Stock abbreviation: Semcorp Stock code: 002812 Announcement No.: 2025-055Bond abbreviation: Energy Convertible Bond Bond code: 128095
Yunnan Energy New Material Co., Ltd.
2024 Annual Report
April 2025
2024 Annual Report
Section 1 Important Notes, Contents and Definitions
The Board of Directors and its members, the Supervisory Committee and itsmembers and the senior management warrant that the contents of the AnnualReport are truthful, accurate and complete, without any false statement,misrepresentation or major omission, and that they are jointly and severally liablefor the contents.Paul Xiaoming Lee (the Company’s person in charge), Li Jian (the person incharge of finance) and Deng Jinhuan (the person in charge of the accountingdepartment) hereby declare and warrant that the contents of the financialstatements in this Annual Report are truthful, accurate and complete.
All Directors were present at the Board meeting to consider and approve thisAnnual Report.
The future plans, development strategies and other forward-looking descriptionsin this report do not constitute material commitments of the Company to investors.Investors and related persons shall be fully aware of the risks in connectiontherewith and should understand the difference between plan, forecast andcommitment. Investors are advised to pay attention to investment risks.
For details, please refer to the “3. Risks the Company may face” under the “XI.Outlook of the Company” in the Section 3 “Management Discussion and Analysis”of this report.
The Company plans to pay no cash dividend and no bonus shares, and no share
will be converted from reserve into share capital.
Contents
Section 1 Important Notes, Contents and Definitions ...... 2
Section 2 Company Profile & Key Financial Indicators ...... 7
Section 3 Management Discussion and Analysis ...... 11
Section 4 Corporate Governance ...... 47
Section 5 Environment and Social Responsibility ...... 70
Section 6 Significant Events ...... 77
Section 7 Share Changes and Shareholder Details ...... 114
Section 8 Details about Preferred Shares ...... 126
Section 9 Details about Bonds ...... 127
Section 10 Financial Report ...... 131
Documents Available for Inspection
I.
Financial statements signed and sealed by the legal representative, the person in charge of finance and the person in chargeof the accounting department of the Company.
II.
The original copies of all documents and announcements of the Company which have been publicly disclosed in newspapersdesignated by the China Securities Regulatory Commission during the Reporting Period.
III.
The original text of the 2024 annual report signed by the Chairman of the Board of Directors.
IV.
The place where the above documents are maintained: the Company’s Securities Department.
Definitions
| Terms | Definitions |
| Energy Technology, this Company, the Company | Yunnan Energy New Material Co., Ltd. |
| Actual controller, Paul Xiaoming Lee family | Paul Xiaoming Lee, Li Xiaohua, Yan Ma, YanYang Hui, Sherry Lee, Jerry Yang Li |
| Hongta Plastic | Yunnan Hongta Plastic Co., Ltd., a wholly-owned subsidiary of the Company |
| Chengdu Hongta Plastic | Hongta Plastic (Chengdu) Co., Ltd., a subsidiary of the Company |
| Dexin Paper | Yunnan Dexin Paper Co., Ltd., a wholly-owned subsidiary of the Company |
| Hongchuang Packaging | Yunnan Hongchuang Packaging Co., Ltd., a controlled subsidiary of the Company |
| Anhui Hongchuang | Hongchuang Packaging (Anhui) Co., Ltd., a subsidiary of the Company |
| Shanghai Energy | Shanghai Energy New Material Technology Co., Ltd., a controlled subsidiary of the Company |
| Zhuhai Energy | Zhuhai Energy New Material Technology Co., Ltd., a subsidiary of the Company |
| Wuxi Energy | Wuxi Energy New Material Technology Co., Ltd., a subsidiary of the Company |
| Jiangsu Energy | Jiangsu Energy New Material Technology Co., Ltd., a subsidiary of the Company |
| Chongqing Energy | Chongqing Energy New Material Technology Co., Ltd., a subsidiary of the Company |
| Yuxi Energy | Yuxi Energy New Materials Co., Ltd., a subsidiary of the Company |
| Newmi Tech | Chongqing Energy Newmi Technological Co., Ltd., a subsidiary of the Company |
| Jiangxi Tonry | Jiangxi Tonry New Energy Technology Development Co., Ltd., a subsidiary of the Company |
| Jiangsu Ruijie | Jiangsu Ruijie New Material Technology Co., Ltd., a subsidiary of the Company |
| Jiangsu Sanhe | Jiangsu Sanhe Battery Material Technology Co., Ltd., a subsidiary of the Company |
| Jiangxi Ruijie | Jiangxi Ruijie New Material Technology Co., Ltd., a subsidiary of the Company |
| Jiangxi Energy | Jiangxi Energy New Material Technology Co., Ltd., a subsidiary of the Company |
| Jiangxi Enpo | Jiangxi Enpo New Materials Co., Ltd., a subsidiary of the Company |
| Hubei Energy | Hubei Energy New Material Technology Co., Ltd., a subsidiary of the Company |
| Suzhou GreenPower | Suzhou GreenPower New Energy Materials Co., Ltd., a subsidiary of the Company |
| Hunan Energy | Hunan Energy Frontier New Material Technology Co., Ltd., a subsidiary of the Company |
| SEMCORP Hungary KFT | SEMCORP Hungary Korlátolt Felel?sség? Társaság (Hungary), a subsidiary of the Company |
| Heyi Investment | Yuxi Heyi Investment Co., Ltd., a shareholder holding more than 5% of the Company’s shares |
| Heli Investment | Yuxi Heli Investment Co., Ltd., an employee stock ownership platform of the Company |
| General Meeting of Shareholders | The general meeting of shareholders of Yunnan Energy New Material Co., Ltd. |
| Board of Directors | The Board of Directors of Yunnan Energy New Material Co., Ltd. |
| Supervisory Committee | The supervisory committee of Yunnan Energy New Material Co., Ltd. |
| CSRC | China Securities Regulatory Commission |
| SZSE | Shenzhen Stock Exchange |
| CSDC Shenzhen Branch | Shenzhen Branch of China Securities Depository and Clearing Corporation Limited (CSDC) |
