement and innovative products in the fields of consumer electronics and new energy vehicles, supply core products to keycustomers to seize the opportunities for rapid growth, continuously create values for our customers, and actively enhance our corecompetencies.II. Persist in innovation-driven development, and continuously promote digital transitionWe have adhered to the long-termism, promoted innovation-driven development, closely followed the frontier technologies,continuously increased R&D funding, and improved our R&D system; through participation in the preliminary developmentprojects of leading customers of the industry, enhanced technical innovation, improved production technologies and processcapabilities, and continuously cultivated new quality productive forces, to promote our high-quality development; further exploredthe frontier manufacturing technologies for core components in the field of intelligent interconnection, to lay a solid foundation forserving the future innovative business fields, and further respond to customer demands; continuously promoted the integration ofinformatization and industrialization, focused on the application of cutting-edge big data and AI technologies, vigorouslypromoted intelligent manufacturing and built smart factories. In 2023, some of our subsidiaries were named “National ModelFactory for Intelligent Manufacturing” and “5G Factory of Jiangsu”, and awarded other honorary titles. While promoting theintegration of informatization and industrialization, we have also improved system and data governance, fully aroused theinitiative and creativity of all organizations, established and improved a scientific and efficient management system, and enhancedour core competencies in an all-around way from the system and organization levels.III. Enhance corporate governance and improve the level of operational complianceWe have continuously consolidated the basis of corporate governance, actively improved the level of corporate governance, andpromoted the sound operation of general meetings of shareholders, board of directors, board of supervisors and management;established and improved the internal control system, enhanced risk management, and improved the decision-making level, toenter into a virtuous circle in our development, and vigorously protect the legitimate rights and interests of our shareholders. OurBoard of Directors has seriously implemented all resolutions of shareholders, and faithfully performed their duty of loyalty. Ourmanagement has seriously performed all duties assigned by the Board of Directors, further improved their managementcapabilities, and continuously enhanced our core competencies, profitability and overall risk management capabilities, to achievesustainable development and strive to maximize returns to our shareholders.IV. Put investors first, and attach great importance to returns to investors(I) Attach great importance to the quality of information disclosures. We have strictly complied with the information disclosureprinciples of “truthfulness, accuracy, completeness, timeliness and fairness”, strived to satisfy the demands of investors,continuously improved the quality and effectiveness of information disclosures, and disclosed complete information related to ourbusiness and other affairs at multiple layers and from multiple perspectives. In the future, we will, taking into account our actualbusiness situations and development characteristics, perform our information disclosure obligations with high quality,continuously optimize the ways to disclose our business information, proactively disclose useful information for the investors tomake their investment decisions, emphasize on the disclosure of important and well-targeted information, enhance the disclosureof critical information related to industrial competition, business operation and risk factors, and reduce the disclosure of redundantinformation.(II) Enhance communications with investors. We have attached great importance to the management of investor relations,continuously improved the working mechanisms and content of the management of investor relations, through performancebriefings, teleconferences, on-site visits and investigations or otherwise, deepened the investors’ understanding of our productionand business situations and other activities, and enhanced their acceptance of and confidence in us, to achieve the objectives of
respecting investors, offering returns to investors and protecting investors. In the future, we will continue to build the ecosystemfor active interactions with investors, provide conveniences for all kinds of investors to participate in the decision-making onmaterial matters, and create long-term values for investors.(III) Attach great importance to returns to investors. While focusing on our own development, we have attached great importanceto returns to investors, and always put investors first. Since our listing, we have distributed cash dividends in strict accordancewith the profit distribution policy set forth in our Articles of Association, and shared our development results with the investors. Inthe future, we will maintain a dynamic balance among our development, performance growth and returns to shareholders,according to the profit distribution principle taking into account our development stage, seriously implement the mechanism of“long-term, stable and sustainable” returns to shareholders, and continuously enhance the investors’ sense of gain.We will remain true to our original aspiration, consolidate the foundation of our enterprise, keep pace with the times, and start anew journey. We will always bear in mind returns to shareholders, put investors first, actively implement the action plan toimprove the quality and returns, strive to improve our operating quality and investment value, effectively enhance the investors’sense of gain, and make positive contributions to the stabilization of market and confidence.
Section IV Corporate Governance
I. Overview of Corporate GovernanceDuring the reporting period, we have continuously improved our corporate governance structure, operated in compliance with theregulations, and enhanced information disclosure in strict accordance with the Company Law, the Securities Law, the Code ofCorporate Governance for Listed Companies, the Rules Governing the Listing of Shares on the Shenzhen Stock Exchange andother applicable laws and regulations. We have established a corporate governance structure that sets forth well-defined powersand responsibilities, and mutual restraint mechanisms, and operates in a coordinated manner. Our general meeting, Board ofDirectors and Board of Supervisors have duly performed their duties and exercised their functions, operated in compliance withthe regulations, and seriously protected the legitimate rights and interests of the investors and the Company.Is there any significant difference between the actual circumstance of corporate governance of the Company and the applicablelaws, administrative regulations and the provisions of the CSRC regarding corporate governance of the listed companies?
□ Yes ? No
There isn’t any significant difference between the actual circumstance of our corporate governance and the applicable laws,administrative regulations and the provisions of the CSRC regarding corporate governance of the listed companies.
II. The Company’s Independence of its Controlling Shareholders and Actual Controllers inAssets, Personnel, Finance, Organization and Business
We are independent of our controlling shareholders in business, personnel, assets, organization and finance, and have our ownindependent and complete business, and are independent in management.
1. Independence in business operation: We are independent of our shareholders and other affiliates in business operation, havecomplete production, R&D, management, procurement and sales systems, and are able to do business independently on the market.
2. Independence in personnel: We have a sound corporate governance structure in place, and our directors, supervisors and seniorexecutives have been appointed in strict accordance with the Company Law and the AOA, and do not hold any concurrent post incontravention of the applicable laws and regulations. We are independent of our shareholders in personnel and payrollmanagement, and all of our employees receive their salaries from us. We have developed stringent employee, performanceappraisal, promotion and other labor management policies, and entered into a Labor Contract with each employee. We are fullyindependent in labor, personnel and payroll management.
3. Independence in assets: We have a clear property right relationship with our controlling shareholders, own or have the right touse the premises and land necessary for our production and operating activities, and have complete auxiliary production systemsand supporting facilities. None of our controlling shareholders or the business entities controlled by them has occupied any of ourfunds, assets or other resources.
4. Independence in organization: We have established a sound corporate governance structure in accordance with the requirementsof the Company Law and the AOA, and our general meeting, Board of Directors and Board of Supervisors exercise their respectivefunctions in strict accordance with applicable laws and regulations. We have set up internal bodies suitable for our development,defined their respective functions, and developed corresponding internal management and control systems. All of our functionaldepartments operate independently, free from any interference by any shareholders, other departments, entities or individuals, anddo not engage in any mixed operation or share office space with other departments.
5. Independence in finance: We have an independent finance department, and full-time financial personnel, established a soundaccounting system and financial management and decision-making policies, and implemented strict financial supervision andadministration. We open independent bank accounts, and control our funds and assets independently, free from any interference byour shareholders. We are an independent taxpayer, pay taxes independently according to law, and do not mix our tax payment withany shareholder.III. Horizontal Competition
□ Applicable ? N/A
IV. Particulars of Annual General Meeting and Extraordinary General Meetings Heldduring the Reporting Period
1. General meetings held during the reporting period
| Session | Type of meeting | Percentage of investors attending the meeting | Date of meeting | Disclosure date | Resolution of the meeting |
| 1st extraordinary general meeting in 2023 | Extraordinary general meeting | 46.86% | March 31, 2023 | April 1, 2023 | Announcement of the resolutions of the 1st extraordinary general meeting in 2023 (Announcement No.: 2023-016) |
| 2nd extraordinary general meeting in 2023 | Extraordinary general meeting | 48.80% | April 19, 2023 | April 20, 2023 | Announcement of the resolutions of the 2nd extraordinary general meeting in 2023 (Announcement No.: 2023-022) |
| 2022 annual general meeting | Annual general meeting | 49.82% | June 6, 2023 | June 7, 2023 | Announcement of the resolutions of the 2022 annual general meeting (Announcement No.: 2023-048) |
| 3rd extraordinary general meeting in 2023 | Extraordinary general meeting | 48.89% | June 15, 2023 | June 16, 2023 | Announcement of the resolutions of the 3rd extraordinary general meeting in 2023 (Announcement No.: 2023-056) |
V. Directors, Supervisors and Senior Executives
1. Particulars
| Name | Sex | Age | Title | Status | Beginning date of the term of office | End date of the term of office | Opening balance of shares held | No. of additional shares acquired in the current period | No. of shares disposed of in the current period | Changes in the number of shares held due to other reasons | Closing balance of shares held | Cause of increase or decrease in the number of shares held |
| YUAN Yonggang | Male | 45 | Chairman | Active | June 6, 2023 | June 5, 2026 | 202,226,196 | 202,226,196 | ||||
| YUAN Yongfeng | Male | 47 | Director & General Manager | Active | June 6, 2023 | June 5, 2026 | 222,388,153 | 222,388,153 | ||||
| ZHAO Xiutian | Male | 61 | Vice Chairman | Active | June 6, 2023 | June 5, 2026 | ||||||
| SHAN Jianbin | Male | 48 | Director & Executive President | Active | June 6, 2023 | June 5, 2026 | 553,700 | 553,700 | ||||
| MAO Xiaoyan | Female | 44 | Director, Deputy General Manager & Board Secretary | Active | June 6, 2023 | June 5, 2026 | 391,600 | 391,600 | ||||
| WANG Xu | Male | 42 | Director, Deputy General Manager & CFO | Active | June 6, 2023 | June 5, 2026 | 560,000 | 560,000 | ||||
| WANG Zhangzhong | Male | 61 | Independent director | Active | June 6, 2023 | June 5, 2026 | ||||||
| SONG Liguo | Male | 60 | Independent director | Active | June 6, 2023 | June 5, 2026 | ||||||
| GAO Yongru | Male | 56 | Independent director | Active | June 6, 2023 | June 5, 2026 | ||||||
| MA Liqiang | Male | 43 | Chairman of the Board of Supervisors | Active | June 6, 2023 | June 5, 2026 | 3,000 | 3,000 | ||||
| JI Yachun | Male | 46 | Employee representative supervisor | Active | June 6, 2023 | June 5, 2026 | ||||||
| HUANG Yongxin | Male | 38 | Employee representative supervisor | Active | June 6, 2023 | June 5, 2026 | ||||||
| Total | -- | -- | -- | -- | -- | -- | 426,122,649 | 426,122,649 | -- |
Whether any director or supervisor retired or any executive was removed during the reporting period?
□ Yes ? No
Changes in directors, supervisors and senior executives:
□ Applicable ? N/A
2. Profile
Professional background, main work experience and main duties of our current directors, supervisors and senior executives:
(1) Members of the Board of Directors
Mr. YUAN Yonggang: PRC citizen, having permanent residency in Singapore, bachelor’s degree, one of the controllingshareholders and actual controllers of the Company. He has served as the Director of the Marketing Department, Deputy Managerand Vice Chairman of the Company since October 1998, and is now Chairman of the Company, Vice Chairman of the JiangsuGeneral Chamber of Commerce, Vice Chairman of the Suzhou Association of Industry and Commerce, and member of the 17
th
People’s Congress of Suzhou.Mr. YUAN Yongfeng: PRC citizen, bachelor’s degree, one of the controlling shareholders and actual controllers of the Company.He has served as the Director of the Manufacturing Department and Supervisor of the Company since October 1998, and is nowdirector and General Manager of the Company, Chairman of the Yancheng Electronic Information Industry Association, andmember of the 5
th
CPPCC Wuzhong District Committee of Suzhou.Mr. ZHAO Xiutian: US citizen, postgraduate. He has served in Feichuang, Hughes Network Systems, MCE, Celiant and Andrew,and is now Vice Chairman of the Company.Mr. SHAN Jianbin: PRC, bachelor’s degree. He has served in Mektec Manufacturing Corporation (Zhuhai) Ltd., and is nowdirector and Executive President of the Company, and Vice Chairman of the Executive Council of the China Printed CircuitAssociation.Ms. MAO Xiaoyan: PRC citizen, postgraduate, and economist. She has served in Suzhou Huacheng Group Company Limited andJiangsu Wuzhong Pharmaceutical Development Co., Ltd., and is now the director, Deputy General Manager and Board Secretaryof the Company.Mr. WANG Xu: PRC citizen, postgraduate, certified public accountant (non-practitioner). He has served in Kunshan FengruiUnited Accounting Firm and Suzhou Good-ark Electronics Co., Ltd., and is now director, Deputy General Manager and CFO ofthe Company, part-time tutor for postgraduates in accounting of the Soochow University Dongwu Business School, part-time tutorfor postgraduates in accounting and audit of the Nanjing University of Information Science & Technology School of Business, andpart-time tutor for postgraduates in accounting of the Jiangsu Normal University School of Business.Mr. WANG Zhangzhong: PRC citizen, postgraduate. He has served in the Nanjing Institute of Technology School of MaterialsScience and Engineering as a teacher, office director, secretary of the Party committee, chief of the division of science andtechnology, dean and professor since August 1983, and is now independent director of the Company, Director of the NanjingInstitute of Technology Institute of New Material Technology, Director of the Jiangsu Key Laboratory of Advanced StructuralMaterials and Application Technology, member of the Executive Council of the China Heat Treatment Association, Chairman ofthe Executive Council of the Industrial Furnace Branch of Jiangsu Mechanical Engineering Society, Vice Chairman of the NewMetal Materials Branch of Jiangsu Metallurgical Industry Association, and independent director of Suzhou Huike Technology Co.,Ltd.Mr. SONG Liguo: Hong Kong citizen, PhD candidate. He has served in CITIC Securities Tianjin Business Department, theTianjin Equity Exchange, Anhui Antai Law Firm, China Baoan Group, Hong Kong Heng Feng Group International InvestmentLimited, CHAN & Co., ARTHUR K.H. and Denton Wilde Sapte (Hong Kong), and is now independent director of the Company,counsel of Jones Day International Law Firm (Hong Kong), visiting associate professor of the Anhui University Law School, and
arbitrator of the China International Economic and Trade Arbitration Commission, the Cross-Straits Arbitration Center, and theXiamen Arbitration Commission.Mr. GAO Yongru: PRC citizen, PhD candidate, senior accountant. He has served in Panda Electronic Group, Jiangsu JinlingAccounting Firm, the Nanjing Municipal Bureau of Labor, Huatai Securities Co., Ltd., Nanjing Transportation Holding Co., Ltd.,Yincheng Properties Group Co., Ltd., Jinling Resort Nanjing Co., Ltd., Shenwu Energy Saving Co., Ltd., Hefei Genius AdvancedMaterial Co., Ltd., Guangzhou Haozhi Industrial Co., Ltd. and Jiangsu Limin Paper Packaging Co., Ltd., and is now independentdirector of the Company, director of Nanjing Borun Intelligent Technology Co., Ltd., CFO of Nanjing Borun Brain IntelligentTechnology Co., Ltd., director of Jiangsu Sunlant Bioengineering Co., Ltd., independent director of Nanjing CompTechComposites Corp., director of Jiangsu Binhai Rural Commercial Bank Co., Ltd., supervisor of Jiangsu Xinruide SystemIntegration Engineering Co., Ltd., Deputy General Manager of Yongtuo Certified Public Accountants LLP Jiangsu Office,managing director of Shengkun Business Service (Nanjing) Co., Ltd., part-time tutor for postgraduates in accounting of theNanjing University of Information Science & Technology, and part-time tutor for postgraduates in accounting of the ShenyangUniversity.
(2) Members of the Board of Supervisors
Mr. MA Liqiang: PRC citizen, bachelor’s degree. He has served in Suzhou Dayin Electronic Telecommunications Equipment Co.,Ltd., Suzhou Jinhuasheng Paper Co., Ltd. and Dongshan Optronics (Suzhou) Co., Ltd., and is now Chairman of the Board ofSupervisors of the Company, and COO, President of China Region, and President of Touch & Display Business Unit of Multek.Mr. JI Yachun: PRC citizen, postgraduate. He has served in the Central Committee of the Communist Youth League of China, andis now the employee representative supervisor and Public Relations President (Yancheng) of the Company, Secretary of the PartyCommittee and Chairman of the Management Committee of the Yancheng Dongshan Precision Industrial Park, and member of the
th
People’s Congress of Jiangsu Province.Mr. HUANG Yongxin: PRC citizen, bachelor’s degree. He has served in Everlight Electronics (China) Co., Ltd., and is nowemployee representative supervisor of the Company, and General Manager of Yancheng Dongshan Precision Manufacturing Co.,Ltd.
(3) Senior executives
The resume of Mr. YUAN Yongfeng (General Manager), Mr. SHAN Jianbin (Executive President), Ms. MAO Xiaoyan (DeputyGeneral Manager and Board Secretary) and Mr. WANG Xu (Deputy General Manager and CFO) are set forth in “Members ofBoard of Directors” above.Positions held in shareholders:
□ Applicable ? N/A
Positions held in other entities:
? Applicable □ N/A
| Name | Entity | Position |
| YUAN Yonggang | Suzhou Dongyang Investment Co., Ltd. | Supervisor |
| YUAN Yonggang | Anhui Landun Photoelectron Co., Ltd. | Chairman |
| YUAN Yonggang | Shanghai Corkuna New Material Technologies Co., Ltd. | Chairman |
| YUAN Yonggang | Jingbaiyue Investment Development (Suzhou) Co., Ltd. | Managing Director |
| YUAN Yonggang | Shenzhen National Star Vision Technology Co., Ltd. | Director |
| YUAN Yonggang | Suzhou Dongding Tea Shop Co., Ltd. | Supervisor |
| YUAN Yonggang | Shanghai Xinhuarui Semiconductor Technology Co., Ltd. | Director |
| YUAN Yonggang | Jiangsu Xinhuarui Semiconductor Technology Co., Ltd. | Director |
| YUAN Yonggang | Ningbo Qixiang Information Technology Co., Ltd. | Director |
| YUAN Yonggang | Brave Pioneer International Limited | Managing director |
| YUAN Yonggang | Hong Kong Dongshan Investment Holdings Co., Ltd. | Managing Director |
| YUAN Yonggang | Fujian Nanping Nanfu Battery Co., Ltd. | Director |
| YUAN Yonggang | Jiangsu General Chamber of Commerce | Vice Chairman |
| YUAN Yonggang | Suzhou Association of Industry and Commerce | Vice Chairman |
| YUAN Yongfeng | Suzhou Dongyang Investment Co., Ltd. | Managing Director |
| YUAN Yongfeng | Yancheng Electronic Information Industry Association | Chairman |
| YUAN Yongfeng | CPPCC Wuzhong District Committee of Suzhou | Member |
| ZHAO Xiutian | Suzhou Langsheng Communication Technology Co., Ltd. | Director |
| SHAN Jianbin | China Printed Circuit Association | Vice Chairman of the Executive Council |
| MAO Xiaoyan | Dotwil Radio Frequency (Anhui) Technology Co. Ltd. | Director |
| WANG Xu | Soochow University Dongwu Business School | Part-time tutor for postgraduates in accounting |
| WANG Xu | Nanjing University of Information Science & Technology School of Business | Part-time tutor for postgraduates in accounting and audit |
| WANG Xu | Jiangsu Normal University School of Business | Part-time tutor for postgraduates in accounting |
| WANG Zhangzhong | Nanjing Institute of Technology Institute of New Material Technology | Dean |
| WANG Zhangzhong | Nanjing Institute of Technology School of Materials Science and Engineering | Professor |
| WANG Zhangzhong | Jiangsu Key Laboratory of Advanced Structural Materials and Application Technology | Director |
| WANG Zhangzhong | China Heat Treatment Association | Member of the Executive Council |
| WANG Zhangzhong | Industrial Furnace Branch of Jiangsu Mechanical Engineering Society | Chairman of the Executive Council |
| WANG Zhangzhong | New Metal Materials Branch of Jiangsu Metallurgical Industry Association | Vice Chairman |
| WANG Zhangzhong | Suzhou Huike Technology Co., Ltd. | Independent director |
| SONG Liguo | Jones Day International Law Firm (Hong Kong) | Counsel |
| SONG Liguo | Anhui University Law School | Visiting associate professor |
| SONG Liguo | China International Economic and Trade Arbitration Commission | Arbitrator |
| SONG Liguo | Cross-Straits Arbitration Center | Arbitrator |
| SONG Liguo | Xiamen Arbitration Commission | Arbitrator |
| GAO Yongru | Yongtuo Certified Public Accountants LLP Jiangsu Office | Deputy General Manager |
| GAO Yongru | Nanjing CompTech Composites Corp. | Independent Director |
| GAO Yongru | Jiangsu Sunlant Bioengineering Co., Ltd. | Independent Director |
| GAO Yongru | Jiangsu Binhai Rural Commercial Bank Co., Ltd. | Independent Director |
| GAO Yongru | Jiangsu Xinruide System Integration Engineering Co., Ltd. | Supervisor |
| GAO Yongru | Shengkun Business Service (Nanjing) Co., Ltd. | Managing Director |
| GAO Yongru | Nanjing Borun Intelligent Technology Co., Ltd. | Director |
| GAO Yongru | Nanjing Borun Brain Intelligent Technology Co., L | CFO |
| GAO Yongru | Nanjing University of Information Science & Technology | Part-time tutor for postgraduates in accounting |
| GAO Yongru | Shenyang University | Part-time tutor for postgraduates in accounting |
Punishments imposed by the securities regulatory authorities in the past three years on the directors, supervisors and seniorexecutives of the Company currently in office or leaving office during the reporting period:
□ Applicable ? N/A
3. Remunerations of directors, supervisors and senior executives
Decision-making process, criteria for determination and actual amount in respect of remunerations of directors, supervisors andsenior executives:
The remunerations of our directors, supervisors and senior executives are determined in accordance with the provisions of theAOA as follows: the amount and terms of payment of remuneration of the members of the Board of Directors and the Board ofSupervisors are determined by the general meeting; the amount and terms of payment of remuneration of the senior executives aredetermined by the Board of Directors; the remunerations of the directors, supervisors and senior executives are determined basedon their respective job responsibilities, and achievement of annual performance indicators for those holding key operational
positions concurrently, or fulfillment of job responsibilities and annual tasks for those holding key managerial positionsconcurrently. The remunerations paid by us to our directors, supervisors and senior executives conform to our remunerationpolicies and the fulfillment of their job responsibilities.Remunerations of directors, supervisors and senior executives paid in the current period:
In RMB0’000
| Name | Sex | Age | Title | Status | Total remuneration received from the Company (inclusive of tax) | Whether or not receiving remunerations from any affiliate of the Company |
| YUAN Yonggang | Male | 45 | Chairman | Active | 301.56 | No |
| YUAN Yongfeng | Male | 47 | Director & General Manager | Active | 301.56 | No |
| ZHAO Xiutian | Male | 61 | Vice Chairman | Active | 410.00 | No |
| SHAN Jianbin | Male | 48 | Director & Executive President | Active | 361.65 | No |
| MAO Xiaoyan | Female | 44 | Director, Deputy General Manager & Board Secretary | Active | 121.89 | No |
| WANG Xu | Male | 42 | Director, Deputy General Manager & CFO | Active | 186.25 | No |
| WANG Zhangzhong | Male | 61 | Independent Director | Active | 12.00 | No |
| SONG Liguo | Male | 60 | Independent Director | Active | 12.00 | No |
| GAO Yongru | Male | 56 | Independent Director | Active | 12.00 | No |
| MA Liqiang | Male | 43 | Chairman of the Board of Supervisors | Active | 218.93 | No |
| JI Yachun | Male | 46 | Employee representative supervisor | Active | 110.66 | No |
| HUANG Yongxin | Male | 38 | Employee representative supervisor | Active | 147.80 | No |
| Total | -- | -- | -- | -- | 2,196.30 | -- |
Other information:
□ Applicable ? N/A
VI. Performance of Duties by the Directors during the Reporting Period
1. Meetings of the Board of Directors held during the reporting period
| Session | Date of meeting | Disclosure date | Resolution of the meeting |
| 31st meeting of the 5th Board of Directors | March 15, 2023 | March 16, 2023 | Announcement of the resolutions of the 31st meeting of the 5th Board of Directors (Announcement No.: 2023-012) |
| 32nd meeting of the 5th Board of Directors | April 3, 2023 | April 4, 2023 | Announcement of the resolutions of the 32nd meeting of the 5th Board of Directors (Announcement No.: 2023-017) |
| 33rd meeting of the 5th Board of Directors | April 19, 2023 | April 21, 2023 | Announcement of the resolutions of the 33rd meeting of the 5th Board of Directors (Announcement No.: 2023-023) |
| 34th meeting of the 5th Board of Directors | April 24, 2023 | April 25, 2023 | The First Quarter Report 2023 was adopted. |
| 35th meeting of the 5th Board of Directors | May 25, 2023 | May 26, 2023 | Announcement of the resolutions of the 35th meeting of the 5th Board of Directors (Announcement No.: 2023-041) |
| 1st meeting of the 6th Board of Directors | June 6, 2023 | June 7, 2023 | Announcement of the resolutions of the 1st meeting of the 6th Board of Directors (Announcement No.: 2023-049) |
| 2nd meeting of the 6th Board of Directors | June 12, 2023 | June 13, 2023 | Announcement of the resolutions of the 2nd meeting of the 6th Board of Directors (Announcement No.: 2023-053) |
| 3rd meeting of the 6th Board of Directors | July 7, 2023 | July 8, 2023 | Announcement of the resolutions of the 3rd meeting of the 6th Board of Directors (Announcement No.: 2023-059) |
| 4th meeting of the 6th Board of Directors | August 29, 2023 | August 31, 2023 | Announcement of the resolutions of the 4th meeting of the 6th Board of Directors (Announcement No.: 2023-063) |
| 5th meeting of the 6th Board of Directors | October 24, 2023 | October 25, 2023 | The Third Quarter Report 2023 was adopted. |
| 6th meeting of the 6th Board of Directors | December 28, 2023 | December 30, 2023 | Announcement of the resolutions of the 6th meeting of the 6th Board of Directors (Announcement No.: 2023-073) |
2. Attendance of the directors at meetings of the Board of Directors and general meetings
| Attendance of the directors at meetings of the Board of Directors and general meetings | |||||||
| Director | No. of board meetings attended during the | No. of board meetings present in person | No. of board meetings present by means of | No. of board meetings present by proxy | No. of board meetings absent from | Whether or not having been absent from two consecutive board | No. of general meeting attended |
| reporting period | communication equipment | meetings | |||||
| YUAN Yonggang | 11 | 3 | 8 | 0 | 0 | No | 4 |
| YUAN Yongfeng | 11 | 6 | 5 | 0 | 0 | No | 4 |
| ZHAO Xiutian | 11 | 1 | 10 | 0 | 0 | No | 4 |
| SHAN Jianbin | 11 | 6 | 5 | 0 | 0 | No | 4 |
| MAO Xiaoyan | 11 | 6 | 5 | 0 | 0 | No | 4 |
| WANG Xu | 11 | 6 | 5 | 0 | 0 | No | 4 |
| WANG Zhangzhong | 11 | 1 | 10 | 0 | 0 | No | 4 |
| SONG Liguo | 11 | 1 | 10 | 0 | 0 | No | 4 |
| GAO Yongru | 11 | 1 | 10 | 0 | 0 | No | 4 |
Reason for absence from two consecutive board meetings: None.
3. Objections raised by the directors regarding matters of the CompanyWhether any director has raised any objection regarding matters of the Company?
□ Yes ? No
No director has raised any objection regarding matters of the Company during the reporting period.
4. Other information regarding the performance of duties by the directors
Whether the suggestions put forward by the directors have been adopted by the Company?? Yes □ NoExplanation of the adoption or rejection by the Company of the suggestions put forward by the directors:
During the reporting period, no director has raised any objection to our matters.
VII. Activities of the Committees of the Board of Directors during the Reporting Period
| Committee | Members | No. of meetings held | Date of meeting | Subject | Important opinions and suggestions | Performance of other duties |
| Audit Committee | GAO Yongru, WANG Zhangzhong and YUAN Yonggang (SHAN Jianbin before June 6, 2023) | 9 | March 15, 2023 | Considered the Proposal for Provision of Guarantee by the Company for the Financing Obtained by its Subsidiaries from Banks and other Financial Institutions. | The relevant proposals were approved and submitted to the Board of Directors for consideration. | |
| April 19, 2023 | Considered the Summary of Internal Audit in 2022 and the Audit Plan 2023, the Annual Report 2022 and Summary of the Report, the Annual Financial Report 2022, the 2022 Profit Distribution Proposal, the Proposal for Re-engagement of the Auditor for 2023, the 2022 Self-assessment Report on Internal Controls, the 2022 Special Report on the Deposit and Use of Offering Proceeds, the Proposal Regarding Application for Facilities from Banks and other Financial Institutions in 2023, the Proposal Regarding External Guarantees, the Proposal Regarding External Investments, the Proposal Regarding Completion of Certain Committed Investment Projects and Permanent Replenishment of Working Capital with Surplus Offering Funds, the Proposal Regarding Extension of Certain Committed Investment Projects, and the Proposal Regarding Changes in Accounting Policies. | The relevant proposals were approved and submitted to the Board of Directors for consideration. | The Audit Committee has actively communicated with the auditor of our annual report, to effectively supervise the conduct of the annual audit of the Company. | |||
| April 24, 2023 | Considered the First Quarter Report 2023. | The relevant proposals were approved and submitted to the Board of Directors for consideration. | ||||
| May 25, 2023 | Considered the Proposal Regarding the Report on the Application of the Previous Offering Proceeds. | The relevant proposals were approved and submitted to the Board of Directors for |
| consideration. | ||||||
| June 6, 2023 | Considered the Proposal for the Appointment of the Audit Manager of the Company. | The relevant proposals were approved and submitted to the Board of Directors for consideration. | ||||
| June 12, 2023 | Considered the Proposal for Temporary Replenishment of Working Capital with the Idle Offering Proceeds. | The relevant proposals were approved and submitted to the Board of Directors for consideration. | ||||
| August 29, 2023 | Considered the Semi-annual Report 2023 and Summary of the Report, and the Special Report on the Deposit and Use of Offering Proceeds in the First Half of 2023. | The relevant proposals were approved and submitted to the Board of Directors for consideration. | ||||
| October 24, 2023 | Considered the Third Quarter Report 2023. | The relevant proposals were approved and submitted to the Board of Directors for consideration. | ||||
| December 28, 2023 | Considered the Proposal Regarding Commodity Futures Hedging Transactions, the Feasibility Report on Commodity Futures Hedging Transactions, the Proposal Regarding Foreign Exchange Hedging Transactions, the Feasibility Report on Foreign Exchange Hedging Transactions, and the Proposal for Amending the AOA and its Exhibits. | The relevant proposals were approved and submitted to the Board of Directors for consideration. | ||||
| Strategy Committee | YUAN Yonggang, WANG Zhangzhong, SONG Liguo, GAO Yongru and SHAN Jianbin | 5 | April 3, 2023 | Considered the Proposal Regarding the Repurchase of the Company’s Shares and the Proposal Regarding External Investments. | The relevant proposals were approved and submitted to the Board of Directors for consideration. | |
| April 19, 2023 | Considered the Proposal Regarding External Investments. | The relevant proposals were approved and submitted to the Board of Directors for consideration. | ||||
| May 25, 2023 | Considered the Proposal Regarding the Company’s Qualification for Offering Convertible Corporate Bonds to Unspecified Investors, the Proposal for Offering by the Company of Convertible Corporate Bonds to Unspecified Investors, the Proposal Regarding the Plan on Offering by the Company of Convertible Corporate Bonds to Unspecified Investors, the Proposal Regarding the Feasibility Report on the Offering by the Company of Convertible Corporate Bonds to Unspecified Investors, the Proposal Regarding the Feasibility Report on the Application of Proceeds from the Offering by the Company of Convertible Corporate Bonds to Unspecified Investors, the Proposal Regarding the Report on the Application of the Previous Offering Proceeds, the Proposal Regarding the Dilution of Current Earnings Caused by the Offering by the Company of Convertible Corporate Bonds to Unspecified Investors, Corresponding Remedial Measures, and Covenants Made by the Relevant Persons, the Proposal Regarding the Rules of Meetings of Convertible Corporate Bond Holders, the Proposal Regarding the Three-year Plan for Returns to Shareholders (2024-2026), and the Proposal for Requesting the General Meeting of Shareholders to Authorize the Board of Directors and its Authorized Personnel to Handle the Affairs Related to the Offering of Convertible Corporate Bonds to Unspecified Investors. | The relevant proposals were approved and submitted to the Board of Directors for consideration. | ||||
| July 7, 2023 | Considered the Proposal Regarding Investment in MFLEX Suzhou and Other Wholly-owned Subsidiaries. | The relevant proposals were approved and submitted to the Board of Directors for consideration. | ||||
| December 28, 2023 | Considered Proposal Regarding Repurchase of the Company’s Shares. | The relevant proposals were approved and submitted to the Board of Directors for consideration. | ||||
| Nomination Committee | WANG Zhangzhong, SONG Liguo, YUAN Yonggang, YUAN | 2 | April 19, 2023 | Considered the Proposal Regarding the Election of the Non-independent Directors of the 6th Board of Directors, and the Proposal Regarding the Election of Independent Directors of the 6th Board of Directors. | The relevant proposal was approved and submitted to the |
| Yongfeng and GAO Yongru | Board of Directors for consideration. | |||||
| June 6, 2023 | Considered the Proposal Regarding the Election of the Chairman and Vice Chairman of the 6th Board of Directors, the Proposal Regarding the Appointment of Senior Executives of the Company, and the Proposal Regarding the Appointment of the Audit Manager of the Company. | The relevant proposals were approved and submitted to the Board of Directors for consideration. | ||||
| Compensation and Appraisal Committee | SONG Liguo, WANG Zhangzhong, GAO Yongru, YUAN Yonggang and YUAN Yongfeng | 1 | April 19, 2023 | Considered the Proposal Regarding the Remunerations of the Directors and Senior Executives of the Company in 2023. | The relevant proposals were approved and submitted to the Board of Directors for consideration. |
VIII. Activities of the Board of SupervisorsWhether the Board of Supervisors has identified any risk involving the Company in its supervisory activities during the reportingperiod?
□ Yes ? No
The Board of Supervisors has not raised any objection to the supervisory matters during the reporting period.IX. Employees
1. Number, structure of profession and education of employees
| Number of current employees of the parent at the end of the reporting period | 1,848 |
| Number of current employees of the major subsidiaries at the end of the reporting period | 20,710 |
| Total number of current employees at the end of the reporting period | 22,558 |
| Total number of salaried employees during the reporting period | 22,558 |
| Total number of retired employees to or for whom the parent and the major subsidiaries are obligated to make payments | 0 |
| Structure of profession | |
| Categories of profession | Number of employees |
| Production staff | 16,413 |
| Sales staff | 412 |
| Technical staff | 4,148 |
| Financial staff | 140 |
| Administrative staff | 495 |
| Management staff | 950 |
| Total | 22,558 |
| Education | |
| Degree of education | Number of employees |
| PhD | 3 |
| Master | 155 |
| Undergraduate | 2,923 |
| College | 4,375 |
| Below college | 15,102 |
| Total | 22,558 |
2. Compensation policies
We advocate the creation of values, and give priority to high-performance teams and individuals in compensation and incentives.We have sound compensation and incentive policies in place, which are designed to attract and retain outstanding technical and
management talents with competitive compensation, and give long-acting incentives to our employees through the combination ofshort-, medium- and long-term incentives taking into account our overall operating results and the employees’ performance, inorder to enhance our core competencies.
3. Training programs
We actively recruit, seek and train talents, and make efforts to build an efficient and systemic talent training system, tocontinuously improve our employees’ comprehensive capabilities; conduct capability improvement and training programs invarious forms focusing on cadre fostering, management of engineers and other professional personnel and building of talent pools,to improve our employees’ professional quality, skills and management capabilities; actively provide our employees with learningand growth opportunities, encourage them to strive for progress, and build talent pools, to promote the achievement of ourstrategic objectives.
4. Outsourced workers
□ Applicable ? N/A
X. Profit Distribution and Transfer of Capital Reserve to the Share Capital
Establishment, implementation or adjustment of profit distribution policy, in particular, cash dividend policy, during the reportingperiod:
? Applicable □ N/AWe attach great importance to the return to our shareholders. In order to maintain a continuous and stable profit distribution policy,pursuant to the Regulatory Guidance for Listed Companies No. 3 – Distribution of Cash Dividends by the Listed Companies, theAOA and other relevant provisions, we have developed the Three-year Plan for Return to Shareholders (2022-2024), which setsforth the specific principles and plans for return to shareholders. During the reporting period, we developed the 2023 ProfitDistribution Proposal taking into account our actual business situations and development plans, and the needs to ensure normalbusiness operation and long-term development.
| Special explanation about the cash dividend policy | |
| Whether or not comply with the provisions of the articles of association or requirements of resolutions of the general meeting of the Company? | Yes |
| Whether the standard and ratio of cash dividend distribution are clear and definite? | Yes |
| Whether the relevant decision-making processes and mechanisms are sound? | Yes |
| Whether the independent directors have performed their duties and exercised their functions? | Yes |
| If the Company has not distributed cash dividends, explain the reason, and describe the measures to be taken in order to increase the returns to investors in the future: | N/A |
| Whether the minority shareholders have sufficient opportunities to express their opinions and requests and their legitimate rights and interests are fully protected? | Yes |
| Whether the conditions and procedures in respect of any adjustment or amendment of the cash dividend policy comply with the applicable regulations and are transparent? | Yes |
Whether the Company has made a profit in the current period and the parent has profits available for distribution to theshareholders, but the Company does not propose to distribute cash dividends?
□ Applicable ? N/A
Particulars of profit distribution and transfer of capital reserve to the share capital for the reporting period:
? Applicable □ N/A
| Number of bonus shares per 10 shares | 0 |
| Amount of cash dividends per 10 shares (inclusive of tax) | 2.5 |
| Share capital based on which the distribution proposal was made | 1,701,276,209.00 |
| Amount of cash dividends (inclusive of tax) | 425,319,052.25 |
| Amount of cash dividends distributed in other ways (such as share repurchase) (RMB) | 0.00 |
| Total amount of cash dividends (RMB) | 425,319,052.25 |
| Distributable profit (RMB) | 482,854,237.57 |
| Ratio of total cash dividends to the distributable profit | 100% |
| Particulars of cash dividends distributed for the reporting period | |
| If we are at the growth stage and have certain material capital expenditure arrangements, at least 20% of the distributable profit will be distributed in cash. | |
| Particulars of the proposal of profit distribution or for transfer of capital reserve to share capital | |
| Our 2023 Profit Distribution Proposal is as follows: to distribute to all shareholders a cash dividend of RMB2.50 (inclusive of tax) per 10 shares on the basis of the total share capital of 1,701,276,209 shares (excluding treasury shares), or RMB425,319,052.25 in total, without distribution of any bonus shares or transfer of any capital reserve to the share capital. (Note: As of the date of this Report, we had a total share capital of 1,709,867,327 shares, of which, 8,591,118 shares held in the dedicated securities account for repurchase would not participate in the profit distribution.) | |
XI. Share Incentive Plans, Employee Stock Ownership Plans or Other Employee Incentives? Applicable □ N/A
1. Share incentives
We have not granted any share incentive during the reporting period.Share incentives granted to directors and senior executives:
□ Applicable ? N/A
Performance appraisal and incentives in respect of senior executives: N/A.
2. Employee stock ownership plans (ESOPs)
? Applicable □ N/AEffective ESOPs in the current period:
| Scope of employees | No. of employees | Total shares held | Changes | % of total share capital | Source of funds |
| Certain directors, supervisors and senior executives of the Company, and mid- and high-level officers and key employees at the level of director or above who do full-time jobs for, receive salaries from and have valid employment contracts with the Company or its controlled subsidiaries (2021 ESOP)1 | 119 | 21,914,118 | None | 1.28% | Legal remunerations of the employees, self-raised funds or otherwise permitted by the applicable laws and administrative regulations |
| Certain key officers and technical personnel of the Company or its controlled subsidiaries, excluding directors, supervisors and senior executives of the Company (2022 ESOP for key officers and technical personnel)2 | 308 | 1,366,120 | None | 0.08% | Legal remunerations of the employees, self-raised funds or otherwise permitted by the applicable laws and administrative regulations |
| Certain employees who do full-time jobs for, receive salaries from and have valid employment contracts with the Company or its controlled subsidiaries, excluding directors, supervisors and senior executives of the Company (2022 second ESOP) 3 | 366 | 4,847,178 | None | 0.28% | Legal remunerations of the employees, self-raised funds or otherwise permitted by the applicable laws and administrative regulations |
Note: 1. As of February 24, 2023, the shares held under the 2021 ESOP were sold and the 2021 ESOP was terminated.
2. As of the date of this Report, The vesting period for the 2022 ESOP for key officers and technical personnel has expired, underwhich, the first installment of shares, representing 50% of the total shares granted thereunder were already vested, and the secondinstallment of shares, representing 50% of the total shares granted thereunder, has entered the vesting period.
3. As of the date of this Report, the 2022 second ESOP was still within the lock-up period.
Shares held by the directors, supervisors and senior executives under the ESOPs during the reporting period:
| Name | Title | Opening balance of shares held | Closing balance of | % of total |
| (share) | shares held (share) | share capital | ||
| SHAN Jianbin | Director & Executive President | 1,753,128 | 0 | 0.00% |
| WANG Xu | Director, Deputy General Manager & CFO | 1,314,846 | 0 | 0.00% |
| MAO Xiaoyan | Director, Deputy General Manager & Board Secretary | 525,938 | 0 | 0.00% |
| MA Liqiang | Chairman of the Board of Supervisors | 525,938 | 0 | 0.00% |
| JI Yachun | Supervisor | 525,938 | 0 | 0.00% |
| HUANG Yongxin | Supervisor | 525,938 | 0 | 0.00% |
Changes in asset manager during the reporting period:
□ Applicable ? N/A
Changes in equity due to disposal of shares by the holders or otherwise during the reporting period:
□ Applicable ? N/A
Exercise of shareholder rights during the reporting period: None.Other information related to the ESOPs during the reporting period and the relevant explanation:
□ Applicable ? N/A
Changes in the members of the ESOP management committee during the reporting period:
□ Applicable ? N/A
The financial effect of the ESOPs on the Listed Company during the reporting period and the relevant accounting treatment:
□ Applicable ? N/A
Termination of the ESOPs during the reporting period:
□ Applicable ? N/A
Other information:
1. During the reporting period, our directors, supervisors and senior executives only held shares under the 2021 ESOP, and did notparticipate in any other ESOP.
2. As of February 24, 2023, the shares held under the 2021 ESOP were sold and the 2021 ESOP terminated.
XII. Establishment and Implementation of Internal Controls during the ReportingPeriod
1. Establishment and implementation of internal controls
Pursuant to the requirements of the Company Law, the Basic Internal Control Standards for Enterprises and the relevantguidelines, we have established a sound internal control system according to our actual situations and needs of management.During the reporting period, we have continuously improved the internal control system, carried out internal control self-assessment, and identified deficiencies in internal control, risks and hazards, to further improve the effectiveness of our internalcontrols.According to the assessment of material weakness in internal control over financial reporting, as of the reference date for theassessment report on internal controls, there’s no material weakness in our internal control over financial reporting. We havemaintained effective internal control over financial reporting in all material respects pursuant to the requirements of the BasicInternal Control Standards for Enterprises and other relevant provisions. According to the assessment of material weakness ininternal control over non-financial reporting, as of the reference date for the assessment report on internal controls, there’s nomaterial weakness in our internal control over non-financial reporting.
2. Material weaknesses in internal controls identified during the reporting period
□ Yes ? No
XIII. Management and Control of Subsidiaries during the Reporting PeriodXIV. Assessment Report on Internal Controls or Auditor’s Report on Internal Controls
1. Assessment report on internal controls
| Disclosure date of the full copy of the assessment report on internal controls | April 18, 2024 | |
| Full copy of the assessment report on internal controls available at | http://www.cninfo.com.cn | |
| Ratio of total assets of the entities covered by the assessment to total assets recorded in the consolidated financial statements of the Company | 100.00% | |
| Ratio of total operating revenue of the entities covered by the assessment to total operating revenue recorded in the consolidated financial statements of the Company | 100.00% | |
| Criteria for determination of deficiencies | ||
| Type | Financial reporting | Non-financial reporting |
| Qualitative criteria | Indicators of material weaknesses in internal control over financial reporting include: (i) any fraud on the part of directors, supervisors and senior executives of the Company; (ii) any correction of a financial report already disclosed; (iii) any material misstatement in the financial report for the current period that was found by the public certified accountants but failed to be identified through internal controls; and (iv) ineffective supervision by the Audit Committee and the Internal Audit Department of the Company over the financial reports disclosed externally or internal control over financial reporting. Indicators of significant deficiencies in internal control over financial reporting include: (i) failure to correctly select and apply accounting policies pursuant to the generally accepted accounting principles; (ii) failure to establish anti-fraud procedures and controls; (iii) failure to establish or implement controls over the accounting treatment of extraordinary or special transactions, and failure to establish corresponding compensatory controls; and (iv) one or more deficiencies existing in control over the preparation of financial report at the end of the period, and inability to reasonably ensure the truthfulness and completeness of the financial statements. General deficiencies in internal control over financial reporting include deficiencies in control other than material weakness and significant deficiency. | Indicators of material weaknesses in internal control over non-financial reporting include: (i) any violation of the applicable laws, regulations or normative documents of the country; (ii) unscientific procedure in making any major decision; (iii) absence of any regulations which may result in systemic failure; (iv) failure to rectify any material weakness or significant deficiency; and (v) any other circumstance that has a material adverse effect on the Company. Other deficiencies are classified as significant or general deficiencies depending on the degree of effect. |
| Quantitative criteria | Material weakness: amount of misstatement ≥ 0.5% of the operating revenue; significant deficiency: 0.3% of the operating revenue ≤ amount of misstatement ＜0.5% of the operating revenue; general deficiency: amount of misstatement ＜0.3% of the operating revenue. | Material weakness: direct loss > 0.5% of the total assets; significant deficiency: 0.2% of the total asset < direct loss ≤ 0.5% of the total asset; general deficiency: direct loss ≤ 0.2% of the total asset. |
| Number of material weaknesses in financial reporting | 0 | |
| Number of material weaknesses in non-financial reporting | 0 | |
| Number of significant deficiencies in financial reporting | 0 | |
| Number of significant deficiencies in non-financial reporting | 0 | |
2. Auditor’s report on internal controls
? Applicable □ N/A
| Auditor’s opinion expressed in the auditor’s report on internal controls | |
| In our opinion, DSBJ has maintained effective internal control over financial reporting in all material respects as of December 31, 2023 in accordance with the Guide on Self-regulatory Supervision for Companies Listed on the Shenzhen Stock Exchange No. 1 – Code of Operations for Companies Listed on the Main Board (Shen Zheng Shang [2023] No. 1145). | |
| Disclosure of the auditor’s report on internal controls | Disclosed |
| Disclosure date of the full copy of the auditor’s report on internal controls | April 18, 2023 |
| Full copy of the auditor’s report on internal controls available at | http://www.cninfo.com.cn |
| Type of opinion expressed in the auditor’s report on internal controls | Standard unqualified opinion |
| Whether there’s any material weakness in non-financial reporting | No |
Whether the accounting firm issued a modified auditor’s report on internal controls?
□ Yes ? No
Whether the auditor’s report on internal controls issued by the accounting firm is consistent with the opinion expressed in the self-assessment report of the Board of Directors?? Yes □ No
XV. Rectification of Non-Compliance Found in the Special Self-Examination of CorporateGovernance of the Listed CompanyN/A
Section V Environmental and Social ResponsibilitiesI. Material Environmental IssuesWhether the Listed Company and its subsidiaries have been identified as major polluters by the environmental protectionauthorities?? Yes □ NoPolicies and industrial standards related to environmental protection:
During the reporting period, we and our subsidiaries identified as major polluters have strictly complied with the EnvironmentalProtection Law of the People’s Republic of China, the Law of the People’s Republic of China on Prevention and Control ofAtmospheric Pollution, the Law of the People’s Republic of China on Prevention and Control of Water Pollution, the Law of thePeople’s Republic of China on Prevention and Control of Environmental Pollution by Solid Wastes, the Law of the People’sRepublic of China on Prevention and Control of Noise Pollution, the Law of the People’s Republic of China on Prevention andControl of Soil Pollution, the Law of the People’s Republic of China on Environmental Impact Assessment, the Work Safety Law ofthe People’s Republic of China, the Fire Protection Law of the People’s Republic of China and other laws and regulations relatedto environmental protection, and implemented the Emission Standard for Odor Pollutants (GB14554-93), the Integrated EmissionStandard for Air Pollutants (DB32/4041-2021), the Emission Standard of Air Pollutants for Boilers (GB13271-2014), theEmission Standard of Air Pollutants for Industrial Furnaces and Kilns (DB32/3728-2021), the Standard for Pollution Control onHazardous Waste Storage (GB18597-2001), the Emission Standard for Pollutants from Electroplating (GB21900-2008), theEmission Standard for Industrial Enterprises Noise at Boundary (GB12348-2008), the Standard for Fugitive Emission of VolatileOrganic Compounds (GB37822-2019), the Discharge Standard of Water Pollutants for Electronic Industry (GB39731-2021), theIntegrated Wastewater Discharge Standard (GB8978-1996), the Wastewater Quality Standards for Discharge to Municipal Sewers(GB/T31962-2015), the Standard for Pollution Control on the Non-Hazardous Industrial Solid Waste Storage and Landfill(GB18599-2020) and other national and industrial standards related to environmental protection.Environmental Permits of the CompanyEnvironmental permits held by the Company and its subsidiaries identified as major polluters during the reporting period:
| Company name | No. | Validity period |
| Suzhou Dongshan Precision Manufacturing Co., Ltd. | 91320500703719732P001U | From January 15, 2023 to January 14, 2028 |
| Multek Technologies (Zhuhai) Co., Ltd. | 914404007718663989001X | From November 28, 2022 to November 27, 2027 |
| Multek Industries Limited | 91440400714732019J001W | From August 17, 2023 to August 16, 2028 |
| Multek Zhuhai Limited | 9144040061749918XX001Y | From April 12, 2022 to April 11, 2027 |
| Multek China Limited | 914404006182559377001W | From December 20, 2021 to December 19, 2026 |
| Suzhou Chengjia Precision Manufacturing Co., Ltd. | 913205065754151948001X | From April 8, 2020 to April 7, 2025 |
| Suzhou Yongchuang Metal Science and Technology Co., Ltd. | 9132050675271409XG001U | From December 14, 2022 to December 13, 2027 |
| Yancheng Dongshan Precision Manufacturing Co., Ltd. | 91320903MA1P7PG85D001X | From October 8, 2023 to October 7, 2028 |
| MFLEX Yancheng Co., Ltd. | 91320903MA1P7PLE6D001T | From October 8, 2023 to October 7, 2028 |
| MFLEX Suzhou Co., Ltd. | 91320500738277671B001V | From August 14, 2023 to August 13, 2028 |
| MFLEX Suzhou Co., Ltd. | 91320500738277671B002U | From January 31, 2022 to January 30, 2027 |
| Suzhou JDI Electronics Inc. | 913205056082373800001C | From June 27, 2022 to June 26, 2027 |
Industrial discharge standards and the pollutants discharged in our production and operating activities:
| Company name | Category of main pollutants and specific pollutants | Description of main pollutants and specific pollutants | Method of discharge | No. of discharge outlets | Location of discharge outlets | Pollutant concentration | Applicable pollutant discharge standard | Total volume discharged | Approved total volume dischargeable | Excessive discharge |
| Multek Industries, Multek Electronics and Multek Technologies | Wastewater from the general discharge outlet | COD | Continuous discharge | 1 | Within factory boundary | 15.75mg/L | 160mg/L | 41t | 242.36t | No |
| Multek Industries, | Wastewater from the | Ammonia nitrogen | Continuous discharge | 1 | Within factory | 2.42 mg/L | 30mg/L | 5.19t | 45.44t | No |
| Multek Electronics and Multek Technologies | general discharge outlet | boundary | ||||||||
| Multek Industries, Multek Electronics and Multek Technologies | Wastewater from the general discharge outlet | Total nitrogen | Continuous discharge | 1 | Within factory boundary | 13.57 mg/L | 40mg/L | 29.46t | 60.59t | No |
| Multek Industries, Multek Electronics and Multek Technologies | Wastewater from Class I waste discharge outlet | Total nickel | Intermittent discharge | 1 | Within factory boundary | 0.1 mg/L | 0.5mg/L | 0.0026t | 0.055t | No |
| Multek Zhuhai | Wastewater from the general discharge outlet | COD | Continuous discharge | 1 | Within factory boundary | 14.75mg/L | 160mg/L | 3.28t | 33.643t | No |
| Multek Zhuhai | Wastewater from the general discharge outlet | Ammonia nitrogen | Continuous discharge | 1 | Within factory boundary | 1.82 mg/L | 30mg/L | 0.385t | 6.308t | No |
| Multek Zhuhai | Wastewater from the general discharge outlet | Total nitrogen | Continuous discharge | 1 | Within factory boundary | 6.56 mg/L | 40mg/L | 1.44t | 28.6748t | No |
| Multek Zhuhai | Wastewater from Class I waste discharge outlet | Total nickel | Intermittent discharge | 1 | Within factory boundary | 0 mg/L | 0.5mg/L | 0t | 0.358t | No |
| Multek China | Wastewater from the general discharge outlet | COD | Continuous discharge | 1 | Within factory boundary | 25.547mg/L | 160mg/L | 11.13t | 216.372t | No |
| Multek China | Wastewater from the general discharge outlet | Ammonia nitrogen | Continuous discharge | 1 | Within factory boundary | 10.797mg/L | 30mg/L | 4.6t | 40.5697t | No |
| Multek China | Wastewater from the general discharge outlet | Total nitrogen | Continuous discharge | 1 | Within factory boundary | 19.21mg/L | 40mg/L | 7.71t | 54.093t | No |
| Multek China | Wastewater from Class I waste discharge outlet | Total nickel | Intermittent discharge | 1 | Within factory boundary | 0.0122mg/L | 0.5mg/L | 0.000068t | 1.3523t | No |
| Multek China | Wastewater from Class I waste discharge outlet | Total silver | Intermittent discharge | 1 | Within factory boundary | 0.0067mg/L | 0.1mg/L | 0.0000127t | 0.270465t | No |
| Yongchuang Tech | Waste gas | Particles | Continuous discharge | 1 | Southwest of the factory | 4.6mg/m? | 20 mg/m? | 0.336057 | / | No |
| Yongchuang Tech | Waste gas | Nitrogen oxide | Continuous discharge | 1 | Southwest of the factory | 4mg/m? | 180 mg/m? | 0.292225 | / | No |
| Yongchuang Tech | Waste gas | Sulfur dioxide | Continuous discharge | 1 | Southwest of the factory | 6mg/m? | 80 mg/m? | 0.438337 | / | No |
| Suzhou Chengjia | Waste gas | NmHc | Organized discharge | 1 | East of the roof of factory buildings | 1.98 mg/m3 | 120 mg/m3 | 0.021 | 0.18 | No |
| Yancheng Dongshan | Wastewater | COD | Indirect discharge | 1 | General wastewater discharge outlet at the southeast of the factory | 32.57mg/L | 500mg/L | 4.783526t | 232.467t | No |
| Yancheng Dongshan | Wastewater | Ammonia nitrogen | Indirect discharge | 1 | General wastewater discharge outlet at the southeast of the factory | 5.66mg/L | 35mg/L | 0.562892t | 14.058t | No |
| Yancheng Dongshan | Wastewater | Total phosphorus | Indirect discharge | 1 | General wastewater discharge outlet at the southeast of the factory | 0.36mg/L | 3.5mg/L | 0.083336t | 1.743t | No |
| Yancheng Dongshan | Wastewater | Total nitrogen | Indirect discharge | 1 | General wastewater discharge | 18.99mg/L | 40mg/L | 1.871285t | 19.054t | No |
| outlet at the southeast of the factory | ||||||||||
| Yancheng Dongshan | Wastewater | Total silver | Indirect discharge | 1 | General wastewater discharge outlet at the southeast of the factory | 0.0082mg/L | 0.3mg/L | 0.000527t | 0.022t | No |
| Yancheng Dongshan | Wastewater | Total nickel | Indirect discharge | 1 | General wastewater discharge outlet at the southeast of the factory | 0.091mg/L | 0.5mg/L | 0.000637t | 0.033t | No |
| Yancheng Dongshan | Waste gas | VOCs | Organized discharge | 5 | Roof of buildings 4# and 5# | 1.2 mg/m3 | 60mg/m3 | 0.625t | 12.04t | No |
| MFLEX Yancheng | Wastewater | Total nitrogen | Indirect discharge | 1 | General discharge outlet at east of the factory | 18.5mg/L | 40mg/L | 14.88t | 84.183t | No |
| MFLEX Yancheng | Wastewater | Ammonia nitrogen | Indirect discharge | 1 | General discharge outlet at east of the factory | 12.1mg/L | 35mg/L | 4.29t | 75.729t | No |
| MFLEX Yancheng | Wastewater | COD | Indirect discharge | 1 | General discharge outlet at east of the factory | 28mg/L | 500mg/L | 33.57t | 844.263t | No |
| MFLEX Yancheng | Wastewater | Total phosphorus | Indirect discharge | 1 | General discharge outlet at east of the factory | 0.14mg/L | 3.5mg/L | 0.472t | 7.744t | No |
| MFLEX Yancheng | Wastewater | Nickel | Indirect discharge | 1 | General discharge outlet at east of the factory | 0.01mg/L | 0.5mg/L | 0.019t | 0.085t | No |
| MFLEX Suzhou | Wastewater from the general discharge outlet | COD | Continuous discharge | 1 | Within factory boundary | 50.232mg/L | 500mg/L | 73.744t | 471.035t | No |
| MFLEX Suzhou | Wastewater from the general discharge outlet | Ammonia nitrogen | Continuous discharge | 1 | Within factory boundary | 1.046mg/L | 25mg/L | 1.535t | 26.020t | No |
| MFLEX Suzhou | Wastewater from the general discharge outlet | Total copper | Continuous discharge | 1 | Within factory boundary | 0.018mg/L | 2.0mg/L | 0.026t | 0.9405t | No |
| MFLEX Suzhou | Wastewater from Class I waste discharge outlet | Total nickel | Continuous discharge | 1 | Within factory boundary | ND | 0.5mg/L | / | 0.057t | No |
| MFLEX Suzhou | Wastewater from the general discharge outlet | COD | Continuous discharge | 1 | Within factory boundary | 18mg/L | 500mg/L | 2.111t | 92.893t | No |
| MFLEX Suzhou | Wastewater from the general discharge outlet | Ammonia nitrogen | Continuous discharge | 1 | Within factory boundary | 6.05mg/L | 30mg/L | 0.709t | 7.963t | No |
Treatment of pollutantsWith respect to the wastewater, waste gas, solid wastes and other wastes generated during our production, we have a complete setof pollution treatment facilities in place, which are operated and maintained by ourselves or the service providers engaged by us.We designate special personnel to monitor the operation of equipment and discharge of pollutants, and maintain and repair theequipment and facilities on a regular basis, to ensure the discharge and disposal of all kinds of pollutants in accordance with theapplicable standards and regulations, and minimize the environmental impact of our production. During the reporting period, ourdischarge of pollutants complied with the applicable standards and regulations.Environmental self-monitoring plansWe have developed environmental self-monitoring plans in accordance with the applicable laws and regulations, and installedautomatic monitoring equipment or engaged qualified third-party inspection institutions to monitor the wastewater, waste gas,
noise and other pollutants on a regular basis. During the reporting period, the results of our environmental monitoring compliedwith the applicable standards and regulations.
Environmental emergency response plans
We have developed environmental emergency response plans in accordance with the National Environmental EmergencyResponse Plan, filed the same with the local environmental protection authority, and carried out exercises on a regular basis, toimprove our capability to respond to environmental emergencies, and reduce harm to the environment and impact on the society.Expenditures on environmental governance and protection, and payment of environmental protection taxWe have made continuous investments in environmental governance and protection, regularly maintained the waste gas,wastewater and solid waste treatment and other environmental protection facilities to ensure their effective operation, anddischarge of all kinds of pollutants in conformity with the applicable standards, and promote our sustainable development.Measures taken for reducing carbon emission during the reporting period and their effect:
? Applicable □ N/ARefer to our Social Responsibility Report 2023 disclosed on www.cninfo.com.cn.Environment-related administrative penalties the Company has been subject to during the reporting period: N/A.Other environmental information that should be disclosed: N/A.Refer to our Social Responsibility Report 2023 disclosed on www.cninfo.com.cn for other information related to environmentalprotection.II. Social ResponsibilityRefer to our Social Responsibility Report 2023 disclosed on www.cninfo.com.cn.III. Consolidating and Expanding the Result of Poverty Alleviation and Rural RevitalizationRefer to our Social Responsibility Report 2023 disclosed on www.cninfo.com.cn.
Section VI Significant MattersI. Fulfillment of Covenants
1. Covenants made by the actual controllers, shareholders, affiliates and acquirer of the Company, theCompany itself and other related parties that have been fulfilled during the reporting period or have notyet been completely fulfilled as of the end of the reporting period? Applicable □ N/A
| Background of covenant | Covenantor | Type of covenant | Content of covenant | Time of covenant | Validity period of the covenant | Status of fulfillment |
| Covenant relating to initial public offering or subsequent fundraisings | YUAN Yongfeng and YUAN Yonggang | Covenants related to restrictions on the sale of shares | Each of the shareholders YUAN Yongfeng and YUAN Yonggang, as director and senior executive of the Company, covenants that so long as I remain a director and senior executive of the Company, I will not transfer more than 25% of the total shares held by me in the Company each year; and if I cease to be a director and senior executive of the Company, I will not transfer any shares held by me in the Company within half a year, and will not transfer more than 50% of the total shares held by me in the Company through the stock exchange within 12 months thereafter. | April 9, 2010 | Permanently binding | As of the end of the reporting period, the covenantors have complied with such covenants. |
| YUAN Fugen, YUAN Yongfeng and YUAN Yonggang | Covenants related to horizontal competition, related-party transactions and occupation of funds | Covenants related to horizontal competition: Each of the shareholders YUAN Yongfeng and YUAN Yonggang covenants that I will not, directly or indirectly, engage in any business in competition with the business actually conducted by the Company. | April 9, 2010 | Permanently binding | As of the end of the reporting period, the covenantors have complied with such covenants. | |
| YUAN Fugen, YUAN Yongfeng and YUAN Yonggang | Covenants related to horizontal competition, related-party transactions and occupation of funds | Covenants related to horizontal competition: Each of the shareholders YUAN Yongfeng and YUAN Yonggang covenants that after the completion of this material asset restructuring, I will not, directly or through any affiliate, participate or engage in any business that substantially competes or might compete with the business of the Company; and if any product manufactured or business conducted by any entity wholly owned, controlled or invested by me in the future competes or might compete with the Company, at the request of the Company, I will transfer all of the investment or shares held by me in such entity, give priority to the Company or its wholly-owned subsidiary in the acquisition of such investment or shares subject to the applicable laws and regulations, and use my best efforts to procure that the transfer price will be determined on an arm length’s basis; and if I or any of my affiliates breaches any covenant set forth above, I will indemnify the Company and other shareholders for the damages arising therefrom according to law. | June 11, 2018 | Permanently binding | As of the end of the reporting period, the covenantors have complied with such covenants. | |
| YUAN Fugen, YUAN Yongfeng and YUAN Yonggang | Covenants related to horizontal competition, related-party transactions and occupation of funds | Covenants related to the regulation and reduction of related-party transactions: Each of the shareholders YUAN Yongfeng, YUAN Yonggang and YUAN Fugen covenants that: (i) I and my affiliates will avoid and reduce related-party transactions with the Company to the maximum extent practicable; (ii) with respect to the related-party transactions that are unavoidable or necessary, I will abide by the principle of | June 11, 2018 | Permanently binding | As of the end of the reporting period, the covenantors have complied with such covenants. |
| justice, fairness and openness, enter into the relevant agreements according to law, perform the legal procedures pursuant to the applicable laws, regulations, normative documents, the Articles of Association and other relevant provisions of the Company, ensure that such related-party transactions are fair, comply with the regulations, and will not damage the legitimate rights and interests of the Company and other shareholders, and make the relevant information disclosures promptly in accordance with the requirements of the applicable laws, regulations and normative documents; and (iii) I will exercise the shareholder rights in strict accordance with the Company Law and other the applicable laws and regulations, and the relevant provisions of the Articles of Association of the Company, and abstain from the voting on the related-party transactions involving me and other entities controlled by me at the general meeting of the Company in accordance with the relevant provisions. | |||||
| YUAN Yongfeng, YUAN Yonggang, ZHAO Xiutian, SHAN Jianbin, WANG Xu, MAO Xiaoyan and MA Liqiang | Other covenants | Covenant regarding the remedial measures against dilution of current earnings caused by the private placement: Each of the directors and senior executives of the Company covenants that: (i) I will not transfer benefits to any other entity or individual without compensation or on unfair terms, or otherwise damage the interest of the Company; (ii) I will exercise self-discipline in consumption in performing my duties; (iii) I will not use the assets of the Company to engage in any investment or consumption activities not in connection with my duties; (iv) I will link the compensation system adopted by the Board of Directors or the Compensation Committee with the implementation of the Company’s remedial measures against dilution of current earnings; (v) if the Company implements any share incentive plan in the future, I will link the vesting conditions under such share incentive plan with the implementation of the Company’s remedial measures against dilution of current earnings; and (vi) I will seriously implement the Company’s remedial measures against dilution of current earnings, and abide by the relevant covenants made by me; and if I breach any covenant set forth above, I will indemnify the Company and other shareholders for the losses arising therefrom according to law, and accept the punishments that the competent regulatory authorities may impose on me. | October 10, 2019 | Permanently binding | As of the end of the reporting period, the covenantors have complied with such covenants. |
| YUAN Fugen, YUAN Yongfeng and YUAN Yonggang | Other covenants | Covenant regarding the remedial measures against dilution of current earnings caused by the private placement: Each of the controlling shareholders and actual controllers of the Company covenants that I will not interfere with the management and operation of the Company beyond my powers, or infringe on the interest of the Company; and as the person responsible for the serious implementation of the remedial measures against dilution of current earnings, if I breach or refuse to fulfill any covenant set forth above, I will assume the relevant liabilities according to law. | October 17, 2019 | Permanently binding | As of the end of the reporting period, the covenantors have complied with such covenants. |
| YUAN Fugen, YUAN Yongfeng and YUAN Yonggang | Other covenants | To ensure the effective implementation of the remedial measures against dilution of earnings to be taken by the Company, each of the controlling shareholders and actual controllers of the Company covenants that: (i) I will not interfere with the management and operation of the Company beyond my | March 12, 2024 | Permanently binding | As of the end of the reporting period, the covenantors have complied with such covenants. |
| powers, or infringe on the interest of the Company; (ii) from the date of this Letter of Undertaking till the completion of this offering, in case of any new regulatory provisions promulgated by the SCRC, the SZSE or other competent securities authorities regarding the remedial measures against dilution of earnings and related covenants, as a result of which the covenants set forth above no longer comply with such new provisions, I will make additional covenants in accordance with such new provisions; and (iii) I will seriously implement the remedial measures against dilution of earnings adopted by the Company and fulfill my covenants in connection therewith, and if I breach or refuse to fulfill any covenant set forth above, accept the penalties or other regulatory actions that may be imposed or taken by the SCRC, the SZSE or other competent securities authorities against me, and indemnify the Company or the investors for the losses arising therefrom according to law. | ||||||
| YUAN Yongfeng, YUAN Yonggang, ZHAO Xiutian, SHAN Jianbin, WANG Xu and MAO Xiaoyan | Other covenants | To ensure the effective implementation of the remedial measures against dilution of earnings to be taken by the Company, each of the directors and senior executives of the Company covenants that: (i) I will not transfer benefits to any other entity or individual without compensation or on unfair terms, or otherwise damage the interest of the Company; (ii) I will exercise self-discipline in consumption in performing my duties; (iii) I will not use the assets of the Company to engage in any investment or consumption activities not in connection with my duties; (iv) I will link the compensation system adopted by the Board of Directors or the Compensation Committee with the implementation of the Company’s remedial measures against dilution of current earnings; (v) if the Company implements any share incentive plan in the future, I will link the vesting conditions under such share incentive plan with the implementation of the Company’s remedial measures against dilution of current earnings; (vi) from the date of this Letter of Undertaking till the completion of this offering, in case of any new regulatory provisions promulgated by the SCRC, the SZSE or other competent securities authorities regarding the remedial measures against dilution of earnings and related covenants, as a result of which the covenants set forth above no longer comply with such new provisions, I will make additional covenants in accordance with such new provisions; and (vii) I will seriously implement the remedial measures against dilution of earnings adopted by the Company and fulfill my covenants in connection therewith, and if I breach or refuse to fulfill any covenant set forth above, accept the penalties or other regulatory actions that may be imposed or taken by the SCRC, the SZSE or other competent securities authorities against me, and indemnify the Company or the investors for the losses arising therefrom according to law. | March 12, 2024 | Permanently binding | As of the end of the reporting period, the covenantors have complied with such covenants. | |
| Whether the covenants have been fulfilled on time | Yes | |||||
| If any covenant fails to be fulfilled on time, | N/A | |||||
please explain thereason and therelevant actionsto be taken indetail
2. If the Company has made any profit forecast on its assets or project and the reporting period fallswithin the period of such profit forecast, explanation about whether the goal has been achieved and therelated reasons
□ Applicable ? N/A
II. Occupation by the Controlling Shareholders and their Affiliates of the Funds of theCompany for Non-Operating Purpose
□ Applicable ? N/A
Our controlling shareholders and their affiliates have not occupied our funds for non-operating purposes during the reportingperiod.III. External Guarantees in Violation of the Regulations
□ Applicable ? N/A
We have not provided any external guarantee in violation of the applicable regulations during the reporting period.IV. Explanation by the Board of Directors about the Most Recent Modified Auditor’sReport
□ Applicable ? N/A
V. Explanation by the Board of Directors, the Board of Supervisors and the IndependentDirectors (if any) about the Modified Auditor’s Report Issued by the Accounting Firm forthe Reporting Period
□ Applicable ? N/A
VI. Changes in the Accounting Policies and Accounting Estimates Compared with theFinancial Report for the Previous Year or Correction of Material Accounting Errors
□ Applicable ? N/A
During the reporting period, there wasn’t any change in the accounting policies or accounting estimates, or correction of materialaccounting errors.
VII. Explanation of Changes in the Scope of Consolidation Compared with the FinancialReport for the Previous Year
? Applicable □ N/A
1. Subsidiaries newly included in the scope of consolidation
| Company name | Method of acquisition of shares | Date of acquisition of shares | Registered capital | Ratio of capital contribution |
| Aranda | Acquisition | February 1, 2023 | 100.00% | |
| Suzhou JDI Electronics Inc. | Acquisition | February 1, 2023 | RMB1,043,692,731 | 100.00% |
| Suzhou Dongdi Holding Limited | Established | February 13, 2023 | RMB10,000,000 | 100.00% |
| Hong Kong Dongdi Holding Limited | Established | July 28, 2023 | HKD10,000 | 100.00% |
| Multek Zhuhai Enterprise Management Co., LTD | Established | April 27, 2023 | RMB1,000,000 | 100.00% |
| Multi-Fineline Electronics (Thailand) Co., Ltd. | Established | June 30, 2023 | USD50,000,000 | 100.00% |
2. Subsidiaries removed from the scope of consolidation
| Company name | Method of disposal of shares | Date of disposal of shares | Net assets at the date of disposal (RMB) | Net profit from January 1, 2023 to the date of disposal (RMB) |
| Zhuhai Dii Information Technology Consulting Co., Ltd. | Deregistration | September 7, 2023 | ||
| Hainan Chengjia Technology Consulting Co., Ltd. | Deregistration | November 1, 2023 | -206,048.28 | 12,320,966.42 |
| Suzhou Yuanshi Electronic Technology Co., Ltd. | Deregistration | August 4, 2023 | -12,592,979.40 | -468,295.88 |
| DSBJ Norway AS | Deregistration | December 27, 2023 | 345,205.52 | 18,211,422.23 |
VIII. Engagement and Termination of Engagement of Accounting FirmAccounting firm currently engaged:
| Name of domestic accounting firm | Pan-China Certified Public Accountants LLP |
| Remuneration of domestic accounting firm (in RMB0’000) | 240 |
| Consecutive years in which the domestic accounting firm has provided auditing service | 13 |
| Certified public accountants of the domestic accounting firm | ZHANG Yang and FU Zhenlong |
| Consecutive years in which the certified public accountants of the domestic accounting firm have provided auditing service | 2, 2 |
| Name of foreign accounting firm (if any) | N/A |
| Remuneration of foreign accounting firm (if any) (in RMB0’000) | 0 |
| Consecutive years in which the foreign accounting firm (if any) has provided auditing service | N/A |
| Certified public accountants of the foreign accounting firm (if any) | N/A |
| Consecutive years in which the certified public accountants of the foreign accounting firm (if any) have provided auditing service | N/A |
Whether a new accounting firm was engaged during the reporting period?
□ Yes ? No
Engagement of accounting firm for auditing internal controls, financial advisor or sponsor:
?Applicable □ N/ADuring the reporting period, we engaged Pan-China Certified Public Accountants LLP as the auditor of internal controls,responsible for the audit of our internal controls in 2023.IX. Risk of Delisting after Disclosure of the Annual Report
□ Applicable ? N/A
X. Matters Relating to Bankruptcy and Reorganization
□ Applicable ? N/A
We have not been involved in any bankruptcy or reorganization proceedings during the reporting period.XI. Material Litigations and Arbitrations
□Applicable ?N/A
We have not been involved in any material litigation or arbitration proceedings during the reporting period.
XII. Punishments and Rectifications
□ Applicable ? N/A
We have not been involved in any punishment and rectification during the reporting period.XIII. Credit Standing of the Company and its Controlling Shareholders and ActualControllers
□ Applicable ? N/A
XIV. Material Related-party Transactions
1. Related-party transactions relating to day-to-day operation
□ Applicable ? N/A
There has been no related-party transaction relating to day-to-day operation during the reporting period.
2. Related-party transactions involving the acquisition or sale of assets or equities
□ Applicable ? N/A
There has been no related-party transaction involving the acquisition or sale of assets or equities during the reporting period.
3. Related-party transactions involving joint external investment
□ Applicable ? N/A
There has been no related-party transaction involving joint external investment during the reporting period.
4. Debts owed by and to related parties
□ Applicable ? N/A
There has been no debt owed by or to related parties during the reporting period.
5. Dealings with affiliated financial companies
□ Applicable ? N/A
There has been no deposit, loan, facility or other financial business between us and any of our affiliated financial companies.
6. Dealings with financial companies controlled by the Company and its affiliates
□ Applicable ? N/A
There has been no deposit, loan, facility or other financial business between any of our controlled financial companies andaffiliates.
7. Other material related-party transactions
□ Applicable ? N/A
There has been no other material related-party transaction during the reporting period.XV. Particulars and Performance of Material Contracts
1. Trusteeship, contracting and leases
(1) Trusteeship
□ Applicable ? N/A
No such case during the reporting period.
(2) Contracting
□ Applicable ? N/A
No such case during the reporting period.
(3) Leases
□ Applicable ? N/A
No such case during the reporting period.
2. Material guarantees
?Applicable □N/A
In RMB0’000
| External guarantees provided by the Company and its subsidiaries (excluding those provided for the subsidiaries) | ||||||||||
| Obligor | Disclosure date of announcement of the maximum amount guaranteed | Maximum amount guaranteed | Effective date of guarantee | Actual amount guaranteed | Type of guarantee | Collateral (if applicable) | Counter guarantee (if applicable) | Term of guarantee | Whether or not expired | Whether or not provided for a related party |
| Suzhou Toprun Electric Equipment Co., Ltd. | April 20, 2023 | 3,000 | 2,500 | 18 months | No | Yes | ||||
| Suzhou LEGATE Intelligent Equipment Corp., Ltd. | April 20, 2023 | 3,000 | ||||||||
| Shanghai Fu Shan Precision Manufacturing Co., Ltd. | April 20, 2023 | 3,000 | 3,000 | 18 months | No | Yes | ||||
| Total amount of external guarantee approved during the reporting period (A1) | 9,000 | Total amount of external guarantee actually provided during the reporting period (A2) | 8,000 | |||||||
| Total amount of external guarantee approved as at the end of the reporting period (A3) | 9,000 | Total amount of external guarantee actually provided as at the end of the reporting period (A4) | 5,500 | |||||||
| Guarantees provided by the Company for its subsidiaries | ||||||||||
| Obligor | Disclosure date of announcement of the maximum amount guaranteed | Maximum amount guaranteed | Effective date of the guarantee | Actual amount guaranteed | Type of guarantee | Collateral (if applicable) | Counter guarantee (if applicable) | Term of guarantee | Whether or not expired | Whether or not provided for a related |
| party | ||||||||||
| Dragon Holdings and its controlled subsidiaries | April 20, 2023 | 280,000 | 228,862.81 | 18 months | No | No | ||||
| Hong Kong Dongshan Holding | April 20, 2023 | 60,000 | ||||||||
| Yancheng Dongshan | April 20, 2023 | 150,000 | 83,385.08 | 18 months | No | No | ||||
| Multek Group and its controlled subsidiaries | April 20, 2023 | 150,000 | 48,000.89 | 18 months | No | No | ||||
| Mutto Optronics | April 20, 2023 | 100,000 | 31,210.94 | 18 months | No | No | ||||
| Yongchuang Tech | April 20, 2023 | 80,000 | 32,589.46 | 18 months | No | No | ||||
| Chaowei Microelectronics (Yancheng) Co., Ltd. | April 20, 2023 | 80,000 | 20,000 | |||||||
| Shanghai Dongxin New Energy Technology Co., Ltd. | April 20, 2023 | 40,000 | ||||||||
| Yancheng Dongshan Communication Technology Co., Ltd. | April 20, 2023 | 30,000 | 5,100 | 18 months | No | No | ||||
| RF Top Electronic | April 20, 2023 | 30,000 | 1,411.88 | 18 months | No | No | ||||
| Hong Kong Dongshan | April 20, 2023 | 10,000 | No | |||||||
| Suzhou Chengjia Precision Manufacturing Co., Ltd. | April 20, 2023 | 8,000 | 4,554.95 | 18 months | No | No | ||||
| Suzhou Dongbo Precision Manufacturing Co., Ltd. | April 20, 2023 | 3,000 | 200 | 18 months | No | No | ||||
| Suzhou Dongyue New Energy Technology Co., Ltd. | April 20, 2023 | 20,000 | No | No | ||||||
| Yancheng Dongchuang Precision Manufacturing Co., Ltd. | April 20, 2023 | 50,000 | 46,278.42 | 18 months | No | No | ||||
| Total amount of guarantee approved to be provided for subsidiaries during the reporting period (B1) | 1,091,000 | Total amount of guarantee actually provided for subsidiaries during the reporting period (B2) | 873,399.48 | |||||||
| Total amount of guarantee approved to be provided for subsidiaries as at the end of the reporting period (B3) | 1,091,000 | Total amount of guarantee actually provided for subsidiaries as at the end of the reporting period (B4) | 501,594.43 | |||||||
| Guarantees provided by subsidiaries for each other | ||||||||||
| Obligor | Disclosure date of announcement of the maximum amount guaranteed | Maximum amount guaranteed | Effective date of the guarantee | Actual amount guaranteed | Type of guarantee | Collateral (if applicable) | Counter guarantee (if applicable) | Term of guarantee | Whether or not expired | Whether or not provided for a related party |
| Total amount of guarantee approved to be provided for subsidiaries during the reporting period (C1) | 0 | Total amount of guarantee actually provided for subsidiaries during the reporting period (C2) | 0 | |||||||
| Total amount of guarantee approved to be provided for subsidiaries as at the end of the reporting period (C3) | 0 | Total amount of guarantee actually provided for subsidiaries as at the end of the reporting period (C4) | 0 | |||||||
| Total amount of guarantee provided by the Company | ||||||||||
| Total amount of guarantee approved during the reporting period (A1+B1+C1) | 1,100,000 | Total amount of guarantee actually provided during the reporting period (A2+B2+C2) | 881,399.48 | |||||||
| Total amount of guarantee approved as at the end of the reporting period (A3+B3+C3) | 1,100,000 | Total amount of guarantee actually provided as at the end of the reporting period (A4+B4+C4) | 507,094.43 | |||||||
| Ratio of the total amount of guarantee actually provided (A4+B4+C4) to the net assets of the Company | 27.95% | |||||||||
| Where: | ||||||||||
| Outstanding guarantees provided for shareholders, actual controllers and their affiliates (D) | 5,500 | |||||||||
| Outstanding guarantees directly or indirectly provided for obligors whose debt-to-assets ratio exceeds 70% (E) | 432,581.66 | |||||||||
| Portion of the total amount of guarantee in excess of 50% of the net assets (F) | 0 | |||||||||
| Total (D+E+F) | 432,581.66 |
| Explanation about the joint and several liability that have been or might be incurred in respect of outstanding guarantees during the reporting period (if any) | N/A |
| Explanation about external guarantees provided in contravention of the established procedures (if any) | N/A |
3. Entrusted management of cash assets
(1) Entrusted wealth management
? Applicable □ N/AParticulars of entrusted wealth management during the reporting period:
In RMB0’000
| Type | Source of funds | Total amount | Outstanding amount | Overdue amount | Impairment loss recognized for overdue wealth management products |
| Bank wealth management product | Self-owned funds | 244,779.79 | 1,674.49 | 0 | 0 |
| Total | 244,779.79 | 1,674.49 | 0 | 0 | |
High-risk entrusted wealth management products that are significant individually, illiquid or not principal protected:
□ Applicable ? N/A
Entrusted wealth management products the principal of which may be unrecoverable or which may otherwise be impaired:
□ Applicable ? N/A
(2) Entrusted loans
□ Applicable ? N/A
No such case during the reporting period.
4. Other material contracts
□ Applicable ? N/A
We have not entered into any other material contract during the reporting period.
XVI. Other significant Matters
□ Applicable ? N/A
There’s no other significant matter needing to be explained for the reporting period.
XVII. Significant Matters of Subsidiaries
□ Applicable ? N/A
Section VII Changes in Shares and Shareholders
I. Changes in Shares
1. Changes in shares
Unit: Shares
| Before the change | ＋/- | After the change | |||||||
| Number | % | New shares | Bonus shares | Capitalization of capital reserves | Others | Subtotal | Number | % | |
| I. Non-tradable shares | 319,591,987 | 18.69% | 319,591,987 | 18.69% | |||||
| 1. Shares held by the State | |||||||||
| 2. Shares held by State-owned corporations | |||||||||
| 3. Shares held by other domestic investors | 319,591,987 | 18.69% | 319,591,987 | 18.69% | |||||
| Incl.: Shares held by domestic non-State-owned corporations | |||||||||
| Shares held by domestic natural persons | 319,591,987 | 18.69% | 319,591,987 | 18.69% | |||||
| 4. Shares held by foreign investors | |||||||||
| Incl.: Shares held by foreign corporations | |||||||||
| Shares held by foreign natural persons | |||||||||
| II. Tradable shares | 1,390,275,340 | 81.31% | 1,390,275,340 | 81.31% | |||||
| 1. RMB-denominated ordinary shares | 1,390,275,340 | 81.31% | 1,390,275,340 | 81.31% | |||||
| 2. Foreign currency-denominated shares listed domestically | |||||||||
| 3. Foreign currency-denominated shares listed overseas | |||||||||
| 4. Others | |||||||||
| III. Total shares | 1,709,867,327 | 100.00% | 1,709,867,327 | 100.00% | |||||
2. Changes in non-tradable shares
□ Applicable ? N/A
II. Offering and Listing of Securities
1. Offering of securities (other than preferred shares) during the reporting period
□ Applicable ? N/A
2. Changes in the total number of shares, shareholding structure, and structure of assets and liabilitiesof the Company
□ Applicable ? N/A
3. Outstanding employee shares
□ Applicable ? N/A
III. Shareholders and Actual Controllers
1. Number of shareholders and shareholding structure of the Company
Unit: Shares
| Total number of ordinary shareholders at the end of the reporting period | 91,686 | Total number of ordinary shareholders at the end of the month | 107,091 | Total number of preferred shareholders whose voting rights had been | 0 | Total number of preferred shareholders whose voting rights had been restituted at the end of the month immediately preceding the disclosure date of this annual report (if any) | 0 |
| immediately preceding the disclosure date of this annual report | restituted at the end of the reporting period (if any) (Note 8) | (Note 8) | ||||||
| Shareholding by shareholders holding more than 5% of the shares or top 10 shareholders (excluding the shares lent via refinancing) | ||||||||
| Name of shareholder | Status of shareholder | Shareholding percentage | No. of shares held at the end of the reporting period | Changes in shareholding during the reporting period | No. of non-tradable shares held | No. of tradable shares held | Pledge, attachment or freeze | |
| Status of shares | Number | |||||||
| YUAN Yongfeng | Domestic natural person | 13.01% | 222,388,153 | 0 | 166,791,115 | 55,597,038 | Pledged | 109,600,000 |
| YUAN Yonggang | Domestic natural person | 11.83% | 202,226,196 | 0 | 151,669,647 | 50,556,549 | Pledged | 90,790,000 |
| Hong Kong Securities Clearing Company Limited | Foreign corporation | 3.86% | 66,012,602 | 5,346,736 | 0 | 66,012,602 | N/A | 0 |
| YUAN Fugen | Domestic natural person | 3.44% | 58,796,052 | 0 | 0 | 58,796,052 | N/A | 0 |
| Schroder Investment Management (Hong Kong) Limited- Schroder Global Fund Series Chinese A-shares (Exchange) | Others | 1.30% | 22,181,428 | 22,181,428 | 0 | 22,181,428 | N/A | 0 |
| China Everbright Bank - Aegon-Industrial Business Model Selection Hybrid Securities Investment Fund (LOF) | Others | 1.10% | 18,856,074 | 18,856,074 | 0 | 18,856,074 | N/A | 0 |
| Industrial Bank - Aegon-Industrial New Vision Flexible Allocation, Periodic Opening Hybrid Sponsored Securities Investment Fund | Others | 1.03% | 17,657,030 | 17,657,030 | 0 | 17,657,030 | N/A | 0 |
| Taikang Life Insurance – Traditional – General Insurance Product -019L-CT001 Shenzhen | Others | 0.90% | 15,473,215 | 518,500 | 0 | 15,473,215 | N/A | 0 |
| China Merchants Bank – Ruiyuan Growth Value Hybrid Securities Investment Fund | Others | 0.89% | 15,295,548 | 15,295,548 | 0 | 15,295,548 | N/A | 0 |
| Ping An Anying Stock-oriented Pension Product – Bank of China | Others | 0.88% | 15,012,151 | 4,104,654 | 0 | 15,012,151 | N/A | 0 |
| Strategic investors or general corporations becoming top 10 shareholders as a result of rights issue (if any) (Note 3) | N/A | |||||||
| Affiliates or concert parties among the shareholders listed above | Among the shareholders listed above, YUAN Yonggang and YUAN Yongfeng are sons of YUAN Fugen, and YUAN Yongfeng is the elder brother of YUAN Yonggang. YUAN Fugen, YUAN Yongfeng and YUAN Yonggang are our actual controllers. We are not aware whether there are affiliates or concert parties within the meaning of the Administrative Measures for Information Disclosure by the Listed Companies Relating to Changes in Shares Held by Shareholders among other shareholders listed above. | |||||||
| Delegation or waiver of voting rights or ownership of voting rights by or to the shareholders listed above | N/A | |||||||
| Special explanation about any dedicated account for repurchase opened by any top 10 shareholder (if any) (Note 10) | N/A | |||||||
| Shareholding by the top 10 holders of tradable shares | ||||||||
| Name of shareholder | Number of tradable shares held at the end of the reporting period | Type and number of shares | ||||||
| Type | Number | |||||||
| Hong Kong Securities Clearing Company Limited | 66,012,602 | RMB-denominated ordinary share | 66,012,602 | |||||
| YUAN Fugen | 58,796,052 | RMB-denominated ordinary share | 58,796,052 | |||||
| YUAN Yongfeng | 55,597,038 | RMB-denominated ordinary share | 55,597,038 | |||||
| YUAN Yonggang | 50,556,549 | RMB-denominated ordinary share | 50,556,549 | |||||
| Schroder Investment Management (Hong Kong) Limited- Schroder Global Fund Series Chinese A-shares (Exchange) | 22,181,428 | RMB-denominated ordinary share | 22,181,428 | |||||
| China Everbright Bank - Aegon-Industrial Business Model Selection Hybrid Securities Investment Fund (LOF) | 18,856,074 | RMB-denominated ordinary share | 18,856,074 | |||||
| Industrial Bank - Aegon-Industrial New Vision Flexible Allocation, Periodic Opening Hybrid Sponsored Securities Investment Fund | 17,657,030 | RMB-denominated ordinary share | 17,657,030 | |||||
| Taikang Life Insurance – Traditional – General Insurance Product -019L-CT001 Shenzhen | 15,473,215 | RMB-denominated ordinary share | 15,473,215 | |||||
| China Merchants Bank – Ruiyuan Growth Value Hybrid Securities Investment Fund | 15,295,548 | RMB-denominated ordinary share | 15,295,548 | |||||
| Ping An Anying Stock-oriented Pension Product – Bank of China | 15,012,151 | RMB-denominated ordinary share | 15,012,151 | |||||
| Affiliates or concert parties among the top 10 holders of tradable ordinary shares, and among the top 10 holders of tradable ordinary shares and top 10 | Among the shareholders listed above, YUAN Yonggang and YUAN Yongfeng are sons of YUAN Fugen, and YUAN Yongfeng is the elder brother of YUAN Yonggang. YUAN Fugen, YUAN Yongfeng and YUAN Yonggang are our actual controllers. We are not aware whether there are affiliates or concert parties within the meaning of the Administrative Measures for Information Disclosure by the Listed Companies Relating to Changes in Shares Held by Shareholders among other shareholders listed above. | |||||||
| ordinary shareholders | |
| Securities margin trading conducted by top 10 ordinary shareholders (if any) (Note 4) | N/A |
Share lending by top 10 shareholders via refinancing:
□ Applicable ? N/A
Changes in top 10 shareholders compared to the previous period:
?Applicable □N/A
Unit: Shares
| Changes in top 10 shareholders compared to the end of the previous period | |||||
| Full name of shareholder | New or withdrawn in the current period | Number of outstanding shares lent via refinancing at the end of the current period | Number of shares held in ordinary account and margin trading account and outstanding shares lent via refinancing at the end of the current period | ||
| Total number | % of total share capital | Total number | % of total share capital | ||
| Schroder Investment Management (Hong Kong) Limited- Schroder Global Fund Series Chinese A-shares (Exchange) | New | 0 | 0.00% | 22,181,428 | 1.30% |
| China Everbright Bank - Aegon-Industrial Business Model Selection Hybrid Securities Investment Fund (LOF) | New | 0 | 0.00% | 18,856,074 | 1.10% |
| Industrial Bank - Aegon-Industrial New Vision Flexible Allocation, Periodic Opening Hybrid Sponsored Securities Investment Fund | New | 0 | 0.00% | 17,657,030 | 1.03% |
| Taikang Life Insurance – Traditional – General Insurance Product -019L-CT001 Shenzhen | New | 0 | 0.00% | 15,473,215 | 0.90% |
| China Merchants Bank – Ruiyuan Growth Value Hybrid Securities Investment Fund | New | 0 | 0.00% | 15,295,548 | 0.89% |
| Ping An Anying Stock-oriented Pension Product – Bank of China | New | 0 | 0.00% | 15,012,151 | 0.88% |
| Industrial and Commercial Bank of China Limited – GF Multi-factor Flexible Commingled Securities Investment Fund | Withdrawn | 0 | 0.00% | 0 | 0.00% |
| Shaanxi International Trust Co., Ltd.－SITI-DSBJ ESOP Collective Trust Plan II | Withdrawn | 0 | 0.00% | 0 | 0.00% |
| Pension Fund Portfolio 15022 | Withdrawn | 0 | 0.00% | 11,900,000 | 0.70% |
| Zhangjiagang Industrial Capital Investment Co., Ltd. | Withdrawn | 0 | 0.00% | 10,998,700 | 0.64% |
| Pension Fund Portfolio 1204 | Withdrawn | 0 | 0.00% | 2,548,100 | 0.15% |
| GF Fund Management Co., Ltd. Social Security Fund Portfolio 402 | Withdrawn | 0 | 0.00% | 9,799,012 | 0.57% |
No top 10 ordinary shareholder or top 10 holders of tradable ordinary shares has conducted any transaction under the repurchaseagreement during the reporting period.