| Company Law | Company Law of the People’s Republic of China |
| Securities Law | Securities Law of the People’s Republic of China |
| Articles of Association | Articles of Association of Yunnan Energy New Material Co., Ltd. |
| Designated information disclosure media | China Securities Journal, Shanghai Securities News, Securities Times, Securities Daily, and Cninfo (www.cninfo.com.cn) |
| RMB, RMB10 thousand, RMB100 million | RMB, RMB10 thousand, RMB100 million |
| Reporting Period, this Reporting Period | January 1, 2024 to December 31, 2024 |
| Same period last year | January 1, 2023 to December 31, 2023 |
| Lithium-ion battery, lithium battery | Rechargeable battery, which mainly depends on the lithium ion moving between the positive and negative electrodes. It generally uses materials containing lithium as the electrodes, and is the representative of modern high-performance batteries |
| Lithium battery separator, the separator | In the structure of lithium battery, the separator is one of the key inner components. Its main function is to separate the positive and negative electrodes of the battery, preventing the short circuit arising from the contact between the two electrodes, current conduction and overheating |
| Base film, base separator |
The separator immersed in the electrolyte of lithium battery is widely distributed with nano-scalemicropores on its surface for lithium ions to move freely between the positive and negative electrodes
| Coating film, coated separator | The separator with coating treatment |
| Wet-process, wet-processing | A process technique of lithium battery separator, also known as phase separation process or thermally induced phase separation process, is to add small molecules with high boiling point as porogen to polyolefin, heat and melt them into a uniform state, extrude the casting sheet by screw, extract the porogen with organic solvent after simultaneous or sequential biaxial stretching, and then obtain microporous separator material through post-processing such as stretching heat setting process |
| Dry-process, dry-processing | Also known as melt-stretching process, including unidirectional stretching process, biaxial stretching process and blow molding process. It refers to a preparation process of melting and extruding polyolefin resin into crystalline thin polymer film, which is crystallized and annealed to obtain a high crystallinity structure, and then further stretching at high temperature to peel off the crystalline interface to form porous structure |
| Cigarette label | Cigarette packaging, commonly known as “cigarette pack” |
| Aseptic packaging | Composite packaging materials for aseptic filling of dairy products or non-carbonated soft drinks |
| Specialty paper | Specialty paper refers to the paper with special functions, a general term for all kinds of special purpose paper or art paper. The term “specialty paper” in this report mainly refers to special packaging paper |
| BOPP film | The separator made by stretching and processing (such as corona, coating, etc.) the thick film made of polymer polypropylene melt at a certain temperature and speed in a special stretcher |
| Cigarette film | BOPP film used for the packaging of cigarette, also known as “BOPP cigarette film” |
| Flat film | BOPP film for general packaging, also known as “BOPP flat film” |
| Aluminum laminated film | Aluminum laminated composite film for lithium-ion pouch cell, a packaging material for lithium-ion batteries, which protects the internal materials of lithium-ion batteries |
| Convertible Bonds, Energy Convertible Bonds | The convertible corporate bonds of RMB1.6 billion issued on February 11, 2020 with a code of 128095 |
Section 2 Company Profile & Key Financial Indicators
I. Corporate Information
| Stock Name | Energy Technology | Stock Code | 002812 |
| Stock Name Prior to Change (If any) | Innovation Co., Ltd. | ||
| The Stock Exchange Where the Shares Are Listed | Shenzhen Stock Exchange | ||
| Name of the Company in Chinese | 云南恩捷新材料股份有限公司 | ||
| Short Name of the Company in Chinese | 恩捷股份 | ||
| Name of the Company in English (If any) | YUNNAN ENERGY NEW MATERIAL CO., LTD. | ||
| Short Name of the Company in English (If any) | ENERGY TECHNOLOGY | ||
| Legal Representative of the Company | Paul Xiaoming Lee | ||
| Registered Address | No.125, Fuxian Road, High-tech Zone, Yuxi City, Yunnan Province | ||
| Postal Code for Registered Address | 653100 | ||
| Historical Changes of the Registered Address of the Company | No | ||
| Office Address | No.125, Fuxian Road, High-tech Zone, Yuxi City, Yunnan Province | ||
| Postal Code for Office Address | 653100 | ||
| Official Website | www.semcorp.com | ||
| groupheadquarter@cxxcl.cn | |||
II. Contact Information
| Board Secretary | Securities Affairs Representative | |
| Name | Yu Xue | |
| Correspondence Address | No.125, Fuxian Road, High-tech Zone, Yuxi City, Yunnan Province | |
| Telephone | 0877-8888661 | |
| Fax | 0877-8888677 | |
| groupheadquarter@cxxcl.cn | ||
III. Information Disclosure and the Place Where the Annual Report is Kept
| The website of the stock exchange where the Company discloses its annual report | Shenzhen Stock Exchange (www.szse.cn) |
| The names and websites of the media where the Company discloses the annual report | Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily and Cninfo (www.cninfo.com.cn) |
| The place where the annual report is kept | Securities Department of the Company |
IV. Changes of Registration
| Unified social credit code | 91530000727317703K |
| Changes of main businesses since the Company’s listing | When the Company was listed, its main businesses were divided into two categories: (1) packaging materials: BOPP films (cigarette film and flat film) and specialty paper products (laser transfer anti-counterfeiting paper, direct plating paper and cellophane); |