2. Controlling shareholders of the Company
Nature of controlling shareholders: Natural persons.Type of controlling shareholders: Natural persons.
| Name of controlling shareholder | Nationality | Whether or not having obtained residency in any other country or region |
| YUAN Yongfeng | China | No |
| YUAN Yonggang | China | Yes |
| YUAN Fugen | China | No |
| Main occupation and title | YUAN Yonggang is our Chairman, YUAN Yongfeng is our director and General Manager, and YUAN Fugen is our senior advisor. | |
| Shares held in other domestic or foreign listed companies controlled or invested by the controlling shareholders during the reporting period | (1) YUAN Yonggang holds 23.94% shares in Anhui Landun Photoelectron Co., Ltd. (stock short name: Landun Photoelectron; stock code: 300862) directly, and Anhui Gaoxin Jintong Anyi Venture Capital Fund II (L.P.), which is jointly controlled by YUAN Yonggang and his wife WANG Wenjuan, holds 7.45% in Landun Photoelectron, so YUAN Yonggang and his wife WANG Wenjuan hold 31.39% shares of Landun Photoelectron in aggregate and are its actual controllers. (2) YUAN Yonggang and his wife WANG Wenjuan hold 95% shares of Shenzhen Qinghai Rongyao Capital Management Co., Ltd. (“Rongyao Capital”) through Jintong Zhihui Investment Management Co., Ltd. (an investment company operated and managed by a professional management team, whose investment capital was primarily raised from the public), and Rongyao Capital is the Managing Partner of Hefei Rongxin Equity Investment Fund Partnership (L.P.) (“Hefei Rongxin”). On November 21, 2019, Hefei Rongxin became the controlling shareholder of Anhui Anfu Battery Technology Co., Ltd. (stock short name: Anfu Technology; stock code: 603031). At present, Hefei Rongxin holds 22.41% shares of Anfu Technology together with its concert parties, and is the controlling shareholder of Anfu Technology, so YUAN Yonggang and his wife WANG Wenjuan are actual controllers of Anfu Technology. | |
Change in the controlling shareholders during the reporting period:
□ Applicable ? N/A
There has been no change in our controlling shareholders during the reporting period.
3. Actual controllers of the Company and their concerted parties
Nature of actual controllers: Natural persons.Type of actual controllers: Natural persons.
| Name of the actual controller | Relationship with the actual controller | Nationality | Whether or not having obtained residency in any other country or region |
| YUAN Yongfeng | Himself | China | No |
| YUAN Yonggang | Himself | China | Yes |
| YUAN Fugen | Himself | China | No |
| Main occupation and title | See “III. Shareholders and Actual Controllers – 2. Controlling shareholders of the Company” above. | ||
| Domestic or foreign listed companies that have been controlled by the actual controllers in the past 10 years | See “III. Shareholders and Actual Controllers – 2. Controlling shareholder of the Company” above. | ||
Change in the actual controllers during the reporting period:
□ Applicable ? N/A
There has been no change in our actual controllers during the reporting period.Diagram of ownership and control relationship between the Company and its actual controllers:
4. Whether the controlling shareholder or largest shareholder of the Company and its concert partieshave pledged more than 80% of shares held by them in the Company in aggregate?
□Applicable ?N/A
5. Other corporate shareholders owning over 10% of shares in the Company
□Applicable ?N/A
6. Restrictions on the sale of shares by the controlling shareholder, actual controller, parties involved inrestructuring, and other covenantors
□Applicable ?N/A
IV. Share Repurchases Effected during the Reporting Period
Progress of share repurchases
Persons acting in concertYUAN Fugen(3.44% shares)
YUAN Fugen(3.44% shares)Suzhou Dongshan Precision Manufacturing Co., Ltd.
Suzhou Dongshan Precision Manufacturing Co., Ltd.
YUAN Yonggang(11.83% shares)
| YUAN Yonggang (11.83% shares) | YUAN Yongfeng (13.01% shares) |
? Applicable □ N/A
| Disclosure date of the repurchase plan | Number of shares proposed to be repurchased (share) | % of total share capital | Amount of shares proposed to be repurchased (in RMB0’000) | Proposed period of repurchase | Use of shares repurchased | Number of shares already repurchased |
| April 27, 2022 | 4?545?500-9?090?900 | 0.27%-0.53% | 10?000-20?000 | 12 months following the date that the share repurchase plan was approved by the Board of Directors | Implementation of ESOP or share incentives | 3,048,700 |
Progress of sale or repurchase of shares by aggregate auction:
? Applicable □ N/A
1. As of April 4, 2023, we repurchased 3,048,700 shares in total by aggregate auction through the dedicated securities account forrepurchase, representing 0.18% of our total share capital.
2. As our stock fared well on the secondary market and stock prices continuously exceeded the upper price limit for repurchase,and the window for share repurchase was limited due to the restriction period in respect of annual report or otherwise, and theexpiration of the share repurchase plan on April 25, 2023, through careful consideration, we decided to terminate the sharerepurchase plan, which termination of was approved at the 2
ndextraordinary general meeting of shareholders in 2023. Please referto the relevant announcement disclosed on www.cninfo.com.cn, and our designated newspapers for information disclosure.
Section VIII Preferred Shares
□ Applicable ? N/A
We did not have any preferred share during the reporting period.
Section IX Bonds
□ Applicable ? N/A
Section X Financial Report
I. Financial Report
| Audit opinion | Standard unqualified opinion |
| Signing date of the auditor’s report | April 16, 2024 |
| Auditor | Pan-China Certified Public Accountants LLP |
| Document number of the auditor’s report | PCCPA Audit [2024] No. 5-24 |
| Name of certified public accountants | ZHANG Yang and FU Zhenlong |
Text
Auditor’s ReportPCCPA Audit [2024] No. 5-24
To shareholders of Suzhou Dongshan Precision Manufacturing Co., Ltd.,
I. OpinionWe have audited the financial statements of Suzhou Dongshan Precision Manufacturing Co., Ltd. (the “Company”), whichcomprise the consolidated and standalone balance sheets as of December 31, 2023, consolidated and standalone income statements,consolidated and standalone cash flow statements, and consolidated and standalone statements of changes in owners’ equity for theyear ended December 31, 2023, and notes to the financial statements.In our opinion, the accompanying financial statements are prepared and present fairly, in all material respects, the consolidated andstandalone financial positions of the Company as of December 31, 2023 and its consolidated and standalone results of operationsand cash flows for the year ended December 31, 2023 in accordance with the Accounting Standards for Business Enterprises (the“CASBEs”).II. Basis for opinionWe conducted our audit in accordance with the Auditing Standards for Certified Public Accountants of China. Our responsibilitiesunder those standards are further described in “Responsibilities of the certified public accountants for the audit of the financialstatements” below. We are independent of the Company in accordance with the Code of Ethics for Certified Public Accountants ofChina, and have fulfilled our other ethical responsibilities. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.III. Key audit mattersKey audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financialstatements for 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.(I) Revenue recognition
1. Description
See Notes III(XXV) and V(II)1 to the financial statements for details.
The operating revenue of the Company was primarily generated from the sale of PCBs, LED display devices, touch panels andLCMs, precision components and other products, which amounted to RMB33,651,205,500 in 2023.Since operating revenue is a key performance indicator of the Company, and there is an inherent risk that the management of theCompany (the “Management”) may attempt to achieve the specific objectives or expectations through improper revenuerecognition, we identified revenue recognition as a critical audit matter.
2. Audit response
Our audit procedures related to revenue recognition included the following, among others:
(1) Obtained an understanding of the key internal controls related to revenue recognition, assessed the design of such controls,determined whether such controls have been implemented, and tested the effectiveness of the relevant internal controls;
(2) Examined the sales contracts, obtained an understanding of the main contract terms and conditions, and assessed theappropriateness of the method of revenue recognition;
(3) With respect to the revenue from domestic sales, examined on a sample basis the sales contracts, sales invoices, deliveryorders, delivery notes and other supporting documents related; with respect to the revenue from export, obtained the relevantinformation from the China Electronic Port, checked the same against the book records kept by the Company, and examined on asample basis the sales contracts, sales invoices, delivery orders, export declaration forms, bills of lading and other supportingdocuments;
(4) Analyzed the operating revenues and gross margin by month, product and customer, identified major or abnormalfluctuations, and found out the causes;
(5) With respect to accounts receivable confirmation, selected sampled items to confirm the sales amounts via confirmationletters;
(6) Conducted cut-off tests on the operating revenues recognized around the balance sheet date to check whether the operatingrevenues were recognized in the proper period; and
(7) Examined whether the information related to operating revenues has been properly presented in the financial statements.(II) Impairment of accounts receivable
1. Description
See Notes III(XI), III(XII) and V(I)4 to the financial statements for details.As of December 31, 2023, the Company’s book balance of accounts receivable was RMB8,194,146,400, allowance for doubtfulaccounts was RMB480,981,700, and carrying value of accounts receivable was RMB7,713,164,800.The Management measures the lifetime expected credit losses on accounts receivable and contract assets individually orcollectively according to their credit risk characteristics, and recognizes an equal amount as allowance for impairment losses. Dueto the significant amount of accounts receivable and contract assets, and the impairment of accounts receivable involves significantmanagement judgment, we identified impairment of accounts receivable and contract assets as a critical audit matter.
2. Audit response
Our audit procedures related to impairment of accounts receivable included the following, among others:
(1) Obtained an understanding of the key internal controls related to impairment of accounts receivable, assessed the design ofsuch controls, determined whether such controls have been implemented, and tested the effectiveness of the relevant internalcontrols;
(2) With respect to the allowance for doubtful accounts estimated by the Management in prior years, reviewed the relevant
results or subsequent re-estimates made by the Management;
(3) Reviewed the considerations and objective evidence used by the Management in assessing the credit risk of accountsreceivable, and assessed whether the Management has properly identified the credit risk characteristics of all accounts receivable;
(4) With respect to the accounts receivable and contract assets assessed individually, reviewed the estimated future cash flowsforecast by the Management, assessed the appropriateness of the material assumptions and the appropriateness, relevance andreliability of the data used in such forecasts, and checked the same against the external evidence available;
(5) With respect to the accounts receivable and contract assets assessed collectively, assessed the reasonableness of grouping bythe Management according to credit risk characteristics, and the reasonableness of the expected credit loss ratios determined by theManagement, including the appropriateness of the material assumptions and the appropriateness, relevance and reliability of thedata used by the Management, and tested the accuracy of the allowance for doubtful accounts and for impairment loss calculatedby the Management;
(6) Examined the confirmation requests and subsequent recovery in respect of accounts receivable, to assess the reasonablenessof the allowance for impairment loss on accounts receivable recognized by the Management; and
(7) Examined whether the information related to the impairment of accounts receivable has been properly presented in thefinancial statements.(III) Goodwill impairment
1. Description
See Notes III(XX) and V(I)18 to the financial statements for details.As of December 31, 2023, the Company’s original value of goodwill was RMB2?289,543,600, allowance for goodwill impairmentwas RMB80,344,100, and carrying value of goodwill was RMB 2?209,199,500.The Management assesses the goodwill for impairment together with the relevant asset group or combination of asset groups,whose recoverable amount is determined according to the present value of its estimated future cash flows. Due to the significantamount of goodwill, and the goodwill impairment assessment involving significant management judgment, we identified goodwillimpairment as a critical audit matter.
2. Audit response
Our audit procedures related to goodwill impairment included the following, among others:
(1) Obtained an understanding of the key internal controls related to goodwill impairment, assessed the design of such controls,determined whether they have been executed, and tested the effectiveness of such internal controls;
(2) With respect to the present value of future cash flows estimated by the Management in prior years, reviewed the relevantresults or subsequent re-estimates made by the Management;
(3) Inquired about and assessed the competencies, professional quality and objectivity of the external appraisers engaged by theManagement;
(4) Assessed the appropriateness and consistency of the approaches adopted by the Management in impairment tests;
(5) Assessed the appropriateness of the material assumptions used by the Management in impairment tests and whether therelevant assumptions were consistent with the overall economic environment, industrial conditions, operating situations, historicalexperience, business plans, approved budgets, and other assumptions used by the Management in relation to the financialstatements;
(6) Tested the appropriateness, relevance and reliability of the data used by the Management in impairment tests and reviewedthe consistency of inputs in impairment tests;
(7) Tested the accuracy of the calculation of the estimated present value of future cash flows by the Management; and
(8) Examined whether the information related to goodwill impairment has been properly presented in the financial statements.IV. Other informationThe Management is responsible for the other information. The other information comprises the information included in the AnnualReport, but does not include the financial statements and our Auditor’s Report.Our opinion in the financial statements does not cover the other information, and we will not express any form of assuranceconclusions 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 theaudit, or otherwise appears to be materially misstated.If we conclude that there is a material misstatement therein, we are required to communicate such matter. We have nothing toreport in this regard.V. Responsibilities of the Management and those charged with governance for the financial statementsThe Management is responsible for the preparation and fair presentation of the financial statements in accordance with theCASBE, and the design, implementation and maintenance of internal controls that are necessary to enable the preparation offinancial statements that are free from material misstatement, whether due to fraud or error.In preparing the financial statements, the Management is responsible for assessing the Company’s ability to continue as a goingconcern, disclosing (as applicable) matters relating to going concerned, and using the going concern basis of accounting unless theManagement either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.Those charged with governance of the Company are responsible for overseeing the financial reporting process of the Company.VI. Responsibilities of the Certified Public Accountants for the audit of the financial statementsOur objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from materialmisstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is ahigh level of assurance, but is not a guarantee that an audit conducted in accordance with the audit standards will always detect amaterial misstatement when it exists. Misstatements can arise from fraud or error, and are considered material if, individually or inthe aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financialstatements.As part of an audit in accordance with the audit standards, we exercise professional judgment and maintain professional skepticismthroughout the audit. We also:
(I) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design andperform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basisfor our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error,as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;(II) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate inthe circumstances;(III) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and relateddisclosures made by the Management;(IV) Conclude on the appropriateness of the Management’s use of the going concern basis of accounting and, based on the auditevidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the
Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required by the auditstandards to draw attention in our auditor’s report to the related disclosures in the financial statements, or if such disclosures areinadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report.However, future events or conditions may cause the Company to cease to continue as a going concern;(V) Evaluate the overall presentation, structure and content of the financial statements, and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fair presentation; and(VI) Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activitieswithin the Company, to express an opinion in the financial statements. We are responsible for the direction, supervision andperformance of the audit of the Group, and solely responsible for our audit opinion.We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the auditand significant audit findings, including any noteworthy deficiencies in internal control that we identify during our audit.We also provide those charged with governance with a statement that we have complied with relevant ethical requirementsregarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear onour independence, and where applicable, related safeguards.From the matters communicated with those charged with governance, we determine those matters that were of most significance inthe audit of the financial statements of the current period and are therefore the critical audit matters. We describe these matters inour 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 report because the adverse consequences of doing so wouldreasonably be expected to outweigh the public interest benefits of such communication.
| Pan-China Certified Public Accountants LLP | Certified Public Accountant of China (Engagement Partner): ZHANG Yang |
| Hangzhou, China | Certified Public Accountant of China: FU Zhenlong |
| Date: April 16, 2024 |
II. Financial statements
The amounts in the statements contained in the notes to the financial statements are presented in RMB.
1. Consolidated balance sheet
Prepared by: Suzhou Dongshan Precision Manufacturing Co., Ltd.
December 31, 2023
In RMB
| Item | December 31, 2023 | January 1, 2023 |
| Current assets: | ||
| Cash and bank balances | 7,190,036,231.06 | 7,131,202,817.72 |
| Settlement deposit | ||
| Loans to banks and other financial institutions | ||
| Financial assets held for trading | 146,141,371.77 | 575,783,803.93 |
| Derivative financial assets | ||
| Notes receivable | 3,407,623.49 | 48,401,430.82 |
| Accounts receivable | 7,713,164,772.05 | 7,006,411,466.74 |
| Accounts receivable financing | 290,477,095.22 | 644,057,382.41 |
| Advances to suppliers | 79,782,739.11 | 161,512,824.53 |
| Premiums receivable | ||
| Reinsurance accounts receivable | ||
| Reinsurance contract reserves receivable | ||
| Other receivables | 77,134,897.39 | 35,793,851.22 |
| Incl.: Interest receivable | ||
| Dividends receivable | ||
| Financial assets held under resale agreements | ||
| Inventories | 6,293,879,276.54 | 6,165,738,409.09 |
| Contract assets | ||
| Assets held for sale | ||
| Non-current assets due within one year | ||
| Other current assets | 651,719,745.68 | 504,573,874.64 |
| Total current assets | 22,445,743,752.31 | 22,273,475,861.10 |
| Non-current assets: | ||
| Loans and advances to clients | ||
| Debt investments | ||
| Other debt investments | ||
| Long-term receivable | 30,000,000.00 | 30,000,000.00 |
| Long-term equity investments | 155,406,879.89 | 139,767,215.41 |
| Investments in other equity instruments | 278,157,110.00 | 171,322,110.00 |
| Other non-current financial assets | ||
| Investment properties | 1,038,840.26 | 1,296,551.42 |
| Fixed assets | 12,415,251,689.80 | 10,673,700,468.47 |
| Construction in progress | 1,842,525,188.54 | 1,813,183,815.67 |
| Productive biological assets | ||
| Oil and gas assets | ||
| Right-of-use assets | 1,252,668,050.83 | 951,068,254.01 |
| Intangible assets | 863,692,421.74 | 302,589,719.92 |
| Development expenses | ||
| Goodwill | 2,209,199,500.98 | 2,191,939,940.60 |
| Long-term deferred expenses | 866,872,191.21 | 501,517,044.33 |
| Deferred tax assets | 1,078,140,428.38 | 880,233,046.10 |
| Other non-current assets | 933,022,974.34 | 872,512,776.58 |
| Total non-current assets | 21,925,975,275.97 | 18,529,130,942.51 |
| Total assets | 44,371,719,028.28 | 40,802,606,803.61 |
| Current liabilities: | ||
| Short-term borrowings | 5,156,100,217.01 | 7,794,409,944.68 |
| Borrowings from Central Bank | ||
| Borrowings from banks and other financial institutions | ||
| Financial liabilities held for trading | 104,174,076.23 | 91,517,116.89 |
| Derivative financial liabilities | ||
| Notes payable | 909,171,215.93 | 2,008,405,860.19 |
| Accounts payable | 8,039,107,176.52 | 5,986,286,590.32 |
| Advances from clients | ||
| Contract liabilities | 28,982,676.07 | 26,193,456.12 |
| Financial assets sold under repurchase agreements | ||
| Deposits from clients and other banks | ||
| Funds received as stock broker | ||
| Funds received as underwriter of securities | ||
| Employee benefits payable | 553,178,980.68 | 500,125,315.30 |
| Taxes payable | 475,576,206.83 | 412,289,780.94 |
| Other payables | 80,188,628.54 | 54,324,601.72 |
| Incl.: Interest payable | ||
| Dividends payable | ||
| Fees and commissions payable | ||
| Reinsurance accounts payable | ||
| Liabilities held for sale | ||
| Non-current liabilities due within one year | 2,496,716,906.35 | 1,189,744,866.13 |
| Other current liabilities | 6,556,017.38 | 4,476,657.36 |
| Total current liabilities | 17,849,752,101.54 | 18,067,774,189.65 |
| Non-current liabilities: | ||
| Provision for insurance contracts | ||
| Long-term borrowings | 4,706,280,338.76 | 3,197,821,643.49 |
| Bonds payable | ||
| Incl.: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | 1,842,799,193.80 | 1,647,319,046.20 |
| Long-term payables | 296,995,789.48 | |
| Long-term employee benefits payable | ||
| Provisions | 60,785,210.44 | 69,202,183.16 |
| Deferred income | 733,456,685.17 | 747,587,634.12 |
| Deferred tax liabilities | 691,293,111.83 | 647,343,610.25 |
| Other non-current liabilities | ||
| Total non-current liabilities | 8,331,610,329.48 | 6,309,274,117.22 |
| Total liabilities | 26,181,362,431.02 | 24,377,048,306.87 |
| Owners’ equity: | ||
| Share capital | 1,709,867,327.00 | 1,709,867,327.00 |
| Other equity instruments | ||
| Incl.: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserve | 8,063,768,409.73 | 8,054,894,080.77 |
| Less: Treasury shares | 125,906,811.33 | 125,906,811.33 |
| Other comprehensive income | -714,664,578.64 | -692,976,005.21 |
| Special reserve | ||
| Surplus reserve | 184,866,869.73 | 135,347,835.10 |
| General risk reserve | ||
| Retained profits | 9,025,095,529.05 | 7,297,404,445.02 |
| Total owners’ equity attributable to the parent company | 18,143,026,745.54 | 16,378,630,871.35 |
| Minority interests | 47,329,851.72 | 46,927,625.39 |
| Total owners’ equity | 18,190,356,597.26 | 16,425,558,496.74 | |||
| Total liabilities and owners’ equity | 44,371,719,028.28 | 40,802,606,803.61 | |||
| Legal Representative: YUAN Yonggang | CFO: WANG Xu | Accounting Supervisor: ZHU Deguang | |||
2. Standalone balance sheet
In RMB
| Item | December 31, 2023 | January 1, 2023 |
| Current assets: | ||
| Cash and bank balances | 1,121,824,500.79 | 1,412,679,165.36 |
| Financial assets held for trading | 5,339,600.00 | |
| Derivative financial assets | ||
| Notes receivable | 182,944.04 | 561,448.01 |
| Accounts receivable | 2,084,703,275.22 | 1,941,106,338.87 |
| Accounts receivable financing | 16,445,639.29 | 12,405,985.23 |
| Advances to suppliers | 264,702,649.93 | 398,743,645.61 |
| Other receivables | 5,252,635,539.56 | 3,245,530,947.12 |
| Incl.: Interest receivable | ||
| Dividends receivable | 2,203,111,413.70 | 1,210,095,256.90 |
| Inventories | 1,299,182,931.81 | 1,009,877,418.76 |
| Contract assets | ||
| Assets held for sale | ||
| Non-current assets due within one year | ||
| Other current assets | 50,271,463.84 | 95,208,426.22 |
| Total current assets | 10,089,948,944.48 | 8,121,452,975.18 |
| Non-current assets: | ||
| Debt investments | ||
| Other debt investments | ||
| Long-term receivables | 30,000,000.00 | 30,000,000.00 |
| Long-term equity investments | 9,466,303,266.56 | 7,580,547,437.18 |
| Investments in other equity instruments | 171,322,110.00 | 171,322,110.00 |
| Other non-current financial assets | ||
| Investment properties | ||
| Fixed assets | 1,292,621,445.22 | 1,224,723,019.96 |
| Construction in progress | 237,324,474.45 | 482,015,287.67 |
| Productive biological assets | ||
| Oil and gas assets | ||
| Right-of-use assets | 4,566,101.24 | 6,523,001.84 |
| Intangible assets | 61,083,591.40 | 61,782,911.44 |
| Development expenses | ||
| Goodwill | ||
| Long-term deferred expenses | 87,384,070.37 | 156,467,709.39 |
| Deferred tax assets | 189,735,608.41 | 190,241,689.38 |
| Other non-current assets | 163,595,104.57 | 110,280,926.88 |
| Total non-current assets | 11,703,935,772.22 | 10,013,904,093.74 |
| Total assets | 21,793,884,716.70 | 18,135,357,068.92 |
| Current liabilities: | ||
| Short-term borrowings | 2,911,521,728.06 | 3,239,724,817.50 |
| Financial liabilities held for trading | ||
| Derivative financial assets | ||
| Notes payable | 449,069,523.81 | 1,433,148,316.04 |
| Accounts payable | 1,326,777,885.36 | 725,307,838.44 |
| Advances from clients | ||
| Contract liabilities | 11,196,344.94 | 261,978,225.55 |
| Employee benefits payable | 53,045,775.35 | 36,013,112.32 |
| Taxes payable | 3,260,417.40 | 2,676,526.20 |
| Other payables | 3,680,367,551.64 | 1,527,486,936.57 |
| Incl.: Interest payable | ||
| Dividends payable | ||
| Liabilities held for sale | ||
| Non-current liabilities due within one year | 834,828,298.62 | 216,525,360.27 |
| Other current liabilities | 3,373,087.29 | 2,052,903.93 |
| Total current liabilities | 9,273,440,612.47 | 7,444,914,036.82 |
| Non-current liabilities: | ||
| Long-term borrowings | 2,405,437,622.23 | 1,106,033,055.55 |
| Bonds payable | ||
| Incl.: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | 2,741,061.12 | 4,746,572.24 |
| Long-term payables | 226,168,789.48 | |
| Long-term employee benefits payable | ||
| Provisions | 1,852,066.56 | 3,414,342.70 |
| Deferred income | 19,403,333.49 | 22,333,333.41 |
| Deferred tax liabilities | 920,551.61 | 2,214,274.41 |
| Other non-current liabilities | ||
| Total non-current liabilities | 2,656,523,424.49 | 1,138,741,578.31 |
| Total liabilities | 11,929,964,036.96 | 8,583,655,615.13 |
| Owners’ equity: | ||
| Share capital | 1,709,867,327.00 | 1,709,867,327.00 |
| Other equity instruments | ||
| Incl.: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserve | 7,962,239,056.77 | 7,953,356,366.17 |
| Less: Treasury shares | 125,906,811.33 | 125,906,811.33 |
| Other comprehensive income | -350,000,000.00 | -345,461,340.00 |
| Special reserve | ||
| Surplus reserve | 184,866,869.73 | 135,347,835.10 |
| Retained profits | 482,854,237.57 | 224,498,076.85 |
| Total owners’ equity | 9,863,920,679.74 | 9,551,701,453.79 |
| Total liabilities and owners’ equity | 21,793,884,716.70 | 18,135,357,068.92 |
3. Consolidated income statement
In RMB
| Item | 2023 | 2022 |
| I. Total operating revenue | 33,651,205,468.80 | 31,580,146,732.58 |
| Incl.: Operating revenue | 33,651,205,468.80 | 31,580,146,732.58 |
| Interest income | ||
| Premiums earned | ||
| Fee and commission income | ||
| II. Total operating costs | 31,334,350,168.82 | 28,434,705,720.60 |
| Incl.: Operating costs | 28,541,641,042.74 | 26,020,679,333.24 |
| Interest expenses | ||
| Fee and commission expenses | ||
| Surrenders | ||
| Net payments for insurance claims | ||
| Net insurance claim reserves | ||
| Policyholder dividends | ||
| Reinsurance expenses | ||
| Taxes and surcharges | 122,969,094.29 | 105,651,890.50 |
| Selling expenses | 362,094,101.76 | 352,993,453.50 |
| Administrative expenses | 957,323,918.86 | 815,662,486.89 |
| Research and development expenses | 1,161,190,274.48 | 940,085,451.98 |
| Financial expenses | 189,131,736.69 | 199,633,104.49 |
| Incl.: Interest expenses | 463,688,943.50 | 302,704,601.47 |
| Interest income | 225,593,949.55 | 42,128,725.22 |
| Add: Other income | 249,881,956.51 | 318,574,095.64 |
| Investment income (loss expressed with “-”) | 4,158,524.35 | -922,388.82 |
| Incl.: Investment income from associates and joint ventures | -10,820,910.91 | -3,353,804.37 |
| Gain on derecognition of financial assets at amortized cost | ||
| Exchange gain (loss expressed with “-”) | ||
| Net exposure hedging income (loss expressed with “-”) | ||
| Gain on changes in fair value (loss expressed with “-”) | -9,740,779.67 | -66,613,459.50 |
| Credit loss (loss expressed with “-”) | -39,436,689.63 | -76,228,643.25 |
| Impairment loss on assets (loss expressed with “-”) | -438,676,762.78 | -468,204,563.83 |
| Gain on disposal of assets (loss expressed with “-”) | -18,240,640.06 | -5,513,221.27 |
| III. Operating profit (loss expressed with “-”) | 2,064,800,908.70 | 2,846,532,830.95 |
| Add: Non-operating revenue | 141,478,735.80 | 12,212,345.74 |
| Less: Non-operating expenses | 15,191,689.58 | 17,846,210.04 |
| IV. Profit before tax (loss expressed with “-”) | 2,191,087,954.92 | 2,840,898,966.65 |
| Less: Income tax expenses | 226,037,787.50 | 472,836,462.81 |
| V. Net profit (loss expressed with “-”) | 1,965,050,167.42 | 2,368,062,503.84 |
| (I) Classified by continuity of operation | ||
| 1. Net profit from continuing operation (loss expressed with “-”) | 1,965,050,167.42 | 2,368,062,503.84 |
| 2. Net profit from discontinued operation (loss expressed with “-”) | ||
| (II) Classified by attribution | ||
| 1. Net profit attributable to owners of the parent company (loss expressed with “-”) | 1,964,525,269.65 | 2,368,347,970.02 |
| 2. Profit attributable to minority interests (loss expressed with “-”) | 524,897.77 | -285,466.18 |
| VI. Other comprehensive income, net | -21,688,573.43 | -173,374,048.73 |
| Other comprehensive income attributable to owners of the parent company, net after tax | -21,688,573.43 | -173,349,939.00 |
| (I) Other comprehensive income that cannot be reclassified to profit or loss | ||
| 1. Changes arising from remeasurement of defined benefit plans | ||
| 2. Other comprehensive income that cannot be reclassified to profit or loss under equity method | ||
| 3. Change in fair value of investments in other equity instruments | ||
| 4. Change in fair value of the corporation’s credit risk | ||
| 5. Others | ||
| (II) Other comprehensive income that will be reclassified to profit or loss | -21,688,573.43 | -173,349,939.00 |
| 1. Other comprehensive income that can be reclassified to profit or loss under equity method | ||
| 2. Change in fair value of other debt investments | ||
| 3. Financial assets reclassified to other comprehensive income | ||
| 4. Provision for credit impairment of other debt investments | ||
| 5. Reserves for cash flow hedge | 39,915,469.78 | -112,225,912.41 |
| 6. Differences in translation of foreign currency financial statements | -61,604,043.21 | -61,124,026.59 |
| 7. Others |
| Other comprehensive income attributable to minority interests, net after tax | -24,109.73 | ||||
| VII. Total comprehensive income | 1,943,361,593.99 | 2,194,688,455.11 | |||
| Total comprehensive income attributable to owners of the parent company | 1,942,836,696.22 | 2,194,998,031.02 | |||
| Total comprehensive income attributable to minority interests | 524,897.77 | -309,575.91 | |||
| VIII. Earnings per share: | |||||
| (I) Basic earnings per share | 1.15 | 1.39 | |||
| (II) Diluted earnings per share | 1.15 | 1.39 | |||
| Legal Representative: YUAN Yonggang | CFO: WANG Xu | Accounting Supervisor: ZHU Deguang | |||
4. Standalone income statement
In RMB
| Item | 2023 | 2022 |
| I. Operating revenue | 3,737,530,873.50 | 3,877,913,051.67 |
| Less: Operating costs | 3,381,377,455.45 | 3,478,568,986.55 |
| Taxes and surcharges | 7,671,794.48 | 7,784,720.56 |
| Selling expenses | 65,003,786.00 | 63,703,774.98 |
| Administrative expenses | 264,117,661.70 | 354,137,272.59 |
| Research and development expenses | 252,953,031.98 | 149,446,571.49 |
| Financial expenses | 244,140,628.33 | 145,208,675.20 |
| Incl.: Interest expenses | 355,406,845.27 | 272,353,140.97 |
| Interest income | 97,881,674.07 | 71,430,377.19 |
| Add: Other income | 5,526,956.76 | 10,684,111.51 |
| Investment income (loss expressed with “-”) | 1,097,355,440.91 | 589,880,146.37 |
| Incl.: Investment income from associates and joint ventures | -7,147,658.81 | -2,530,300.44 |
| Gain on derecognition of financial assets at amortized cost | ||
| Net exposure hedging income (loss expressed with “-”) | ||
| Gain on changes in fair value (loss expressed with “-”) | -14,434,367.40 | |
| Credit loss (loss expressed with “-”) | -53,563,010.03 | -14,517,058.05 |
| Impairment loss on assets (loss expressed with “-”) | -73,708,230.19 | -34,480,575.88 |
| Gain on disposal of assets (loss expressed with “-”) | 932,378.60 | 102,024.93 |
| II. Operating profit (loss expressed with “-”) | 498,810,051.61 | 216,297,331.78 |
| Add: Non-operating revenue | 94,150.75 | 205,398.99 |
| Less: Non-operating expenses | 3,700,557.85 | 9,176,319.82 |
| III. Profit before tax (loss expressed with “-”) | 495,203,644.51 | 207,326,410.95 |
| Less: Income tax expenses | 13,298.17 | -29,158,019.65 |
| IV. Net profit (loss expressed with “-”) | 495,190,346.34 | 236,484,430.60 |
| (I) Net profit from continuing operation (loss expressed with “-”) | 495,190,346.34 | 236,484,430.60 |
| (II) Net profit from discontinued operation (loss expressed with “-”) | ||
| V. Other comprehensive income, net | -4,538,660.00 | 4,538,660.00 |
| (I) Other comprehensive income that cannot be reclassified to profit or loss | ||
| 1. Changes arising from remeasurement of defined benefit plans | ||
| 2. Other comprehensive income that cannot be reclassified to profit or loss under equity method | ||
| 3. Change in fair value of investments in other equity instruments | ||
| 4. Change in fair value of the corporation’s credit |
| risk | ||
| 5. Others | ||
| (II) Other comprehensive income that will be reclassified to profit or loss | -4,538,660.00 | 4,538,660.00 |
| 1. Other comprehensive income that can be reclassified to profit or loss under equity method | ||
| 2. Change in fair value of other debt investments | ||
| 3. Financial assets reclassified to other comprehensive income | ||
| 4. Provision for credit impairment of other debt investments | ||
| 5. Reserves for cash flow hedge | -4,538,660.00 | 4,538,660.00 |
| 6. Differences in translation of foreign currency financial statements | ||
| 7. Others | ||
| VI. Total comprehensive income | 490,651,686.34 | 241,023,090.60 |
| VII. Earnings per share | ||
| (I) Basic earnings per share | ||
| (II) Diluted earnings per share |
5. Consolidated cash flow statement
In RMB
| Item | 2023 | 2022 |
| I. Cash flows from operating activities | ||
| Proceeds from sale of goods and rendering of services | 32,739,066,437.34 | 30,689,737,979.37 |
| Net increase in deposits from clients and other banks | ||
| Net increase in borrowings from Central Bank | ||
| Net increase in borrowings from other financial institutions | ||
| Proceeds from premiums under prior insurance contracts | ||
| Net proceeds from reinsurance business | ||
| Net increase in insured’s deposits and investments | ||
| Proceeds from interest, fees and commissions | ||
| Net increase in borrowings from banks and other financial institutions | ||
| Net increase in receipts under repurchase transactions | ||
| Net cash received as stock broker | ||
| Tax refunds received | 1,137,521,361.97 | 1,402,945,080.65 |
| Other proceeds relating to operating activities | 1,064,645,853.79 | 856,136,731.36 |
| Subtotal of cash inflows from operating activities | 34,941,233,653.10 | 32,948,819,791.38 |
| Payments for purchase of goods and receipt of services | 23,717,207,870.38 | 22,311,360,256.76 |
| Net increase in loans and advances from clients | ||
| Net increase in deposits in Central Bank and other banks | ||
| Payment of claims under prior insurance contracts | ||
| Net increase in loans to banks and other financial institutions | ||
| Payment of interest, fees and commissions | ||
| Payment of policyholder dividends | ||
| Payments to and for employees | 4,361,937,171.07 | 4,177,722,088.02 |
| Taxes paid | 605,774,751.89 | 492,638,579.06 |
| Other payments relating to operating activities | 1,083,894,389.56 | 1,337,214,856.16 |
| Subtotal of cash outflows from operating activities | 29,768,814,182.90 | 28,318,935,780.00 |
| Net cash flows from operating activities | 5,172,419,470.20 | 4,629,884,011.38 |
| II. Cash flows from investing activities | ||
| Proceeds from disposal of investments | 456,515,984.16 | 424,159,710.89 |
| Proceeds from return on investments | 130,859,749.94 | 10,968,187.55 |
| Net proceeds from the disposal of fixed assets, intangible assets and other long-term assets | 37,557,278.12 | 8,924,465.56 |
| Net proceeds from the disposal of subsidiaries and other business entities | ||
| Other proceeds relating to investing activities | 439,820,656.38 | 235,424,521.00 |
| Subtotal of cash inflows from investing activities | 1,064,753,668.60 | 679,476,885.00 |
| Payments for the acquisition of fixed assets, intangible assets and other long-term assets | 3,466,863,364.13 | 3,375,029,627.94 |
| Payments for investments | 664,445,169.56 | 608,374,219.69 |
| Net increase in mortgage loans | ||
| Net Payments for the acquisition of subsidiaries and other business entities | 863,778,442.89 | |
| Other cash payments relating to investing activities | 908,569,017.53 | 455,064,192.71 |
| Subtotal of cash outflows from investing activities | 5,903,655,994.11 | 4,438,468,040.34 |
| Net cash flows from investing activities | -4,838,902,325.51 | -3,758,991,155.34 |
| III. Cash flows from financing activities | ||
| Proceeds from investors | ||
| Incl.: Proceeds of subsidiaries from minority shareholders’ investments | ||
| Cash receipts from borrowings | 13,365,424,866.08 | 10,828,761,291.26 |
| Other proceeds relating to financing activities | 1,329,035,764.61 | 2,139,193,721.85 |
| Subtotal of cash inflows from financing activities | 14,694,460,630.69 | 12,967,955,013.11 |
| Repayment of borrowings | 12,628,310,459.03 | 9,629,498,697.60 |
| Payment of distribution of dividends and profits or for interest | 566,998,901.47 | 642,139,429.34 |
| Incl.: Dividends and profits distributed by subsidiaries to minor shareholders | 131,033.08 | 36,408.79 |
| Other payments relating to financing activities | 1,741,698,784.20 | 2,192,696,813.07 |
| Subtotal of cash outflows from financing activities | 14,937,008,144.70 | 12,464,334,940.01 |
| Net cash flows from financing activities | -242,547,514.01 | 503,620,073.10 |
| IV. Effect of exchange rate changes on cash and cash equivalents | 96,490,564.93 | 143,212,766.77 |
| V. Net increase in cash and cash equivalents | 187,460,195.61 | 1,517,725,695.91 |
| Add: Opening balance of cash and cash equivalents | 5,457,026,822.70 | 3,939,301,126.79 |
| VI. Closing balance of cash and cash equivalents | 5,644,487,018.31 | 5,457,026,822.70 |
6. Standalone cash flow statement
In RMB
| Item | 2023 | 2022 |
| I. Cash flows from operating activities | ||
| Proceeds from the sale of goods and rendering of services | 3,599,977,055.52 | 3,930,357,686.47 |
| Tax refunds received | 170,635,154.61 | 238,277,121.92 |
| Other proceeds relating to operating activities | 2,473,918,043.84 | 2,118,216,199.44 |
| Subtotal of cash inflows from operating activities | 6,244,530,253.97 | 6,286,851,007.83 |
| Payments for purchase of goods and receipt of services | 3,993,122,870.14 | 4,440,683,078.94 |
| Payments to and for employees | 408,725,850.72 | 337,116,177.01 |
| Taxes paid | 25,001,677.19 | 19,309,238.75 |
| Other payments relating to operating activities | 1,209,977,998.48 | 639,515,727.10 |
| Subtotal of cash outflows from operating activities | 5,636,828,396.53 | 5,436,624,221.80 |
| Net cash flows from operating activities | 607,701,857.44 | 850,226,786.03 |
| II. Cash flows from investing activities | ||
| Proceeds from disposal of investments | 15,357,541.22 | 121,461,752.60 |
| Proceeds from return on investments | 115,022,537.63 | 573,504,702.64 |
| Net proceeds from the disposal of fixed assets, intangible assets and other long-term assets | 15,584,415.51 | 15,670,927.06 |
| Net proceeds from the disposal of subsidiaries and other business entities | ||
| Other proceeds relating to investing activities | 72,539,552.45 | |
| Subtotal of cash inflows from investing activities | 218,504,046.81 | 710,637,382.30 |
| Payments for the acquisition of fixed assets, intangible assets and other long-term assets | 218,313,936.35 | 797,364,143.36 |
| Payments for investments | 1,671,525,214.35 | 458,359,760.00 |
| Net payments for the acquisition of subsidiaries and other business entities | ||
| Other payments relating to investing activities | 557,893,589.63 | |
| Subtotal of cash outflows from investing activities | 2,447,732,740.33 | 1,255,723,903.36 |
| Net cash flows from investing activities | -2,229,228,693.52 | -545,086,521.06 |
| III. Cash flows from financing activities | ||
| Proceeds from investors | ||
| Proceeds from borrowings | 5,892,310,572.50 | 4,553,408,751.02 |
| Other proceeds relating to financing activities | ||
| Subtotal of cash inflows from financing activities | 5,892,310,572.50 | 4,553,408,751.02 |
| Repayment of borrowings | 4,307,827,399.66 | 3,991,741,102.36 |
| Payment of distribution of dividends and profits or for interest | 386,091,836.92 | 606,951,054.50 |
| Other payments relating to financing activities | 153,521,804.76 | 120,819,536.78 |
| Subtotal of cash outflows from financing activities | 4,847,441,041.34 | 4,719,511,693.64 |
| Net cash flows from financing activities | 1,044,869,531.16 | -166,102,942.62 |
| IV. Effect of exchange rate changes on cash and cash equivalents | 21,358,018.36 | -35,276,962.44 |
| V. Net increase in cash and cash equivalents | -555,299,286.56 | 103,760,359.91 |
| Add: Opening balance of cash and cash equivalents | 1,034,143,525.12 | 930,383,165.21 |
| VI. Closing balance of cash and cash equivalents | 478,844,238.56 | 1,034,143,525.12 |
7. Consolidated statement of changes in owners’ equity
2023
In RMB
| Item | 2023 | ||||||||||||||
| Owners’ equity attributable to the parent | Minority interests | Total owners’ equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | General risk reserve | Retained profit | Others | Subtotal | |||||
| Preferred shares | Perpetual bonds | Others | |||||||||||||
| I. Balance at the end of the previous year | 1,709,867,327.00 | 8,054,894,080.77 | 125,906,811.33 | -692,976,005.21 | 135,347,835.10 | 7,297,404,445.02 | 16,378,630,871.35 | 46,927,625.39 | 16,425,558,496.74 | ||||||
| Add: Changes in accounting policies | |||||||||||||||
| Correction of previous period errors | |||||||||||||||
| Others | |||||||||||||||
| II. Balance at the beginning of the current year | 1,709,867,327.00 | 8,054,894,080.77 | 125,906,811.33 | -692,976,005.21 | 135,347,835.10 | 7,297,404,445.02 | 16,378,630,871.35 | 46,927,625.39 | 16,425,558,496.74 | ||||||
| III. Increase/(decrease) in the current period (decrease expressed with “-”) | 8,874,328.96 | -21,688,573.43 | 49,519,034.63 | 1,727,691,084.03 | 1,764,395,874.19 | 402,226.33 | 1,764,798,100.52 | ||||||||
| (I) Total comprehensive income | -21,688,573.43 | 1,964,525,269.65 | 1,942,836,696.22 | 524,897.77 | 1,943,361,593.99 | ||||||||||
| (II) Investment/(divestment) by shareholders | 8,874,328.96 | 8,874,328.96 | 8,361.64 | 8,882,690.60 | |||||||||||
| 1. Contributions from holders of ordinary shares | |||||||||||||||
| 2. Contributions from holders of other equity instruments | |||||||||||||||
| 3. Share-based payments recorded in owners’ equity | 8,874,328.96 | 8,874,328.96 | 8,361.64 | 8,882,690.60 | |||||||||||
| 4. Others | |||||||||||||||
| (III) Distribution of profits | 49,519,034.63 | -236,834,185.62 | -187,315,150.99 | -131,033.08 | -187,446,184.07 | ||||||||||
| 1. Surplus reserve | 49,519,034.63 | -49,519,034.63 | |||||||||||||
| 2. General risk reserve | |||||||||||||||
| 3. Distributions to owners (shareholders) | -187,315,150.99 | -187,315,150.99 | -131,033.08 | -187,446,184.07 | |||||||||||
| 4. Others | |||||||||||||||
| (IV) Internal transfer of owners’ equity | |||||||||||||||
| 1. Transfer of capital reserve to (share) capital | |||||||||||||||
| 2. Transfer of surplus reserve to (share) capital | |||||||||||||||
| 3. Make-up of losses by surplus reserve | |||||||||||||||
| 4. Transfer of changes in defined benefit plans to retained earnings | |||||||||||||||
| 5. Transfer of other comprehensive income to retained earnings | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserve | |||||||||||||||
| 1. Appropriated in the current year | |||||||||||||||
| 2. Used in the current year | |||||||||||||||
| (VI) Others | |||||||||||||||
| IV. Balance at the end of the | 1,709,867,327.00 | 8,063,768,409.73 | 125,906,811.33 | -714,664,578.64 | 184,866,869.73 | 9,025,095,529.05 | 18,143,026,745.54 | 47,329,851.72 | 18,190,356,597.26 |
currentyear
2022
In RMB
| Item | 2022 | ||||||||||||||
| Owners’ equity attributable to the parent | Minority interests | Total owners’ equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | General risk reserve | Retained profit | Others | Subtotal | |||||
| Preferred shares | Perpetual bonds | Others | |||||||||||||
| I. Balance at the end of the previous year | 1,709,867,327.00 | 8,099,524,872.90 | 100,479,794.32 | -519,626,066.21 | 111,698,315.15 | 5,275,515,670.63 | 14,576,500,325.15 | 93,842,214.03 | 14,670,342,539.18 | ||||||
| Add: Changes in accounting policies | 18,372,951.79 | 18,372,951.79 | 35,116.06 | 18,408,067.85 | |||||||||||
| Correction of previous period errors | |||||||||||||||
| Others | |||||||||||||||
| II. Balance at the beginning of the current year | 1,709,867,327.00 | 8,099,524,872.90 | 100,479,794.32 | -519,626,066.21 | 111,698,315.15 | 5,293,888,622.42 | 14,594,873,276.94 | 93,877,330.09 | 14,688,750,607.03 | ||||||
| III. Increase/(decrease) in the current period (decrease expressed with “-”) | -44,630,792.13 | 25,427,017.01 | -173,349,939.00 | 23,649,519.95 | 2,003,515,822.60 | 1,783,757,594.41 | -46,949,704.70 | 1,736,807,889.71 | |||||||
| (I) Total comprehensive income | -173,349,939.00 | 2,368,347,970.02 | 2,194,998,031.02 | -309,575.91 | 2,194,688,455.11 | ||||||||||
| (II) Investment/(divestment) by shareholders | -44,630,792.13 | 25,427,017.01 | -70,057,809.14 | -46,603,720.00 | -116,661,529.14 | ||||||||||
| 1. Contributions from holders of ordinary shares | |||||||||||||||
| 2. Contributions from holders of other equity instruments | |||||||||||||||
| 3. Share-based payments recorded in owners’ equity | 16,730,212.08 | 16,730,212.08 | 4,703.42 | 16,734,915.50 | |||||||||||
| 4. Others | -61,361,004.21 | 25,427,017.01 | -86,788,021.22 | -46,608,423.42 | -133,396,444.64 | ||||||||||
| (III) Distribution of profits | 23,649,519.95 | -364,832,147.42 | -341,182,627.47 | -36,408.79 | -341,219,036.26 | ||||||||||
| 1. Surplus reserve | 23,649,519.95 | -23,649,519.95 | |||||||||||||
| 2. General risk reserve | |||||||||||||||
| 3. Distributions to owners (shareholders) | -341,182,627.47 | -341,182,627.47 | -36,408.79 | -341,219,036.26 | |||||||||||
| 4. Others | |||||||||||||||
| (IV) Internal transfer of owners’ equity | |||||||||||||||
| 1. Transfer of capital reserve to (share) | |||||||||||||||
| capital | |||||||||||||||
| 2. Transfer of surplus reserve to (share) capital | |||||||||||||||
| 3. Make-up of losses by surplus reserve | |||||||||||||||
| 4. Transfer of changes in defined benefit plans to retained earnings | |||||||||||||||
| 5. Transfer of other comprehensive income to retained earnings | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserve | |||||||||||||||
| 1. Appropriated in the current year | |||||||||||||||
| 2. Used in the current year | |||||||||||||||
| (VI) Others | |||||||||||||||
| IV. Balance at the end of the current year | 1,709,867,327.00 | 8,054,894,080.77 | 125,906,811.33 | -692,976,005.21 | 135,347,835.10 | 7,297,404,445.02 | 16,378,630,871.35 | 46,927,625.39 | 16,425,558,496.74 |
8. Standalone statement of changes in owners’ equity
2023
In RMB
| Item | 2023 | |||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Retained profit | Others | Total owners’ equity | |||
| Preferred shares | Perpetual bonds | Others | ||||||||||
| I. Balance at the end of the previous year | 1,709,867,327.00 | 7,953,356,366.17 | 125,906,811.33 | -345,461,340.00 | 135,347,835.10 | 224,498,076.85 | 9,551,701,453.79 | |||||
| Add: Changes in accounting policies | ||||||||||||
| Correction of previous period errors | ||||||||||||
| Others | ||||||||||||
| II. Balance at the beginning of the current year | 1,709,867,327.00 | 7,953,356,366.17 | 125,906,811.33 | -345,461,340.00 | 135,347,835.10 | 224,498,076.85 | 9,551,701,453.79 | |||||
| III. Increase/(decrease) in the current period (decrease expressed with “-”) | 8,882,690.60 | -4,538,660.00 | 49,519,034.63 | 258,356,160.72 | 312,219,225.95 | |||||||
| (I) Total comprehensive income | -4,538,660.00 | 495,190,346.34 | 490,651,686.34 | |||||||||
| (II) Investment/(divestment) by shareholders | 8,882,690.60 | 8,882,690.60 | ||||||||||
| 1. Contributions from holders of ordinary shares | ||||||||||||
| 2. Contributions from | ||||||||||||
| holders of other equity instruments | ||||||||||||
| 3. Share-based payments recorded in owners’ equity | 8,882,690.60 | 8,882,690.60 | ||||||||||
| 4. Others | ||||||||||||
| (III) Distribution of profits | 49,519,034.63 | -236,834,185.62 | -187,315,150.99 | |||||||||
| 1. Surplus reserve | 49,519,034.63 | -49,519,034.63 | ||||||||||
| 2. Distributions to owners (shareholders) | -187,315,150.99 | -187,315,150.99 | ||||||||||
| 3. Others | ||||||||||||
| (IV) Internal transfer of owners’ equity | ||||||||||||
| 1. Transfer of capital reserve to (share) capital | ||||||||||||
| 2. Transfer of surplus reserve to (share) capital | ||||||||||||
| 3. Make-up of losses by surplus reserve | ||||||||||||
| 4. Transfer of changes in defined benefit plans to retained earnings | ||||||||||||
| 5. Transfer of other comprehensive income to retained earnings | ||||||||||||
| 6. Others | ||||||||||||
| (V) Special reserve | ||||||||||||
| 1. Appropriated in the current year | ||||||||||||
| 2. Used in the current year | ||||||||||||
| (VI) Others | ||||||||||||
| IV. Balance at the end of the current year | 1,709,867,327.00 | 7,962,239,056.77 | 125,906,811.33 | -350,000,000.00 | 184,866,869.73 | 482,854,237.57 | 9,863,920,679.74 |
2022
In RMB
| Item | 2022 | |||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Retained profit | Others | Total owners’ equity | |||
| Preferred shares | Perpetual bonds | Others | ||||||||||
| I. Balance at the end of the previous year | 1,709,867,327.00 | 7,961,185,289.83 | 100,479,794.32 | -350,000,000.00 | 111,698,315.15 | 352,818,601.06 | 9,685,089,738.72 | |||||
| Add: Changes in accounting policies | 27,192.61 | 27,192.61 | ||||||||||
| Correction of previous period errors | ||||||||||||
| Others | ||||||||||||
| II. Balance at the beginning of the current year | 1,709,867,327.00 | 7,961,185,289.83 | 100,479,794.32 | -350,000,000.00 | 111,698,315.15 | 352,845,793.67 | 9,685,116,931.33 | |||||
| III. Increase/(decrease) in the current period (decrease expressed with “-”) | -7,828,923.66 | 25,427,017.01 | 4,538,660.00 | 23,649,519.95 | -128,347,716.82 | -133,415,477.54 | ||||||
| (I) Total comprehensive income | 4,538,660.00 | 236,484,430.60 | 241,023,090.60 | |||||||||
| (II) Investment/(divestment) by shareholders | -7,828,923.66 | 25,427,017.01 | -33,255,940.67 | |||||||||
| 1. Contribution | 49,990,856.17 | -49,990,856.1 | ||||||||||
| s from holders of ordinary shares | 7 | |||||||||||
| 2. Contributions from holders of other equity instruments | ||||||||||||
| 3. Share-based payments recorded in owners’ equity | 16,734,915.50 | 16,734,915.50 | ||||||||||
| 4. Others | -24,563,839.16 | -24,563,839.16 | ||||||||||
| (III) Distribution of profits | 23,649,519.95 | -364,832,147.42 | -341,182,627.47 | |||||||||
| 1. Surplus reserve | 23,649,519.95 | -23,649,519.95 | ||||||||||
| 2. Distributions to owners (shareholders) | -341,182,627.47 | -341,182,627.47 | ||||||||||
| 3. Others | ||||||||||||
| (IV) Internal transfer of owners’ equity | ||||||||||||
| 1. Transfer of capital reserve to (share) capital | ||||||||||||
| 2. Transfer of surplus reserve to (share) capital | ||||||||||||
| 3. Make-up of losses by surplus reserve | ||||||||||||
| 4. Transfer of changes in defined benefit plans to retained earnings | ||||||||||||
| 5. Transfer of other comprehensive income to retained earnings | ||||||||||||
| 6. Others | ||||||||||||
| (V) Special reserve | ||||||||||||
| 1. Appropriated in the current year | ||||||||||||
| 2. Used in the current year | ||||||||||||
| (VI) Others | ||||||||||||
| IV. Balance at the end of the current year | 1,709,867,327.00 | 7,953,356,366.17 | 125,906,811.33 | -345,461,340.00 | 135,347,835.10 | 224,498,076.85 | 9,551,701,453.79 |
III. General Information of the Company
Suzhou Dongshan Precision Manufacturing Co., Ltd. (the “Company”) is a company limited by shares converted from SuzhouDongshan Sheet Metal Co., Ltd., and registered with the Suzhou Municipal Administration for Industry and Commerce of Jiangsuon December 24, 2007, and is headquartered in Suzhou, Jiangsu, holds a business license with unified social credit code of91320500703719732P, and has a registered capital of RMB1?709?867?327.00, divided into 1,709,867,327 shares with a par valueof RMB 1 each, of which, 319,591,987 shares are non-tradable A-shares, and 1,390,275,340 shares are tradable A-shares. TheCompany’s shares have been listed and traded on the Shenzhen Stock Exchange since April 9, 2010.The Company belongs to the computer, communication and other electronic equipment manufacturing industry, and is primarilyengaged in the provision of core devices for intelligent interconnection, including PCBs, LED display devices, touch panels,LCMs, precision components, etc.These financial statements are published with the approval of the 9
th
meeting of the 6
thBoard of Directors of the Company onApril 16, 2024.
IV. Basis for Preparation of the Financial Statements
1. Basis for preparation
These financial statements have been prepared on the assumption that the Company is a going concern.
2. Going concern
No event or fact may cast significant doubts on the Company’s ability to remain a going concern within 12 months after the end ofthe reporting period.
V. Significant Accounting Policies and Accounting EstimatesNote about specific accounting policies and accounting estimates:
Important note: The Company has established specific accounting policies and made specific accounting estimates with respect tothe impairment of financial instruments, inventories, depreciation of fixed assets, construction in progress, intangible assets,recognition of revenues and other transactions and events according to its actual production and operation characteristics.
1. Statement of compliance with the Accounting Standards for Business Enterprises (“CASBEs”)
The financial statements prepared by the Company conform to the requirements of the CASBEs, and truly and completely reflectthe Company’s financial condition, operating results, cash flows and other related information.
2. Accounting period
The Company’s accounting year is from January 1 to December 31 of each calendar year.
3. Operating cycle
The Company has a relatively short operating cycle, and determines the liquidity of assets and liabilities on the basis of 12 months.
4. Functional currency
The Company adopts RMB as its functional currency, MFLEX adopts USD as its functional currency, and the subsidiaries ofMFLEX, Multek and other companies adopt the currencies of the main economic environment in which they operate as theirfunctional currencies.
5. Determination and basis for selection of materiality criteria
?Applicable □N/A
| Item | Materiality criteria |
| Significant accounts receivable assessed for impairment loss individually |
Individual accounts receivable accounting for over 0.5% of the total assets of theCompany are recognized as significant accounts receivable.
| Significant written off accounts receivable | Individual written off accounts receivable accounting for over 0.5% of the total assets of the Company are recognized as significant written off accounts receivable. |
| Significant dividends receivable aged over one year | Individual dividends receivable aged over one year and accounting for over 0.5% of the total assets of the Company are recognized as significant dividends receivable aged over |
| one year. | |
| Significant constructions in progress | Individual constructions in progress accounting for over 0.5% of the total assets of the Company are recognized as significant constructions in progress. |
6. Accounting treatment of business combinations involving entities under common control and notunder common control
(1) Accounting treatment of business combinations involving entities under common controlAssets and liabilities acquired from a business combination by the Company are measured at the carrying value of the assets andliabilities of the acquiree in the consolidated financial statements of the ultimate controller at the combination date. The differencebetween the carrying value of the owners’ equity of the acquiree as stated in the consolidated financial statements of the ultimatecontroller and the carrying value of the total consideration paid or total par value of the shares issued in connection with thecombination is treated as an adjustment to the capital reserve. In case the capital reserve is not sufficient to absorb the difference,the remaining balance is charged against the retained earnings.
(2) Accounting treatment of business combinations involving entities not under common controlWhere the cost of the combination exceeds the Company’s share of the fair value of the acquiree’s net identifiable assets, thedifference is recognized as goodwill at the acquisition date. Where the cost of combination is lower than the Company’s share ofthe fair value of the acquiree’s net identifiable assets, the Company reviews the measurement of the fair value of each of theidentifiable assets, liabilities and contingent liabilities acquired from the acquiree and the cost of combination, and if the cost ofcombination as reviewed is still lower than the Company’s share of the fair value of the acquiree’s net identifiable assets, thedifference is recognized in profit or loss.
7. Determination of control and method of preparation of consolidated financial statements
(1) Determination of control
Control means that the Company has power over the investee, exposure or rights to variable returns from its involvement with theinvestee and the ability to use its power to affect the amount of those returns.
(2) Method of preparation of consolidated financial statements
The parent includes all of its controlled subsidiaries in its consolidated financial statements. The consolidated financial statementsare prepared by the parent in accordance with CASBE 33 “Consolidated Financial Statements”, on the basis of the respectivefinancial statements of the parent and its subsidiaries, by reference to other relevant data.
8. Classification of joint arrangements and accounting treatment of joint operations
(1) Joint arrangements are classified as joint operations and joint ventures.
(2) When the Company is a party to a joint operation, the Company recognizes the following items relating to its interest in thejoint operation:
1) the assets individually held by the Company, and the Company’s share of the assets held jointly;
2) the liabilities incurred individually by the Company, and the Company’s share of the liabilities incurred jointly;
3) the Company’s revenue from the sale of its share of the output of the joint operation;
4) the Company’s share of revenue from the sale of assets by the joint operation; and
5) the expenses incurred individually by the Company, and the Company’s share of the expenses incurred jointly.
9. Recognition of cash and cash equivalents
For the purpose of the statement of cash flows, cash comprises cash on hand and demand deposits, and cash equivalents compriseshort-term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to aninsignificant risk of changes in value.
10. Translation of foreign currency transactions and foreign currency financial statements
(1) Translation of foreign currency transactions
Upon initial recognition, foreign currency transactions are translated into RMB using the approximate exchange rates of spotexchange rates at the transaction dates. At the balance sheet date, monetary items denominated in foreign currencies are translatedinto RMB using the spot exchange rates then prevailing. Exchange differences arising from such translations are recognized inprofit or loss, except for those attributable to foreign currency borrowings that have been taken out specifically for the acquisitionor construction of qualifying assets and accrued interest. Non-monetary items denominated in foreign currencies that are measuredat historical cost are translated using the approximate exchange rates of spot exchange rates at the transaction dates, withoutadjusting the amounts in RMB. Non-monetary items denominated in foreign currencies that are measured at fair value aretranslated using the foreign exchange rates prevailing at the dates the fair value was determined, with the exchange differencesarising from such translations recognized in profit or loss or other comprehensive income.
(2) Translation of foreign currency financial statements
The asset and liability items in the balance sheet are translated at the spot exchange rates prevailing at the balance sheet date. Theowners’ equity items other than “retained profits” are translated at the spot exchange rates prevailing at the transaction dates. Theincome and expense items in the income statement are translated at the approximate exchange rates of spot exchange rates at thetransaction dates. The differences arising from such translation of foreign currency financial statements are recognized in othercomprehensive income.
11. Financial instruments
1. Classification of financial assets and financial liabilities
Upon initial recognition, financial assets are classified as: (i) financial assets at amortized cost; (ii) financial assets at fair valuethrough other comprehensive income; and (iii) financial assets at fair value through profit or loss.Upon initial recognition, financial liabilities are classified as: (i) financial liabilities at fair value through profit or loss; (ii)financial liabilities arising as a result of the transfer of financial assets not meeting the criteria for derecognition or continuinginvolvement in the financial assets transferred; (iii) financial guarantee contracts not falling under items (i) and (ii), and loancommitments not falling under item (i) and below market interest rate; and (iv) financial liabilities at amortized cost.
2. Recognition, measurement and derecognition of financial assets and financial liabilities
(1) Recognition and initial measurement of financial assets and financial liabilities
When the Company becomes a party to a financial instrument contract, a financial asset or liability is recognized. Financial assetsand liabilities are initially measured at fair value. Transaction costs relating to financial assets or liabilities at fair value throughprofit or loss are directly recognized in profit or loss. Transaction costs relating to other kinds of financial assets or liabilities areincluded in their initially recognized amount. However, the accounts receivable that do not contain any significant financingcomponent or are recognized by the Company without taking into consideration the significant financing components under thecontracts with a term of less than one year upon initial recognition are initially measured at transaction price as defined in CASBE
14 “Revenue”.
(2) Subsequent measurement of financial assets
1) Financial assets at amortized cost
Financial assets at amortized cost are subsequently measured at amortized cost using the effective interest method. Gains or losseson financial assets at amortized cost that do not belong to any hedging relationship are recognized in profit or loss uponderecognition, reclassification, amortization using the effective interest method, or recognition of impairment.
2) Investments in debt instruments at fair value through other comprehensive income
Investments in debt instruments at fair value through other comprehensive income are subsequently measured at fair value.Interest, impairment losses or gains and exchange gains or losses calculated using the effective interest method are recognized inprofit or loss, while other gains or losses are recognized in other comprehensive income. Upon derecognition, the aggregate gainsor losses previously recognized in other comprehensive income are transferred to profit or loss.
3) Investments in equity instruments at fair value through other comprehensive income
Investments in equity instruments at fair value through other comprehensive income are subsequently measured at fair value.Dividends received (other than those received as recovery of investment cost) are recognized in profit or loss, while other gains orlosses are recognized in other comprehensive income. Upon derecognition, the aggregate gains or losses previously recognized inother comprehensive income are transferred to retained earnings.
4) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are subsequently measured at fair value. Gains or losses thereon, includinginterest and dividend income, are recognized in profit or loss, except the financial assets belonging to any hedging relationship.
(3) Subsequent measurement of financial liabilities
1) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading (including derivatives classifiedas financial liabilities), and financial liabilities directly designated as at fair value through profit or loss. Such financial liabilitiesare subsequently measured at fair value. Changes in the fair value of financial liabilities designated as at fair value through profitor loss arising out of changes in the Company’s credit risk are recognized in other comprehensive income, unless such treatmentwill result in or increase any accounting mismatch in profit or loss. Other gains or losses on such financial liabilities, includinginterest expenses and changes in fair value not arising out of changes in the Company’s credit risk, are recognized in profit or loss,except the financial liabilities belonging to any hedging relationship. Upon derecognition, the aggregate gains or losses previouslyrecognized in other comprehensive income are transferred to retained earnings.
2) Financial liabilities arising as a result of the transfer of financial assets not meeting the criteria for derecognition or continuinginvolvement in the financial assets transferredSuch financial liabilities are measured in accordance with CASBE 23 “Transfer of Financial Assets”.
3) Financial guarantee contracts not falling under items 1) and 2), and loan commitments not falling under item 1) and below themarket interest rateSuch financial liabilities are subsequently measured at the higher of (i) allowance for impairment losses determined according tothe policy for impairment of financial instruments; and (ii) balance of the initially recognized amount after deduction of theaccumulated amortization determined in accordance with CASBE 14 “Revenue”.
4) Financial liabilities at amortized cost
Financial liabilities at amortized cost are subsequently measured at amortized cost using the effective interest method. Gains or
losses on financial liabilities at amortized cost that do not belong to any hedging relationship are recognized in profit or loss uponderecognition or amortization using the effective interest method.
(4) Derecognition of financial assets and financial liabilities
1) Financial assets are derecognized when:
① the contractual right to receive cash flows from the financial assets has expired; or
② the financial assets have been transferred and such transfer meets the criteria for derecognition of financial assets as set forth inCASBE 23 “Transfer of Financial Assets”.
2) A financial liability (or part thereof) is derecognized when all or part of the outstanding obligations thereunder have beendischarged.
3. Determination and measurement of financial assets transferred
When a financial asset of the Company is transferred, if substantially all the risks and rewards incidental to the ownership of thefinancial asset have been transferred, the financial asset is derecognized, and the rights and obligations incurred or retained in suchtransfer are separately recognized as assets or liabilities (as the case may be); if the Company has retained substantially all therisks and rewards incidental to the ownership of the financial asset, the Company continues to recognize the financial assettransferred. If the Company neither transferred nor retained a substantial portion of all risks and rewards incidental to theownership of the financial asset, then: (i) if the Company does not retain control over the financial asset, the financial asset isderecognized, and the rights and obligations incurred or retained in such transfer are separately recognized as assets or liabilities(as the case may be); or (ii) if the Company retains control over the financial asset, the financial asset continues to be recognized tothe extent of the Company’s continuing involvement in the financial asset transferred, and a corresponding liability is recognized.If an entire transfer of a financial asset meets the criteria for derecognition, the difference between (i) the carrying value of thefinancial asset transferred at the date of derecognition; and (ii) the sum of the consideration received from the transfer and theportion of the cumulative amount of changes in fair value directly recorded as other comprehensive income originally thatcorresponds to the part derecognized (where the financial asset transferred is an investment in debt instruments at fair valuethrough other comprehensive income) is recognized in profit or loss. If part of a financial asset is transferred and the parttransferred entirely meets the criteria for derecognition, the total carrying value of the financial asset immediately prior to thetransfer is allocated between the part derecognized and the part not derecognized in proportion to their relative fair value at thedate of transfer, and the difference between (i) the carrying value of the part derecognized; and (ii) the sum of the considerationreceived from the transfer of the part derecognized and the portion of the cumulative amount of changes in fair value directlyrecorded as other comprehensive income originally that corresponds to the part derecognized (where the financial asset transferredis an investment in debt instruments at fair value through other comprehensive income) is recognized in profit or loss.
4. Determination of fair value of financial assets and financial liabilities
The Company adopts the valuation techniques applicable to the current situations and with sufficient data available and support ofother information, to determine the fair value of financial assets and financial liabilities. The Company classifies the inputs used bythe valuation techniques in the following levels and uses them in turn:
(1) Level 1 inputs: quoted market price (unadjusted) in an active market for an identical asset or liability available at the date ofmeasurement;
(2) Level 2 inputs: inputs other than inputs included within Level 1 that are observable directly or indirectly. This categoryincludes quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities ininactive markets, observable inputs other than quoted prices (such as interest rate and yield curves observable during regularintervals of quotation), and inputs validated by the market;
(3) Level 3 inputs: inputs that are unobservable. This category includes interest rate or stock volatility that cannot be directlyobserved or validated by observable market data, future cash flows from retirement obligations incurred in business combinations,and financial forecasts made using own data.
5. Impairment of financial instruments
The Company determines the impairment and assesses allowance for impairment of financial assets at amortized cost, investmentsin debt instruments at fair value through other comprehensive income, contract assets, lease payments receivable, loancommitments other than financial liabilities designated at fair value through profit or loss, and financial guarantee contracts otherthan financial liabilities designated at fair value through profit or loss and financial liabilities arising as a result of the transfer offinancial assets not meeting the criteria for derecognition or continuing involvement in the financial assets transferred, on the basisof expected credit losses.Expected credit loss is the weighted average of credit losses on financial instruments taking into account the possibility of default.Credit loss is the present value of the difference between all contractual cash flows receivable under the contract and estimatedfuture cash flows discounted at the original effective interest rate, i.e. the present value of all cash shortages, where the Company’spurchased or originated financial assets that have become credit impaired are discounted at their credit-adjusted effective interestrate.With respect to purchased or originated financial assets that have become credit impaired, at the balance sheet date, the Companyrecognizes an impairment loss equal to the cumulative amount of changes in lifetime expected credit losses since initialrecognition.With respect to lease payments receivable, accounts receivable arising from transactions within the meaning of CASBE 14“Revenue”, the Company uses the simplified measurement method and recognizes an impairment loss equal to the lifetimeexpected credit losses.With respect to financial assets not using the measurement methods stated above, at each balance sheet date, the Company assesseswhether the credit risk has increased significantly since initial recognition, and recognizes an impairment loss equal to the lifetimeexpected credit losses if the credit risk has increased significantly since initial recognition, or to the expected credit losses withinthe next 12 months if the credit risk has not increased significantly since initial recognition.The Company uses reasonable and supportable information, including forward-looking information, and compares the possibilityof default at the balance sheet date with the possibility of default upon initial recognition, to determine whether the credit risk ofthe financial instruments has increased significantly since initial recognition.At the balance sheet date, if the Company determines that a financial instrument has low credit risk, the Company assumes that itscredit risk has not increased significantly since initial recognition.The Company assesses expected credit risk and measures expected credit losses of financial instruments individually orcollectively. When assessing the financial instruments collectively, the Company includes the financial instruments in differentgroups according to their common risk characteristics.At each balance sheet date, the Company re-assesses the expected credit losses, with the amount of increase in or reversal ofimpairment loss recognized in profit or loss as impairment losses or gains. With respect to a financial asset at amortized cost, itscarrying value recorded in the balance sheet is written off against the impairment loss. With respect to an investment in debtinstruments at fair value through other comprehensive income, the Company recognizes the impairment loss in othercomprehensive income, without reducing its carrying value.
6. Offsetting of financial assets and financial liabilities
Financial assets and financial liabilities are offset and presented on a net basis in the balance sheet only if: (i) the Company has acurrently enforceable legal right to offset the recognized amounts; and (ii) the Company has an intention to settle on a net basis, or
realize the assets and settle the liabilities simultaneously. Except as stated above, financial assets and financial liabilities arepresented in the balance sheet separately, without offsetting each other.With respect to the transfer of financial assets not meeting the criteria for derecognition, the Company does not offset the financialassets transferred against the relevant liabilities.(XII). Determination and recognition of expected credit losses on accounts receivable
1. Accounts receivable for which the allowance for expected credit losses is recognized collectively according to credit riskcharacteristics
| Group type | Basis for grouping | Method for measuring expected credit losses |
| Banker’s acceptance bills receivable | Type of bills | By reference to historical credit loss experience, and taking into account the current situations and prediction of future economic conditions, calculate the expected credit losses according to the default risk exposure and rate of lifetime expected credit loss. |
| Commercial acceptance bills receivable | ||
| Accounts receivable – aging group | Age | By reference to historical credit loss experience, and taking into account the current situations and prediction of future economic conditions, prepare a comparison table of the age of accounts receivable and rate of lifetime expected credit loss, and calculate the expected credit losses. |
| Other receivables – aging group | Age | By reference to historical credit loss experience, and taking into account the current situations and prediction of future economic conditions, prepare a comparison table of the age of other receivables and rate of lifetime expected credit loss, and calculate the expected credit losses. |
| Long-term receivables – group of security deposits | Nature of accounts | By reference to historical credit loss experience, and taking into account the current situations and prediction of future economic conditions, calculate the expected credit losses according to the default risk exposure and rate of lifetime expected credit loss. |
(2) Comparison table of the age and rate of expected credit loss
| Age | Rate of expected credit loss on accounts receivable (%) | Rate of expected credit loss on other accounts receivable (%) |
| Within 6 months (inclusive, the same below) | 0.5 | 5 |
| 7-12 months | 5 | 5 |
| 1-2 years | 20 | 10 |
| 2-3 years | 60 | 50 |
| Over 3 years | 100 | 100 |
The age of an account receivable, other account receivable or commercial acceptance bill receivable is calculated from the monthit actually occurred.
3. Determination of accounts receivable for which the allowance for expected credit losses is recognized individuallyWith respect to the accounts receivable whose credit risk is significantly different from that of the relevant group, an allowance forexpected credit losses is recognized individually.
12. Notes receivable
See Note 11 “Financial instruments”.
13. Accounts receivable
See Note 11 “Financial instruments”.
14. Accounts receivable
See Note 11 “Financial instruments”.
15. Other receivables
See Note 11 “Financial instruments”.
16. Contract assets
Contract assets or contract liabilities are presented in the balance sheet according to the relationship between the relevantperformance obligations and payment by the customer. Contract assets and contract liabilities under the same contract arepresented on a net basis.The right of the Company to payment that is unconditional, except for the passage of time, is presented as an account receivable.The right of the Company to payment for goods already transferred to a customer is presented as a contract asset if that right topayment is conditional on something other than the passage of time.The Company’s obligation to transfer goods to a customer in exchange for the consideration paid or payable by the customer ispresented as a contract liability.
17. Inventories
1. Classification of inventories
Inventories include finished products or goods held for sale in the ordinary course of business, work in progress and materials andgoods consumed in the process of production or rendering of services.
2. Valuation of inventories dispatched
The value of inventories dispatched is determined using the weighted average method at the end of the month in which they weredispatched.
3. Inventory system
The perpetual inventory system is adopted.
5. Amortization of low-value consumables and packing materials
(1) Low-value consumables
Low-value consumables are amortized using the immediate write-off method.
(2) Packing materials
Packing materials are amortized using the immediate write-off method.
5. Inventory provision
At the balance sheet date, inventories are measured at the lower of cost and net realizable value. An amount equal to the cost of aninventory in excess of its net realizable value is recognized as an inventory provision. The net realizable value of inventories helddirectly for sale is the estimated selling price of such inventories less the estimated selling expenses and related taxes in theordinary course of business. The net realizable value of inventories to be further processed is the estimated selling price of finishedgoods less the estimated cost of completion, estimated selling expenses and related taxes in the ordinary course of business. At thebalance sheet date, if part of an inventory has a contract price while the remaining part thereof does not have a contract price, the
net realizable value is determined separately, which is compared with their cost, to determine the amount of the inventoryprovision recognized or reversed (as applicable).
18. Assets held for sale
None.
19. Debt investments
See Note 11 “Financial instruments”.
20. Other debt investments
See Note 11 “Financial instruments”.
21. Long-term receivable
None.
22. Long-term equity investments
1. Determination of joint control and significant influence
Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevantactivities require unanimous consent of the parties sharing control. Significant influence is the power to participate in the financialand operating policy-making of an entity, but is not control or joint control over those policies.
2. Determination of investment cost
(1) For an equity investment acquired through a business combination involving entities under common control, if the acquirerpays consideration for the business combination by cash, transfer of non-monetary assets, assumption of liabilities or issuance ofequity securities, the initial investment cost of the long-term equity investment is the Company’s share of the carrying value of theowners’ equity of the acquiree in the consolidated financial statements of the ultimate controller at the combination date. Thedifference between: (i) the initial investment cost of the long-term equity investment; and (ii) the carrying value of theconsideration paid for the combination or the total par value of the shares issued (as applicable) is treated as an adjustment to thecapital reserve. In case the capital reserve is not sufficient to absorb the difference, the remaining balance is charged against theretained earnings.If a business combination is effected through multiple transactions by steps that constitute a package deal, the Company accountsfor such transactions as one deal to gain control. If such transactions do not constitute a package deal, the initial investment cost isthe Company’s share of the carrying value of the owners’ equity of the acquiree in the consolidated financial statements of theultimate controller at the combination date; and the difference between: (i) the initial investment cost of the long-term equityinvestment at the combination date; and (ii) the sum of the carrying value of long-term equity investment before the combinationand the carrying value of the consideration paid for acquisition of the additional shares at the combination date is treated as anadjustment to the capital reserve. In case the capital reserve is not sufficient to absorb the difference, the remaining balance ischarged against the retained earnings.
(2) For an equity investment acquired through a business combination involving entities not under common control, the initialinvestment cost is the fair value of the aggregate consideration paid at the date of acquisition.
With respect to a long-term equity investment acquired through a business combination involving entities under common controlthat is effected through multiple transactions by steps, the accounting thereof in the standalone financial statements is differentfrom that in the consolidated financial statements as stated below:
1) In the standalone financial statements, the sum of the carrying value of the equity investment originally held in the acquiree andthe additional investment cost incurred is recorded as the initial investment cost of the equity investment changed into the costmethod.
2) In the consolidated financial statements, if the transactions constitute a package deal, the Company accounts for suchtransactions as one deal to gain control. If such transactions do not constitute a package deal, the equity held in the acquiree priorto the acquisition date is remeasured at its fair value at the acquisition date, with the difference between its fair value and carryingvalue recognized as an investment income for the current period; if the equity held in the acquiree prior to the acquisition dateinvolves other comprehensive income under the equity method, such other comprehensive income is transferred to the income forthe period in which the acquisition date falls, except for other comprehensive income arising from remeasurement of changes innet liabilities or net assets of defined benefit plans.
(3) For an equity investment not acquired through business combination, the initial investment cost is the purchase price actuallypaid if it is acquired by cash, or the fair value of the equity securities issued if it is acquired through issuance of equity securities,or in accordance with CASBE 12 “Debt Restructuring” if it is acquired through debt restructuring, or CASBE 7 “Exchange ofNon-monetary Assets” if it is acquired through exchange of non-monetary assets.
3. Subsequent measurement and recognition of profit or loss
Long-term equity investments in investees over which the Company exercises control are accounted for using the cost method.Long-term equity investments in associates and joint ventures are accounted for using the equity method.
4. Disposal of investment in a subsidiary through multiple transactions by steps until loss of control over the subsidiary
(1) Criteria for determining a package deal
Where the Company loses control over a subsidiary due to the disposal of equity investment in the subsidiary through multipletransactions by steps, the Company determines whether such transactions constitute a package deal taking into account thetransaction contract terms, consideration received, the transferee of the equity sold, method of disposal, time of disposal and otherinformation in respect of each step.If the terms, conditions and financial effect of such transactions fall under one or more of the circumstances set forth below, suchtransactions are accounted for as a package deal generally:
1) such transactions are concluded simultaneously or in consideration of their mutual effect;
2) such transactions will achieve a complete business result only as a whole;
3) the occurrence of a transaction depends on the occurrence of at least another transaction; and/or
4) a transaction may be uneconomical when considered individually, but is economical when considered together with othertransactions.
(2) Accounting treatment of transactions not constituting a package deal
1) Standalone financial statements
The difference between the carrying value of the equity disposed of and the disposal proceeds actually received is recognized inprofit or loss. If the remaining equity empowers the Company to exercise significant influence or joint control over the investee,the remaining equity is accounted for using the equity method; if the remaining equity does not empower the Company to exercisecontrol, joint control or significant influence over the investee, the remaining equity is accounted for in accordance with CASBE
22 “Recognition and Measurement of Financial Instruments”.
2) Consolidated financial statements
Before the loss of control, the difference between the disposal proceeds and the Company’s share of the net assets of the subsidiarycorresponding to the long-term equity investment disposed of as calculated continuously from the acquisition date or combinationdate is treated as an adjustment to the capital reserve (capital premium). In case the capital premium is not sufficient to absorb thedifference, the remaining balance is charged against the retained earnings.Upon loss of control, the remaining equity is remeasured at its fair value at the date of loss of control. The sum of theconsideration received from the disposal of the equity and the fair value of the remaining equity, net of the Company’s share of thenet assets of the subsidiary as calculated continuously from the acquisition date according to the original shareholding ratio, isincluded in the investment income for the period during which the control was lost, and charged against goodwill. Othercomprehensive income related to the equity investment in the subsidiary is transferred to the investment income for the periodduring which the control was lost.
(3) Accounting treatment of transactions constituting a package deal
1) Standalone financial statements
The Company accounts for such transactions as one deal to dispose of and lose control over the subsidiary; however, in thestandalone financial statements, the difference between the proceeds from each disposal before loss of control and the carryingvalue of the long-term equity investment corresponding to the equity disposed of is recognized in other comprehensive income,which is wholly transferred to profit or loss in the period during which the control was lost.
2) Consolidated financial statements
The Company accounts for such transactions as one deal to dispose of and lose control over the subsidiary; however, in theconsolidated financial statements, the difference between the proceeds from each disposal before loss of control and theCompany’s share of the net assets of the subsidiary corresponding to the equity disposed of is recognized in other comprehensiveincome, which is wholly transferred to profit or loss in the period during which the control was lost.
23. Investment property
Measurement model for investment propertyMeasured at costMethod of depreciation or amortization
1. Investment properties include land use rights leased out or held for appreciation and buildings and structures leased out.
2. An investment property is measured initially at cost, and subsequently using the cost model, and depreciated or amortized usingthe same method as fixed assets and intangible assets.
24. Fixed assets
(1) Criteria for recognition
Fixed assets are tangible assets held for the production of goods, rendering of service, lease or operation and management with auseful life of more than one accounting year. A fixed asset is recognized if the economic benefits relating to it are very likely toflow to the Company and its cost can be reliably measured.
(2) Depreciation
| Category | Method of depreciation | Estimated useful life (years) | Rate of residual value (%) | Annual rate of depreciation |
| Buildings and structures | Straight line method | 20-30 | 5% | 3.17%-4.75% |
| Machinery and equipment | Straight line method | 5-10 | 5% | 9.50%-19.00% |
| Transportation equipment | Straight line method | 5 | 5% | 19.00% |
| Office equipment and others | Straight line method | 5 | 5% | 19.00% |
25. Construction in progress
(1) A construction in progress is recognized if the economic benefits relating to it are very likely to flow to the Company and itscost can be reliably measured. Construction in progress is measured at the actual cost incurred before it is completed and ready forthe intended use.
(2) When a construction in progress is ready for intended use, it is transferred to fixed assets at its actual construction cost. Aconstruction in progress that is ready for intended use but the final settlement of which has not yet been completed is transferred tofixed assets at estimated value first, and after the completion of the final settlement, the estimated value is adjusted according tothe actual cost, without adjusting the accumulated depreciation.
| Category | Criteria and time for transfer of construction in progress to fixed assets |
| Machinery and equipment | Meet the design requirements or agreed standards after installation and commissioning |
| Buildings and structures | Meet the building completion acceptance criteria |
26. Borrowing costs
1. Recognition of capitalization of borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized aspart of the cost of the asset when they meet the condition for capitalization. Other borrowing costs are expensed when they areincurred and recognized in profit or loss.
2. Period of capitalization of borrowing costs
(1) A borrowing cost is capitalized when all of the following conditions are satisfied: (i) the expenditures on the asset have alreadybeen incurred; (ii) the borrowing cost has already been incurred; and (iii) the acquisition, construction or production activitiesnecessary to prepare the asset for its intended use or sale have already commenced.
(2) Capitalization of borrowing costs is suspended during the period of abnormal interruption of acquisition, construction orproduction of a qualifying asset which lasts for more than three consecutive months. The borrowing costs incurred during theperiod of suspension are recognized as expenses for the current period. The capitalization of borrowing costs is suspended until theresumption of acquisition, construction or production activities.
(3) Capitalization of borrowing costs ceases when a qualifying asset acquired, constructed or produced gets ready for its intendeduse or sale.
3. Rate and amount of capitalization of borrowing costs
For borrowings obtained specially for the acquisition, construction or production of a qualifying asset, the amount of capitalizationof the borrowing costs is the cost of the borrowings actually incurred in the current period (including amortized discount orpremium determined using the effective interest method) less the interest income from the part of borrowings that has not yet beenutilized and is deposited in banks or investment income from temporary investment of the borrowings. For general borrowings
occupied for the acquisition, construction or production of a qualifying asset, the amount of borrowing costs eligible forcapitalization is determined by multiplying the weighted average of the excess of cumulative expenditures on the asset over thespecial-purpose borrowings by the capitalization rate of the general borrowings occupied.
27. Biological assets
None.
28. Oil and gas assets
None.
29. Intangible assets
(1) Useful life and basis for determination of useful life, estimates, method of amortization or review procedure
1. Intangible assets, including land use right, patents, non-patent technologies, etc., are initially measured at cost.
2. An intangible asset with a finite useful life is amortized in a systematic and reasonable manner according to the pattern in whichthe economic benefits related to the intangible asset are expected to be realized, or if that pattern cannot be determined reliably,using the straight line method as follows:
| Item | Useful life and basis for determination of useful life (years) | Method of amortization |
| Land use right | 50 | Straight line method |
| Development expenses | 5 | Straight line method |
| Software | 3 | Straight line method |
| Trademarks and patents | 10 | Straight line method |
| Customer resources | 10 | Straight line method |
(2) Intangible asset with indefinite useful life is not amortized, but its useful life is reviewed annually.
(3) Scope and accounting treatment of research and development (R&D) expensesScope of R&D expenses
(1) Labor costs
Labor costs comprise the wages, salaries, basic pension insurance, basic medical insurance, unemployment, worker’scompensation insurance, maternity insurance and housing provident fund contributions paid to or for the R&D personnel, andservice fees of the outsourced R&D personnel.With respect to the R&D personnel serving a number of R&D projects concurrently, their labor costs are allocated to the relevantR&D projects on a pro-rata basis according to the record of working hours spent by them in such R&D projects as provided by theadministrative department.With respect to the Company’s own R&D personnel and outsourced R&D personnel who are directly engaged in R&D activitiesand also engaged in non-R&D activities, their labor costs actually incurred are allocated between R&D expenses and productionand business expenses on a pro-rata basis in proportion to the percentage of working hours spent by them on different posts asrecorded, or otherwise reasonably.
(2) Direct costs
Direct costs refer to the costs actually incurred by the Company in connection with R&D activities, including (i) costs of materials,fuels and powers directly consumed; (ii) costs of development and fabrication of molds and process equipment used in pilot trialsand trial production, purchasing costs of samples, prototypes and general testing methods not classified as fixed assets, andinspection costs of trial produces; and (iii) operation, maintenance, calibration, inspection, testing, repair and other costs ofinstruments and equipment used in R&D activities.