| (2) packaging printing products: mainly including cigarette label products and aseptic packaging products. Upon the completion of major asset restructuring in 2018, the Company’s main businesses were divided into three categories: (1) film products (lithium battery separator and BOPP film); (2) packaging printing products (cigarette label and aseptic packaging); and (3) packaging products (specialty papers, holographic anti-counterfeiting electrochemical aluminum and other products). | |
| Changes of controlling shareholders | Mr. Paul Xiaoming Lee and Ms. Sherry Lee, who are shareholders and actual controllers of the Company and members of Xiaoming Lee’s family, signed the Power of Attorney for Shareholding on January 14, 2020. Pursuant to the Power of Attorney, Ms. Sherry Lee fully delegated the shareholders’ rights, such as rights to address inquiries, propose and vote, in connection with all the shares she held in the Company, to her father Mr. Paul Xiaoming Lee. After the signing of the above-mentioned Power of Attorney for Shareholding, Mr. Paul Xiaoming Lee has become the single shareholder of the Company with the largest number of shares with voting right, and the controlling shareholder of the Company changed from Heyi Investment to Mr. Paul Xiaoming Lee. At present, Mr. Paul Xiaoming Lee is still the controlling shareholder of the Company. |
V. Other Relevant Information
The accounting firm engaged by the Company
| The name of the accounting firm | RSM CHINA (Special General Partnership) |
| The office address of the accounting firm | Units 1001-1 to 1001-26, 10/F, Building 1, No.22 Fuchengmenwai Street, Xicheng District, Beijing |
| The names of the accountants | Yao Rui, Yang Ganlin, Tian Guocheng |
The sponsor engaged by the Company to perform continuous supervision duties during the Reporting Period?Applicable □Not applicable
| Name of sponsor | Office address of sponsor | Name of sponsor representative | Supervision duration |
| CITIC Securities Company Limited | 21/F, CITIC Securities Tower, No. 48 Liangmaqiao Road, Chaoyang District, Beijing | Wang Jiaji and Liu Chunqin | From June 20, 2023 to December 31, 2024 |
The financial adviser engaged by the Company to perform continuous supervision duties during the Reporting Period
□Applicable
?Not applicable
VI. Key Accounting Data and Financial Indicators
Whether the Company is required to retroactively adjust or restate prior years’ accounting data
□Yes
?
No
| 2024 | 2023 | Increase or decrease in this year compared to last year | 2022 | |
| Operating income (RMB) | 10,163,655,793.70 | 12,042,229,789.30 | -15.60% | 12,590,925,529.68 |
| Net profit attributable to the shareholders of the listed company (RMB) | -556,317,501.09 | 2,526,688,570.92 | -122.02% | 4,000,461,964.37 |
| Net profit, net of the non-recurring gains or losses, attributable to the shareholders of the listed company (RMB) | -613,297,983.45 | 2,461,257,928.99 | -124.92% | 3,839,792,123.08 |
| Net cash flow generated from the operating activities (RMB) | 1,158,249,055.10 | 2,667,453,259.32 | -56.58% | 503,587,598.66 |
| Basic earnings per share (RMB/share) | -0.57 | 2.68 | -121.27% | 4.48 |
| Diluted earnings per share (RMB/share) | -0.8733 | 2.5788 | -133.86% | 4.46 |
| Weighted average return on equity | -2.17% | 11.87% | -14.04% | 25.39% |
| At the end of 2024 | At the end of 2023 | Increase or decrease at the end of this year | At the end of 2022 |
| compared to the end of last year | ||||
| Total assets (RMB) | 47,199,637,500.22 | 47,200,916,635.69 | 0.00% | 38,622,731,492.57 |
| Net assets attributable to the shareholders of the listed company (RMB) | 24,471,229,555.06 | 26,926,495,494.24 | -9.12% | 17,726,202,872.37 |
The lower of the Company’s net profits before and after the deduction of non-recurring gains or losses for the last three fiscal years are
negative, and the audit report for the latest year shows that Company’s ability to continue as a going concern is uncertain
□Yes
?No
The lower of the net profit before and after the deduction of non-recurring gains or losses is negative
□Yes
?No
VII. Accounting Data Differences under Chinese and Overseas AccountingStandards
1.
Difference between the net profits and net assets of the financial report disclosed in accordance with theinternational accounting standards and the Chinese accounting standards
□Applicable
?Not applicable
There was no difference between the net profits and net assets of the financial report disclosed in accordance with the internationalaccounting standards and the Chinese accounting standards during the Reporting Period of the Company.
2.
Difference between the net profits and net assets of the financial report disclosed in accordance with theoverseas accounting standards and the Chinese accounting standards
□Applicable
?Not applicable
There was no difference between the net profits and net assets of the financial report disclosed in accordance with the overseas accountingstandards and the Chinese accounting standards during the Reporting Period of the Company.
VIII. Key Financial Indicators by Quarter
Unit: RMB
| Q1 | Q2 | Q3 | Q4 | |
| Operating income | 2,327,574,815.97 | 2,455,666,764.51 | 2,681,433,947.72 | 2,698,980,265.50 |
| Net profit attributable to the shareholders of the listed company | 158,141,200.24 | 132,886,152.20 | 152,472,211.35 | -999,817,064.88 |
| Net profit, net of the non-recurring gains or losses, attributable to the shareholders of the listed company | 149,108,725.80 | 110,398,664.07 | 157,313,641.40 | -1,030,119,014.72 |
| Net cash flow generated from the operating activities | 455,833,032.02 | 1,553,077,396.86 | 744,197,734.96 | -1,139,026,076.72 |
Whether the above financial indicators or their sums are materially different from those disclosed in the quarterly and interim reports ofthe Company
□Yes
?