(3) Depreciation expenses and long-term deferred expenses
Depreciation expenses refer to the depreciation expenses of instruments, equipment and buildings used in R&D activities.With respect to the instruments, equipment and buildings used in both R&D activities and non-R&D activities, the depreciationexpenses actually incurred are allocated between R&D expenses and production and business expenses according to the actualworking hours and area used as recorded, or otherwise reasonably.Long-term deferred expenses refer to the long-term deferred expenses incurred in the alteration, modification, renovation andrepair of R&D facilities, which are recorded according to the amounts actually spent, and amortized on a straight line basis overthe defined period.
(4) Amortization expenses of intangible assets
Amortization expenses of intangible assets refer to the amortization expenses of software, intellectual properties, and non-patentedtechnologies (know-how, licenses, designs, computing methods, etc.) used in R&D activities.
(5) Design costs
Design costs refer to the costs incurred in the design of processes, technical specifications, rules of operation and operatingfeatures in connection with the concept, development and manufacturing of new products and new processes, including the costsof creative design activities conducted for the purpose of developing innovative, creative and breakthrough products.
(6) Equipment commissioning costs and testing costs
Equipment commissioning costs refer to the costs incurred during the equipment preparation phase of R&D activities, includingthe costs of developing special-purpose production machines, changing production and quality control procedures, developing newapproaches and standards, etc.The costs incurred for general equipment preparation and industrial engineering in connection with large-scale mass andcommercial production are excluded from the scope of aggregation.Testing costs include clinical trial costs for the development of new drugs, field trial costs for exploration and developmenttechnologies, field experiment costs, etc.
(7) Outsourced R&D expenses
Outsourced R&D expenses refer to the expenses of R&D activities that the Company engages external entities or individuals athome or abroad to conduct, provided that the results of such R&D activities will be owned by the Company and such R&Dactivities are closely related to the primary business of the Company.
(8) Other expenses
Other expenses refer to the expenses that are not set forth above and directly related to R&D activities, including the expenses oftechnical documents and data, translation, advisors and consultants, high and new technology R&D insurance, retrieval,verification, evaluation, appraisal and acceptance inspection of R&D achievements, application, registration and agency service inrespect of intellectual properties, meetings, travel, communication, etc.
4. Expenditures on an internal R&D project at the research phase are recognized in profit or loss in the period in which they areincurred. Expenditures on an internal R&D project at the development phase are recognized as an intangible asset if: (i) it is
technically feasible to complete the intangible asset so that it will be available for use of sale; (ii) it is intended to complete theintangible asset so that it will be available for use of sale; (iii) the pattern in which the intangible asset will generate economicresults can demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself, or if it is to beused internally, the usefulness of the intangible asset; (iv) there are sufficient technical, financial and other resources available tocomplete the development activities and to use or sell the intangible asset; and (v) the expenditures attributable to the developmentof the intangible asset can be reliably measured.
30. Impairment of long-term assets
With respect to long-term equity investments, investment properties at cost, fixed assets, construction in progress, productivebiological assets at cost, oil and gas assets, right-of-use assets, intangible assets with a finite useful life and other long-term assets,if there’s an indication of impairment at the balance sheet date, the Company assesses their recoverable amount. Goodwill arisingfrom business combinations and intangible assets with an infinite useful life are tested for impairment every year regardless ofwhether there’s an indication of impairment. Goodwill is tested for impairment together with the relevant groups of assets orcombinations of groups of assets.If the recoverable amount of a long-term asset is less than its carrying value, the difference is measured as impairment loss on theasset and recognized in profit or loss.
31. Long-term deferred expenses
Long-term deferred expenses are expenses that have already been incurred but should be amortized over a period of more than oneyear. Long-term deferred expenses are stated as the amount actually incurred, and equally amortized over the benefit period orestablished period. If an item of long-term deferred expenses will not benefit the subsequent periods, the remaining unamortizedbalance of the item is wholly transferred to profit or loss.
32. Contract liabilities
Contract assets or contract liabilities are presented in the balance sheet according to the relationship between the relevantperformance obligations and payment by the customer. Contract assets and contract liabilities under the same contract arepresented on a net basis.The Company’s obligation to transfer goods to a customer in exchange for the consideration paid or payable by the customer ispresented as a contract liability.
33. Employee benefits
(1) Accounting treatment of short-term employee benefits
The short-term employee benefits actually incurred are recognized as liabilities in the accounting period during which employeeservices are rendered, and included in profit or loss or the cost of related assets.
(2) Accounting treatment of post-employment benefits
Post-employment benefits are classified as defined contribution plans and defined benefit plans.
(1) In the accounting period during which employee services are rendered, the amount contributable as calculated according to the
defined contribution plan is recognized as liabilities and included in profit or loss or the costs of related assets.
(2) The accounting treatment of a defined benefit plan generally involves the following steps:
1) According to the projected unit credit method, use unbiased and consistent actuarial assumptions to estimate demographicvariables and financial variables, measure the obligation arising from the defined benefit plan and determine the period to whichthe relevant obligation belongs. Meanwhile, discount the obligation arising from the defined benefit plan, in order to determine thepresent value of the benefit plan obligation and the current service cost;
2) If the defined benefit plan has assets, the deficit or surplus resulting after reducing the present value of the defined benefitobligation by the fair value of the defined benefit plan is recognized as a net liability or asset of the defined benefit plan. If thedefined benefit plan has a surplus, the net assets of the defined benefit plan are measured at the lower of surplus in the definedbenefit plan and asset ceiling;
3) At the end of the current period, the cost of employee benefits arising from the defined benefit plan is recorded as service cost,net interest on the net liabilities or net assets of the defined benefit plan, and changes arising from remeasurement of the netliabilities or net assets of the defined benefit plan, where the service cost and the net interest on the net liabilities or net assets ofthe defined benefit plan are included in profit or loss or the cost of related assets, and the changes arising from remeasurement ofthe net liabilities or net assets of the defined benefit plan are included in other comprehensive income, which will not be reversedto profit or loss in subsequent periods, but may be transferred within the scope of equity.
(3) Accounting treatment of termination benefits
When the Company can no longer withdraw the offer of termination benefits as a result of termination of employment orredundancy, or recognizes the restructuring costs or expenses relating to payment of termination benefits, whichever the earlier, theemployee benefit liabilities arising from recognition of termination benefits are recognized in profit or loss.
(4) Accounting treatment of other long-term employee benefits
Other long-term employee benefits are accounted for in accordance with the provisions applicable to defined contribution plans ifthey are qualified as defined contribution plans, otherwise, are accounted for in accordance with the provisions applicable todefined benefit plans. In order to simplify the accounting, the total net amount of the cost of employee benefits arising from thedefined benefit plans that is recorded as service cost, net interest on the net liabilities or net assets of the defined benefit plan,changes arising from remeasurement of the net liabilities or net assets of the defined benefit plan and other components is includedin profit or loss or the cost of related assets.
34. Provisions
1. Provisions are recognized when the Company has a present obligation as a result of any external guarantee, litigations, productquality warranty, onerous contract or other contingencies, and it is probable that an outflow of resources embodying economicbenefits will be required to settle the obligation, and the amount of the obligation can be reliably measured.
2. Provisions are initially measured according to the best estimates of the expenditures required to settle the related presentobligations. The carrying value of provisions is reviewed at the balance sheet date.
35. Share-based payments
1. Types of share-based payments
Share-based payments include equity-settled share-based payment and cash-settled share-based payment.
2. Accounting treatment of implementation, amendment and termination of share-based payment plans
(1) Equity-settled share-based payment
With respect to an equity-settled share-based payment that is granted in exchange for the services of employees, if the right can beimmediately exercised after the grant, at the date of the grant, the fair value of the equity instruments is included in the relevantcosts or expenses, and the capital reserve is adjusted accordingly; if the right may not be exercised until the vesting period comesto an end or until the specified performance conditions are met, at each balance sheet date within the vesting period, the servicesreceived in the current period are, based on the best estimate of the exercisable equity, included in the relevant costs or expenses atthe fair value of the equity instruments at the date of grant, and the capital reserve is adjusted accordingly.An equity-settled share-based payment that is granted in exchange for the services of any other party is measured at fair value atthe date of receipt of such services if the fair value of such services can be reliably measured, or at the fair value of the equityinstruments at the date of receipt of such services if the fair value of such services cannot be reliably measured but the fair value ofthe equity instruments can be reliably measured. The services are included in the relevant costs or expenses, and the owners’ equityis increased accordingly.
(2) Cash-settled share-based payment
With respect to a cash-settled share-based payment that is granted in exchange for the services of employees, if the right can beimmediately exercised after the grant, at the date of grant, the fair value of the liability undertaken by the Company is included inthe relevant costs or expenses, and the liabilities are increased accordingly; if the right may not be exercised until the vestingperiod comes to an end or until the specified performance conditions are met, at each balance sheet date within the vesting period,the services received in the current period are, based on the best estimate about the exercisable right, included in the relevant costsor expenses and the corresponding liabilities at the fair value of the liability undertaken by the Company.
(3) Amendment and termination of share-based payment plans
If such amendment results in an increase in the fair value of the equity instruments granted, the Company recognizes acorresponding increase in the services received according to the increase in the fair value of the equity instruments. If suchamendment results in an increase in the number of the equity instruments granted, the Company recognizes a correspondingincrease in the services received according to the fair value of the additional equity instruments granted. If the Company amendsthe vesting conditions in a manner favorable to the employees, the Company will take into account the vesting conditions asamended in the accounting thereof.If such amendment results in a decrease in the fair value of the equity instruments granted, the Company continues to recognizethe services received based on the fair value of the equity instruments at the date of grant, without taking into account the decreasein the fair value of the equity instruments. If such amendment results in a decrease in the number of the equity instruments granted,the portion of the equity instruments reduced is deemed canceled. If the Company amends the vesting conditions in a mannerunfavorable to the employees, the Company will not take into account the vesting conditions as amended in the accountingthereof.If, during the vesting period, the Company cancels or settles any equity instruments granted (except for those canceled due tofailure to satisfy the vesting conditions), such cancellation or settlement is treated as an acceleration of vesting, and the amountthat would have been recognized in the remaining vesting period is recognized immediately.
36. Preferred shares, perpetual bonds and other financial instruments
None.
37. Revenue
Accounting policies for recognition and measurement of revenue disclosed by business type
1. Revenue recognition principle
At contract commencement, the Company assesses a contract to identify each single performance obligation included in thecontract and whether such performance obligation shall be satisfied over time or at a point in time.A performance obligation shall be satisfied over time if it meets one of the following conditions, otherwise, it shall be satisfied at apoint in time: (i) the customer simultaneously receives and consumes the benefits provided by the Company’s performance; (ii) thecustomer can control the work in process created during the Company’s performance; or (iii) the Company’s performance does notcreate the goods with an alternative use to the Company and the Company has an enforceable right to payment for performancecompleted to date.With respect to a performance obligation satisfied over time, the Company recognizes revenue over time by measuring theprogress toward complete satisfaction of that performance obligation. If the Company is unable to reasonably measure the progressof a performance obligation, but expects to recover the costs incurred in satisfying the performance obligation, the Companyrecognizes revenue only to the extent of the costs incurred until such time that it can reasonably measure the progress of theperformance obligation. With respect to a performance obligation satisfied at a point in time, the Company recognizes revenuewhen the customer obtains control of the relevant goods or services. In determining whether the customer has obtained control ofany goods, the Company considers the following indicators: (i) the Company has a present right to payment for the goods, i.e. thecustomer presently is obliged to pay for the goods; (ii) the Company has transferred the legal title to the goods to the customer, i.e.the customer has the legal title to the goods; (iii) the Company has transferred physical possession of the goods to the customer,i.e. the customer physically possesses the goods; (iv) the Company has passed the significant risks and rewards of ownership of thegoods to the customer, i.e. the customer has the significant risks and rewards of ownership of the goods; (v) the customer hasaccepted the goods; and (vi) other indicators showing that the customer has obtained control of the goods.
2. Revenue measurement principle
(1) The Company measures revenue according to the transaction price allocated to each performance obligation. Transaction priceis the amount of consideration to which the Company expects to be entitled in exchange for transferring the relevant goods orservices to a customer, excluding the amounts collected on behalf of third parties or expected to be returned to the customer.
(2) If a contract has any variable consideration, the Company determines the best estimate of the variable consideration accordingto the expected value or the most likely amount, but the Company shall include in the transaction price some or all of an amount ofvariable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenuerecognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.
(3) If a contract contains a significant financing component, the Company determines the transaction price according to theamount that the customer would have paid for the goods or services if it had paid cash when it obtained control of the goods orservices. The difference between such transaction price and the contract consideration is amortized over the term of the contractusing the effective interest method.
(4) If a contract includes two or more performance obligations, at contract commencement, the Company allocates the transactionprice to each performance obligation on a relative standalone selling price basis.
3. Methods of revenue recognition
The Company is primarily engaged in the sale of PCBs, LED display devices, touch panels and LCMs, precision components andother products, the revenues from which constitute performance obligations to be satisfied at a point in time. Revenue from sale ofproducts on the domestic market is recognized when the Company has delivered the products to the agreed place of delivery which
has been accepted by the customer, has received or has a present right to payment for the products, and it is probable that theeconomic benefits associated with the transaction will flow to the Company. Revenue from sale of products on the overseas marketis recognized when the products delivered by the Company pursuant to the contract have been cleared through customs, and theCompany has received the relevant export declaration form and bill of lading, has received or has a present right to payment forthe products, and it is probable that the economic benefits associated with the transaction will flow to the Company.Different methods of revenue recognition and measurement for the same business type that adopts different business models.
38. Contract costs
Contract acquisition costs, i.e. the incremental cost of acquiring a contract, are recognized as an asset if they are expected to berecovered, and if the amortization period is no more than one year, are directly recorded in profit or loss in the period in whichthey are incurred.Contract performance costs, i.e. the costs of fulfilling a contract, are recognized as an asset if they are not addressed by thestandards on inventories, fixed assets and intangible assets and meet all of the following conditions:
1. the costs relate directly to a contract or to an anticipated contract, including direct labor, direct material, manufacturing costs (orsimilar costs), costs that are explicitly chargeable to the relevant customer under the contract and other costs incurred solely inconnection with the contract;
2. the costs enhance the resources of the Company that will be used in satisfying the performance obligations in the future; and
3. the costs are expected to be recovered.
The assets related to contract costs are amortized on the same basis as the recognition of revenues from goods or services related tosuch assets, and recognized in profit or loss.The portion of the carrying value of an asset related to contract costs in excess of the remaining consideration receivable from thetransfer of goods or services related to such asset less the estimated costs that are expected to be incurred is recognized as animpairment loss. If, as a result of changes in the factors of impairment in the previous periods, the remaining considerationreceivable from the transfer of goods or service related to such asset less the estimated costs that are expected to be incurredexceeds the carrying value of such asset, the impairment loss is reversed through profit or loss, provided that the carrying value ofthe reversed asset shall not exceed its carrying value at the reversal date assuming such impairment loss were not recognized.
39. Government grants
1. Government grants are recognized if (i) the Company meets the conditions attached to the government grants; and (ii) theCompany will receive the government grants. Government grants in the form of monetary assets are measured at the amountreceived or receivable. Government grants in the form of non-monetary assets are measured at fair value, or if their fair value isunavailable, at a nominal amount.
2. Determination and accounting treatment of government grants related to assets
Government grants related to assets are government grants which are offered for purchasing, constructing or otherwise acquiringlong-term assets as provided by the applicable government documents, or in the absence of such express provision in theapplicable government documents, whose primary condition is that the Company should purchase, construct or otherwise acquirelong-term assets. Government grants related to assets are offset against the carrying value of the relevant assets or recognized asdeferred income. Government grants related to assets recognized as deferred income are included in profit or loss over the servicelife of the relevant assets on a reasonable and systemic basis. Government grants measured at nominal amount are directlyrecognized in profit or loss. In case of a sale, transfer, retirement or damage of the relevant assets before the end of the intended
service life, the balance of the unallocated deferred income is transferred to profit or loss for the period in which the assets aredisposed of.
3. Determination and accounting treatment of government grants related to income
Government grants related to income are government grants other than those related to assets. Government grants related to bothassets and income where it is difficult to make a distinction between the portion related to assets and the portion related to incomeare wholly classified as government grants related to income. Government grants related to income as compensation for expensesor losses to be incurred in subsequent periods are recognized as deferred income and in the period for recognizing the relevantcosts, expenses or losses, included in profit or loss or offset against the relevant costs. Government grants related to income ascompensation for expenses or losses already incurred are directly included in profit or loss or offset against the relevant costs.
4. Government grants related to day-to-day operations of the Company are recognized in other income or offset against therelevant costs and expenses depending on the nature of economic business. Government grants not related to day-to-day operationsof the Company are recognized in non-operating revenues or expenses.
5. Accounting treatment of policy loan interest subsidy
If the financial authority directly appropriates any interest subsidy to the Company, the interest subsidy is recognized as areduction in the borrowing cost.
40. Deferred tax assets and deferred tax liabilities
1. The difference between the tax base of an asset or liability and its carrying value, or in case of an item not recognized as an assetor liability whose tax base can be determined according to the applicable tax law, the difference between its tax base and carryingvalue, is recognized as a deferred tax asset or deferred tax liability according to the tax rate applicable to the period in which theasset or liability is expected to be recovered or settled.
2. Deferred tax assets are recognized to the extent of the amount of income tax payable that will be available in future periodsagainst which deductible temporary differences are deductible. At the balance sheet date, deferred tax assets not recognized inprevious periods are recognized if there’s conclusive evidence that it is probable that sufficient taxable income will be available infuture periods against which the deductible temporary differences are deductible.
3. At the balance sheet date, the carrying value of deferred tax assets is reviewed and written down to the extent that it is no longerprobable that sufficient taxable income will be available in future periods to allow the benefit of the deferred tax assets to beutilized. If it is probable that sufficient taxable income will be available, the amount of write-down is reversed.
4. The income taxes and deferred income taxes are included in profit or loss as income tax expenses or gains, except the incometaxes arising from any: (i) business combination; or (ii) transaction or event directly recognized in owners’ equity.
5. Deferred income tax assets and deferred income tax liabilities are offset and presented on a net basis if: (i) the Company has alegal right to settle current tax assets and current tax liabilities on a net basis; and (ii) the deferred tax assets and deferred taxliabilities relate to income taxes levied by the same tax authority on either the same taxable entity or different taxable entitieswhich intend either to settle current tax assets and current tax liabilities on a net basis or to realize the assets and liabilitiessimultaneously, in each future period in which significant amounts of deferred tax assets or liabilities are expected to be reversed.
41. Leases
(1) Accounting treatment of leases under which the Company is lessee
The Company as the lessee:
At the lease commencement date, a lease that has a lease term of 12 months or less and does not contain a purchase option is ashort-term lease. A lease of an asset with a low value when new is a lease of a low-value asset. Where the Company subleases orexpects to sublease a leased asset, the original lease is not classified as a lease of a low-value asset.Except short-term leases and leases of low-value assets, at the lease commencement date, the Company recognizes right-of-useassets and lease liabilities for the lease.
(1) Right-of-use assets
A right-of-use asset is a lessee’s right to use an asset over the life of a lease.At the lease commencement date, a right-of-use asset is initially measured at cost, which comprises: (i) the amount of the leaseliability initially measured; (ii) any lease payments made at or before the commencement date, less any lease incentives received;(iii) any initial direct costs incurred by the lessee; and (iv) estimated costs to be incurred by the lessee in dismantling and removingthe underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the termsand conditions of the lease.The Company depreciates the right-of-use assets using the straight-line method. If it is reasonable to be certain that the ownershipof an underlying asset can be acquired by the end of the lease term, the Company depreciates the right-of-use asset over itsremaining useful life. Otherwise, the Company depreciates the right-of-use asset over the shorter of the lease term and itsremaining useful life.
(2) Lease liabilities
At the lease commencement date, the Company measures a lease liability at the present value of the lease payments that have notbeen paid at that date. The present value of lease payments is determined using the interest rate implicit in the lease as the discountrate. If that rate cannot be readily determined, the lessee’s incremental borrowing rate is used. The difference between the leasepayments and their present value is unrecognized financing costs. Interest expenses are measured for each period within the leaseterm using the discount rate for determining the present value of lease payments, and recognized in profit or loss. Variable leasepayments not included in the measurement of lease liabilities are recognized in profit or loss in the period during which they areincurred.At the lease commencement date, if there are changes in the in-substance fixed lease payments, amounts expected to be payableunder residual value guarantee, the index or rate used to determine the lease payments, the result of an assessment of purchaseoption, renewal option or termination option or the actual exercise of such options, the Company re-measures the lease liabilitybased on the present value of lease payments as adjusted, and adjusts the carrying value of the right-of-use assets accordingly. Ifthe carrying value of the right-of-use asset is reduced to zero, but the lease liability needs to be further reduced, the balance isrecognized in profit or loss.
(2) Accounting treatment of leases under which the Company is lessor
The Company as the lessor:
At the lease commencement date, the Company classifies a lease that transfers substantially all the risks and rewards incidental toownership of an underlying asset to the lessee as a finance lease, and all other leases as operating leases.
(1) Operating lease
Lease receipts are recognized as lease income using the straight-line method over the lease term. Initial direct costs incurred arecapitalized, amortized on the same basis as the recognition of lease income, and recognized in profit or loss by installments.Variable lease payments related to the operating lease which are not included in the lease receipts are recognized in profit or loss inthe period during which they are incurred.
(2) Finance lease
At the lease commencement date, the Company recognizes the finance lease payments receivable based on the net investment inthe lease (equal to the sum of unguaranteed residual value and the present value of lease receipts that are not received at the leasecommencement date and discounted using the Company’s incremental interest rate), and derecognizes the assets held under thefinance lease. The Company calculates and recognizes interest income using the interest rate implicit in the lease over the leaseterm.Variable lease payments that are not included in the measurement of the net investment in a lease are recognized in profit or losswhen they are incurred.
42. Other Significant accounting policies and accounting estimates
1. Basis for the adoption of hedge accounting and its accounting treatment
(1) Cash flow hedge.
(2) A hedging relationship qualifies for hedge accounting if all of the following conditions are met: (i) the hedging relationshipconsists only of eligible hedging instruments and eligible hedged instruments; (ii) at the commencement of the hedge there isformal designation of hedging instruments and hedged item, and documentation of the hedging relationship and the Company’srisk management objective and strategy for undertaking the hedge; and (iii) the hedging relationship meets the hedgingeffectiveness requirements.The Company recognizes that the hedging relationship meets effectiveness requirements if all of the following conditions are met:
(i) there is an economic relationship between the hedged item and the hedging instruments; (ii) the effect of credit risk does notdominate the value changes that result from the economic relationship between the hedged item and the hedging instruments; and(iii) the hedge ratio of the hedging relationship is the same as the ratio of the quantity of the hedged item that the Companyactually hedges to the number of hedging instruments that the Company actually uses to hedge such hedged item, but does notreflect an imbalance between the weightings of the hedged item and the hedging instrument.The Company assesses whether a hedging relationship meets the hedge effectiveness requirements at commencement and on anongoing basis. If a hedging relationship ceases to meet the hedge effectiveness requirement relating to the hedge ratio but the riskmanagement objective for that designated hedging relationship remains the same, the hedging relationship will be rebalanced.
(3) Hedge accounting
1) Fair value hedge
① The gain or loss on a hedging instrument is recognized in profit or loss (or other comprehensive income, if the hedginginstrument hedges a non-trading equity instrument (or a component thereof) at fair value through other comprehensive income).
② The gain or loss on a hedged item arising from risk exposure is recognized in profit or loss, with a corresponding adjustment tothe book balance of the hedged item not measured at fair value. If the hedged item is a financial asset (or a component thereof) thatis measured at fair value through other comprehensive income in accordance with Article XVIII of CASBE 22 “FinancialInstruments: Recognition and Measurement”, the gain or loss arising from the risk exposure on the hedged item is recognized inprofit or loss, without adjusting its book balance which has already been measured at fair value; if the hedged item is a non-tradingequity instrument (or a component thereof) for which the Company has elected to present changes at fair value through othercomprehensive income, the gain or loss arising from the risk exposure on the hedged item is recognized in profit or loss, withoutadjusting its book balance which has already been measured at fair value.When a hedged item is an unrecognized firm commitment (or a component thereof), the cumulative change in fair value of thehedged item subsequent to its designation is recognized as an asset or a liability with a corresponding gain or loss recognized in
profit or loss. When a firm commitment is performed to acquire an asset or assume a liability, the initial book balance of the assetor the liability is adjusted to include the cumulative change in fair value of the hedged item that was previously recognized.For a hedged item that is a financial instrument (or a component thereof) measured at amortized cost, any adjustment on the bookbalance of the hedged item is amortized to profit or loss based on a recalculated effective interest rate at the date that amortizationbegins. For a financial asset (or a component thereof) that is a hedged item and measured at fair value through othercomprehensive income in accordance with Article XVIII of CASBE 22 “Financial Instruments: Recognition and Measurement”,the cumulative gain or loss previously recognized thereon is amortized in the same manner, and recognized in profit or loss,without adjusting its book balance.
2) Cash flow hedges
① The portion of the gain or loss on a hedging instrument that is determined to be an effective hedge is recognized in othercomprehensive income as cash flow hedge reserve, while the ineffective portion is recognized in profit or loss. The cash flowhedge reserve is recognized at the lower of the following (in absolute amount): (i) the cumulative gain or loss on the hedginginstrument from the commencement of the hedge; and (ii) the cumulative change in the present value of the estimated future cashflows of the hedged item from the commencement of the hedge.
② If a hedged forecast transaction subsequently results in the recognition of a non-financial asset or non-financial liability, or ahedged forecast transaction for a non-financial asset or non-financial liability becomes a firm commitment for which fair valuehedge accounting is applied, the Company transfers out the amount of cash flow hedge reserve previously recognized in othercomprehensive income, and includes it in the initial cost of the asset or the liability.
③ For other cash flow hedges, the amount of cash flow hedge reserve previously recognized in other comprehensive income istransferred to profit or loss in the same period the hedged forecast sale affects profit or loss.
3) Hedges of a net investment in a foreign operation
The portion of the gain or loss on a hedging instrument that is determined to be an effective hedge is recognized in othercomprehensive income, and reclassified from other comprehensive income into profit or loss on the disposal of the foreignoperation, while the ineffective portion is recognized in profit or loss.
2. Accounting treatment related to share repurchase
When the Company repurchases its shares for the purpose of reducing its registered capital, rewarding its employees or otherwise,if the purchased shares are to be held as treasury shares, the treasury shares are recorded at the amount actually paid and therelevant filing procedures are performed; if the repurchased shares are to be retired, the difference between the total book value ofthe shares retired and the amount actually paid therefore is recognized as a reduction in capital reserve, and if the capital reserve isnot sufficient to absorb the difference, the remaining balance is charged against the retained earnings. If the repurchased shares aregranted to the employees as equity-settled share-based payments, the purchase price paid by the employees upon exercise of theirrights is recognized as a reduction in the cost of the relevant treasury shares vested in the employees and capital reserve (othercapital reserve) accumulated within the vesting period, with a corresponding adjustment to capital reserve (share premium).
43. Significant changes in accounting policies and accounting estimates
(1) Significant changes in accounting policies
? Applicable □ N/A
In RMB
| Content and reason for changes in accounting policies | Financial statement items significantly affected | Amount affected |
| Since January 1, 2023, the Company has applied the provisions | The Proposal Regarding | See the table below |
| contained in the Interpretation of the Accounting Standards for Business Enterprises (“CASBE”) No. 16 issued by the Ministry of Finance, regarding the “accounting treatment of deferred taxes related to assets and liabilities arising from single transactions to which the initial recognition exemption does not apply”, and adjusted the single transactions to which such provisions apply that occurred during the period from the beginning of the earliest period in which the Company applied such provisions in the presentation of financial statements for the first time, till the date of initial application of such provisions as follows: with respect to the taxable temporary difference and deductible temporary differences arising from lease liabilities and right-of-use assets, provisions related to retirement obligations and corresponding assets recognized in connection with the single transactions to which such provisions apply, at the beginning of the earliest period in which the Company applied such provisions in the presentation of financial statements for the first time, the cumulative effect is treated as an adjustment to the opening retained earnings and other related financial statement items for that period in accordance with such provisions and the provisions of CASBE No. 18 “Income Tax”. | Changes in Accounting Policies was considered and adopted at the 9th meeting of the 6th Board of Directors and the 7th meeting of the 6th Board of Supervisors on April 16, 2024. This change in accounting policies is not subject to approval of the general meeting of shareholders. |
The table shows the specific adjustments:
| Financial statement items significantly affected | Amount affected (RMB) | Remark |
| Items of the balance sheet on December 31, 2022 | ||
| Deferred tax assets | 271,245,622.44 | |
| Deferred tax liabilities | 252,034,574.31 | |
| Minority interests | 9,657.23 | |
| Retained profits | 19,201,390.90 | |
| Items of the income statement for the year ended December 31, 2022 | ||
| Income tax expenses | -802,980.28 | |
| Profit or loss attributable to minority interests | -25,458.83 |
(2) Changes in significant accounting estimates
□ Applicable ? N/A
(3) Adjustment of the opening balance of related financial statement items due to the initial adoption of new accounting
standards since 2023? Applicable □N/AAdjustments:
See Note 43 (1) “Significant changes in accounting policies”.
44. Miscellaneous
(1) Sale and leaseback
1) The Company as lessee
In accordance with CASBE 14 “Revenue”, the Company assesses and determines whether the transfer of any asset in a sale andleaseback transaction should be accounted for as a sale of that asset.If the transfer of an asset is accounted for as a sale of the asset, the Company measures the right-of-use asset arising from theleaseback at the proportion of the original carrying value of the asset that relates to the right of use retained by the Company.Accordingly, the Company recognizes only the amount of any gain or loss that relates to the rights transferred to the lessor.Otherwise, the Company continues the recognition of the transferred asset, and recognizes a financial liability equal to the amountof transfer proceeds in accordance with CASBE 22 “Financial Instruments: Recognition and Measurement” at the same time.
2) The Company as lessor
In accordance with CASBE 14 “Revenue”, the Company assesses and determines whether the transfer of any asset in a sale andleaseback transaction should be accounted for as a sale of that asset.If the transfer of an asset is accounted for as a sale of the asset, the Company accounts for the purchase of assets in accordancewith other applicable standards, and accounts for the lease of assets in accordance with CASBE 21 “ Leases”.Otherwise, the Company does not recognize the transferred asset, instead, recognizes a financial asset equal to the amount oftransfer proceeds in accordance with CASBE 22 “Financial Instruments: Recognition and Measurement”.VI. Taxation
1. Main categories of taxes and tax rates
| Category of tax | Tax base | Tax rate |
| Value-added tax | The output tax is calculated based on revenue from sales of goods or rendering of services in accordance with the tax law, net of the input tax deductible in the current period | 13%, 6% or 7%-25% (for the Company’s overseas subsidiaries) |
| Sales tax | Taxable sale revenue | Taxable sale revenue |
| Urban maintenance and construction tax | Amount of turnover tax actually paid | 5% or 7% (China) |
| Enterprise income tax | Amount of taxable income | 15%, 16.50%, 25%, 0, 21%, 0.75%-8.84%, 17%, 10%, 20%, 20.6%, 24% or 30% |
| Property tax | If levied on the basis of price, 1.2% * 70% of the original value of the property; if levied on the basis of rental, 12% of the lease income | 1.2% or 12% (China) |
| Education surcharge | Amount of turnover tax actually paid | 3% (China) |
| Local education surcharge | Amount of turnover tax actually paid | 2% (China) |
Different rates of enterprise income tax applicable to the taxpayers:
| Taxpayer | Income tax rate |
| The Company, Yongchuang Tech, Mutto Optronics, MFLEX Yancheng, Yancheng Dongshan, Dongguan Dongshan Precision Manufacturing Co., Ltd., RF Top Electronic, Suzhou Chengjia, Yancheng Mutto Optronics Science and Technology Co., Ltd. and Suzhou Dongdai Electronic Tech Co Ltd. | 15.00% |
| Hong Kong Dongshan and other companies incorporated in Hong Kong | 16.50% |
| Mutto Optronics Group Limited, Mflex Delaware, Inc., The Dii Group (BVI) Co. Limited | 0 |
| Multi-Fineline Electronix, Inc. and other companies incorporated in the United States | Federal corporate income tax rate, 21%; state corporate income tax rate, 0.75%-8.84% |
| Multi-Fineline Electronix Singapore Ptd. Ltd. and other companies incorporated in Singapore | 17% (Singapore) |
| Multek Technologies Limited | 15% (enjoying an 80% tax exemption) |
| Multek Technology Sweden AB | 20.6% (Sweden) |
| Multek Technology Malaysia SDN.BHD | 24% (Malaysia) |
| DSBJ Mexico, S.DER.L.DEC.V. and other companies in Mexico | 30.00% |
| Other taxpayers not listed above | 25.00% |
2. Tax preferences
1. Pursuant to the Notice on Publishing the Filing of the Third Batch of High and New Technology Enterprises Recognized by theRecognition Authority of Jiangsu Province in 2022 issued by the Office of the National Leading Group for RecognitionManagement of High and New Technology Enterprises, the Company and its subsidiaries Mutto Optronics, Yancheng Dongshan,Yancheng Dongshan Communication Technology Co., Ltd. and MFLEX Yancheng passed the high and new technology enterprisequalification review with a term of three years from 2022 to 2024, and therefore are subject to an enterprise income tax rate of 15%for the current period.
2. Pursuant to the Notice on Publishing the Filing of the Fourth Batch of High and New Technology Enterprises Recognized by theRecognition Authority of Jiangsu Province in 2022 issued by the Office of the National Leading Group for RecognitionManagement of High and New Technology Enterprises, the Company’s wholly-owned subsidiary Suzhou Chengjia passed thehigh and new technology enterprise qualification review with a term of three years from 2022 to 2024, and therefore is subject toan enterprise income tax rate of 15% for the current period.
3. Pursuant to the Notice on Publishing the Filing the Second Batch of High and New Technology Enterprises Recognized by theRecognition Authority of Jiangsu Province in 2022 issued by the Office of the National Leading Group for RecognitionManagement of High and New Technology Enterprises, the Company’s subsidiary EF Top Electronic passed the high and newtechnology enterprise qualification review with a term of three years from 2022 to 2024, and therefore is subject to an enterpriseincome tax rate of 15% for the current period.
4. Pursuant to the Notice on the Filing of the Third Batch of High and New Technology Enterprises of Jiangsu Province in 2021,the Company’s wholly-owned subsidiary Yancheng Mutto Optronics Science and Technology Co., Ltd. passed the high and newtechnology enterprise qualification review with a term of three years from 2021 to 2023, and therefore is subject to an enterpriseincome tax rate of 15% for the current period.
5. The Company’s subsidiary Suzhou Dongdai Electronic Tech Co., Ltd. was listed in the Notice on Publishing the Filing of theSecond Batch of High and New Technology Enterprises Recognized by the Recognition Authority of Jiangsu Province in 2023issued by the Office of the National Leading Group for Recognition Management of High and New Technology Enterprises, andtemporarily paid enterprise income tax at the rate of 15% for the current period.
6. Multek Technologies Limited is subject to a corporate income tax rate of 15% under the Mauritius Corporate Income Tax Act,and as a global Class I company incorporated in Mauritius but operating abroad, enjoys an 80% tax exemption, so its effectivecorporate income tax rate is 3%.VII. Notes to items of the consolidated financial statements
1. Cash and bank balances
In RMB
| Item | Closing balance | Opening balance |
| Cash on hand | 559,941.39 | 340,651.93 |
| Bank deposits | 5,874,124,506.28 | 5,456,686,170.77 |
| Other cash and bank balances | 1,315,351,783.39 | 1,674,175,995.02 |
| Total | 7,190,036,231.06 | 7,131,202,817.72 |
| Incl.: Total amounts deposited abroad | 1,917,732,423.09 | 2,247,517,164.32 |
Note: See Notes to the Financial Statements for cash and cash equivalents subject to restrictions on use, and cash and bankbalances not classified as cash and cash equivalents.
2. Financial assets held for trading
In RMB
| Item | Closing balance | Opening balance |
| Financial assets at fair value through profit or loss | 146,141,371.77 | 575,783,803.93 |
| Incl.: | ||
| Investments in equity instruments | 71,779,147.66 | 56,779,147.66 |
| Derivatives | 26,920,185.50 | 159,865,619.03 |
| Wealth management products | 47,442,038.61 | 359,139,037.24 |
| Total | 146,141,371.77 | 575,783,803.93 |
3. Derivative financial assets
4. Notes receivable
(1) Notes receivable by category
In RMB
| Item | Closing balance | Opening balance |
| Commercial acceptance bills | 3,407,623.49 | 48,401,430.82 |
| Total | 3,407,623.49 | 48,401,430.82 |
(2) Notes receivable by method of recognition of allowance for doubtful accounts
In RMB
| Item | Closing balance | Opening balance | ||||||||
| Book balance | Allowance for doubtful accounts | Carrying value | Book balance | Allowance for doubtful accounts | Carrying value | |||||
| Amount | % | Amount | % | Amount | % | Amount | % | |||
| Incl.: | ||||||||||
| Allowance recognized collectively | 3,424,747.23 | 100.00% | 17,123.74 | 0.50% | 3,407,623.49 | 48,644,654.09 | 100.00% | 243,223.27 | 0.50% | 48,401,430.82 |
| Incl.: | ||||||||||
| Commercial acceptance bills | 3,424,747.23 | 100.00% | 17,123.74 | 0.50% | 3,407,623.49 | 48,644,654.09 | 100.00% | 243,223.27 | 0.50% | 48,401,430.82 |
| Total | 3,424,747.23 | 100.00% | 17,123.74 | 0.50% | 3,407,623.49 | 48,644,654.09 | 100.00% | 243,223.27 | 0.50% | 48,401,430.82 |
Allowance for doubtful accounts recognized collectively:
In RMB
| Item | Closing balance | ||
| Book balance | Allowance for doubtful accounts | % | |
| Group of commercial acceptance bills | 3,424,747.23 | 17,123.74 | 0.50% |
| Total | 3,424,747.23 | 17,123.74 | |
Recognition of allowance for doubtful accounts in accordance with the general model of expected credit losses:
□ Applicable ? N/A
(3) Allowance for doubtful accounts recognized, recovered or reversed in the current periodAllowance for doubtful accounts recognized in the current period:
In RMB
| Item | Opening balance | Changes in the current period | Closing balance | |||
| Recognized | Recovered | Written | Others | |||
| or reversed | off | |||||
| Allowance recognized collectively | 243,223.27 | -226,099.53 | 17,123.74 | |||
| Total | 243,223.27 | -226,099.53 | 17,123.74 |
Significant amount of allowance for doubtful accounts recovered or reversed in the current period:
□Applicable ?N/A
(4) Notes receivable pledged at the end of the current period
(5) Notes receivable already endorsed or discounted but not yet become due at the balance sheet date
In RMB
| Item | Amount derecognized at December 31, 2023 | Amount not derecognized at December 31, 2023 |
| Commercial acceptance bills | 10,645,152.55 | 3,424,747.23 |
| Total | 10,645,152.55 | 3,424,747.23 |
5. Accounts receivable
(1) Accounts receivable by age
In RMB
| Age | Closing book balance | Opening book balance |
| Within 1 year (inclusive) | 7,522,771,106.29 | 6,943,154,404.27 |
| Within 6 months | 7,444,151,188.36 | 6,527,619,977.21 |
| 7-12 months | 78,619,917.93 | 415,534,427.06 |
| 1-2 years | 285,296,373.77 | 79,131,332.02 |
| 2-3 years | 16,989,211.39 | 147,646,312.40 |
| Over 3 years | 369,089,730.68 | 827,282,581.21 |
| 3-4 years | 275,176,513.49 | 780,916,195.14 |
| 4-5 years | 53,209,221.21 | 29,163,991.48 |
| Over 5 years | 40,703,995.98 | 17,202,394.59 |
| Total | 8,194,146,422.13 | 7,997,214,629.90 |
(2) Accounts receivable by method of recognition of allowance for doubtful accounts
In RMB
| Item | Closing balance | Opening balance | ||||||||
| Book balance | Allowance for doubtful accounts | Carrying value | Book balance | Allowance for doubtful accounts | Carrying value | |||||
| Amount | % | Amount | % | Amount | % | Amount | % | |||
| Allowance recognized individually | 221,542,640.42 | 2.70% | 220,877,891.72 | 99.70% | 664,748.70 | 619,864,657.18 | 7.75% | 619,864,657.18 | 100.00% | |
| Incl.: | ||||||||||
| Allowance recognized collectively | 7,972,603,781.71 | 97.30% | 260,103,758.36 | 3.26% | 7,712,500,023.35 | 7,377,349,972.72 | 92.25% | 370,938,505.98 | 5.03% | 7,006,411,466.74 |
| Incl.: | ||||||||||
| Total | 8,194,146,422.13 | 100.00% | 480,981,650.08 | 5.87% | 7,713,164,772.05 | 7,997,214,629.90 | 100.00% | 990,803,163.16 | 12.39% | 7,006,411,466.74 |
Allowance for doubtful accounts recognized individually:
Significant accounts receivable for which allowance for doubtful accounts was recognized individually
In RMB
| Name | Opening balance | Closing balance | ||||
| Book balance | Allowance for doubtful accounts | Book balance | Allowance for doubtful accounts | % | Reason | |
| Dongguan Baofeng Intelligent Technology Co., Ltd. | 169,582,771.72 | 169,582,771.72 | 169,582,771.72 | 169,582,771.72 | 100.00% | The company was ordered to close down, so an amount equal to the account receivable was already |
| recognized as an impairment loss in 2019. | ||||||
| Total | 169,582,771.72 | 169,582,771.72 | 169,582,771.72 | 169,582,771.72 |
Allowance for doubtful accounts recognized collectively: Aging group
In RMB
| Item | Closing balance | ||
| Book balance | Allowance for doubtful accounts | % | |
| Within 6 months | 7,443,314,172.22 | 37,216,570.84 | 0.50% |
| 7-12 months | 77,177,359.99 | 3,858,868.00 | 5.00% |
| 1-2 years | 285,232,629.47 | 57,046,525.89 | 20.00% |
| 2-3 years | 12,244,565.99 | 7,346,739.59 | 60.00% |
| Over 3 years | 154,635,054.04 | 154,635,054.04 | 100.00% |
| Total | 7,972,603,781.71 | 260,103,758.36 | |
Basis for grouping: None.Recognition of allowance for doubtful accounts in accordance with the general model of expected credit losses:
□ Applicable ? N/A
(3) Allowance for doubtful accounts recognized, recovered or reversed in the current periodAllowance for doubtful accounts recognized in the current period:
In RMB
| Item | Opening balance | Changes in the current period | Closing balance | |||
| Recognized | Recovered or reversed | Written off | Others | |||
| Allowance recognized individually | 619,864,657.18 | 2,828,114.52 | 401,778,317.42 | -36,562.56 | 220,877,891.72 | |
| Allowance recognized collectively | 370,938,505.98 | 35,757,413.60 | 149,160,663.65 | 2,568,502.43 | 260,103,758.36 | |
| Total | 990,803,163.16 | 38,585,528.12 | 550,938,981.07 | 2,531,939.87 | 480,981,650.08 | |
(4) Accounts receivable actually written off in the current period
In RMB
| Item | Amount written off |
| Accounts receivable actually written off | 550,938,981.07 |
Significant amount of accounts receivable written off:
In RMB
| Company name | Nature of account | Amount written off | Reason for write-off | Write-off procedure performed | Whether or not arising from related-party transactions |
| Major customers written off | Trade receivable | 401,778,317.42 | The company has gone bankrupt | Resolution of the Board of Directors | No |
| Total | 401,778,317.42 |
(5) Top 5 debtors in terms of closing balance of accounts receivable and contract assets
In RMB
| Company name | Closing balance of accounts receivable | Closing balance of contract assets | Total closing balance of accounts receivable and contract assets | % of total closing balance of accounts receivable and contract assets | Closing balance of allowance for doubtful accounts receivable and |
| impairment of contract assets | |||||
| Debtor 1 | 3,410,937,382.67 | 3,410,937,382.67 | 41.63% | 20,307,235.19 | |
| Debtor 2 | 492,675,037.13 | 492,675,037.13 | 6.01% | 2,463,375.19 | |
| Debtor 3 | 457,362,240.53 | 457,362,240.53 | 5.58% | 2,449,319.44 | |
| Debtor 4 | 316,423,534.67 | 316,423,534.67 | 3.86% | 1,582,117.67 | |
| Debtor 5 | 250,948,110.69 | 250,948,110.69 | 3.06% | 3,897,485.94 | |
| Total | 4,928,346,305.69 | 4,928,346,305.69 | 60.14% | 30,699,533.43 |
6. Contract assets
7. Accounts receivable financing
(1) Accounts receivable financing by category
In RMB
| Item | Closing balance | Opening balance |
| Banker’s acceptance bills | 290,477,095.22 | 644,057,382.41 |
| Total | 290,477,095.22 | 644,057,382.41 |
(2) Accounts receivable financing by method of recognition of allowance for doubtful accounts
In RMB
| Item | Closing balance | Opening balance | ||||||||
| Book balance | Allowance for doubtful accounts | Carrying value | Book balance | Allowance for doubtful accounts | Carrying value | |||||
| Amount | % | Amount | % | Amount | % | Amount | % | |||
| Incl.: | ||||||||||
| Allowance recognized collectively | 290,477,095.22 | 100.00% | 290,477,095.22 | 644,057,382.41 | 100.00% | 644,057,382.41 | ||||
| Incl.: | ||||||||||
| Banker’s acceptance bills | 290,477,095.22 | 100.00% | 290,477,095.22 | 644,057,382.41 | 100.00% | 644,057,382.41 | ||||
| Total | 290,477,095.22 | 100.00% | 290,477,095.22 | 644,057,382.41 | 100.00% | 644,057,382.41 | ||||
(3) Allowance for doubtful accounts recognized, recovered or reversed in the current period
(4) Accounts receivable financing pledged at the end of the current period
In RMB
| Item | Amount pledged at December 31, 2023 |
| Banker’s acceptance bills | 172,685,965.02 |
| Total | 172,685,965.02 |
(5) Accounts receivable financing already endorsed or discounted but not yet become due at the balance sheet date
In RMB
| Item | Amount derecognized at December 31, 2023 | Amount not derecognized at December 31, 2023 |
| Banker’s acceptance bills | 694,778,744.58 | |
| Total | 694,778,744.58 |
(6) Other information
As the acceptors of banker’s acceptance bills are commercial banks that have high credit ratings, banker’s acceptance bills are lesslikely to be dishonored when they become due. Therefore, the Company derecognizes the banker’s acceptance bills alreadyendorsed or discounted. However, if such bills fail to be paid when they become due, the Company will assume joint and severalliability to the holders thereof pursuant to the Law on Negotiable Instruments.