No
IX. Items and Amounts of Non-Recurring Gains or Losses
?Applicable □Not applicable
Unit: RMB
| Item | 2024 Amount | 2023 Amount | 2022 Amount | Remarks |
| Gains and losses from the disposal of non-current assets | -636,682.57 | -2,635,244.01 | -4,869,891.53 |
| (including the write-down of the provision for impairment of assets) | ||||
| Government subsidies recognized in current profit or loss (except for those closely related to the Company’s normal business and are in line with national policies and in accordance with defined criteria that have a continuing impact on the Company’s profit or loss) | 86,288,377.95 | 91,546,051.06 | 171,995,624.29 | |
| Gains or losses from changes in fair value arising from financial assets and financial liabilities held by non-financial corporation, and gains or losses from disposal of financial assets and financial liabilities, excluding the effective hedging business related to the Company’s normal business operations | 124,692.63 | 15,433,062.02 | 21,836,255.17 | |
| Gains or losses on entrusted investments or assets management | 27,838,099.70 | |||
| Reversal of the provisions for impairment of receivables subject to separate impairment test | 2,384,991.32 | 102,906.06 | 2,078,410.35 | |
| One-off share-based payment recognized as a result of cancellation and modification of the share incentive scheme | -21,942,152.71 | |||
| Non-operating income and expenses other than above-mentioned items | -2,924,642.41 | -44,249.00 | 818,785.95 | |
| Other items within the definition of non-recurring gains or losses | 461,445.22 | 589,416.97 | 5,824,344.40 | |
| Less: Effect of the income tax | 21,424,545.54 | 12,614,212.47 | 56,380,407.08 | |
| Effect of minority equities (after tax) | 7,293,154.24 | 5,004,935.99 | 8,471,379.96 | |
| Total | 56,980,482.36 | 65,430,641.93 | 160,669,841.29 | -- |
Details of other profit or loss items that fall within the meaning of non-recurring gain or loss:
□Applicable
?Not applicable
The Company has no details of other profit or loss items that fall within the meaning of non-recurring gain or loss.The reason for the Company to define the non-recurring profit or loss items illustrated in the Information Disclosure and Presentation Rulesfor Companies Making Public Offering of Securities No.1 – Non-recurring Profit or Loss as recurring profit or loss items
□Applicable
?Not applicable
The Company did not define the non-recurring profit or loss items illustrated in the Information Disclosure and Presentation Rules forCompanies Making Public Offering of Securities No.1 – Non-recurring Profit or Loss as recurring profit or loss items.
Section 3 Management Discussion and Analysis
I. Industry Overview of the Company during the Reporting Period
The Company shall comply with the disclosure requirements set out in “Rubber and Plastic Products Manufacturing” under “ChemicalIndustry Related Business” in the Self-Regulatory Guidelines No. 3 for Companies Listed on Shenzhen Stock Exchange – Industry InformationDisclosure.
1. Industry conditions and the industry position of the Company
With increasing global attention on green, low-carbon, and sustainable development, more than 150 countries set ambitious goals forcarbon neutrality. At the United Nations Climate Change Conference, nearly 200 countries reached a milestone agreement – “UAE Consensus,”marking the first consensus in nearly three decades on transitioning the energy system from fossil fuels to clean energy. Countries haveintensified efforts to promote the development of the new energy industry. Guided by China’s national strategic goals of carbon neutrality andcarbon peaking, the new energy vehicle and energy storage industries have maintained the rapid development momentum, although the growthrate has slowed down, and the capacity of various subsectors has been continuously released, with competition intensified. As one of the fourkey materials of lithium batteries, lithium battery separators are widely used in electric vehicles, consumer electronics, energy storage batteries,and other fields, playing a pivotal role in driving the development of China’s and even global new energy industries.
According to the EV TANK’s White Paper on China Lithium-Ion Battery Separator Industry Development (2025), as of the end of 2024,the Company’s market share has ranked first in the market for seven consecutive years. As a leading company in the lithium battery separatorindustry, the Company not only possesses significant competitiveness in global production capacity, product quality, cost-effectiveness, andtechnological R&D, but also has successfully entered the supply chain system of the world’s mainstream lithium battery manufacturers. Ourproducts cover the three major fields of power battery, consumer battery, and energy storage battery, with abundant application scenarios. In2024, the Company maintained its leading position in the industry, with both production capacity and shipment volume of separator productsranking first in the industry.
2. Industry development trends
The global new energy automobile industry and the energy storage market are still growing, in which the growth rate of power classlithium batteries has slowed down in stages. Competition across the industry is fierce, but the energy storage market has seen significant growthin both market size and demand. According to SNE Research, the global power battery installed capacity amounted to 894.4GWh in 2024, ayear-on-year growth of 27.2%. According to ICCSINO, the global shipment of energy storage batteries reached 314.7GWh in 2024, with ayear-on-year growth of 60%. The continuous expansion of the market scale of the lithium battery industry has promoted the development oflithium battery separator. However, with the intensive capacity expansion in the lithium battery separator industry in recent years, marketcompetition has intensified. Coupled with strengthened cost control measures of downstream lithium battery manufacturers, separator productprices have been on a downward trend, squeezing industry profit margins. The White Paper on China Lithium-Ion Battery Separator IndustryDevelopment (2025) released by EV Tank shows that China’s lithium-ion battery separator shipments reached 22.8 billion square meters in2024, up 28.6% year on year.
(1) The separator industry has vast market potential and high requirements for scale and localization
From a global perspective, China has taken the lead in the electric and intelligent development of vehicles, while overseas regions suchas Europe and America are rapidly catching up. Given the enormous growth potential of new energy vehicle and lithium battery markets,especially the energy storage market, GGII data show that, by 2030, the global shipments of new energy passenger vehicles, commercialvehicles, and energy storage batteries are expected to exceed 2,000 GWh, nearly 700 GWh, and 1,400 GWh, respectively. Emerging applicationfields, such as construction machinery, ships, aircraft, and “smart-driven application scenarios,” are also expected to generate demand of over100 GWh by 2030. The penetration rate of new energy vehicles in overseas markets is still lower compared to Chinese markets; therefore, thegrowth rate of overseas markets is expected to surpass that of Chinese markets in the future. Lithium battery separator is an indispensable keyraw material in the manufacture of lithium batteries. Maintaining stable and reliable localized production capacity and product quality are theimportant cornerstones for separator enterprises to undertake large-scale orders from downstream customers. The Company keeps deepeningits partnerships with top clients around the world. Leveraging our global production capacity, product quality and global service capabilities,industry-leading technological R&D and patent advantages, we continue to expand our global market share and consolidate our position as aglobal industry leader.
(2) We enhance innovation capacity and actively improve product and customer structure
Lithium batteries are the core components of new energy vehicles. As the market gradually transitions from policy-oriented to market-driven, manufacturers have increasingly stringent requirements for key performance attributes of lithium batteries, such as safety, rangecapacity, and service life. The continuous advancement of lithium battery technology imposes higher requirements on the performanceimprovement and technological iteration of separator products. Therefore, separator companies that possess core technologies and independentR&D and innovation capabilities will have better development prospects and potential. The application scenarios of lithium batteries areconstantly expanding. In the future, applications such as low-altitude economy, robotics, etc. will further increase the market size of lithiumbattery and lithium battery separator.
The competition in the separator industry has become increasingly fierce, and technological innovation, development of new productsand iterative upgrading of products have become one of the trends in the development of separator companies. Coating inorganic ceramicmaterials, PVDF, aramid, and other materials on the base film can effectively enhance the puncture resistance and heat resistance of lithiumbattery separators, improving the safety and service life of batteries. Compared with base films, coating films are better able to meet the keyperformance requirements of lithium batteries for separators, offering higher product added value. Therefore, separator companies that possessthe core technology of high-quality coating films have better development prospects, and increasing the shipment volume of coating filmshelps enhance the comprehensive profitability. Meanwhile, separator companies need to develop new products such as ultra-thin separatorproducts, fast-charging separator products and semi-solid electrolyte products, to improve the temperature resistance, mechanical strength and
other properties of separator products, and meet the strong demand of the downstream battery customers for improved safety, service life,energy density and range capacity of lithium batteries. In terms of optimizing customer structure, we ramp up efforts in the maintenance anddevelopment of key customers while in exploring overseas markets and accelerating global outreach.Currently, Chinese separator companies dominate the global separator market. As a leading enterprise in the lithium battery separatorindustry, the Company not only has significant competitiveness in global production capacity deployment, product quality, cost-effectivenessand technological R&D, but also successfully entered the supply chain system of the world’s mainstream lithium battery manufacturers,covering the three major fields of lithium batteries: power battery, consumer battery and energy storage lithium battery. During the ReportingPeriod, the overall supply and demand dynamics in the lithium battery separator industry slightly eased, combined with cost reduction pressuresdownstream and intensified market competition, have led to a downward trend in the prices of lithium battery separator products. However,the Company braved the market competition, and actively developed Chinese and overseas markets. By establishing production bases in keymarkets such as Europe, North America, and Southeast Asia, the Company aims to meet the localized demand from global mid-to-high-endlithium battery customers for its wet-process separator products and services with high consistency and safety. The Company has formed deeppartnerships with several globally renowned battery manufacturers, continuously optimizing its product and customer portfolio. With therelease of overseas production capacity in the future, the Company is expected to further expand its market share in the global competition.In addition, the Company has diverse product lines in multiple product segments such as BOPP film, aseptic packaging, and aluminumlaminated film. After approximately 30 years of steady development of the BOPP film industry in China, the technology has becomeincreasingly mature, while the market competition has also become fiercer.In recent years, China’s aseptic packaging market has gradually established a product system with mature technology and diverse producttypes, capable of meeting the needs of aseptic filling of various liquids. The primary application areas of aseptic packaging are concentratedin the food and beverage industries such as liquid dairy products and non-carbonated beverages. With the continuous prosperity of the Chineseeconomy and the increase in urban residents’ income, consumer mindset and health awareness have gradually improved, leading to a rapidgrowth momentum in the consumption of dairy products and non-carbonated beverages. At the same time, the increasing attention from boththe government and consumers on food safety has led to stricter requirements for packaging materials, especially aseptic packaging materials,resulting in rising demands. Although international packaging giants still dominate the market due to their first-mover advantage, with thecontinuous progress of material technologies and production technologies in China, the Chinese aseptic packaging market is poised for rapidgrowth opportunities. Looking ahead, leveraging cost-effectiveness advantages, Chinese manufacturers are expected to gradually expand theirproducts from the mid-to-low-end market to the high-end aseptic packaging market. The market share of Chinese aseptic packagingmanufacturers is expected to gradually increase.Aluminum laminated film, as a crucial encapsulation material for pouch cells, represents one of the most technically challenging aspectsin the pouch cell industry chain, exerting significant influence on the quality of pouch cells. Compared to cylindrical and prismatic batteries,pouch cells demonstrate evident advantages in energy density, cycle life, safety, and flexibility. In the realm of consumer electronics whichseeks high-capacity and lightweight, pouch cells have become the mainstream choice, with a high market share in mobile phone and laptopbatteries, and approaching saturation in tablet batteries. In the field of traction batteries, the overseas new energy vehicle markets and solid-state battery (including semi-solid-state battery) markets show a stronger preference for pouch traction batteries. With continuousadvancements in battery technology and declining costs, the competitiveness of pouch cells will be gradually improving.