8. Other receivables
In RMB
| Item | Closing balance | Opening balance |
| Other receivables | 77,134,897.39 | 35,793,851.22 |
| Total | 77,134,897.39 | 35,793,851.22 |
(1) Interest receivable
(2) Dividends receivable
(3) Other receivables
1) Other receivables by nature
In RMB
| Nature of account | Closing balance | Opening balance |
| Loan and reserve fund | 3,008,693.20 | 7,767,360.70 |
| Security deposit | 24,179,943.43 | 25,463,197.09 |
| Temporary payment receivable and others | 63,320,215.31 | 17,415,911.41 |
| Total | 90,508,851.94 | 50,646,469.20 |
2) Other receivables by age
In RMB
| Age | Closing book balance | Opening book balance |
| Within 1 year (inclusive) | 71,736,165.38 | 32,992,896.42 |
| 1-2 years | 8,616,817.34 | 3,233,448.86 |
| 2-3 years | 2,464,429.36 | 3,764,903.27 |
| Over 3 years | 7,691,439.86 | 10,655,220.65 |
| 3-4 years | 3,078,691.14 | 3,360,841.55 |
| 4-5 years | 1,718,689.00 | 508,660.00 |
| Over 5 years | 2,894,059.72 | 6,785,719.10 |
| Total | 90,508,851.94 | 50,646,469.20 |
3) Other receivables by the method of recognition of allowance for doubtful accounts
? Applicable □ N/A
In RMB
| Item | Closing balance | Opening balance | ||||||||
| Book balance | Allowance for doubtful accounts | Carrying value | Book balance | Allowance for doubtful accounts | Carrying value | |||||
| Amount | % | Amount | % | Amount | % | Amount | % | |||
| Allowance recognized individually | 2,340,704.91 | 2.59% | 2,340,704.91 | 100.00% | 3,590,704.91 | 7.09% | 3,590,704.91 | 100.00% | ||
| Incl.: | ||||||||||
| Allowance recognized collectively | 88,168,147.03 | 97.41% | 11,033,249.64 | 12.51% | 77,134,897.39 | 47,055,764.29 | 92.91% | 11,261,913.07 | 23.93% | 35,793,851.22 |
| Incl.: | ||||||||||
| Total | 90,508,851.94 | 100.00% | 13,373,954.55 | 14.78% | 77,134,897.39 | 50,646,469.20 | 100.00% | 14,852,617.98 | 29.33% | 35,793,851.22 |
Allowance for doubtful accounts recognized collectively: Aging group
In RMB
| Item | Closing balance | ||
| Book balance | Allowance for doubtful accounts | % | |
| Within 1 year | 71,736,165.38 | 3,586,808.28 | 5.00% |
| 1-2 years | 8,616,817.34 | 861,681.73 | 10.00% |
| 2-3 years | 2,460,809.36 | 1,230,404.68 | 50.00% |
| Over 3 years | 5,354,354.95 | 5,354,354.95 | 100.00% |
| Total | 88,168,147.03 | 11,033,249.64 | |
Basis for grouping: None.Recognition of allowance for doubtful accounts in accordance with the general model of expected credit losses:
In RMB
| Allowance for doubtful accounts | Stage 1 | Stage 2 | Stage 3 | Total |
| 12-month expected credit loss | Lifetime expected credit loss (not credit impaired) | Lifetime expected credit loss (credit impaired) | ||
| Balance at January 1, 2023 | 1,649,644.86 | 322,982.88 | 12,879,990.24 | 14,852,617.98 |
| In the current period: | ||||
| - Transferred to stage 2 | -430,842.82 | 430,842.82 | ||
| - Transferred to stage 3 | -246,395.36 | 246,395.36 | ||
| Recognized | 2,759,838.66 | 107,856.03 | -540,433.65 | 2,327,261.04 |
| Reversed | 1,250,000.00 | 1,250,000.00 | ||
| Written off | 2,164,092.05 | 2,164,092.05 | ||
| Other changes | -391,832.42 | -391,832.42 | ||
| Balance at December 31, 2023 | 3,586,808.28 | 861,681.73 | 8,925,464.54 | 13,373,954.55 |
Basis for classification of stages and percentage of allowance for doubtful accounts recognized: None.Significant changes in the book balance of allowance for doubtful accounts in the current period:
□ Applicable ? N/A
4) Allowance for doubtful accounts recognized, recovered or reversed in the current period
5) Other receivables actually written off in the current period
6) Top 5 debtors in terms of closing balance of other receivables
In RMB
| Company name | Nature of account | Closing balance | Age | % of total closing balance of other receivables | Closing balance of allowance for doubtful accounts |
| Debtor 1 | Government grants | 37,648,885.00 | Within 1 year | 41.60% | 1,882,444.25 |
| Debtor 2 | Temporary payment receivable and others | 9,860,000.00 | Within 1 year | 10.89% | 493,000.00 |
| Debtor 3 | Export rebates | 3,192,435.52 | Within 1 year | 3.53% | 159,621.78 |
| Debtor 5 | Security deposit | 2,855,772.00 | 1-2 years | 3.16% | 285,577.20 |
| Debtor 5 | Temporary payment receivable and others | 2,340,704.91 | Over 3 years | 2.59% | 2,340,704.91 |
| Total | 55,897,797.43 | 61.77% | 5,161,348.14 |
9. Advances to suppliers
(1) Advances to suppliers by age
In RMB
| Age | Closing balance | Opening balance | ||
| Amount | % | Amount | % | |
| Within 1 year | 72,605,597.90 | 91.00% | 144,831,544.38 | 89.67% |
| 1 to 2 years | 5,581,589.38 | 7.00% | 9,311,244.44 | 5.77% |
| 2 to 3 years | 21,100.35 | 0.03% | 3,378,241.58 | 2.09% |
| Over 3 years | 1,574,451.48 | 1.97% | 3,991,794.13 | 2.47% |
| Total | 79,782,739.11 | 161,512,824.53 | ||
Reason of failure to timely settle the significant advances to suppliers aged more than one year:
(2) Top 5 suppliers in terms of closing balance of advances to suppliers
| Company name | Book balance (RMB) | % of the total balance of advances to suppliers |
| Supplier 1 | 5,551,132.74 | 6.46 |
| Supplier 2 | 4,813,400.00 | 5.60 |
| Supplier 3 | 3,732,167.64 | 4.35 |
| Supplier 4 | 3,697,195.15 | 4.30 |
| Supplier 5 | 3,624,803.07 | 4.22 |
| Subtotal | 21,418,698.60 | 24.93 |
10. Inventories
Does the Company need to comply with the disclosure requirements for the real estate industry? No.
(1) Categories of inventories
In RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Inventory provision or allowance for impairment of contract fulfilling costs | Carrying value | Book balance | Inventory provision or allowance for impairment of contract fulfilling costs | Carrying value | |
| Raw materials | 1,137,854,380.40 | 144,036,638.90 | 993,817,741.50 | 1,054,142,552.20 | 52,636,496.51 | 1,001,506,055.69 |
| Work in progress | 891,174,574.36 | 125,226,289.12 | 765,948,285.24 | 839,758,226.64 | 29,797,143.67 | 809,961,082.97 |
| Goods on hand | 4,974,174,253.58 | 449,989,021.71 | 4,524,185,231.87 | 4,710,817,179.86 | 366,785,710.02 | 4,344,031,469.84 |
| Circulating materials | 9,966,532.81 | 38,514.88 | 9,928,017.93 | 10,278,315.47 | 38,514.88 | 10,239,800.59 |
| Total | 7,013,169,741.15 | 719,290,464.61 | 6,293,879,276.54 | 6,614,996,274.17 | 449,257,865.08 | 6,165,738,409.09 |
(2) Inventory provision or allowance for impairment of contract fulfilling costs
In RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance | ||
| Recognized | Others | Reversed or written off | Others | |||
| Raw materials | 52,636,496.51 | 99,844,978.15 | 8,444,835.76 | 144,036,638.90 | ||
| Work in progress | 29,797,143.67 | 97,273,963.88 | 1,844,818.43 | 125,226,289.12 | ||
| Goods on hand | 366,785,710.02 | 200,096,019.26 | 5,037,473.33 | 121,930,180.90 | 449,989,021.71 | |
| Circulating materials | 38,514.88 | 38,514.88 | |||||||
| Total | 449,257,865.08 | 397,214,961.29 | 5,037,473.33 | 132,219,835.09 | 719,290,464.61 | ||||
| Item | Basis for determining the net realizable value | Reason for reversing the inventory provision | Reason for writing off the inventory provision | ||||||
| Raw materials | The net realizable value is the estimated selling price of finished goods less the estimated cost of completion, estimated selling expenses and related taxes. | The inventories for which an inventory provision was recognized at the beginning of the current period have been used. | The net realizable value is the estimated selling price of finished goods less the estimated cost of completion, estimated selling expenses and related taxes. | ||||||
| Work in progress | The net realizable value is the estimated selling price of finished goods less the estimated cost of completion, estimated selling expenses and related taxes. | The inventories for which an inventory provision was recognized at the beginning of the current period have been used. | The net realizable value is the estimated selling price of finished goods less the estimated cost of completion, estimated selling expenses and related taxes. | ||||||
| Goods on hand | The net realizable value is the estimated selling price of finished goods less the estimated selling expenses and related taxes. | The inventories for which an inventory provision was recognized at the beginning of the current period have been used. | The net realizable value is the estimated selling price of finished goods less the estimated selling expenses and related taxes. | ||||||
| Other circulating materials | The net realizable value is the estimated selling price of finished goods less the estimated cost of completion, estimated selling expenses and related taxes. | The inventories for which an inventory provision was recognized at the beginning of the current period have been used. | The net realizable value is the estimated selling price of finished goods less the estimated cost of completion, estimated selling expenses and related taxes. | ||||||
11. Assets held for sale
12. Non-current assets due within one year
13. Other current assets
In RMB
| Item | Closing balance | Opening balance |
| Cost of returned goods receivable | 29,832,976.30 | 21,651,650.92 |
| Deductible input tax | 340,312,673.44 | 153,399,758.40 |
| Prepaid enterprise income tax | 35,892,887.21 | 76,293,525.58 |
| Deferred expenses and others | 245,681,208.73 | 253,228,939.74 |
| Total | 651,719,745.68 | 504,573,874.64 |
14. Debt investments
15. Other debt investments
16. Investment in other equity instruments
In RMB
| Item | Closing balance | Opening balance | Income recognized in other comprehensive income in the current period | Loss recognized in other comprehensive income in the current period | Aggregate income recognized in other comprehensive income at the end of the current period | Aggregate loss recognized in other comprehensive income at the end of the current period | Dividend income recognized in the current period | Reason for designation as at fair value through other comprehensive income |
| Jiangsu Bohua Equity Investment Partnership (L.P.) | 150,000,000.00 | 150,000,000.00 | ||||||
| Hai Dixin Semiconductor (Nantong) Co., Ltd. | 21,322,110.00 | 21,322,110.00 | ||||||
| Hostar Intelligence Technology Co., Ltd. | 28,800,000.00 | |||||||
| Dyness Digital Energy Technology Co., Ltd. | 50,000,000.00 | |||||||
| Shinwu Optronics | 22,035,000.00 |
| (Suzhou) Co., Ltd. | ||||||||
| Jinan Moviebook Co., Ltd. | 6,000,000.00 | |||||||
| Total | 278,157,110.00 | 171,322,110.00 |
Other information:
Reason for designation as an investment in equity instruments at fair value through other comprehensive income
1) Hai Dixin Semiconductor (Nantong) Co., Ltd. was established on April 6, 2012, with a registered capital of RMB36,152,329.00,in which the Company holds 10.2345% shares. In consideration that the Company has a close business relationship with Hai DixinSemiconductor (Nantong) Co., Ltd., the shares held by the Company in it will help the Company improve its businesscompetencies and the investment is not held for trading, the Company designated this investment as a financial asset at fair valuethrough other comprehensive income on January 1, 2019.
2) Jiangsu Bohua Equity Investment Partnership (L.P.) was established on September 27, 2021, with a registered capital ofRMB3.3 billion, and is primarily engaged in venture capital investment (in non-listed companies only). In consideration that thisinvestment will bring a good return to the Company and provide the Company with opportunities to invest in premium fields andassets, and is not held for trading, the Company designated this investment as a financial asset at fair value through othercomprehensive income.
3) Hostar Intelligence Technology Co., Ltd. was established on April 2, 2011, with a registered capital of RMB42,660,000, inwhich the Company holds 3.038% shares. In consideration that the shares held by the Company in it will help the Companyimprove its business competencies, including procuring raw materials/equipment, and developing and strengthening market andsales teams, and the investment is not held for trading, the Company designated this investment as a financial asset at fair valuethrough other comprehensive income in February 2023.
4) Dyness Digital Energy Technology Co., Ltd. was established on August 17, 2017, with a registered capital of RMB112,023,809,in which the Company holds 1.7016% shares. In consideration that the shares held by the Company in it will help the Companyimprove its business competencies and the investment is not held for trading, the Company designated this investment as afinancial asset at fair value through other comprehensive income in March 2023.
5) Shinwu Optronics (Suzhou) Co., Ltd. was established on October 19, 2006, with a registered capital of RMB57,754,000, inwhich the Company holds 1.7169% shares. In consideration that the shares held by the Company in it will help the Companyimprove its business competencies and the investment is not held for trading, the Company designated this investment as afinancial asset at fair value through other comprehensive income in May 2023.
6) Jinan Moviebook Co., Ltd. was established on September 6, 2019, with a registered capital of RMB10,000,000, in which theCompany holds 0.1995% shares. In consideration that the shares held by the Company in it will help the Company improve itsbusiness competencies and the investment is not held for trading, the Company designated this investment as a financial asset atfair value through other comprehensive income in October 2023.
17. Long-term receivables
(1) Particulars of long-term receivables
In RMB
| Item | Closing balance | Opening balance | Range of discount rate | ||||
| Book balance | Allowance for doubtful accounts | Carrying value | Book balance | Allowance for doubtful accounts | Carrying value | ||
| Security deposit for finance lease | 30,000,000.00 | 30,000,000.00 | 30,000,000.00 | 30,000,000.00 | |||
| Account receivable from Powerwave Technologies | 10,703,905.76 | 10,703,905.76 | 10,703,905.76 | 10,703,905.76 | 7.5 | ||
| (Thailand) Co., Ltd. | |||||||
| Total | 40,703,905.76 | 10,703,905.76 | 30,000,000.00 | 40,703,905.76 | 10,703,905.76 | 30,000,000.00 |
(2) Long-term receivables by method of recognition of allowance for doubtful accounts
In RMB
| Item | Closing balance | Opening balance | ||||||||
| Book balance | Allowance for doubtful accounts | Carrying value | Book balance | Allowance for doubtful accounts | Carrying value | |||||
| Amount | % | Amount | % | Amount | % | Amount | % | |||
| Allowance recognized individually | 10,703,905.76 | 100.00% | 10,703,905.76 | 100.00% | 10,703,905.76 | 100.00% | 10,703,905.76 | 100.00% | ||
| Incl.: | ||||||||||
| Incl.: | ||||||||||
| Total | 10,703,905.76 | 100.00% | 10,703,905.76 | 100.00% | 10,703,905.76 | 100.00% | 10,703,905.76 | 100.00% | ||
18. Long-term equity investments
In RMB
| Investee | Opening balance (carrying value) | Opening balance of allowance for impairment loss | Changes in the current period | Closing balance (carrying value) | Closing balance of allowance for impairment loss | |||||||
| Additional investment | Reduced investment | Investment income or loss under equity method | Adjustment to other comprehensive income | Other changes in equity | Declared cash dividends or profit distribution | Allowance for impairment loss | Others | |||||
| I. Joint ventures | ||||||||||||
| II. Associates | ||||||||||||
| Suzhou Toprun Electric Equipment Co., Ltd. | 24,240,829.48 | 51,487,204.05 | -4,905,800.86 | 19,335,028.62 | 51,487,204.05 | |||||||
| Shenzhen Nanfang Blog Technology Development Co., Ltd. | 17,507,056.47 | 17,507,056.47 | ||||||||||
| Shanghai Fu Shan Precision Manufacturing Co., Ltd. | ||||||||||||
| Suzhou LEGATE Intelligent Equipment Co., Ltd. | 23,193,983.47 | 313,192.68 | 23,507,176.15 | |||||||||
| Suzhou Dongcan Optoelectronics Technology Co., Ltd. | 3,750,632.95 | 46,625.40 | 3,797,258.35 | |||||||||
| Jiangsu Nangao Intelligent Equipment Innovation Center Co., Ltd. | 4,133,295.48 | 126,074.14 | 4,259,369.62 | |||||||||
| Jiaozuo Songyang Optoelectric Technology Co., Ltd. | 28,198,390.76 | -1,444,609.69 | 26,753,781.07 | |||||||||
| Suzhou Yongxin Jingshang Venture Capital Partnership (L.P.) | 14,521,584.80 | 15,000,000.00 | -3,605,790.74 | 25,915,794.06 | ||||||||
| Isotek Microwave Limited | 8,539,424.61 | 9,319,087.50 | 779,662.89 | 8,539,424.61 | ||||||||
| BVF (BVI) Holding L.P. | 33,189,073.86 | -830,200.69 | 32,358,873.17 | |||||||||
| Shanghai Xinhuarui Semiconductor Technology Co., Ltd. | 20,000,000.00 | -520,401.15 | 19,479,598.85 | |||||||||
| Subtotal | 139,767,215.41 | 68,994,260.52 | 35,000,000.00 | 0.00 | -10,820,910.91 | 0.00 | 0.00 | 0.00 | 9,319,087.50 | 779,662.89 | 155,406,879.89 | 77,533,685.13 |
| Total | 139,767,215.41 | 68,994,260.52 | 35,000,000.00 | 0.00 | -10,820,910.91 | 0.00 | 0.00 | 0.00 | 9,319,087.50 | 779,662.89 | 155,406,879.89 | 77,533,685.13 |
Recoverable amount determined based on fair value net of disposal cost:
□ Applicable ? N/A
Recoverable amount determined based on the present value of estimated future cash flows:
□ Applicable ? N/A
Reason for significant differences between the information set out above and the information used in the prior year’s impairmentassessment or external information: None.Reason for significant differences between the information used in the prior year’s impairment assessment and the actual situationof the current year: None.Other information: None.
19. Other non-current financial assets
20. Investment properties
(1) Investment properties at cost
? Applicable □ N/A
In RMB
| Item | Buildings and structures | Land use right | Construction in progress | Total |
| I. Original value | ||||
| 1. Opening balance | 5,309,132.17 | 5,309,132.17 | ||
| 2. Increase | ||||
| (1) Acquired | ||||
| (2) Transferred from inventories/ fixed assets/ construction in progress | ||||
| (3) Increased due to business combinations | ||||
| 3. Decrease | ||||
| (1) Disposed | ||||
| (2) Other transfer-out | ||||
| 4. Closing balance | 5,309,132.17 | 5,309,132.17 | ||
| II. Accumulated depreciation and amortization | ||||
| 1. Opening balance | 4,012,580.75 | 4,012,580.75 | ||
| 2. Increase | 257,711.16 | 257,711.16 | ||
| (1) Recognized or amortized | 257,711.16 | 257,711.16 | ||
| 3. Decrease | ||||
| (1) Disposed | ||||
| (2) Other transfer-out | ||||
| 4. Closing balance | 4,270,291.91 | 4,270,291.91 | ||
| III. Allowance for impairment loss | ||||
| 1. Opening balance | ||||
| 2. Increase | ||||
| (1) Recognized | ||||
| 3. Decrease | ||||
| (1) Disposed | ||||
| (2) Other transfer-out | ||||
| 4. Closing balance |
| IV. Carrying value | ||||
| 1. Closing balance | 1,038,840.26 | 1,038,840.26 | ||
| 2. Opening balance | 1,296,551.42 | 1,296,551.42 |
Recoverable amount determined based on fair value net of disposal cost:
□ Applicable ? N/A
Recoverable amount determined based on the present value of estimated future cash flows:
□ Applicable ? N/A
(2) Investment properties measured at fair value
□ Applicable ? N/A
21. Fixed assets
In RMB
| Item | Closing balance | Opening balance |
| Fixed assets | 12,415,251,689.80 | 10,673,700,468.47 |
| Disposal of fixed assets | ||
| Total | 12,415,251,689.80 | 10,673,700,468.47 |
(1) Particulars of fixed assets
In RMB
| Item | Buildings and structures | Machinery and equipment | Transport equipment | Office equipment and others | Total |
| I. Original value | |||||
| 1. Opening balance | 3,553,903,845.69 | 17,071,961,591.82 | 85,461,560.03 | 710,439,770.77 | 21,421,766,768.31 |
| 2. Increase | 1,599,985,827.00 | 3,312,937,588.05 | 8,003,493.92 | 332,375,822.33 | 5,253,302,731.30 |
| (1) Acquired | 40,127,058.41 | 86,944,488.06 | 535,192.54 | 23,272,946.81 | 150,879,685.82 |
| (2) Transferred from construction in progress | 782,891,265.98 | 2,468,814,935.86 | 6,490,251.57 | 52,196,060.31 | 3,310,392,513.72 |
| (3) Increased due to business combinations | 776,947,298.06 | 735,744,640.81 | 978,049.81 | 256,764,704.88 | 1,770,434,693.56 |
| (4) Differences in translation of foreign currency financial statements | 20,204.55 | 142,110.33 | 162,314.88 | ||
| (5) Acquisition of assets under finance lease | 21,433,523.32 | 21,433,523.32 | |||
| 3. Decrease | 21,736,488.30 | 587,738,052.73 | 3,839,031.88 | 27,252,924.66 | 640,566,497.57 |
| (1) Disposed or retired | 21,736,488.30 | 574,889,143.65 | 3,839,031.88 | 26,870,924.66 | 627,335,588.49 |
| (2) Transferred to construction in progress | 12,848,909.08 | 382,000.00 | 13,230,909.08 | ||
| 4. Closing balance | 5,132,153,184.39 | 19,797,161,127.14 | 89,626,022.07 | 1,015,562,668.44 | 26,034,503,002.04 |
| II. Accumulated depreciation | |||||
| 1. Opening balance | 1,363,250,836.30 | 8,841,977,675.42 | 59,378,769.89 | 467,938,526.96 | 10,732,545,808.57 |
| 2. Increase | 877,611,038.91 | 2,133,335,285.57 | 6,505,312.64 | 268,975,559.99 | 3,286,427,197.11 |
| (1) Recognized | 185,600,274.02 | 1,559,316,868.68 | 5,627,554.36 | 77,708,641.89 | 1,828,253,338.95 |
| (2) Differences in translation of foreign currency financial statements | 11,023.13 | 111,143.77 | 122,166.90 | ||
| (3) Increased due to business combinations | 691,999,741.76 | 561,840,474.99 | 877,758.28 | 191,155,774.33 | 1,445,873,749.36 |
| (4) Acquisition of assets under finance lease | 12,177,941.90 | 12,177,941.90 | |||
| 3. Decrease | 20,586,201.75 | 372,425,436.83 | 3,660,584.71 | 20,391,884.21 | 417,064,107.50 |
| (1) Disposed or retired | 20,586,201.75 | 366,420,754.97 | 3,660,584.71 | 20,230,595.25 | 410,898,136.68 |
| (2) Transferred to construction in progress | 6,004,681.86 | 161,288.96 | 6,165,970.82 | ||
| 4.Closing balance | 2,220,275,673.46 | 10,602,887,524.16 | 62,223,497.82 | 716,522,202.74 | 13,601,908,898.18 |
| III. Allowance for impairment loss | |||||
| 1. Opening balance | 14,962,205.52 | 558,285.75 | 15,520,491.27 | ||
| 2. Increase | 4,570,236.72 | 640,129.99 | 148,431.45 | 5,358,798.16 | |
| (1) Recognized | |||||
| (2) Increased due to business combinations | 4,570,236.72 | 640,129.99 | 148,431.45 | 5,358,798.16 | |
| 3. Decrease | 3,524,128.48 | 12,746.89 | 3,536,875.37 | ||
| (1) Disposed or retired | 3,524,128.48 | 12,746.89 | 3,536,875.37 | ||
| 4.Closing balance | 4,570,236.72 | 12,078,207.03 | 693,970.31 | 17,342,414.06 | |
| IV. Carrying value | |||||
| 1. Closing balance | 2,907,307,274.21 | 9,182,195,395.95 | 27,402,524.25 | 298,346,495.39 | 12,415,251,689.80 |
| 2. Opening balance | 2,190,653,009.39 | 8,215,021,710.88 | 26,082,790.14 | 241,942,958.06 | 10,673,700,468.47 |
(2) Temporary idle fixed assets
(3) Fixed assets leased out under operating leases
(4) Fixed assets whose property title certificates have not yet been obtained
In RMB
| Item | Carrying value | Reason for not obtaining the property title certificate |
| Factory buildings of Multek | 62,075,953.78 | Pending review |
(5) Impairment assessment of fixed assets
□ Applicable ? N/A
22. Construction in progress
In RMB
| Item | Closing balance | Opening balance |
| Construction in progress | 1,842,525,188.54 | 1,813,183,815.67 |
| Total | 1,842,525,188.54 | 1,813,183,815.67 |
(1) Particulars of construction in progress
In RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Allowance for impairment loss | Carrying value | Book balance | Allowance for impairment loss | Carrying value | |
| Multek 5G high-speed high-frequency and high-density PCB technology upgrading project | 20,138,126.54 | 20,138,126.54 | 8,726,174.90 | 8,726,174.90 | ||
| Multek PCB production line technology upgrading project | 22,910,222.23 | 22,910,222.23 | ||||
| 400,000 m2 fine line FPC production and assembly capacity expansion project | 30,000,000.00 | 30,000,000.00 | ||||
| FPC for new energy application and assembly project of MFLEX Yancheng | 15,994,322.82 | 15,994,322.82 | 15,615,783.77 | 15,615,783.77 | ||
| IC substrate project of Chaowei Microelectronics (Yancheng) Co., Ltd. | 75,645,464.25 | 75,645,464.25 | 212,665,663.71 | 212,665,663.71 | ||
| Large-sized die-casting project of Yancheng Dongchuang | 658,090,750.03 | 658,090,750.03 | 429,683,425.58 | 429,683,425.58 | ||
| Kunshan new energy manufacturing base-related project | 425,232,448.52 | 425,232,448.52 | 97,518,667.74 | 97,518,667.74 | ||
| Mexico new energy manufacturing base-related project | 999,896.91 | 999,896.91 | 11,656,038.90 | 11,656,038.90 | ||
| MFLEX Yancheng Phase II project | 35,619,454.33 | 35,619,454.33 | 228,417,694.07 | 228,417,694.07 | ||
| MFLEX Suzhou Guoxiang Phase II and other production expansion projects | 82,215,960.20 | 82,215,960.20 | 372,710,903.38 | 372,710,903.38 | ||
| LCM business unit | 46,535,180.88 | 46,535,180.88 | ||||
| Installation equipment in progress and others | 482,053,584.06 | 482,053,584.06 | 383,279,241.39 | 383,279,241.39 | ||
| Total | 1,842,525,188.54 | 1,842,525,188.54 | 1,813,183,815.67 | 1,813,183,815.67 | ||
(2) Changes in significant constructions in progress in the current period
In RMB
| Project | Budget | Opening balance | Increase | Amount transferred to fixed assets | Other decreases | Closing balance | % of project costs to the budget | Progress | Aggregate amount of capitalized interest | Incl.: Capitalized interest this year | Rate of interest capitalization this year | Source of funds |
| Large-sized die-casting project of Yancheng Dongchuang | 1,500,000,000.00 | 429,683,425.58 | 635,330,766.92 | 108,557,077.46 | 298,366,365.01 | 658,090,750.03 | 71.00% | 71% | Others | |||
| Kunshan new energy manufacturing base-related project | 1,800,000,000.00 | 97,518,667.74 | 455,486,587.72 | 127,772,806.94 | 425,232,448.52 | 30.72% | 30.72% | Others | ||||
| Total | 3,300,000,000.00 | 527,202,093.32 | 1,090,817,354.64 | 236,329,884.40 | 298,366,365.01 | 1,083,323,198.55 |
23. Productive biological assets
(1) Productive biological assets at cost
□ Applicable ? N/A
(2) Impairment assessment of productive biological assets at cost
□ Applicable ? N/A
(3) Productive biological assets at fair value
□ Applicable ? N/A
24. Oil and gas assets
□ Applicable ? N/A
25. Right-of-use assets
(1) Particulars of right-of-use assets
In RMB
| Item | Buildings and structures | Machinery and equipment | Transportation equipment | Land | Total |
| I. Original value | |||||
| 1. Opening balance | 1,051,602,685.11 | 21,511,443.18 | 93,200,186.63 | 1,166,314,314.92 | |
| 2. Increase | 370,660,463.87 | 32,269,798.63 | 345,470.00 | 475,280.00 | 403,751,012.50 |
| (1) Leased | 7,664,485.13 | 30,676,878.28 | 38,341,363.41 | ||
| (2) Transferred from construction in progress | 213,875,394.21 | 213,875,394.21 | |||
| (3) Differences in translation of foreign currency financial statements | 6,755,038.85 | 6,755,038.85 | |||
| (4) Increased due to business combinations | 142,365,545.68 | 1,592,920.35 | 345,470.00 | 475,280.00 | 144,779,216.03 |
| 3. Decrease | 8,737,522.93 | 23,104,363.53 | 475,280.00 | 32,317,166.46 | |
| (1) Disposed | 8,737,522.93 | 1,670,840.21 | 475,280.00 | 10,883,643.14 | |
| (2) Transferred to fixed assets | 21,433,523.32 | 21,433,523.32 | |||
| 4.Closing balance | 1,413,525,626.05 | 30,676,878.28 | 345,470.00 | 93,200,186.63 | 1,537,748,160.96 |
| II. Accumulated depreciation | |||||
| 1. Opening balance | 198,953,601.81 | 10,773,943.44 | 5,518,515.66 | 215,246,060.91 | |
| 2. Increase | 86,621,585.81 | 4,046,273.17 | 269,898.56 | 1,957,876.72 | 92,895,634.26 |
| (1) Recognized | 70,451,623.47 | 3,950,698.54 | 129,551.28 | 1,482,596.72 | 76,014,470.01 |
| (2) Differences in translation of foreign currency financial statements | 822,374.04 | 822,374.04 | |||
| (3) Increased due | 15,347,588.30 | 95,574.63 | 140,347.28 | 475,280.00 | 16,058,790.21 |
| to business combinations | |||||
| 3. Decrease | 8,737,522.93 | 13,848,782.11 | 475,280.00 | 23,061,585.04 | |
| (1) Disposed | 8,737,522.93 | 1,670,840.21 | 475,280.00 | 10,883,643.14 | |
| (2) Acquisition of assets under finance lease | 12,177,941.90 | 12,177,941.90 | |||
| 4.Closing balance | 276,837,664.69 | 971,434.50 | 269,898.56 | 7,001,112.38 | 285,080,110.13 |
| III. Allowance for impairment loss | |||||
| 1. Opening balance | |||||
| 2. Increase | |||||
| (1) Recognized | |||||
| 3. Decrease | |||||
| (1) Disposed | |||||
| 4. Closing balance | |||||
| IV. Carrying value | |||||
| 1. Closing balance | 1,136,687,961.36 | 29,705,443.78 | 75,571.44 | 86,199,074.25 | 1,252,668,050.83 |
| 2. Opening balance | 852,649,083.30 | 10,737,499.74 | 87,681,670.97 | 951,068,254.01 |
(2) Impairment assessment of right-of-use assets
□ Applicable ? N/A
26. Intangible assets
(1) Particulars of intangible assets
In RMB
| Item | Land use right | Patent | Unpatented technology | Software | Trademark and patent | Development costs | Customer resources | Total |
| I. Original value | ||||||||
| 1. Opening balance | 249,003,308.43 | 232,519,348.24 | 140,567,942.35 | 6,733,029.45 | 628,823,628.47 | |||
| 2. Increase | 380,091,277.46 | 131,169,220.17 | 14,150,943.41 | 207,803,629.23 | 733,215,070.27 | |||
| (1) Acquired | 205,681,870.87 | 3,011,984.82 | 208,693,855.69 | |||||
| (2) Internal R&D | ||||||||
| (3) Increased due to business combinations | 123,630,406.59 | 92,148,597.19 | 207,803,629.23 | 423,582,633.01 | ||||
| (4) Differences in translation of foreign currency financial statements | 453,336.36 | 453,336.36 | ||||||
| (5) Transferred from construction in progress | 50,779,000.00 | 35,555,301.80 | 14,150,943.41 | 100,485,245.21 | ||||
| 3. Decrease | 1,301,960.15 | 1,301,960.15 | ||||||
| (1) Disposed | 1,301,960.15 | 1,301,960.15 | ||||||
| 4. Closing balance | 629,094,585.89 | 362,386,608.26 | 154,718,885.76 | 6,733,029.45 | 207,803,629.23 | 1,360,736,738.59 | ||
| II. Accumulated amortization | ||||||||
| 1. Opening balance | 67,599,772.86 | 166,692,664.59 | 85,208,441.65 | 6,733,029.45 | 326,233,908.55 | |||
| 2. Increase | 32,487,007.66 | 105,051,027.03 | 14,447,161.94 | 19,048,666.01 | 171,033,862.64 | |||
| (1) Recognized | 8,102,283.40 | 45,413,925.79 | 12,226,881.94 | 19,048,666.01 | 84,791,757.14 | |||
| (2) Increased due to business combinations | 24,384,724.26 | 59,184,865.67 | 83,569,589.93 | |||||
| (3) Differences in translation of foreign currency financial statements | 452,235.57 | 2,220,280.00 | 2,672,515.57 | |||||
| 3. Decrease | 223,454.34 | 223,454.34 |
| (1) Disposed | 223,454.34 | 223,454.34 | ||||||
| 4. Closing balance | 100,086,780.52 | 271,520,237.28 | 99,655,603.59 | 6,733,029.45 | 19,048,666.01 | 497,044,316.85 | ||
| III. Allowance for impairment loss | ||||||||
| 1. Opening balance | ||||||||
| 2. Increase | ||||||||
| (1) Recognized | ||||||||
| 3. Decrease | ||||||||
| (1) Disposed | ||||||||
| 4. Closing balance | ||||||||
| IV. Carrying value | ||||||||
| 1. Closing balance | 529,007,805.37 | 90,866,370.98 | 55,063,282.17 | 188,754,963.22 | 863,692,421.74 | |||
| 2. Opening balance | 181,403,535.57 | 65,826,683.65 | 55,359,500.70 | 302,589,719.92 |
27. Goodwill
(1) Original value of goodwill
In RMB
| Investee or event giving rise to goodwill | Opening balance | Increase | Decrease | Closing balance | ||
| Arising from business combination | Disposed | |||||
| MFLEX | 1,770,752,915.84 | 1,770,752,915.84 | ||||
| Multek | 179,329,062.90 | 179,329,062.90 | ||||
| Mutto Optronics | 153,957,647.78 | 153,957,647.78 | ||||
| RF Top Electronic | 135,001,580.53 | 135,001,580.53 | ||||
| Aranda asset group | 50,502,380.96 | 50,502,380.96 | ||||
| Total | 2,239,041,207.05 | 50,502,380.96 | 2,289,543,588.01 | |||
(2) Allowance for impairment of goodwill
In RMB
| Investee or event giving rise to goodwill | Opening balance | Increase | Decrease | Closing balance | ||
| Recognized | Disposed | |||||
| Mutto Optronics | 38,233,132.28 | 29,242,600.72 | 67,475,733.00 | |||
| Aranda asset group | 4,000,219.86 | 4,000,219.86 | ||||
| RF Top Electronic | 8,868,134.17 | 8,868,134.17 | ||||
| Total | 47,101,266.45 | 33,242,820.58 | 80,344,087.03 | |||
(3) Information of asset group or combination of asset groups to which the goodwill belongs
| Name | Composition of asset group or combination of asset group and basis for grouping | Business segment and basis for classification | Whether or not the same as prior years |
| MFLEX | All of its assets and liabilities when acquired by the Company | PCB, manufacturing circuit boards | Yes |
| Multek | All of its assets and liabilities when acquired by the Company | PCB, manufacturing circuit boards | Yes |
| Mutto Optronics | All of its assets and liabilities | Touch panel and LCM, manufacturing touch panels | Yes |
| RF Top Electronic | All of its assets and liabilities | Precision components, manufacturing ceramic filters | Yes |
(4) Method of determination of recoverable amounts
Recoverable amount determined based on fair value net of disposal cost:
□ Applicable ? N/A
Recoverable amount determined based on the present value of estimated future cash flows:
? Applicable □ N/A
In RMB
| Item | Carrying value | Recoverable amount | Impairment loss | Forecast period | Key parameters for the forecast period | Key parameters for the stable period | Basis for determining the key parameters for the stable period |
| MFLEX | 11,065,825,804.14 | 18,740,000,000.00 | 5 years | Revenue growth rate: 0.08%; margin growth rate: 16.65% | Revenue growth rate: 0%; margin growth rate: 16.19% | Pre-tax discount rate of 11.68%, determined based on the weighted average capital cost as adjusted | |
| Multek | 2,384,815,341.96 | 2,690,000,000.00 | 5 years | Revenue growth rate: 2.37%; margin growth rate: 16.86% | Revenue growth rate: 0%; margin growth rate: 16.74% | Pre-tax discount rate of 10.99%, determined based on the weighted average capital cost as adjusted | |
| Mutto Optronics | 449,242,600.72 | 420,000,000.00 | 29,242,600.72 | 5 years | Revenue growth rate: 2.61%; margin growth rate: 6.86% | Revenue growth rate: 0%; margin growth rate: 7.12% | Pre-tax discount rate of 10.84%, determined based on the weighted average capital cost as adjusted |
| RF Top Electronic | 363,486,919.03 | 386,000,000.00 | 5 years | Revenue growth rate: 10.00%; margin growth rate: 20.68% | Revenue growth rate: 0%; margin growth rate: 24.69% | Pre-tax discount rate of 12.46%, determined based on the weighted average capital cost as adjusted | |
| Total | 14,263,370,665.85 | 22,236,000,000.00 | 29,242,600.72 |
Note: The increase in the allowance for impairment of goodwill was primarily due to a goodwill impairment recognized as a resultof the reversal of deferred tax liabilities arising from an increase in the appraised value of Aranda acquired by the Company, andthe effect of goodwill impairment assessment.
1) According to the Valuation Report (Canwin Valuation Report [2024] No. 2-12) issued by Canwin Appraisal Co., Ltd., therecoverable amount of the asset group or combination of asset groups including the goodwill for MFLEX wasRMB18,740,000,000.00, which was higher than its carrying value of RMB7,674,174,195.86, so the goodwill was not impaired.
2) According to the Valuation Report (Canwin Valuation Report [2024] No. 2-13) issued by Canwin Appraisal Co., Ltd., therecoverable amount of the asset group or combination of asset groups including the goodwill for Multek wasRMB2,690,000,000.00, which was higher than its carrying value of RMB305,184,658.04, so the goodwill was not impaired.
3) According to the Valuation Report (Canwin Valuation Report [2024] No. 2-13) issued by Canwin Appraisal Co., Ltd., therecoverable amount of the asset group or combination of asset groups including the goodwill for Mutto Optronics wasRMB420,000,000.00, while its carrying value was RMB449,242,600.72, so a goodwill impairment of RMB29,242,600.72 wasrecognized.
4) According to the Valuation Report (Zhongsheng Valuation Report [2024] No. 0067) issued by Zhongsheng Appraisal &Consulting Co., Ltd., the recoverable amount of the asset group or combination of asset groups including the goodwill for RF TopElectronic was RMB386,000,000.00, which was higher than its carrying value of RMB22,513,080.97, so the goodwill was notimpaired.