3. Industry policies
The Company’s main product is lithium battery separator, an indispensable core component in lithium battery manufacturing. Theindustry chain of new energy lithium battery in which the Company is engaged is highly valued and supported by governments. Relevantindustrial policies that have had a direct or indirect impact on the Company in recent years are detailed below:
| Date | Issuing Authority | Name of Policy or Regulation | Main Content |
| August 2022 | Nine departments including MOST, NDRC and MIIT | Implementation Plan for Carbon Peak and Carbon Neutrality Supported by Science and Technology (2022-2030) | It proposes the action plan for low-carbon and zero-carbon technology research in urban and rural construction and transportation, focusing on recent breakthroughs in basic research in key areas such as new energy development and cutting-edge energy storage. |
| November 2022 | MIIT, SAMR | Notice on the Coordinated and Stable Development of Lithium-Ion Battery Industry Chain and Supply Chain | It guides lithium battery enterprises to moderately expand production scale as needed under the premise of stable supply of key materials, sufficient investment in R&D innovation, and adequate supporting funds. It is important to optimize the industrial regional layout, avoid low-level homogeneous development and vicious competition, and establish a development pattern led by innovation, prioritizing technology, fair competition, and orderly expansion. |
| January 2023 | MIIT | Guiding Opinions on Promoting the Development of the Energy Electronics Industry (Draft for Comments) | It promotes the intelligent upgrading of basic material production, enhances the production of silicon materials, silicon wafers, energy storage battery materials, and high-performance batteries, and improves the mechanization and automation levels of packaging, storage, and transportation to enhance product consistency and stability. |
| February 2023 | Eight departments including MIIT | Notice on Organizing and Carrying Out the Pilot Work of Pioneering Zones for Comprehensive Electrification of Public Sector Vehicles | The goal is to significantly increase the level of electrification for vehicles, aiming to reach 80% in urban public transportation, taxis, sanitation, postal and express delivery, and urban logistics distribution sectors. |
| June 2023 | MIIT, MOF, MOC, GAC, and SAMR | Decision on Amending the Measures for the Parallel Administration of the Average Fuel Consumption and New Energy Vehicle Credits of Passenger Car Enterprises | It adjusts the method of point calculation and the upper limit of points, establishes a flexible point trading mechanism, explores the establishment of a points pool system, and optimizes other points management systems. |
| June 2023 | MOF, STA, MIIT | Announcement on Renewal of the Vehicle Purchase Tax Exemption Policy for New Energy Vehicles | During the period from 1 January 2024 to 31 December 2025, new energy vehicles are exempt from vehicle purchase tax, with each new energy passenger car eligible for a tax exemption of up to RMB30,000 |
| September 2023 | NDRC, NEA | Basic Rules for Electricity Spot Markets (Trial) | The goal is to enhance the adjustment capacity of the power system, promote the consumption and absorption of renewable energy, and facilitate the transformation of the power system towards a clean, low-carbon, safe, and efficient direction. |
| January 2024 | NDRC, NEA, MIIT, SAMR | Implementation Opinions on Strengthening the Integration and Interaction Between New Energy Vehicles and the Power Grid | By 2025, China’s vehicle-network interaction technology standard system is initially completed, and the charging peak and valley tariff mechanism is fully implemented and continuously optimized. By 2030, China’s vehicle-network interaction technical standard system is basically completed. It enhances the key technology research of the power battery, and increases the cycle life of the power battery to 3,000 times and above on the basis of not significantly increasing the cost. |
| March 2024 | The State Council | Action Plan for Promotion of Large-Scale Equipment Replacement and Trade-in of Consumer Goods | To carry out automobile trade-in, enhance policy support, clear circulation blockages, and promote the consumption of automobiles on a step-by-step basis, as well as the consumption of newer vehicles. To support the renewal of transportation equipment and old agricultural machinery, promote the replacement of urban buses with electric ones, and support the upgrade of old new energy buses and power batteries. To accelerate the phasing out of diesel trucks operating under the National III emission standard and below; strengthen capacity building for the industrialization of electric, hydrogen and other green aviation equipment; accelerate the scrapping and renewal of old ships with high energy consumption and high emissions, strongly support the development of new energy-powered ships, improve the supporting infrastructure and standards for new energy-powered ships, and gradually expand the scope of application of new energy-powered ships, such as those powered by electric power, liquefied natural gas, bio-diesel and green methanol. |
| June 2024 | MIIT | Standard Conditions for Lithium-ion Battery Industry (2024 Edition) | To guide enterprises to strengthen technological innovation, improve product quality and reduce production costs, specify the product performance indexes such as energy density, power density, cycle life, capacity retention rate, etc. of power batteries, energy storage batteries and battery packs. |
| European Parliament and Council | Net-Zero Industry Act (Regulation (EU) 2024/1735) | By 2030, the manufacturing capacity for EU-based net-zero technologies (such as solar panels, wind turbines, batteries and heat pumps) shall reach 40% of deployment needs, and by 2040, the EU shall reach 15% of global production in these technologies. The Act provides for a number of initiatives to increase investment in green technologies, including streamlining the licensing process for strategic projects and using public procurement and renewable energy auctions to enhance market access for strategic technology products. | |
| July 2024 | NDRC | Several Measures to Enhance Support for Large-scale Equipment Renewal and Trade-in of Consumer Goods | On the basis of the Implementation Rules of the Automobile Replacement Subsidy, for individual consumers who scrap fuel passenger cars of national III and below emission standard or new energy passenger cars registered before April 30, 2018 (inclusive), and purchase new energy passenger cars or fuel passenger cars with a displacement of 2.0 liters and below, the subsidy standard is raised to RMB20,000 for the purchase of new energy passenger vehicles, and RMB15,000 for the purchase of fuel vehicles with a displacement of 2.0 liters and below. |
| European Parliament and Council | EU Electricity Market Reform (Regulation (EU) 2024/1747) | In response to rising electricity prices due to natural gas prices, electricity market reforms in the European Union aim to reduce the dependence of electricity prices on volatile fossil fuel prices, protect consumers from price spikes, accelerate the deployment of cleaner electricity, such as renewable energy, and incentivize cleaner energy transitions. Key initiatives include: 1) indirectly driving energy storage development through the promotion of long-term power purchase agreements (PPAs) and contracts for difference (CFDs), and investment in renewable energy; and 2) adopting non-fossil flexibility support system of “pay for capacity available,” which will allow flexible resources to fully meet clean energy goals, or directly increase the revenues of storage units and promote the development of energy storage. | |
| September 2024 | NDRC, NEA | Notice on Promoting Pilot Work on Large-scale Vehicle Network Interactive Applications | To expand the scale of bidirectional charging and discharging (V2G) projects, and enrich the application scenarios of vehicle-network interaction in accordance with the principle of “innovative guidance, early and pilot implementation,” comprehensively promote the orderly charging of new energy vehicles, and guide the large-scale development of vehicle-network interaction with market-oriented mechanism, improving the scale and sustainable vehicle-network interaction policy mechanism based on cities, and exploring the business model with advanced technology, clear model and replicable promotion based on V2G projects. Regions participating in the pilot program shall fully implement the charging peak and valley time-sharing tariffs, and strive to have more than 60% of the annual charging electricity |
| concentrated in the low valley hours, of which more than 80% of the electricity charged through private piles is concentrated in the low valley hours. In principle, the total discharge power of V2G projects participating in the pilot program shall not be less than 500 kW, and the annual discharge volume shall not be less than 100,000 kWh, which may be appropriately reduced in the western region. | |||
| December 2024 | NDRC, NEA | Implementation Plan for Optimizing the Regulation Capability of the Power System (2025-2027) | By 2027, the regulation capacity of the power system will be significantly improved, the market environment and business model for the development of various types of regulation resources will be better, and the mechanism for mobilizing various types of regulation resources will be further improved. Through the construction and optimization of regulation capacity, it will support the reasonable consumption and utilization of more than 200 million kilowatts of new energy per year from 2025 to 2027, and the utilization rate of new energy nationwide will not be less than 90%. |
II. Main Businesses of the Company during the Reporting Period
The Company shall comply with the disclosure requirements for the chemical industry set forth in the Self-Regulatory Guidelines No. 3for Companies Listed on Shenzhen Stock Exchange – Industry Information DisclosureProcurement model for major raw materials
Unit: RMB
| Major raw materials | Procurement model | Proportion in total procurement amount | Whether there are significant changes in settlement methods | Average price in the first half of the year | Average price in the second half of the year |
| Raw material A | Market procurement | 14.57% | No | 25.46 | 24.98 |
| Raw material B | Market procurement | 13.64% | No | 11.56 | 11.33 |
| Raw material C | Market procurement | 4.18% | No | 6.86 | 7.31 |
| Raw material D | Market procurement | 3.46% | No | 6.73 | 6.68 |
Note: The total procurement amount mentioned in the above table refers to the total procurement value, which includes all procurementactivities such as raw materials, equipment, engineering, energy and power, packaging materials, and others.Energy procurement costs account for over 30% of total production costs
□Applicable
?Not applicable
Production technology for major products
| Major products | Phase in production technology | Information about key technical personnel | Patent technology | Strengths in product R&D |
| Lithium battery separator | Industrialization | All are employees of the Company, who continue to carry out R&D of projects and proactively respond to the needs of downstream customers | The Company’s R&D team for lithium battery separators has achieved a series of accomplishments in improving production efficiency and lithium battery separator business. Currently, there are a total of 482 valid patents, including 38 international patents. Additionally, 326 patents are currently under application, including 132 international patent applications. | The Company has built a well-established R&D team over the years, responsible for the R&D of forward-looking technological reserve projects, such as separator and coating production equipment, improvements in separator preparation processes and raw materials, coating processes, slurry formulations, recycling and energy-saving technologies, as well as semi-solid and solid-state batteries. The Company’s pioneering online coating technology has further enhanced the quality and production efficiency of coating film products. Additionally, the Company’s lithium battery separator R&D team not only customizes the development of various new products for downstream customers to meet diverse customer needs, but also collaborates with them to develop products and enhance the customer loyalty. |
| BOPP film | Industrialization | All are employees of the Company, who develop relevant products in proactive response to the needs of downstream customers | Currently, there are 69 valid patents, including 6 invention patents and 63 utility model patents; 14 patents are currently under application. | The Company has accumulated nearly thirty years of experience in technical R&D. Leveraging a well-established R&D team within the Company’s research institute system, the Company can develop related products according to customer needs. It is one of the few Chinese enterprises capable of producing anti-counterfeiting printed cigarette films. |
| Aseptic packaging | Industrialization | All are employees of the Company, who develop relevant products based on demands of the market and downstream customers | Currently, there are 47 valid patents, including 2 invention patents, 36 utility model patents, and 9 design patents; 15 patents are currently under application. | Leveraging a well-established R&D team within the Company’s research institute system, the Company can develop related products according to customer needs to meet diverse customer needs. |
Production capacity of major products
| Major products | Designed capacity | Capacity utilization rate | Capacity under construction | Investment in construction |
| Lithium battery separator | 11.7 billion m2 | 92.60% | Chongqing Energy (Phase II), Yuxi Energy, USA Energy Production Base | During the Reporting Period, Jiangsu Energy and Hubei Energy were put into production; Chongqing Energy (Phase II)’s some production lines were put into production; Yuxi Energy and USA Energy were under construction. |
| BOPP film | 100,000 tons | 57.19% | ||
| Aseptic packaging | 5.3 billion units | 87.77% | Anhui Hongchuang Aseptic Packaging Production Base | The infrastructure works of Anhui Hongchuang Aseptic Packaging Production Base were completed. |
Note: The production capacity of the parent roll of the lithium battery separator in the above table was calculated by the rotational speed,width and normal wear and tear during shutdown maintenance as well as the weighted duration of the production lines put into production.In addition, before being sold, different products may need to experience different processes such as cutting and coating. For differentprocesses, wears and tears may be different, leading to certain difference in production volume between the products and their parent rolls.Product categories in major chemical parks
| Major chemical parks | Product category |
| Shanghai Energy, Zhuhai Energy, Wuxi Energy, Jiangxi Tonry, Suzhou GreenPower, Chongqing Energy, Newmi Tech, Jiangsu Energy, Hubei Energy, Hungary Energy, Jiangxi Enpo | Lithium battery separator |
| Hongta Plastic, Chengdu Hongta Plastic | BOPP film |
| Hongchuang Packaging, Anhui Hongchuang | Aseptic packaging |