(5) The completion of performance commitments and corresponding goodwill impairmentGoodwill was recognized based on performance commitments made during the reporting period or the preceding period ofperformance commitments.? Applicable ? N/A
28. Long-term deferred expenses
In RMB
| Item | Opening balance | Increase | Amortization | Other decreases | Closing balance |
| Decoration costs of fixed assets and others | 501,517,044.33 | 619,495,951.41 | 254,140,804.53 | 866,872,191.21 | |
| Total | 501,517,044.33 | 619,495,951.41 | 254,140,804.53 | 866,872,191.21 |
29. Deferred tax assets/deferred tax liabilities
(1) Deferred tax assets not offset
In RMB
| Item | Closing balance | Opening balance | ||
| Deductible temporary differences | Deferred tax assets | Deductible temporary differences | Deferred tax assets | |
| Allowance for impairment of assets | 800,118,130.88 | 128,429,874.02 | 1,152,275,069.45 | 181,401,380.14 |
| Deductible losses | 2,579,402,663.68 | 389,544,407.25 | 1,466,877,523.35 | 222,911,742.77 |
| Fixed assets | 55,181,543.30 | 13,469,931.13 | 200,864,027.50 | 30,334,952.34 |
| Accrued expenses | 132,769,288.28 | 26,353,080.15 | 200,467,698.35 | 40,863,348.65 |
| Lease liabilities | 1,872,497,186.10 | 342,955,848.83 | 1,671,260,217.63 | 271,245,622.44 |
| Unrealized inter-company transactions | 255,979,699.52 | 59,652,829.61 | ||
| Provisions | 57,512,864.31 | 10,480,061.52 | 69,202,183.16 | 12,324,185.63 |
| Deferred income | 660,215,044.53 | 107,254,395.87 | 747,587,634.12 | 121,151,814.13 |
| Total | 6,413,676,420.60 | 1,078,140,428.38 | 5,508,534,353.56 | 880,233,046.10 |
(2) Deferred tax liabilities not offset
In RMB
| Item | Closing balance | Opening balance | ||
| Taxable temporary differences | Deferred tax liabilities | Taxable temporary differences | Deferred tax liabilities | |
| One-off deduction of depreciation of fixed assets | 1,588,082,312.80 | 318,338,339.27 | 1,803,750,324.83 | 380,449,918.63 |
| Accrued interest income and others | 86,995,017.26 | 18,917,600.59 | 69,638,588.72 | 14,859,117.31 |
| Right-of-use assets | 1,252,668,050.83 | 266,830,422.09 | 1,298,935,545.47 | 252,034,574.31 |
| Income tax payable due to increase in appraised value | 384,245,651.82 | 87,206,749.88 | ||
| Total | 3,311,991,032.71 | 691,293,111.83 | 3,172,324,459.02 | 647,343,610.25 |
(3) Deferred tax assets and deferred tax liabilities presented on a netting basis
In RMB
| Item | Closing offset amount of deferred tax assets and liabilities | Closing balance of deferred tax assets or liabilities after offset | Opening offset amount of deferred tax assets and liabilities | Opening balance of deferred tax assets or liabilities after offset |
| Deferred tax assets | 1,078,140,428.38 | 787,330,085.52 | ||
| Deferred tax liabilities | 691,678,802.70 | 554,440,649.67 |
(4) Unrecognized deferred tax assets
In RMB
| Item | Closing balance | Opening balance |
| Deductible temporary differences | 1,045,519,017.80 | 917,684,269.16 |
| Deductible losses | 470,774,420.57 | 460,552,464.56 |
| Total | 1,516,293,438.37 | 1,378,236,733.72 |
(5) Deductible losses on unrecognized deferred tax assets that will expire in the following years
In RMB
| Year | Closing balance | Opening balance | Remark |
| 2023 | 13,996,117.83 | ||
| 2024 | 40,403,329.83 | 40,403,329.83 | |
| 2025 | 100,804,003.97 | 100,804,003.97 | |
| 2026 | 39,377,012.01 | 39,377,012.01 | |
| 2027 | 265,972,000.92 | 265,972,000.92 | |
| 2028 | 24,218,073.84 | ||
| Total | 470,774,420.57 | 460,552,464.56 |
30. Other non-current assets
In RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Allowance for impairment loss | Carrying value | Book balance | Allowance for impairment loss | Carrying value | |
| Deferred income – unrealized gain or loss on sale and leaseback | 26,662,462.41 | 26,662,462.41 | 33,780,926.88 | 33,780,926.88 | ||
| Prepayment for projects and equipment | 906,360,511.93 | 906,360,511.93 | 838,731,849.70 | 838,731,849.70 | ||
| Total | 933,022,974.34 | 933,022,974.34 | 872,512,776.58 | 872,512,776.58 | ||
31. Assets subject to restrictions on ownership or right of use
In RMB
| Item | Closing balance | Opening balance | ||||||
| Book balance | Carrying value | Type of restriction | Reason of restriction | Book balance | Carrying value | Type of restriction | Reason of restriction | |
| Cash and bank balances | 1,315,351,783.39 | 1,315,351,783.39 | Pledge | Security deposit for bills, etc. | 1,674,175,995.02 | 1,674,175,995.02 | Pledge | Security deposit for bills, etc. |
| Notes receivable | 130,000,000.00 | 130,000,000.00 | Pledge | Discounted but yet not matured bills | ||||
| Fixed assets | 784,051,228.85 | 418,641,701.59 | Mortgage | Security for loans, sales and leaseback | 751,006,098.07 | 459,521,491.55 | Mortgage | Security for loans, sale and leaseback |
| Accounts receivable financing | 172,685,965.02 | 172,685,965.02 | Pledge | Pledge of bills | 441,621,937.83 | 441,621,937.83 | Pledge | Pledge of bills |
| Right-of- | 1,535,413,001.39 | 1,252,668,050.83 | Mortgage | Finance lease | 1,166,314,314.92 | 951,068,254.01 | Mortgage | Finance lease |
| use assets | ||||||||
| Accounts receivable | 96,168,092.66 | 96,168,092.66 | Pledge | Factoring | ||||
| Total | 4,033,670,071.31 | 3,385,515,593.49 | 4,033,118,345.84 | 3,526,387,678.41 |
32. Short-term borrowings
(1) Short-term borrowings by category
In RMB
| Item | Closing balance | Opening balance |
| Pledge loans | 747,939,478.37 | |
| Credit loans | 4,376,608,244.06 | 5,734,146,965.18 |
| Discounting and factoring of notes, letters of credit and accounts receivable | 779,491,972.95 | 1,312,323,501.13 |
| Total | 5,156,100,217.01 | 7,794,409,944.68 |
33. Financial liabilities held for trading
In RMB
| Item | Closing balance | Opening balance |
| Financial liabilities held for trading | 104,174,076.23 | 91,517,116.89 |
| Incl.: | ||
| Derivative financial liabilities | 104,174,076.23 | 91,517,116.89 |
| Incl.: | ||
| Total | 104,174,076.23 | 91,517,116.89 |
34. Derivative financial liabilities
35. Notes payable
In RMB
| Category | Closing balance | Opening balance |
| Commercial acceptance bills | 52,292,024.62 | 280,442,316.20 |
| Banker’s acceptance bills | 856,879,191.31 | 1,727,963,543.99 |
| Total | 909,171,215.93 | 2,008,405,860.19 |
36. Accounts payable
In RMB
| Item | Closing balance | Opening balance |
| Payment for materials | 6,672,185,481.42 | 5,156,025,655.74 |
| Payment for projects and equipment | 1,055,789,013.23 | 563,403,370.98 |
| Others | 311,132,681.87 | 266,857,563.60 |
| Total | 8,039,107,176.52 | 5,986,286,590.32 |
37. Other payables
In RMB
| Item | Closing balance | Opening balance |
| Other payables | 80,188,628.54 | 54,324,601.72 |
| Total | 80,188,628.54 | 54,324,601.72 |
1) Other payables by nature
In RMB
| Item | Closing balance | Opening balance |
| Temporary receipts payable | 60,966,287.79 | 30,358,476.53 |
| Others | 19,222,340.75 | 23,966,125.19 |
| Total | 80,188,628.54 | 54,324,601.72 |
38. Advances from clients
39. Contract liabilities
In RMB
| Item | Closing balance | Opening balance |
| Trade payables | 28,982,676.07 | 26,193,456.12 |
| Total | 28,982,676.07 | 26,193,456.12 |
40. Employee benefits payable
(1) Employee benefits payable
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| I. Short-term benefits | 490,065,662.97 | 4,120,276,390.76 | 4,070,078,098.37 | 540,263,955.36 |
| II. Post-employment benefits - defined contribution plans | 10,059,652.33 | 292,066,802.24 | 289,211,429.25 | 12,915,025.32 |
| III. Termination benefits | 4,181,685.07 | 4,181,685.07 | ||
| Total | 500,125,315.30 | 4,416,524,878.07 | 4,363,471,212.69 | 553,178,980.68 |
(2) Short-term employee benefits
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| 1. Wages, bonuses, allowances and subsidies | 477,783,158.98 | 3,582,146,645.16 | 3,529,704,788.53 | 530,225,015.61 |
| 2. Staff welfare | 8,347,077.03 | 233,793,571.45 | 242,140,648.48 | |
| 3. Social insurance contributions | 3,307,563.55 | 150,428,864.50 | 148,108,817.90 | 5,627,610.15 |
| Workers’ compensation insurance | 290,015.13 | 8,735,380.68 | 8,591,031.45 | 434,364.36 |
| Medical and maternity insurance | 3,017,548.42 | 141,693,483.82 | 139,517,786.45 | 5,193,245.79 |
| 4. Housing provident fund | 565,575.35 | 139,484,492.85 | 137,395,679.32 | 2,654,388.88 |
| 5. Trade union fund and employee education fund | 62,288.06 | 14,422,816.80 | 12,728,164.14 | 1,756,940.72 |
| Total | 490,065,662.97 | 4,120,276,390.76 | 4,070,078,098.37 | 540,263,955.36 |
(3) Defined contribution plans
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| 1. Basic pension insurance | 9,558,389.21 | 281,944,662.57 | 279,185,813.20 | 12,317,238.58 |
| 2. Unemployment insurance | 501,263.12 | 10,122,139.67 | 10,025,616.05 | 597,786.74 |
| Total | 10,059,652.33 | 292,066,802.24 | 289,211,429.25 | 12,915,025.32 |
41. Taxes payable
In RMB
| Item | Closing balance | Opening balance |
| Value-added tax | 15,906,070.71 | 51,132,065.23 |
| Enterprise income tax | 425,307,243.33 | 339,281,179.49 |
| Individual income tax | 7,474,547.48 | 6,334,094.56 |
| Urban maintenance and construction tax | 6,227,121.91 | 3,920,049.58 |
| Property tax | 8,141,101.87 | 3,841,808.72 |
| Stamp duty | 6,471,998.78 | 4,553,692.87 |
| Education surcharge | 2,672,083.16 | 1,765,890.80 |
| Land use tax | 735,915.46 | 267,878.11 |
| Local education surcharge | 1,781,388.79 | 1,061,118.33 |
| Other taxes | 858,735.34 | 132,003.25 |
| Total | 475,576,206.83 | 412,289,780.94 |
42. Liabilities held for trading
43. Non-current liabilities due within one year
In RMB
| Item | Closing balance | Opening balance |
| Long-term borrowings due within one year | 2,467,018,914.05 | 1,165,803,694.70 |
| Lease liabilities due within one year | 29,697,992.30 | 23,941,171.43 |
| Total | 2,496,716,906.35 | 1,189,744,866.13 |
44. Other current liabilities
In RMB
| Item | Closing balance | Opening balance |
| Output tax to be recognized | 6,556,017.38 | 4,476,657.36 |
| Total | 6,556,017.38 | 4,476,657.36 |
45. Long-term borrowings
(1) Long-term borrowings by category
In RMB
| Item | Closing balance | Opening balance |
| Pledge loans | 764,600,000.00 | |
| Credit loans | 3,741,405,477.65 | 2,583,821,643.49 |
| Guaranteed and pledge loans | 100,000,000.00 | |
| Mortgage and guaranteed loans | 200,274,861.11 | 514,000,000.00 |
| Total | 4,706,280,338.76 | 3,197,821,643.49 |
46. Bonds payable
47. Lease liabilities
In RMB
| Item | Closing balance | Opening balance |
| Lease obligations payable | 2,098,735,814.79 | 1,985,857,535.57 |
| Less: Unrecognized financing costs | -255,936,620.99 | -338,538,489.37 |
| Total | 1,842,799,193.80 | 1,647,319,046.20 |
48. Long-term payables
In RMB
| Item | Closing balance | Opening balance |
| Long-term payables | 296,995,789.48 | |
| Total | 296,995,789.48 |
(1) Long-term payables by nature
In RMB
| Item | Closing balance | Opening balance |
| Share purchase price | 296,995,789.48 |
49. Long-term employee benefits payable
50. Provisions
In RMB
| Item | Closing balance | Opening balance | Reason |
| Product warranty | 30,235,945.92 | 42,352,230.73 | |
| Provision for sales return | 30,549,264.52 | 26,849,952.43 | |
| Total | 60,785,210.44 | 69,202,183.16 |
51. Deferred income
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance | Reason |
| Government grants | 747,587,634.12 | 131,751,774.19 | 145,882,723.14 | 733,456,685.17 | Government grants |
| Total | 747,587,634.12 | 131,751,774.19 | 145,882,723.14 | 733,456,685.17 | -- |
52. Other non-current liabilities
53. Share capital
In RMB
| Opening balance | +/- | Closing balance | |||||
| New issue | Bonus shares | Capitalization of capital reserve | Others | Subtotal | |||
| Total shares | 1,709,867,327.00 | 1,709,867,327.00 | |||||
54. Other equity instruments
55. Capital reserve
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| Capital premium (share premium) | 7,896,510,906.74 | 7,896,510,906.74 | ||
| Other capital reserve | 158,383,174.03 | 8,874,328.96 | 167,257,502.99 | |
| Total | 8,054,894,080.77 | 8,874,328.96 | 8,063,768,409.73 |
Other information: The change in capital reserve was due to share-based payments recognized under ESOPs in the current period.
56. Treasury shares
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| Treasury shares | 125,906,811.33 | 125,906,811.33 | ||
| Total | 125,906,811.33 | 125,906,811.33 |
57. Other comprehensive income
In RMB
| Item | Balance on January 1, 2023 | 2023 | Balance on December 31, 2023 | |||||
| Amount before tax | Less: Other comprehensive income reclassified to profit or loss | Less: Other comprehensive income reclassified to retained earnings | Less: Income tax expenses | Amount attributable to the parent after tax | Amount attributable to minor interest after tax | |||
| I. Other comprehensive income that cannot be reclassified to profit or loss | -350,000,000.00 | -350,000,000.00 | ||||||
| Change in fair value of investments in other equity instruments | -350,000,000.00 | -350,000,000.00 | ||||||
| II. Other comprehensive income that will be reclassified to profit or loss | -342,976,005.21 | -84,114,998.93 | -72,938,763.54 | 10,512,338.04 | -21,688,573.43 | -364,664,578.64 | ||
| Reserves for cash flow hedge | -57,469,963.42 | -22,510,955.72 | -72,938,763.54 | 10,512,338.04 | 39,915,469.78 | -17,554,493.64 | ||
| Differences in translation of foreign currency financial statements | -285,506,041.79 | -61,604,043.21 | -61,604,043.21 | -347,110,085.00 | ||||
| Total other comprehensive income | -692,976,005.21 | -84,114,998.93 | -72,938,763.54 | 10,512,338.04 | -21,688,573.43 | -714,664,578.64 | ||
58. Special reserve
59. Surplus reserve
In RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| Statutory surplus reserve | 135,347,835.10 | 49,519,034.63 | 184,866,869.73 | |
| Total | 135,347,835.10 | 49,519,034.63 | 184,866,869.73 |
60. Retained profits
In RMB
| Item | 2023 | 2022 |
| Balance of retained profits at the end of the previous period before adjustment | 7,297,404,445.02 | 5,275,515,670.63 |
| Total adjustment to the opening balance of retained profits after adjustment (decrease expressed with “-”) | 18,372,951.79 | |
| Opening balance of retained profits after adjustment | 7,297,404,445.02 | 5,293,888,622.42 |
| Add: Net profit attributable to owners of the parent | 1,964,525,269.65 | 2,368,347,970.02 |
| Less: Appropriation to statutory surplus reserve | 49,519,034.63 | 23,649,519.95 |
| Dividends payable to the ordinary shareholders | 187,315,150.99 | 341,182,627.47 |
| Closing balance of retained profits | 9,025,095,529.05 | 7,297,404,445.02 |
Particulars of adjustment to the retained profits at the beginning of the current period:
1) Effect of retrospective adjustment pursuant to the CASBEs and related new provisions thereunder on the opening balance ofretained profits: Nil.
2) Effect of changes in accounting policies on the opening balance of retained profits: RMB18,372,951.79.
3) Effect of correction of material accounting errors on the opening balance of retained profits: Nil.
4) Effect of changes in the scope of consolidation resulting from business combinations involving entities under common controlon the opening balance of retained profits: Nil.
5) Cumulative effect of other adjustments on the opening balance of retained profits: Nil.
61. Operating revenue and operating costs
In RMB
| Item | 2023 | 2022 | ||
| Revenue | Cost | Revenue | Cost | |
| Primary business | 33,475,973,831.47 | 28,425,160,342.65 | 31,450,821,150.93 | 25,961,338,699.87 |
| Other business | 175,231,637.33 | 116,480,700.09 | 129,325,581.65 | 59,340,633.37 |
| Total | 33,651,205,468.80 | 28,541,641,042.74 | 31,580,146,732.58 | 26,020,679,333.24 |
Whether the lower of the net profit before and after the deduction of non-recurring gain or loss is negative?
□ Yes ? No
62. Taxes and surcharges
In RMB
| Item | 2023 | 2022 |
| Urban maintenance and construction tax | 42,047,978.00 | 42,173,074.00 |
| Education surcharge | 18,986,817.25 | 18,333,969.54 |
| Property tax | 24,366,953.46 | 16,738,300.91 |
| Land use tax | 1,981,401.11 | 1,587,701.79 |
| Vehicle and vessel tax | 53,430.27 | 9,563.33 |
| Stamp duty | 21,991,019.79 | 14,176,516.91 |
| Environmental protection tax | 807,946.43 | 404,606.40 |
| Local education surcharge | 12,733,547.98 | 12,228,157.62 |
| Total | 122,969,094.29 | 105,651,890.50 |
63. Administrative expenses
In RMB
| Item | 2023 | 2022 |
| Employee benefits | 467,679,720.20 | 445,921,834.05 |
| Depreciation and amortization | 156,374,496.81 | 124,492,061.14 |
| Consulting service fees | 82,075,606.89 | 58,050,066.27 |
| Office expenses | 51,393,464.05 | 44,182,104.24 |
| Entertainment expenses | 72,376,322.16 | 44,097,815.99 |
| Travel expenses | 21,691,454.80 | 15,460,221.90 |
| Rents | 3,992,796.13 | 10,211,075.07 |
| Repair costs | 30,527,647.62 | 19,422,207.36 |
| Taxes | 999,118.09 | 1,409,194.20 |
| Others | 70,213,292.11 | 52,415,906.67 |
| Total | 957,323,918.86 | 815,662,486.89 |
64. Selling expenses
In RMB
| Item | 2023 | 2022 |
| Employee benefits | 203,487,546.56 | 178,775,039.38 |
| Sales service fees | 63,214,240.46 | 35,375,649.64 |
| Export charges | 17,420,576.66 | 24,666,048.57 |
| Travel expenses | 11,187,985.21 | 26,656,711.23 |
| Entertainment expenses | 24,420,099.35 | 18,403,395.91 |
| Others | 42,363,653.52 | 69,116,608.77 |
| Total | 362,094,101.76 | 352,993,453.50 |
65. R&D expenses
In RMB
| Item | 2023 | 2022 |
| Direct costs | 476,990,832.66 | 448,026,811.32 |
| Labor costs | 499,166,662.04 | 367,119,066.09 |
| Depreciation and amortization | 86,545,177.50 | 76,160,187.19 |
| Others | 98,487,602.28 | 48,779,387.38 |
| Total | 1,161,190,274.48 | 940,085,451.98 |
66. Financial expenses
In RMB
| Item | 2023 | 2022 |
| Interest expenses | 370,433,774.62 | 302,704,601.47 |
| Interest on leases and financing fees | 93,255,168.88 | 80,950,330.25 |
| Less: Interest income | -225,593,949.55 | -42,128,725.22 |
| Add: Exchange loss | -93,398,783.31 | -204,336,793.36 |
| Bank charges and others | 44,435,526.05 | 62,443,691.35 |
| Total | 189,131,736.69 | 199,633,104.49 |
67. Other income
In RMB
| Sources of other income | 2023 | 2022 |
| Government grants related to assets | 145,882,723.14 | 142,868,540.16 |
| Government grants related to income | 102,195,944.89 | 174,748,593.64 |
| Refund of individual income tax withholding service fees | 1,803,288.48 | 956,961.84 |
68. Net exposure hedging income
69. Gain on changes in fair value
In RMB
| Source of gain on changes in fair value | 2023 | 2022 |
| Financial assets held for trading | -9,740,779.67 | -66,613,459.50 |
| Total | -9,740,779.67 | -66,613,459.50 |
70. Investment income
In RMB
| Item | 2023 | 2022 |
| Income from long-term equity investments under the equity method | -10,820,910.91 | -3,353,804.37 |
| Investment income from financial assets held for trading during the holding period | 6,960,501.71 | 6,348,937.52 |
| Investment income from the disposal of financial assets held for trading | 17,064,250.96 | 7,015,976.12 |
| Discount loss on accounts receivable financing | -9,045,317.41 | -10,933,498.09 |
| Total | 4,158,524.35 | -922,388.82 |
71. Credit loss
In RMB
| Item | 2023 | 2022 |
| Loss from doubtful accounts | -39,436,689.63 | -76,228,643.25 |
| Total | -39,436,689.63 | -76,228,643.25 |
72. Impairment loss on assets
In RMB
| Item | 2023 | 2022 |
| I. Impairment of inventories and contract fulfilling costs | -397,214,961.29 | -441,556,620.37 |
| II. Impairment of long-term equity investments | -9,319,087.50 | |
| IV. Impairment of fixed assets | -11,049,705.17 | |
| X. Impairment of goodwill | -33,242,820.58 | -19,782,833.44 |
| XII. Others | 1,100,106.59 | 4,184,595.15 |
| Total | -438,676,762.78 | -468,204,563.83 |
73. Gain on disposal of assets
In RMB
| Source of gain on disposal of assets | 2023 | 2022 |
| Gain on disposal of fixed assets | -18,240,640.06 | -5,513,221.27 |
74. Non-operating revenue
In RMB
| Item | 2023 | 2022 | Amount recognized in non-recurring gain or loss |
| Penalties | 3,153,492.52 | 7,926,374.74 | 3,153,492.52 |
| Amounts that cannot be paid | 2,085,714.60 | 3,996,486.25 | 2,085,714.60 |
| Others | 1,426,664.84 | 289,484.75 | 1,426,664.84 |
| Investment income | 134,812,863.84 | 134,812,863.84 | |
| Total | 141,478,735.80 | 12,212,345.74 |
75. Non-operating expenses
In RMB
| Item | 2023 | 2022 | Amount recognized in non-recurring gain or loss |
| Donations | 3,522,368.13 | 6,916,600.00 | 3,522,368.13 |
| Loss on destruction and retirement of non-current assets | 8,127,234.15 | 8,707,696.75 | 8,127,234.15 |
| Penalties, overdue fines and liquidated damages | 605,672.00 | 1,440,637.80 | 605,672.00 |
| Others | 2,936,415.30 | 781,275.49 | 2,936,415.30 |
| Total | 15,191,689.58 | 17,846,210.04 |
76. Income tax expenses
(1) Statement of income tax expenses
In RMB
| Item | 2023 | 2022 |
| Income tax expense | 566,656,749.91 | 447,982,671.47 |
| Deferred income tax expenses | -340,618,962.41 | 24,853,791.34 |
| Total | 226,037,787.50 | 472,836,462.81 |
(2) Reconciliation of income tax expenses to accounting profit
In RMB
| Item | 2023 |
| Total profit | 2,191,087,954.92 |
| Income tax expenses calculated based on statutory/applicable tax rate | 328,663,193.24 |
| Effect of different tax rates applicable to subsidiaries | 21,407,363.25 |
| Effect of adjustment of income taxes for prior years | -80,205,723.18 |
| Effect of non-deductible costs, expenses and losses | 4,796,799.62 |
| Effect of deductible temporary differences or deductible losses not recognized for deferred tax assets for the current period | 19,985,704.42 |
| Effect of super deduction of R&D expenses | -68,609,549.85 |
| Income tax expenses | 226,037,787.50 |
77. Other comprehensive income
See Notes to the Financial Statements.
78. Items of the cash flow statement
(1) Cash flows related to operating activities
Other cash receipts related to operating activities:
In RMB
| Item | 2023 | 2022 |
| Security deposit for acceptance bills | 619,568,010.65 | 406,241,523.96 |
| Government grants | 200,684,445.55 | 379,880,087.27 |
| Interest income | 210,139,325.51 | 42,128,725.22 |
| Temporary receipts payable and others | 34,254,072.08 | 27,886,394.91 |
| Total | 1,064,645,853.79 | 856,136,731.36 |
Other cash payments related to operating activities
In RMB
| Item | 2023 | 2022 |
| Security deposit for acceptance bills | 447,811,795.42 | 767,949,563.14 |
| Payment of period expenses in cash | 589,898,141.45 | 470,246,313.16 |
| Bank charges | 44,435,526.05 | 62,443,691.35 |
| Temporary payments receivable and others | 1,748,926.64 | 36,575,288.51 |
| Total | 1,083,894,389.56 | 1,337,214,856.16 |
(2) Cash flows related to investing activities
Other cash receipts related to investing activities
In RMB
| Item | 2023 | 2022 |
| Recovery of term deposits | 439,820,656.38 | 228,424,521.00 |
| Recovery of performance compensation | 7,000,000.00 | |
| Total | 439,820,656.38 | 235,424,521.00 |
Other cash payments related to investing activities
In RMB
| Item | 2023 | 2022 |
| Term deposits | 682,400,228.05 | 455,064,192.71 |
| Security deposit for the acquisition | 226,168,789.48 | |
| Total | 908,569,017.53 | 455,064,192.71 |
(3) Cash flows related to financing activities
Other cash receipts related to financing activities
In RMB
| Item | 2023 | 2022 |
| Security deposits | 599,543,791.66 | 826,870,220.72 |
| Proceeds from discounts on acceptance bills and letters of credit | 729,491,972.95 | 1,312,323,501.13 |
| Total | 1,329,035,764.61 | 2,139,193,721.85 |
Other cash payments related to financing activities
In RMB
| Item | 2023 | 2022 |
| Security deposits | 261,577,385.74 | 453,162,239.17 |
| Payment of rents | 183,001,957.26 | 253,811,187.11 |
| Payments under bill financing | 1,297,119,441.20 | 1,337,897,642.56 |
| Repurchase of shares | 49,990,856.17 | |
| Acquisition of minority interests in RF Top Electronic | 97,834,888.06 | |
| Total | 1,741,698,784.20 | 2,192,696,813.07 |
Changes in liabilities arising from financing activities
□ Applicable ? N/A
79. Supplementary information to the cash flow statement
(1) Supplementary information to the cash flow statement
In RMB
| Supplementary information | 2023 | 2022 |
| 1. Reconciliation of net profit to cash flows from operating activities: | ||
| Net profit | 1,965,050,167.42 | 2,368,062,503.84 |
| Add: Allowance for impairment of assets | 478,113,452.41 | 544,433,207.08 |
| Depreciation of fixed assets, oil and gas assets, and productive biological assets | 1,828,511,050.11 | 1,697,771,894.84 |
| Depreciation of right-of-use assets | 76,014,470.01 | 100,106,051.84 |
| Amortization of intangible assets | 84,791,757.14 | 57,776,055.04 |
| Amortization of long-term deferred expenses | 254,140,804.53 | 157,201,034.52 |
| Loss on disposal of fixed assets, intangible assets and other long-term assets (gain expressed with “-”) | 18,240,640.06 | 5,513,221.27 |
| Loss on retirement of fixed assets (gain expressed with “-”) | 8,127,234.15 | 8,707,696.75 |
| Loss on changes in fair value (gain expressed with “-”) | 9,740,779.67 | 66,613,459.50 |
| Financial expenses (income expressed with “-”) | 356,010,007.62 | 179,318,138.36 |
| Investment loss (income expressed with “-”) | -13,203,841.76 | -10,011,109.27 |
| Decrease in deferred tax assets (increase expressed with “-”) | -197,907,382.28 | -279,275,317.07 |
| Increase in deferred tax liabilities (decrease expressed with “-”) | -7,551,164.41 | 304,128,458.41 |
| Decrease in inventories (increase expressed with “-”) | -528,190,428.16 | -160,903,575.10 |
| Decrease in trade receivables (increase expressed with “-”) | 268,250,724.76 | 625,999,220.48 |
| Increase in trade payables (decrease expressed with “-”) | 698,298,848.99 | -1,052,291,844.61 |
| Others | -126,017,650.06 | 16,734,915.50 |
| Net cash flows from operating activities | 5,172,419,470.20 | 4,629,884,011.38 |
| 2. Significant investing and financing activities not involving cash receipts and payments | ||
| Debt-to-capital swap | ||
| Convertible corporate bonds due within one year | ||
| Fixed assets acquired under finance |
| leases | ||
| 3. Net changes in cash and cash equivalents: | ||
| Closing balance of cash | 5,644,487,018.31 | 5,457,026,822.70 |
| Less: Opening balance of cash | 5,457,026,822.70 | 3,939,301,126.79 |
| Add: Closing balance of cash equivalents | ||
| Less: Opening balance of cash equivalents | ||
| Net increase in cash and cash equivalents | 187,460,195.61 | 1,517,725,695.91 |
(2) Net cash paid for the acquisition of subsidiaries in the current period
(3) Net cash received from the disposal of subsidiaries in the current period
(4) Components of cash and cash equivalents
In RMB
| Item | Closing balance | Opening balance |
| I. Cash | 5,644,487,018.31 | 5,457,026,822.70 |
| Incl.: Cash on hand | 559,941.39 | 340,651.93 |
| Bank deposits immediately available for withdrawal | 5,643,927,076.92 | 5,456,686,170.77 |
| III. Closing balance of cash and cash equivalents | 5,644,487,018.31 | 5,457,026,822.70 |
(5) Amounts subject to restriction on use but still presented as cash and cash equivalents
In RMB
| Item | 2023 | 2022 | Reason for presentation as cash and cash equivalents |
| Offering proceeds | 30,654,962.53 | 104,031,255.89 | Immediately available for withdrawal despite of restriction on use |
| Total | 30,654,962.53 | 104,031,255.89 |
(6) Cash and bank balances not classified as cash and cash equivalents
In RMB
| Item | 2023 | 2022 | Reason for not classified as cash and cash equivalents |
| Term deposits and interest | 690,180,814.95 | 455,064,192.71 | May be unavailable for withdrawal due to pledge, freeze or otherwise |
| Security deposit for bills | 497,103,353.58 | 889,734,249.82 | May be unavailable for withdrawal due to pledge, freeze or otherwise |
| Security deposit for the acquisition | 230,197,429.36 | May be unavailable for withdrawal due to pledge, freeze or otherwise | |
| Security deposit for letters of credit | 73,225,915.43 | 59,093,243.44 | May be unavailable for withdrawal due to pledge, freeze or otherwise |
| Security deposit for letters of guarantee | 54,841,699.43 | 87,288,309.05 | May be unavailable for withdrawal due to pledge, freeze or otherwise |
| Security deposit for loans | 174,646,000.00 | May be unavailable for withdrawal due to pledge, freeze or otherwise | |
| Security deposit for foreign exchange transactions | 8,350,000.00 | May be unavailable for withdrawal due to pledge, freeze or otherwise | |
| Total | 1,545,549,212.75 | 1,674,175,995.02 |
80. Notes to items of the statement of changes in owners’ equity
Titles of items under “others” whose balance at the end of the previous year was adjusted and amount of adjustment:
81. Monetary items denominated in foreign currencies
(1) Monetary items denominated in foreign currencies
In RMB
| Item | Closing balance in foreign | Exchange rate | Closing balance in RMB |
| currency | |||
| Cash and bank balances | |||
| Incl.: USD | 558,879,977.22 | 7.0827 | 3,958,379,214.66 |
| EUR | 571,300.04 | 7.8592 | 4,489,961.27 |
| HKD | 1,332,881.14 | 0.9062 | 1,207,856.89 |
| KRW | 11,568,030.00 | 0.0055 | 63,624.17 |
| SGD | 4,411,846.57 | 5.3772 | 23,723,381.38 |
| NTD | 261,627.00 | 0.2314 | 60,540.49 |
| JPY | 200,982.36 | 0.0502 | 10,089.31 |
| SEK | 9,674.71 | 0.7110 | 6,878.72 |
| MXN | 7,963,587.98 | 0.4181 | 3,329,576.13 |
| THB | 43,843,261.44 | 0.2074 | 9,093,092.42 |
| Accounts receivable | |||
| Incl.: USD | 868,151,602.60 | 7.0827 | 6,148,857,355.74 |
| EUR | 74,192.00 | 7.8592 | 583,089.77 |
| HKD | |||
| JPY | 2,582,351.20 | 0.0502 | 129,634.03 |
| MXN | 733,568.66 | 0.4181 | 306,705.06 |
| Long-term borrowings | |||
| Incl.: USD | 6,216,932.28 | 7.0827 | 44,032,666.26 |
| EUR | |||
| HKD | |||
| Other receivables | 5,582,005.98 | ||
| Incl.: USD | 612,024.52 | 7.0827 | 4,334,786.07 |
| NTD | 13,000.00 | 0.2314 | 3,008.20 |
| MXN | 2,975,871.10 | 0.4181 | 1,244,211.71 |
| Short-term borrowings | 317,746,358.48 | ||
| Incl.: USD | 40,645,713.99 | 7.0827 | 287,881,398.48 |
| EUR | 3,800,000.00 | 7.8592 | 29,864,960.00 |
| Accounts payable | 3,080,098,899.87 | ||
| Incl.: USD | 432,437,416.05 | 7.0827 | 3,062,824,486.66 |
| EUR | 439,112.92 | 7.8592 | 3,451,076.26 |
| JPY | 275,327,745.00 | 0.0502 | 13,821,452.80 |
| SEK | 2,650.00 | 0.7110 | 1,884.15 |
| Employee benefits payable | 106,710,962.50 | ||
| Incl.: USD | 15,005,314.31 | 7.0827 | 106,278,139.66 |
| MXN | 1,035,213.69 | 0.4181 | 432,822.84 |
| Taxes payable | 129,467,727.16 | ||
| Incl.: USD | 18,182,287.29 | 7.0827 | 128,779,686.19 |
| MXN | 1,645,637.34 | 0.4181 | 688,040.97 |
| Other payables | 19,978,118.28 | ||
| Incl.: USD | 2,609,716.00 | 7.0827 | 18,483,835.51 |
| JPY | 2,747,701.00 | 0.0502 | 137,934.59 |
| MXN | 3,244,076.01 | 0.4181 | 1,356,348.18 |
| Non-current liabilities due within one year | 1,863,699.39 | ||
| Incl.: USD | 263,134.03 | 7.0827 | 1,863,699.39 |
(2) Information about overseas operating entities, including main places of business and functional currencies of majoroverseas operating entities, basis for the choice of functional currencies, and reasons for changes in functional currencies:
□ Applicable ? N/A
82. Leases
(1) The Company as the lessee
?Applicable □N/AVariable lease payments not included in lease liabilities:
□Applicable ?N/A
Lease expenses under short-term leases and leases of low-value assets using the simplified approach:
□Applicable ?N/A
Sale and leaseback transactions:
(2) The Company as the lessor
The Company as lessor under operating leases?Applicable □N/A
In RMB
| Item | Rental income | Incl.: Income related to variable lease payments not included in lease receipts |
| Rental income | 2,074,264.15 | |
| Total | 2,074,264.15 |
The Company as lessor under finance leases
□Applicable ?N/A
Annual undiscounted lease receipts in the following five years:
□Applicable ?N/A
Reconciliation of undiscounted lease receipts to net investment in leases:
(3) Gain or loss on sales under finance leases as producer or distributor
□Applicable ?N/A
VIII. Research and Development Expenses
In RMB
| Item | 2023 | 2022 |
| Direct costs | 476,990,832.66 | 448,026,811.32 |
| Labor costs | 499,166,662.04 | 367,119,066.09 |
| Depreciation | 86,545,177.50 | 76,160,187.19 |
| Others | 98,487,602.28 | 48,779,387.38 |
| Total | 1,161,190,274.48 | 940,085,451.98 |
| Incl.: Expensed research and development expenses | 1,161,190,274.48 | 940,085,451.98 |
IX. Changes in the Scope of Consolidation
1. Business combination involving entities not under common control
(1) Business combination involving entities not under common control effected in the current period
In RMB
| Acquiree | Time of acquisition of shares | Acquisition cost | Percentage of shares acquired | Method of acquisition | Acquisition date | Basis for determining the acquisition date | Revenues of the acquiree from the acquisition date till the end of the current period | Net profit of the acquiree from the acquisition date till the end of the current period | Cash flows of the acquiree from the acquisition date till the end of the current period |
| Suzhou JDI | February 1, 2023 | 1,382,684,003.83 | 100.00% | Acquisition | February 1, 2023 | When the control is actually gained | 2,514,129,505.84 | 128,984,222.52 | -248,837,791.83 |
| Aranda | February 1, 2023 | 360,773,589.22 | 100.00% | Acquisition | February 1, 2023 | When the control is actually gained | 367,294,065.03 | -12,895,662.95 | 30,193,527.70 |
(2) Acquisition cost and goodwill
In RMB
| Acquisition cost | Suzhou JDI | Aranda |
| --Cash | 1,382,684,003.83 | 289,946,589.22 |
| --Fair value of non-cash assets | ||
| --Fair value of liabilities issued or assumed | ||
| --Fair value of equity securities issued | ||
| --Fair value of contingent consideration | 70,827,000.00 | |
| --Fair value of shares at the acquisition date held prior to the acquisition date |
| --Others | ||
| Total acquisition cost | 1,382,684,003.83 | 360,773,589.22 |
| Less: Share of fair value of identifiable net assets acquired | 1,517,496,867.67 | 310,271,208.26 |
| Excess of the share of fair value of identifiable net assets acquired over goodwill/acquisition cost | -134,812,863.84 | 50,502,380.96 |
Method for determining the fair value of acquisition cost: The acquisition cost of Suzhou JDI is the amount of cash paid by theacquirer for gaining control over the acquiree at the acquisition date.Contingent consideration and changes therein: The acquisition cost of Aranda is the sum of cash and fair value of contingentconsideration paid or payable by the acquirer for gaining control over the acquiree at the acquisition date; where the contingentconsideration depends on the future results of operation of Aranda, and is up to USD10 million. The fair value of contingentconsideration is determined by applying the exchange rate prevailing at the acquisition date to USD1000, the maximum amountpayable in the future.
(3) Identifiable assets and liabilities of the acquirees at the acquisition date
In RMB
| Suzhou JDI | Aranda | |||
| Fair value at the acquisition date | Carrying value at the acquisition date | Fair value at the acquisition date | Carrying value at the acquisition date | |
| Assets: | 1,817,532,018.97 | 1,614,138,284.07 | 544,168,939.62 | 336,365,310.40 |
| Cash and bank balances | 503,174,580.68 | 503,174,580.68 | 8,681,780.00 | 8,681,780.00 |
| Accounts receivable | 404,450,501.88 | 404,450,501.88 | 61,622,190.43 | 61,622,190.43 |
| Inventories | 338,247,580.15 | 336,044,706.24 | 23,865,137.30 | 23,865,137.30 |
| Fixed assets | 350,430,429.36 | 255,511,571.22 | 73,667,928.80 | 73,667,928.80 |
| Intangible assets | 139,415,048.00 | 33,143,045.15 | 207,803,629.22 | |
| Deferred tax assets | 346,501.93 | 346,501.93 | ||
| Liabilities: | 248,455,370.13 | 251,064,299.20 | 233,897,731.36 | 190,258,969.22 |
| Borrowings | ||||
| Accounts payable | 190,671,256.87 | 190,671,256.87 | 36,554,844.60 | 36,554,844.60 |
| Deferred tax liabilities | 51,926,283.10 | 425,617.11 | 43,638,762.14 | |
| Deferred income | 869,643.03 | 3,478,572.10 | ||
| Net assets | 1,517,496,867.67 | 1,362,994,869.69 | 310,271,208.26 | 146,106,341.18 |
| Less: Minority interests | ||||
| Net assets acquired | 1,517,496,867.67 | 1,362,994,869.69 | 310,271,208.26 | 146,106,341.18 |
(4) Gain or loss on remeasurement of fair value of shares held prior to the acquisition dateWhether the control over any acquiree was gained during the current period as a result of business combination effected throughmultiple transactions by steps?
□ Yes ? No
2. Business combination involving entities under common control
3. Reverse acquisition
4. Disposal of subsidiaries
Whether the control over any subsidiary was lost as a result of disposal of investment in such subsidiary through a singletransaction?
□ Yes ? No
Whether the control over any subsidiary was lost during the current period as a result of the disposal of investment in suchsubsidiary through multiple transactions by steps?
□ Yes ? No
5. Changes in the scope of consolidation due to other reasons
1. Subsidiaries newly included in the scope of consolidation
| Company name | Method of acquisition of shares | Date of acquisition of shares | Registered capital | Percentage of capital contribution |
| Suzhou Dongdi Holding Limited | Established | February 13, 2023 | RMB100,000,000 | 100.00% |
| Hong Kong Dongdi Holding Limited | Established | July 28, 2023 | HKD10,000 | 100.00% |
| Multek Zhuhai Enterprise Management Co., | Established | April 27, 2023 | RMB1,000,000 | 100.00% |
| LTD | ||||
| Multi-Fineline Electronics (Thailand) Co., Ltd. | Established | June 30, 2023 | USD50,000,000 | 100.00% |
2. Subsidiaries removed from the scope of consolidation
| Company name | Method of disposal of shares | Date of disposal of shares | Net assets at the date of disposal | Net profit from January 1, 2023 to the date of disposal (RMB) |
| Zhuhai Dii Information Technology Consulting Co., Ltd. | Deregistration | September 7, 2023 | ||
| Hainan Chengjia Technology Consulting Co., Ltd. | Deregistration | November 1, 2023 | -206,048.28 | 12,320,966.42 |
| Suzhou Yuanshi Electronic Technology Co., Ltd. | Deregistration | August 4, 2023 | -12,592,979.40 | -468,295.88 |
| DSBJ Norway AS | Deregistration | December 27, 2023 | 345,205.52 | 18,211,422.23 |
X. Interests in Other Entities
1. Interests in subsidiaries
(1) Composition of the enterprise group
| Subsidiary | Registered capital | Principal place of business | Place of incorporation | Nature of business | Shareholding percentage | Method of acquisition | |
| Direct | Indirect | ||||||
| Suzhou Yongchuang Metal Science and Technology Co., Ltd. | Suzhou | Suzhou | Manufacturing | 100.00% | Business combinations involving entities under common control | ||
| Suzhou Dongkui Lighting Co., Ltd. | Suzhou | Suzhou | Manufacturing | 100.00% | Established | ||
| Suzhou Chengjia | Suzhou | Suzhou | Manufacturing | 100.00% | Established | ||
| Dongguan Dongshan Precision Manufacturing Co., Ltd. | Dongguan | Dongguan | Manufacturing | 95.00% | 5.00% | Established | |
| Suzhou Dongjiyuan Metal Technology Co., Ltd. | Suzhou | Suzhou | Manufacturing | 100.00% | Established | ||
| Yancheng Dongshan | Yancheng | Yancheng | Manufacturing | 95.00% | 5.00% | Established | |
| Suzhou Jebson Intelligent Technology Co., Ltd. | Suzhou | Suzhou | Manufacturing | 51.00% | Established | ||
| Suzhou Dongdai Electronic Technology Co., Ltd. | Suzhou | Suzhou | Manufacturing | 51.00% | Established | ||
| Suzhou Dongyan Electronic Technology Co., Ltd. | Suzhou | Suzhou | Manufacturing | 51.00% | Established | ||
| Yancheng Dongshan Business Management Co., Ltd. | Yancheng | Yancheng | Property management | 95.00% | 5.00% | Established | |
| Yancheng Dongshan Communication Technology Co., Ltd. | Yancheng | Yancheng | Manufacturing | 100.00% | Established | ||
| Shanghai Chengjia Consulting Management Co., Ltd. | Shanghai | Shanghai | Business & investment | 100.00% | Established | ||
| Yancheng Mutto Optronics Technology Co., Ltd. | Yancheng | Yancheng | Manufacturing | 100.00% | Established | ||
| Dowell Smart Suzhou Co., Ltd. | Suzhou | Suzhou | Manufacturing | 100.00% | Established | ||
| MFLEX Yancheng Co., Ltd. | Yancheng | Yancheng | Manufacturing | 100.00% | Established | ||
| MFLEX Suzhou | Suzhou | Suzhou | Manufacturing | 100.00% | Business combinations involving entities not under common control | ||
| MFLEX Chengdu Co., Ltd. | Chengdu | Chengdu | Manufacturing | 100.00% | Business combinations involving entities not under common control | ||
| RF Top Electronic | Suzhou | Suzhou | Manufacturing | 93.51% | Business combinations involving entities not under common control | ||
| Mutto Optronics | Suzhou | Suzhou | Manufacturing | 100.00% | Business combinations involving entities not under common control | ||
| Multek Technology (Zhuhai) Co., Ltd. | Zhuhai | Zhuhai | Manufacturing | 100.00% | Business combinations involving entities not under common control | ||
| Multek Industries | Zhuhai | Zhuhai | Manufacturing | 100.00% | Business combinations involving entities not under common control | ||
| Multek Electronics | Zhuhai | Zhuhai | Manufacturing | 100.00% | Business combinations involving entities not under common control | ||
| Multek Zhuhai | Zhuhai | Zhuhai | Manufacturing | 100.00% | Business combinations involving entities not under common control | ||
| Multek China | Zhuhai | Zhuhai | Manufacturing | 100.00% | Business combinations involving entities not under common control | ||
| Multek Zhuhai Enterprise Management Co., LTD | Zhuhai | Zhuhai | Business & investment | 100.00% | Established | ||
| Suzhou Dongbo Precision Manufacturing Co., Ltd. | Suzhou | Suzhou | Manufacturing | 51.00% | Established | ||
| MFLEX Shanghai Co., Ltd. | Shanghai | Shanghai | Wholesale | 100.00% | Established | ||
| Shenzhen Qindao Dongchuang Investment Partnership (L.P.) | Shenzhen | Shenzhen | Business & investment | 76.92% | Established | ||
| Suzhou Dongke Real Estate Co., Ltd. | Suzhou | Suzhou | Real estate | 100.00% | Established | ||
| Yancheng Dongchuang Precision Manufacturing Co., Ltd. | Yancheng | Yancheng | Manufacturing | 100.00% | Established | ||
| Suzhou Dongchen Intelligent Equipment Manufacturing Co., Ltd. | Suzhou | Suzhou | Manufacturing | 100.00% | Established | ||
| Shanghai Dongxin New Energy Technology Co., Ltd. | Shanghai | Shanghai | Manufacturing | 95.00% | 5.00% | Established | |
| Shanghai Donglan New Energy Technology Co., Ltd. | Shanghai | Shanghai | Manufacturing | 100.00% | Established | ||
| Suzhou Dongyue New Energy Technology Co., Ltd. | Kunshan | Kunshan | Manufacturing | 90.00% | 10.00% | Established | |
| Suzhou Dongshan Industrial Investment Co., Ltd. | Suzhou | Suzhou | Business & investment | 100.00% | Established | ||
| Suzhou Dongdi Holding Limited | Suzhou | Suzhou | Business & investment | 100.00% | Established | ||
| Suzhou JDI | Suzhou | Suzhou | Manufacturing | 100.00% | |||
| Chaowei Microelectronics (Yancheng) Co., Ltd. | Yancheng | Yancheng | Manufacturing | 100.00% | Established | ||
| Hong Kong Dongshan | Hong Kong | Hong Kong | Business & investment | 100.00% | Established | ||
| Mutto Optronics Group Limited | BVI | Business & investment | 100.00% | Business combinations involving entities not under common control | |||
| DSBJ holdings Inc. | USA | Business & investment | 100.00% | Established | |||
| DSBJ International Inc. | USA | Business & investment | 100.00% | Established | |||
| DSBJ Solutions INC | USA | Business & investment | 100.00% | Established | |||
| Dragon Electronix Holdings INC. | USA | Business & investment | 100.00% | Established | |||
| Multi-Fineline Electronix, Inc. | USA | Business & investment | 100.00% | Business combinations involving entities not under common control | |||
| MFLEX Delaware, Inc. | Delaware | Business & investment | 100.00% | Business combinations involving entities not under common control | |||
| Multi-Fineline Electronix Singapore Pte. Ltd. | Singapore | Business & investment | 100.00% | Business combinations involving entities not under common control | |||
| MFLEX B.V. | Netherlands | Business & investment | 100.00% | Business combinations involving entities not under common control | |||
| Hong Kong Dongshan Holding Limited | Hong Kong | Business & investment | 100.00% | Established | |||
| DSBJ PTE. LTD. | Singapore | Business & investment | 100.00% | Established | |||
| Multek Group (Hong Kong) Limited | Hong Kong | Business & investment | 100.00% | Established | |||
| Multek Technology, Inc. | USA | Business & investment | 100.00% | Established | |||
| Multek Technologies Limited | Mauritius | Business & investment | 100.00% | Business combinations involving entities not under common control | |||
| The Dii Group (BVI) Co. Limited | BVI | Business & investment | 100.00% | Business combinations involving entities not under common control |
| The Dii Group Asia Limited | Hong Kong | Business & investment | 100.00% | Business combinations involving entities not under common control | |||
| Multek Hong Kong Limited | Hong Kong | Business & investment | 100.00% | Business combinations involving entities not under common control | |||
| Astron Group Limited | Hong Kong | Business & investment | 100.00% | Business combinations involving entities not under common control | |||
| Vastbright PCB (Holding) Limited | Hong Kong | Business & investment | 100.00% | Business combinations involving entities not under common control | |||
| Multek Technology Germany GmbH | Germany | Business & investment | 100.00% | Business combinations involving entities not under common control | |||
| Multek Technology Sweden AB | Sweden | Business & investment | 100.00% | Established | |||
| Multek Technology Malaysia SDN.BHD | Malaysia | Business & investment | 100.00% | Established | |||
| Korea branch office of DSBJ Pte. Ltd. | Korea | Business & investment | 100.00% | Established | |||
| Autotech Producti on de Mexico S. de R. L. de C.V. | Mexico | Manufacturing | 100.00% | Business combinations involving entities not under common control | |||
| Aranda Tooling, Inc. | USA | Manufacturing | 100.00% | Business combinations involving entities not under common control | |||
| AutoTech Production Services, Inc. | USA | Manufacturing | 100.00% | Business combinations involving entities not under common control | |||
| DSBJ MEXICO,S.DER.L.DEC.V. | Mexico | Manufacturing | 100.00% | Established | |||
| Multi-Fineline Electronics (Thailand) Co., Ltd. | Thailand | Manufacturing | 100.00% | Established | |||
| Hong Kong Dongdi Holding Limited | Hong Kong | Business & investment | 100.00% | Established |
XI. Government Grants
1. Government grants recognized at the amount receivable at the end of the reporting period
?Applicable □N/AClosing balance of government receivable: RMB37,648,885.00.Reason for failure to receive expected government grants at the expected time:
□ Applicable ?N/A
2. Liabilities related to government grants
?Applicable □N/A
In RMB
| Item | Opening balance | New grants received in the current period | Amount of non-operating revenue recognized in the current period | Amount transferred to other income in the current period | Other changes in the current period | Closing balance | Related to assets/income |
| Deferred income | 747,587,634.12 | 131,751,774.19 | 145,882,723.14 | 733,456,685.17 | Related to assets | ||
| Subtotal | 747,587,634.12 | 131,751,774.19 | 145,882,723.14 | 733,456,685.17 |
3. Government grants recognized in profit or loss
?Applicable □N/A
In RMB
| Item | 2023 | 2022 |
| Government grants recognized in other income | 248,078,668.03 | 317,617,133.80 |
| Effect of financial interest subsidy on total profit | 1,174,471.47 | 309,000.00 |
| Total | 249,253,139.50 | 317,926,133.80 |
XII. Risks associated with financial instruments
1. Risks arising from financial instruments
The Company’s objectives of risk management are to maintain a balance between risk and income, minimize the negative effect of
risks on the operating results of the Company and maximize the interests of the shareholders and other equity investors. On thebasis of such objectives of risk management, the Company’s basic risk management policy is designed to identify and analyze allkinds of risks facing the Company, set appropriate risk thresholds in risk management, and monitor risks and adherence to limits ina timely and reliable manner.The Company faces a variety of risks associated with financial instruments in its daily activities, mainly including credit risk,liquidity risk and market risk. Below is a summary of the policies for managing such risks considered and approved by themanagement.(I) Credit riskCredit risk is the risk that one party to a financial instrument will cause a financial loss to the other party by failing to discharge anobligation.
1. Credit risk management practice
(1) Assessment of credit risk
At each balance sheet date, the Company assesses whether the credit risk of a financial instrument has increased significantly sinceinitial recognition. In assessing whether the credit risk has increased significantly since initial recognition, the Company takes intoaccount reasonable and supportable information, which is available without undue cost or effort, including qualitative andquantitative analysis based on historical data, external credit risk rating, and forward-looking information. The Companydetermines the changes in default risk of financial instruments during their estimated lifetime through a comparison of the defaultrisk at the balance sheet date and the initial recognition date, on an individual or collective basis.The Company determines that the credit risk of a financial instrument has increased significantly when one or more of thefollowing qualitative and quantitative standards are met:
1) Quantitative standard, mainly relates to the scenario in which, at the balance sheet date, the probability of default in theremaining lifetime has risen by more than a certain percentage compared with the initial recognition; and/or
2) Qualitative standard, mainly relates to significant adverse changes in the debtor’s business situation or financial position, andpresent or expected changes in technology, market, economy or legal environment that will have a material adverse effect on thedebtor’s ability to repay.
(2) Definition of default and credit-impaired assets
A financial instrument is in default or credit impaired when one or more of the following conditions are met:
1) significant financial difficulty of the debtor;
2) any breach by the debtor of contract terms binding on it;
3) it becomes probable that the debtor will enter bankruptcy or other financial reorganization;
4) the creditors of the debtor, for economic or contractual reasons relating to the debtor’s financial difficulty, having granted to thedebtor a concession that the creditors would not otherwise consider.
2. Measurement of expected credit losses
The key factors in the measurement of expected credit losses include the probability of default, loss given default, and exposure todefault risk. The Company has developed a model of the probability of default, loss given default and exposure to default risk onthe basis of quantitative analysis of historical data (e.g. counterparty rating, guarantee measures and collateral type, paymentmethod, etc.) and forward-looking information.
3. See Notes V(I)3, V(I)4, V(I)7 and V(I)10 for the conciliation table of opening balances and closing balances of allowance forimpairment loss on financial instruments.
4. Credit risk exposure and credit risk concentration
The Company’s credit risk is primarily attributable to cash and bank balances and receivables. In order to control such risks, theCompany has taken the following measures:
(1) Cash and bank balances
The Company deposits its bank balances and other monetary capital in financial institutions with relatively high credit ratings, soits credit risk is relatively low.
(2) Accounts receivable
The Company performs credit assessments on customers using credit settlement on an ongoing basis. The Company selectsapproved and creditworthy customers based on the result of credit assessment, and monitors the balance of accounts receivablefrom them on an ongoing basis, to avoid significant risk of doubtful accounts.As the Company only deals with approved and creditworthy third parties, no collateral is required. As of December 31, 2023, theCompany faced certain credit concentration risks. In particular, 60.39% (December 31, 2022: 52.73%) of the Company’s accountsreceivable came from the top 5 customers, without any collateral or other credit enhancement.The Company’s maximum exposure to credit risk is the carrying value of each financial asset in the balance sheet.(II) Liquidity riskLiquidity risk is the risk that the Company may not have enough cash to satisfy its obligation to deliver cash or other financialassets, due to the inability to liquidate financial assets at fair value in a timely manner, or failure of counterparties to dischargetheir contract liabilities, acceleration of debts, failure to generate expected cash flows, or otherwise.In order to control such risk, the Company utilizes a variety of financing tools such as settlement by means of notes, bank loans,etc., combines long-term and short-term financing to optimize financing structure, and maintains a balance between financingsustainability and flexibility. The Company has obtained lines of credit from many commercial banks to satisfy its working capitalrequirements and capital expenditures.Financial liabilities classified by remaining maturity
In RMB
| Item | December 31, 2023 | ||||
| Carrying value | Undiscounted contract amount | Within 1 year | 1-3 years | Over 3 years | |
| Bank loans | 12,329,399,469.82 | 12,883,478,634.71 | 7,981,675,775.53 | 3,054,956,512.84 | 1,846,846,346.34 |
| Financial liabilities held for trading | 104,174,076.23 | 104,174,076.23 | 104,174,076.23 | ||
| Notes payable | 909,171,215.93 | 909,171,215.93 | 909,171,215.93 | ||
| Accounts payable | 8,039,107,176.52 | 8,039,107,176.52 | 8,039,107,176.52 | ||
| Other payables | 80,188,628.54 | 80,188,628.54 | 80,188,628.54 | ||
| Lease liabilities (including non-current liabilities due within one year) | 1,872,497,186.10 | 2,130,134,243.16 | 77,293,792.42 | 1,609,372,610.71 | 443,467,840.03 |
| Long-term payables (including non-current liabilities due within one year) | 296,995,789.48 | 296,995,789.48 | 296,995,789.48 | ||
| Subtotal | 23,631,533,542.62 | 24,443,249,764.57 | 17,191,610,665.17 | 4,961,324,913.03 | 2,290,314,186.37 |
(Continued)
| Item | December 31, 2022 | ||||
| Carrying value | Undiscounted contract amount | Within 1 year | 1-3 years | Over 3 years | |
| Bank loans (including non-current liabilities due within one year) | 12,158,035,282.87 | 12,622,983,732.45 | 9,154,149,516.56 | 2,953,900,674.22 | 514,933,541.67 |
| Financial liabilities held for trading | 91,517,116.89 | 91,517,116.89 | 91,517,116.89 | ||
| Notes payable | 2,008,405,860.19 | 2,008,405,860.19 | 2,008,405,860.19 | ||
| Accounts payable | 5,986,286,590.32 | 5,986,286,590.32 | 5,986,286,590.32 | ||
| Other payables | 54,324,601.72 | 54,324,601.72 | 54,324,601.72 | ||
| Lease liabilities (including non-current liabilities due within one year) | 1,671,260,217.63 | 2,187,054,071.55 | 24,396,526.02 | 303,388,335.26 | 1,859,269,210.27 |
| Subtotal | 21,969,829,669.62 | 22,950,571,973.12 | 17,319,080,211.70 | 3,257,289,009.48 | 2,374,202,751.94 |
(III) Market Risk
Market risk is the risk of fluctuation in the fair value or future cash flows of financial instruments due to changes in market prices.Market risk mainly includes interest risk and foreign exchange risk.
1. Interest risk
Interest risk is the risk of fluctuation in the fair value or future cash flows of financial instruments due to changes in marketinterest rates. Interest-bearing financial instruments with fixed interest rates expose the Company to fair value interest rate risk,while interest-bearing financial instruments with floating interest rates expose the Company to cash flow interest rate risk. TheCompany determines the proportion of fixed-rate financial instruments and floating-rate financial instruments based on the marketenvironment, and reviews and monitors the appropriateness of its portfolio of financial instruments on a regular basis. The cashflow interest rate risk that the Company faces is primarily associated with the floating-rate bank loans owed by the Company,which amounted to RMB1,406,781,793.94 as of December 31, 2023 (December 31, 2022: RMB735?900?000.00). Supposing theinterest rate changes by 50 basic points while other variables remain unchanged, the Company’s total profit and shareholders’interest will not be materially affected.
2. Foreign exchange risk
Foreign exchange risk is the risk of fluctuation in the fair value or future cash flows of financial instruments due to changes inexchange rates. The Company’s foreign exchange risk relates mainly to foreign currency denominated monetary assets andliabilities. When a short-term imbalance occurs on foreign currency denominated assets and liabilities, the Company may tradeforeign currencies at market exchange rates when necessary, in order to maintain the net risk exposure at an acceptable level.See notes to the Financial Statements for details of foreign currency denominated monetary assets and liabilities on December 31,2023.XIII. Fair Value Disclosures
1. Closing balance of the fair value of assets and liabilities measured at fair value
In RMB
| Item | Closing balance of fair value | |||
| Level 1 fair value measurement | Level 2 fair value measurement | Level 3 fair value measurement | Total | |
| I. Recurring fair value measurement | -- | -- | -- | -- |
| 1. Financial assets at fair value through profit or loss | 146,141,371.77 | 146,141,371.77 | ||
| (2) Investment in equity instruments | 71,779,147.66 | 71,779,147.66 | ||
| (4) Derivatives | 26,920,185.50 | 26,920,185.50 | ||
| (5) Bank wealth management products | 47,442,038.61 | 47,442,038.61 | ||
| (II) Other debt investments | 290,477,095.22 | 290,477,095.22 | ||
| (III) Investment in other equity instruments | 278,157,110.00 | 278,157,110.00 | ||
| Total assets measured at fair value on a recurring basis | 714,775,576.99 | 714,775,576.99 | ||
| (VI) Financial liabilities held for trading | 104,174,076.23 | 104,174,076.23 | ||
| Total liabilities measured at fair value on a recurring basis | 104,174,076.23 | 104,174,076.23 | ||
| II. Fair value measurement on a non-recurring basis | -- | -- | -- | -- |
2. Basis for determining the market prices of items subject to recurring and non-recurring fair valuemeasurements within Level 1
3. Valuation techniques and qualitative and quantitative information of important inputs for itemssubject to recurring and non-recurring fair value measurements within Level 2
4. Valuation techniques and qualitative and quantitative information of important inputs for itemssubject to recurring and non-recurring fair value measurements within Level 3
1. The closing balance of the fair value of bank wealth management products is determined mainly based on their principal andexpected income.
2. The fair value of forward exchange settlement and sale transactions already authorized but not yet settled is determined basedon the forward exchange rates as confirmed with the transaction bank at the end of the reporting period.
3. The fair value of an investment in other equity instruments is determined based on the initial investment amount.
4. The fair value of a note receivable is determined based on its face amount.
5. The fair value of an investment in equity instruments is determined based on the initial investment amount.XIV. Related Parties and Related-party Transactions
1. Parent of the Company
The Company’s actual controllers are YUAN Yonggang, YUAN Yongfeng and YUAN Fugen, who hold 11.83%, 13.01% and
3.44% of the total shares and votes of the Company respectively, and 28.27% of the total shares and votes of the Company inaggregate.
2. Subsidiaries of the Company
The particulars of the subsidiaries of the Company are set forth in “Interests in Other Entities”.
3. Joint ventures and associates of the Company
The particulars of the joint ventures and associates of the Company are set forth in “Interests in Other Entities”.Other joint ventures or associates that have carried out related-party transactions with the Company in the current period or theprevious periods with balances recorded in the current period:
| Name of joint venture or associate | Relationship with the Company |
| Suzhou Toprun Electric Equipment Co., Ltd. | Associate |
| Suzhou Dongcan Optoelectronics Technology Co., Ltd. | Associate |
4. Other related parties
| Name of other related party | Relationship with the Company |
| Hai Dixin Semiconductor (Nantong) Co., Ltd. | Associate |
| Anhui Landun Photoelectron Co., Ltd. | A company controlled by the actual controllers of the Company |
| Shanghai Corkuna New Material Technologies Co., Ltd. | A company controlled by the actual controllers of the Company |
| Suzhou Corkuna New Material Technologies Co., Ltd. | A company controlled by the actual controllers of the Company |
5. Related-party transactions
(1) Related-party commodity and service transactions
Purchase of goods and receipt of services from related parties
In RMB
| Related party | Subject matter | 2023 | Transaction quota approved | Whether or not exceed the transaction quota? | 2022 |
| Suzhou Toprun Electric Equipment Co., Ltd. | Purchase of goods | 3,097.35 | |||
| Suzhou Dongcan Optoelectronics Technology Co., Ltd. | Purchase of goods | 1,153,371.50 | 204,576.69 | ||
| Shanghai Corkuna New Material | Purchase of goods | 11,426,652.85 |
Technologies Co., Ltd.
Sale of goods and rendering of services to related parties
In RMB
| Related party | Subject matter | 2023 | 2022 |
| Suzhou Toprun Electric Equipment Co., Ltd. | Sale of goods | 131,783.22 | |
| Suzhou Toprun Electric Equipment Co., Ltd | Purchase of equipment | 154,390.07 | |
| Suzhou Dongcan Optoelectronics Technology Co., Ltd. | Sale of goods | 18,297.73 | |
| Suzhou Dongcan Optoelectronics Technology Co., Ltd. | Rendering of services | 150,462.54 | 97,261.61 |
| Anhui Landun Photoelectron Co., Ltd. | Rendering of services | 269,820.00 | 485,700.00 |
| Suzhou Corkuna New Material Technologies Co., Ltd. | Sale of equipment | 964,438.95 |
(2) Related-party entrusted management/contracts
(3) Related-party leases
(4) Related-party guarantees
The Company as guarantor:
In RMB
| Obligor | Amount guaranteed | Effective date of guarantee | Expiry date of guarantee | Whether the obligation guaranteed has been discharged |
| Suzhou Toprun Electric Equipment Co., Ltd. | 5,000,000.00 | April 30, 2023 | April 30, 2024 | No |
| Suzhou Toprun Electric Equipment Co., Ltd. | 3,000,000.00 | May 11, 2023 | May 11, 2024 | No |
| Suzhou Toprun Electric Equipment Co., Ltd. | 5,400,000.00 | August 24, 2023 | August 23, 2024 | No |
| Suzhou Toprun Electric Equipment Co., Ltd. | 6,600,000.00 | September 5, 2023 | September 4, 2024 | No |
| Suzhou Toprun Electric Equipment Co., Ltd. | 5,000,000.00 | January 12, 2023 | January 12, 2024 | No |
| Shanghai Fu Shan Precision Manufacturing Co., Ltd. | 30,000,000.00 | October 12, 2023 | October 11, 2024 | No |
The Company as obligor:
In RMB
| Guarantor | Amount guaranteed | Effective date of guarantee | Expiry date of guarantee | Whether the obligation guaranteed has been discharged |
| YUAN Yonggang and YUAN Yongfeng | 500,000,000.00 | March 22, 2018 | August 28, 2024 | No |
(5) Related-party loans
(6) Related-party asset transfer and debt restructuring
(7) Remunerations of key officers
In RMB
| Item | 2023 | 2022 |
| Remunerations of key officers | 21,963,000.00 | 23,629,500.00 |
6. Amounts receivable from/payable to related parties
(1) Amounts receivable from related parties
In RMB
| Item | Related party | Closing balance | Opening balance | ||
| Book balance | Allowance for doubtful accounts | Book balance | Allowance for doubtful accounts | ||
| Accounts receivable | Suzhou Dongcan Optoelectronics Technology Co., Ltd. | 257,026.80 | 22,356.61 | 95,094.62 | 1,972.32 |
| Accounts receivable | Suzhou Toprun Electric Equipment Co., Ltd. | 129,457.70 | 1,150.29 | 1,032,857.12 | 181,059.83 |
| Accounts receivable | Hai Dixin Semiconductor (Nantong) Co., Ltd. | 1,607,132.92 | 1,607,132.92 | 1,607,132.92 | 1,607,132.92 |
| Other receivables | Suzhou Corkuna New Material Technologies Co., Ltd. | 339,816.02 | 1,699.08 | ||
| Other receivables | Hai Dixin Semiconductor (Nantong) Co., Ltd. | 1,790,748.55 | 1,790,748.55 | 1,790,748.55 | 1,790,748.55 |
(2) Amounts payable to related parties
In RMB
| Item | Related party | Closing balance | Opening balance |
| Accounts payable | Suzhou Dongcan Optoelectronics Technology Co., Ltd. | 310,347.77 | 45,359.67 |
| Accounts payable | Shanghai Corkuna New Material Technologies Co., Ltd. | 7,338,661.31 |
XV. Share-based Payments
1. Summary of share-based payments
? Applicable □ N/A
In RMB
| Type of grantees | Granted in the current period | Exercised in the current period | Vested in the current period | Expired in the current period | ||||
| Number of shares | Amount | Number of shares | Amount | Number of shares | Amount | Number of shares | Amount | |
| Administrative personnel | 555,885.50 | 10,895,355.80 | 559,888.50 | 10,973,814.60 | 4,003.00 | 109,041.72 | ||
| R&D personnel | 57,157.00 | 1,120,277.20 | 58,370.00 | 1,144,052.00 | 1,213.00 | 33,042.12 | ||
| Sales personnel | 64,799.00 | 1,270,060.40 | 64,799.00 | 1,270,060.40 | ||||
| Total | 677,841.50 | 13,285,693.40 | 683,057.50 | 13,387,927.00 | 5,216.00 | 142,083.84 | ||
Outstanding share options or other equity instruments at the end of the current period:
□ Applicable ? N/A
2. Equity-settled share-based payments
? Applicable □ N/A
In RMB
| Important parameters for determining the fair value of equity instruments at the grant date | Closing price of the Company’s stock at the date the relevant employee stock ownership plan was approved by the general meeting of shareholders |
| Basis for determining the number of exercisable equity instruments | The number approved by the Board of Directors and the general meeting of shareholders of the Company, taking into account the performance indicators |
| Reason of significant differences between the current estimates and previous estimates | N/A |
| Aggregate amount of equity-settled share-based payments recorded in capital reserve | 25,609,244.46 |
| Total amount of equity-settled share-based payments recognized in expenses in the current period | 8,882,690.60 |
3. Cash-settled share-based payments
□ Applicable ? N/A
4. Share-based payments in the current period
? Applicable □ N/A
In RMB
| Type of grantees | Equity-settled share-based payments | Cash-settled share-based payments |
| Administrative personnel | 7,190,365.68 | |
| R&D personnel | 802,000.00 |
| Sales personnel | 890,324.92 | |
| Total | 8,882,690.60 |
XVI. Commitments and Contingencies
1. Significant commitments
As of the balance sheet date, the Company did not have any significant commitment needing to be disclosed.
2. Contingencies
(1) Significant contingencies as of the balance sheet date
As of the balance sheet date, the Company did not have any contingency needing to be disclosed.
(2) Whether the Company does not have any significant contingency needing to be disclosed?The Company does not have any significant contingency needing to be disclosed.XVII. Subsequent Events
1. Significant non-adjusting events
2. Profit distribution
| Dividends to be distributed per 10 shares (RMB) | 2.5 |
| Number of bonus shares to be distributed per 10 shares (shares) | 0 |
| Number of shares to be distributed per 10 shares through capitalization of capital reserve (shares) | 0 |
| Dividends to be distributed per 10 shares approved and declared (RMB) | 0 |
| Number of bonus shares to be distributed per 10 shares approved and declared (shares) | 0 |
| Number of shares to be distributed per 10 shares through capitalization of capital reserve approved and declared (shares) | 0 |
| Profit distribution proposal | Pursuant to the Regulatory Guidance for Listed Companies No. 3 – Distribution of Cash Dividends by the Listed Companies, the AOA and other relevant provisions, taking into account the actual business situation and development plans of the Company, as well as the requirements of normal operation and sustainable development of the Company, the Company proposed to distribute a cash dividend of RMB 2.5 (inclusive of tax) per 10 shares, or RMB425,319,052.25 in total, to all shareholders on the basis of 1,701,276,209 shares (excluding the treasury shares) for the year 2023, without distributing any bonus shares or transferring any capital reserve to the share capital. (Note: As of the date of this Report, the Company had a total share capital of 1,709,867,327 shares, of which, 8,591,118 shares held in the dedicated securities account for repurchase would not participate in the profit distribution.) |
3. Sales return
4. Other subsequent events
Pursuant to the resolution adopted at the 2
nd
extraordinary general meeting of shareholders of the Company in 2024 held on March29, 2024, the Company decided to issue shares in a total amount of up to RMB1,500,000,000 to YUAN Yonggang and YUANYongfeng, the actual controllers of the Company, the offering proceeds received from which, after deduction of the offering costs,would be wholly used to replenish the Company’s working capital.
XVIII. Other Significant InformationXIX. Notes to Key Items of the Standalone Financial Statements
1. Accounts receivable
(1) Accounts receivable by age
In RMB
| Age | Closing book balance | Opening book balance |
| Within 1 year (inclusive) | 1,278,554,642.91 | 1,687,314,119.76 |
| Within 6 months | 1,195,439,845.81 | 1,391,027,273.41 |
| 7-12 months | 83,114,797.10 | 296,286,846.35 |
| 1-2 years | 689,194,247.06 | 42,046,884.05 |
| 2-3 years | 4,893,435.36 | 46,005,127.05 |
| Over 3 years | 227,083,256.45 | 265,061,558.90 |
| 3-4 years | 195,473,911.72 | 230,459,611.43 |
| 4-5 years | 9,831,416.31 | 15,304,313.92 |
| Over 5 years | 21,777,928.42 | 19,297,633.55 |
| Total | 2,199,725,581.78 | 2,040,427,689.76 |
(2) Accounts receivable by method of recognition of allowance for doubtful accounts
In RMB
| Item | Closing balance | Opening balance | ||||||||
| Book balance | Allowance for doubtful accounts | Carrying value | Book balance | Allowance for doubtful accounts | Carrying value | |||||
| Amount | % | Amount | % | Amount | % | Amount | % | |||
| Allowance recognized individually | 12,127,413.92 | 0.55% | 12,127,413.92 | 100.00% | 11,014,431.64 | 0.54% | 11,014,431.64 | 100.00% | ||
| Incl.: | ||||||||||
| Allowance recognized collectively | 2,187,598,167.86 | 99.45% | 102,894,892.64 | 4.70% | 2,084,703,275.22 | 2,029,413,258.12 | 99.46% | 88,306,919.25 | 4.35% | 1,941,106,338.87 |
| Incl.: | ||||||||||
| Total | 2,199,725,581.78 | 100.00% | 115,022,306.56 | 5.23% | 2,084,703,275.22 | 2,040,427,689.76 | 100.00% | 99,321,350.89 | 4.87% | 1,941,106,338.87 |
Allowance for doubtful accounts recognized collectively:
In RMB
| Item | Closing balance | ||
| Book balance | Allowance for doubtful accounts | % | |
| Group of related parties within the scope of consolidation | 1,214,252,593.14 | ||
| Aging group | 973,345,574.72 | 102,894,892.64 | 10.57% |
| Total | 2,187,598,167.86 | 102,894,892.64 | |
Recognition of allowance for doubtful accounts in accordance with the general model of expected credit losses:
□ Applicable ? N/A
(3) Allowance for doubtful accounts recognized, recovered or reversed in the current periodAllowance for doubtful accounts recognized in the current period:
In RMB
| Item | Opening balance | Changes in the current period | Closing balance | |||
| Recognized | Recovered or reversed | Written off | Others | |||
| Allowance recognized individually | 11,014,431.64 | 1,149,544.84 | -36,562.56 | 12,127,413.92 | ||
| Allowance recognized collectively | 88,306,919.25 | 51,693,067.04 | 37,105,093.65 | 102,894,892.64 | ||
| Total | 99,321,350.89 | 52,842,611.88 | 37,105,093.65 | -36,562.56 | 115,022,306.56 | |
(4) Accounts receivable actually written off in the current period
(5) Top 5 debtors in terms of closing balance of accounts receivable
In RMB
| Company name | Closing balance of accounts receivable | Closing balance of contract assets | Total closing balance of accounts receivable and contract assets | % of total closing balance of accounts receivable and contract assets | Closing balance of allowance for doubtful accounts receivable and impairment of contract assets |
| Debtor 1 | 384,489,368.13 | 384,489,368.13 | 17.48% | ||
| Debtor 2 | 248,011,073.93 | 248,011,073.93 | 11.27% | ||
| Debtor 3 | 231,272,368.40 | 231,272,368.40 | 10.51% | ||
| Debtor 4 | 164,038,130.02 | 164,038,130.02 | 7.46% | 820,190.65 | |
| Debtor 5 | 108,970,984.24 | 108,970,984.24 | 4.95% |
| Total | 1,136,781,924.72 | 1,136,781,924.72 | 51.67% | 820,190.65 |
2. Other receivables
In RMB
| Item | Closing balance | Opening balance |
| Dividends receivable | 2,203,111,413.70 | 1,210,095,256.90 |
| Other receivables | 3,049,524,125.86 | 2,035,435,690.22 |
| Total | 5,252,635,539.56 | 3,245,530,947.12 |
(1) Dividends receivable by category
In RMB
| Item (or investee) | Closing balance | Opening balance |
| Hong Kong Dongshan Holding | 1,817,111,413.70 | 944,095,256.90 |
| Yancheng Dongshan | 266,000,000.00 | 266,000,000.00 |
| Suzhou JDI | 120,000,000.00 | |
| Total | 2,203,111,413.70 | 1,210,095,256.90 |
(2) Significant dividends receivable aged over one year
In RMB
| Item (or investee) | Closing balance | Age | Reason for failure to collect | Whether or not impaired and the basis for determination |
| Hong Kong Dongshan Holding | 344,095,256.90 | 2-3 years | To support the development of the subsidiary | |
| Yancheng Dongshan | 266,000,000.00 | 2-3 years | To support the development of the subsidiary | |
| Total | 610,095,256.90 |
(3) Other receivables
1) Other receivables by nature
In RMB
| Nature of account | Closing balance | Opening balance |
| Current accounts | 3,043,264,560.13 | 2,021,455,028.32 |
| Security deposit | 2,042,208.17 | 8,626,398.25 |
| Loans and reserve fund | 2,562,780.89 | 7,191,382.15 |
| Temporary payment receivable | 4,250,557.91 | |
| Total | 3,052,120,107.10 | 2,037,272,808.72 |
2) Other receivables by age
In RMB
| Age | Closing book balance | Opening book balance |
| Within 1 year (inclusive) | 2,918,638,154.04 | 1,811,580,254.07 |
| 1-2 years | 123,650,779.00 | 209,574,243.72 |
| 2-3 years | 1,451,851.51 | 8,539,126.50 |
| Over 3 years | 8,379,322.55 | 7,579,184.43 |
| 3-4 years | 8,199,590.38 | 39,000.00 |
| 4-5 years | 39,000.00 | 189,660.00 |
| Over 5 years | 140,732.17 | 7,350,524.43 |
| Total | 3,052,120,107.10 | 2,037,272,808.72 |
3) Other receivables by the method of recognition of allowance for doubtful accounts
? Applicable □ N/A
In RMB
| Item | Closing balance | Opening balance | ||||||||
| Book balance | Allowance for doubtful accounts | Carrying value | Book balance | Allowance for doubtful accounts | Carrying value | |||||
| Amount | % | Amount | % | Amount | % | Amount | % | |||
| Allowance recognized collectively | 3,052,120,107.10 | 100.00% | 2,595,981.24 | 0.09% | 3,049,524,125.86 | 2,037,272,808.72 | 100.00% | 1,837,118.50 | 0.09% | 2,035,435,690.22 |
| Incl.: | ||||||||||
| Total | 3,052,120,107.10 | 100.00% | 2,595,981.24 | 0.09% | 3,049,524,125.86 | 2,037,272,808.72 | 100.00% | 1,837,118.50 | 0.09% | 2,035,435,690.22 |
Allowance for doubtful accounts recognized collectively: Aging group
In RMB
| Item | Closing balance | ||
| Book balance | Allowance for doubtful accounts | % | |
| Group of related parties within the scope of consolidation | 3,043,264,560.13 | ||
| Aging group | 8,855,546.97 | 2,595,981.24 | 29.31% |
| Incl.: Within 1 year | 3,640,461.98 | 182,023.10 | 5.00% |
| 1-2 years | 2,305,779.00 | 230,577.90 | 10.00% |
| 2-3 years | 1,451,851.51 | 725,925.76 | 50.00% |
| Over 3 years | 1,457,454.48 | 1,457,454.48 | 100.00% |
| Total | 3,052,120,107.10 | 2,595,981.24 | |
Basis for grouping:
Recognition of allowance for doubtful accounts in accordance with the general model of expected credit losses:
In RMB
| Allowance for doubtful accounts | Stage 1 | Stage 2 | Stage 3 | Total |
| 12-month expected credit loss | Lifetime expected credit loss (not credit impaired) | Lifetime expected credit loss (credit impaired) | ||
| Balance on January 1, 2023 | 597,356.91 | 202,472.37 | 1,037,289.22 | 1,837,118.50 |
| In the current period: | ||||
| - Transferred to stage 2 | -115,288.95 | 115,288.95 | ||
| - Transferred to stage 3 | -145,185.15 | 145,185.15 | ||
| Recognized | -300,044.86 | -87,183.42 | 1,146,091.02 | 758,862.74 |
| Balance on December 31, 2023 | 182,023.10 | 230,577.90 | 2,183,380.24 | 2,595,981.24 |
Basis for classification of stages and percentage of allowance for doubtful accounts recognized:
Significant changes in the book balance of allowance for doubtful accounts in the current period:
□ Applicable ? N/A
4) Allowance for doubtful accounts recognized, recovered or reversed in the current period
5) Other receivables actually written off in the current period
6) Top 5 debtors in terms of closing balance of other receivables
In RMB
| Company name | Nature of account | Closing balance | Age | % of total closing balance of other receivables | Closing balance of allowance for doubtful accounts |
| Yancheng Dongshan | Current accounts | 897,244,867.35 | Within 1 year | 29.40% | |
| Mutto Optronics | Current accounts | 509,763,515.78 | Within 1 year | 16.70% | |
| Hong Kong Dongshan Holding Limited | Current accounts | 521,768,759.08 | Within 1 year | 21.07% | |
| Hong Kong Dongshan Holding | Current accounts | 121,345,000.00 | 1-2 years | ||
| Suzhou Dongkui Lighting Co., Ltd. | Current accounts | 308,786,242.13 | Within 1 year | 10.12% | |
| Yancheng Dongchuang Precision Manufacturing Co., Ltd. | Current accounts | 265,473,073.23 | Within 1 year | 8.70% | |
| Total | 2,624,381,457.57 | 85.99% |
3. Long-term equity investments
In RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Allowance for impairment loss | Carrying value | Book balance | Allowance for impairment loss | Carrying value | |
| Investments in subsidiaries | 9,515,272,968.95 | 133,690,000.00 | 9,381,582,968.95 | 7,635,046,830.50 | 133,690,000.00 | 7,501,356,830.50 |
| Investments in associates and joint ventures | 102,227,354.08 | 17,507,056.47 | 84,720,297.61 | 96,697,663.15 | 17,507,056.47 | 79,190,606.68 |
| Total | 9,617,500,323.03 | 151,197,056.47 | 9,466,303,266.56 | 7,731,744,493.65 | 151,197,056.47 | 7,580,547,437.18 |
(1) Investments in subsidiaries
In RMB
| Investee | Opening balance (carrying value) | Opening balance of allowance for impairment loss | Changes in the current period | Closing balance (carrying value) | Closing balance of allowance for impairment loss | |||
| Additional investment | Reduced investment | Allowance for impairment loss | Others | |||||
| Dongguan Dongshan Precision Manufacturing Co., Ltd. | 342,000,000.00 | 342,000,000.00 | ||||||
| Hainan Chengjia Technology Consulting Co., Ltd. | 4,090,724.00 | 5,017,941.22 | 927,217.22 | |||||
| MFLEX Shanghai Co., Ltd. | 2,023,777.30 | 2,023,777.30 | ||||||
| Shenzhen Qindao Dongchuang Investment Partnership (L.P.) | 100,000,000.00 | 100,000,000.00 | ||||||
| RF Top Electronic | 372,735,017.46 | 128,922.38 | 372,863,939.84 | |||||
| Suzhou Chengjia Precision Manufacturing Co., Ltd. | 80,068,355.10 | 36,456.12 | 80,104,811.22 | |||||
| Suzhou Dongbo Precision Manufacturing Co., Ltd. | 5,100,000.00 | 5,100,000.00 | ||||||
| Suzhou Dongdai Electronic Tech Co Ltd. | 1,530,000.00 | 1,530,000.00 | ||||||
| Suzhou Dongjiyuan Metal Technology Co., Ltd. | 52,600,000.00 | 52,600,000.00 | ||||||
| Suzhou Dongke Real Estate Co., Ltd. | 152,389,096.00 | 152,389,096.00 | ||||||
| Suzhou Dongkui Lighting Co., Ltd. | 12,100,000.00 | 12,100,000.00 | ||||||
| Suzhou Dongyan Electronic Technology Co., Ltd. | 1,530,000.00 | 1,530,000.00 | ||||||
| Suzhou Jebson Intelligent Technology Co., Ltd. | 255,000.00 | 255,000.00 | ||||||
| Yongchuang Tech | 451,528,857.01 | 47,869.88 | 451,576,726.89 | |||||
| Suzhou Yuanshi Electronic Technology Co., Ltd. | 5,000,000.00 | 7,600,000.00 | 12,600,000.00 | |||||
| Hong Kong Dongshan | 3,744,565,150.00 | 133,690,000.00 | 3,744,565,150.00 | 133,690,000.00 | ||||
| Hong Kong Dongshan Holding Limited | 452,677,880.00 | 452,677,880.00 | ||||||
| Yancheng Dongshan | 1,093,199,757.00 | 373,203.50 | 1,093,572,960.50 | |||||
| Yancheng Dongshan Business Management Co., Ltd. | 3,042,042.00 | 22,422.40 | 3,064,464.40 | |||||
| Yancheng Dongshan Communication Technology Co., Ltd. | 280,242,702.43 | 141,067.86 | 280,383,770.29 | |||||
| Suzhou JDI | 1,382,684,003.83 | 1,382,684,003.83 | ||||||
| Suzhou Dongshan Industrial Investment Co., Ltd. | 20,010,000.00 | 20,010,000.00 | ||||||
| Shanghai Dongxin New Energy Technology Co., Ltd. | 20,000,000.00 | 60,000,000.00 | 80,000,000.00 | |||||
| Yancheng Dongchuang Precision Manufacturing Co., Ltd. | 150,000,000.00 | 120,000,000.00 | 270,000,000.00 | |||||
| Suzhou Dongyue New Energy Technology Co., Ltd. | 165,000,000.00 | 300,000,000.00 | 465,000,000.00 | |||||
| Multek China | 44,577.80 | 23,774.86 | 68,352.66 | |||||
| Mutto Optronics | 571,953.00 | 295,135.50 | 867,088.50 | |||||
| MFLEX Suzhou | 4,501,718.20 | 2,393,008.44 | 6,894,726.64 | |||||
| Yancheng Mutto Optronics Technology Co., Ltd. | 29,718.50 | 15,849.90 | 45,568.40 | |||||
| MFLEX Yancheng | 2,806,806.40 | 1,492,033.48 | 4,298,839.88 | |||||
| Multek Industries | 1,536,469.20 | 819,450.24 | 2,355,919.44 | |||||
| Multek Zhuhai | 187,229.10 | 99,855.62 | 287,084.72 | |||||
| Dowell Smart Suzhou Co., Ltd. | 12,639.46 | 12,639.46 | ||||||
| Multek Zhuhai Enterprise Management Co., LTD | 721,168.98 | 721,168.98 | ||||||
| Total | 7,501,356,830.50 | 133,690,000.00 | 1,890,294,003.83 | 17,617,941.22 | 7,550,075.84 | 9,381,582,968.95 | 133,690,000.00 |
(2) Investments in associates and joint ventures
In RMB
| Investee | Opening balance (carrying value) | Opening balance of allowance for impairment loss | Changes in the current period | Closing balance (carrying value) | Closing balance of allowance for impairment loss | |||||||
| Additional investment | Reduced investment | Investment income or loss under equity method | Adjustment to other comprehensive income | Other changes in equity | Declared cash dividends or profit distribution | Allowance for impairment loss | Others | |||||
| I. Joint ventures | ||||||||||||
| II. Associates | ||||||||||||
| Suzhou Toprun Electric Equipment Co., Ltd. | 16,547,578.41 | -4,905,800.86 | 11,641,777.55 | |||||||||
| Shenzhen Nanfang Blog Technology Development Co., Ltd. | 17,507,056.47 | 17,507,056.47 | ||||||||||
| Shanghai Fu Shan Precision Manufacturing Co., Ltd. | ||||||||||||
| Suzhou LEGATE Intelligent Equipment Co., Ltd. | 12,039,124.28 | 313,192.68 | 12,352,316.96 | |||||||||
| Suzhou Dongcan Optoelectronics Technology Co., Ltd. | 3,750,632.95 | 46,625.40 | 3,797,258.35 | |||||||||
| Jiangsu Nangao Intelligent Equipment Innovation Center Co., Ltd. | 4,133,295.48 | 126,074.14 | 4,259,369.62 | |||||||||
| Jiaozuo Songyang Optoelectric Technology Co., Ltd. | 28,198,390.76 | -1,444,609.69 | 26,753,781.07 | |||||||||
| Suzhou Yongxin Jingshang Venture Capital Partnership (L.P.) | 14,521,584.80 | 15,000,000.00 | -3,605,790.74 | 25,915,794.06 | ||||||||
| Subtotal | 79,190,606.68 | 17,507,056.47 | 15,000,000.00 | -9,470,309.07 | 84,720,297.61 | 17,507,056.47 | ||||||
| Total | 79,190,606.68 | 17,507,056.47 | 15,000,000.00 | -9,470,309.07 | 84,720,297.61 | 17,507,056.47 | ||||||
Recoverable amount determined based on fair value net of disposal cost:
□ Applicable ? N/A
Recoverable amount determined based on the present value of estimated future cash flows:
□ Applicable ? N/A
4. Operating revenue and operating costs
In RMB
| Item | 2023 | 2022 | ||
| Income | Cost | Income | Cost | |
| Primary business | 3,432,663,877.17 | 3,217,738,606.44 | 3,614,088,084.88 | 3,328,227,008.90 |
| Other business | 304,866,996.33 | 163,638,849.01 | 263,824,966.79 | 150,341,977.65 |
| Total | 3,737,530,873.50 | 3,381,377,455.45 | 3,877,913,051.67 | 3,478,568,986.55 |
5. Investment income
In RMB
| Item | 2023 | 2022 |
| Income from long-term equity investments under cost method | 1,120,631,673.83 | 600,121,362.64 |
| Income from long-term equity investments under the equity method | -9,470,309.07 | -2,530,300.44 |
| Investment income from the disposal of long-term equity investments | -12,592,979.40 | |
| Discount loss on accounts receivable financing | -1,212,944.45 | -7,880,660.00 |
| Income from bank wealth management products | 169,744.17 | |
| Total | 1,097,355,440.91 | 589,880,146.37 |
XX. Supplementary Information
1. Statement of non-recurring gain or loss for the current period
? Applicable □ N/A
In RMB
| Item | Amount | Remark |
| Gain or loss from disposal of non-current assets | -26,367,874.21 | |
| Government grants recognized in profit or loss (excluding the government grants that are closely related to the business of the Company, conform to the applicable policies of the country, are provided in accordance with the established standards, and continuously affect the Company’s profit or loss) | 249,253,139.50 | |
| Gain or loss on changes in fair value of financial assets and financial liabilities held by non-financial entities, and gain or loss on disposal of financial assets and financial liabilities, except for effective hedges held in the ordinary course of business | 14,283,973.00 | |
| Reversal of allowance for impairment loss on accounts receivable assessed individually | 1,250,000.00 | |
| Other non-operating revenues and expenses | -398,583.47 | |
| Other gain or loss within the meaning of non-recurring gain or loss | 134,812,863.84 | Investment income arising from business combinations involving entities not under common control |
| Less: Effect on income tax | 22,244,723.86 | |
| Effect on minority interests (exclusive of tax) | 597,751.37 | |
| Total | 349,991,043.43 | -- |
Other items of gain or loss within the meaning of non-recurring gain or loss:
□ Applicable ? N/A
Classification of any item of non-recurring gain or loss defined by the Explanatory Announcement No. 1 on InformationDisclosure for Companies Publicly Offering Securities - Non-recurring gain or Loss as recurring profit or loss:
□ Applicable ? N/A
2. Return on equity and earnings per share
| Profit for the reporting period | Weighted average return on net assets | Earnings per share | |
| Basic earnings per share (RMB/share) | Diluted earnings per share (RMB/share) | ||
| Net profit attributable to ordinary shareholders of the Company | 11.38% | 1.15 | 1.15 |
| Net profit attributable to ordinary shareholders of the Company after | 9.35% | 0.95 | 0.95 |
deduction of non-recurring gain or loss
3. Differences in accounting data under the CASBEs and overseas accounting standards
(1) Differences in net profit and net assets disclosed in the financial report prepared under the CASBEs and the IFRS
□ Applicable ? N/A
(2) Differences in net profit and net assets disclosed in the financial report prepared under the CASBEs and overseas
accounting standards
□ Applicable ? N/A
Suzhou Dongshan Precision Manufacturing Co., Ltd.
Legal representative: YUAN Yonggang
April 18, 2024