Note: Chemical park refers to the chemical area which features with defined geological boundary and management entities, completeinfrastructure and management system, and is established after being approved by the government for developing chemical industry. TheCompany operates in the rubber and plastic products manufacturing sector. None of the production bases listed in the above table arelocated within chemical parks.Environmental Impact Assessment (EIA) approvals being applied for or newly obtained during the Reporting Period?Applicable □Not applicableDuring the Reporting Period, Zhuhai Energy obtained the EIA approval of “Zhu Huan Jian Shu [2024] No. 55” issued by Zhuhai Bureauof Ecology and Environment; Newmi Tech received the EIA approval “Yu (Chang) Huan Zhun [2024] No. 28” issued by ChongqingMunicipal Bureau of Ecology and Environment; Jiangxi Tonry, Jiangxi Energy and Jiangxi Enpo obtained the EIA approvals of “GaoHuan Ping Zi [2024] No. 2”, “Gao Huan Ping Zi [2024] No. 8” and “Gao Huan Ping Zi [2024] No. 12” issued by Yichun Gao’an Ecologicaland Environmental Protection Bureau respectively.Abnormal production shutdowns occurring in the listed company during the Reporting Period
□Applicable
?Not applicable
Relevant approvals, permits, qualifications and their validity periods
□Applicable
?Not applicable
Conducting petroleum processing and petroleum trading business
□Yes
?No
Conducting fertilizer business
□Yes
?No
Conducting pesticide business
□Yes
?No
Conducting chlor-alkali and soda ash businesses
□Yes
?No
III. Analysis of Core Competitiveness
1. Scale advantage
As of the end of the Reporting Period, the Company is a world leader in terms of the production scale of wet-process lithium-ion batteryseparator, and has the largest lithium-ion battery separator supply capacity in the world. The Company is the world’s largest supplier of lithium-ion battery separator, ranking No. 1 globally in terms of market share. The scale advantage of the Company is mainly reflected in cost controland sales expansion. The Company can take large-scale orders from leading lithium battery manufacturers such as LGES, Panasonic, ACC,Ultium Cells, an overseas large vehicle manufacturer, CATL, CALB, EVE and Gotion High-tech. Furthermore, the Company’s scale advantagealso helps improve production efficiency and procurement advantage. In terms of cost control, the Company’s scale advantage firstly reducesits cost in raw materials procurement as large-scale centralized procurement makes the Company’s raw materials costs lower than that of itsindustry peers. Secondly, the Company’s huge sales scale brings a large number of orders to the Company, so that the Company can effectivelyreduce the frequency of downtime during production and effectively reduce costs caused by downtime through reasonable productionscheduling. As a result, the Company leads its peers in terms of operating rate and capacity utilization rate. In terms of sales development, thelithium battery industry is currently experiencing an increasing level of market concentration. The Chinese first-class lithium batterymanufacturers boast huge production scale. Meanwhile, the industry has put forward higher requirements for the performance of lithium-ionbatteries such as energy density, cycle life, safety and charging speed. Therefore, whether the suppliers have a supply capacity to meet thecurrent and future demand of world-class lithium battery manufacturers and the consistency of product quality will become the firstconsideration in their selection of suppliers. As the world’s largest lithium-ion battery separator supplier, the Company boasts a competitiveadvantage thanks to its sufficient supply capacity and the consistency, stability and safety of its separator products.
2. Cost advantage
The Company has long been committed to the development and improvement of the production technology for advanced wet-processlithium-ion battery separators. Thanks to the continuous improvement of production equipment and process technique by the Company’sproduction management and technical teams, the Company leads its industry peers in terms of output from a single production equipment lineof lithium-ion battery separators and further reduces unit depreciation, energy consumption and labor costs. Moreover, thanks to its continuousimprovement of production technology and production management, the Company also leads its peers in terms of yield coefficient and firstpass yield of lithium-ion battery separators. Besides, the Company has continually improved the recovery efficiency of auxiliary materials, andits consumption of auxiliary materials is far lower than that of competitors in the industry. On the whole, the Company’s cost advantage isbrought forth by the integration of continuous improvement of production equipment and production technology, sustained investment in R&D,constant improvement of production management, and strong market development ability.
3. Product advantage
The Company has long been committed to the R&D of lithium-ion battery separators and creating value for customers with high-qualityproducts and excellent services. Mainstream lithium battery manufacturers, especially world-class lithium battery manufacturers, have strictrequirements for material quality. As one of the core materials for lithium batteries, the lithium-ion battery separator has high technical barrierand its performance directly affects the discharge capacity, cycle life and safety of lithium battery. Lithium battery manufacturing has extremelyhigh requirements on separators in terms of properties, such as the size, distribution uniformity and consistency of separator micropores.Mainstream lithium-ion battery manufacturers apply a long system verification process, covering product, process and production flow, whenselecting material suppliers. The Company has successfully passed the product certification of most Chinese and foreign mainstream lithiumbattery manufacturers, and is included in the most demanding overseas power battery supply chain systems. The quality of our products hasbeen recognized by many lithium battery manufacturers. In addition, the Company has continually invested in the development of new productsand carried out product research and forward-looking technical reserve while meeting customers’ demand for customized products. TheCompany has become a supplier with the most diversified lithium-ion battery separator products to meet various demands of differentcustomers.
4. R&D advantage
The Company has established a R&D team with a sound system through years of accumulation. Its R&D scope covers separator andcoating production equipment, improvement of separator preparation process, raw & auxiliary materials, coating process, slurry formula,recovery and energy saving technologies as well as the R&D of forward-looking technical reserve projects. As of December 31, 2024, theCompany’s R&D team of lithium battery separator has made a series of achievements in improving production efficiency, enhancing thequality of lithium battery separators and developing new products. The Company now has 482 effective patents (including 38 internationalpatents) and 326 ongoing patent applications (including 132 international patent applications). In addition, our R&D team of lithium-ionbattery separator can not only customize the development of a variety of new products for downstream customers, but also carry out jointdevelopment with downstream customers to meet the diverse needs of customers. The Company pays close attention to the development ofnew technology in the industry, and makes forward-looking R&D deployment and reserves according to the market demand and its own R&Dsituation, including the R&D of semi-solid and all-solid state related technology.
5. Talent advantage
The lithium-ion battery separator industry is currently an emerging industry in China with a history of only over a decade. The rapidgrowth of the global new energy industry in recent years has brought about an increasing demand for talents of lithium-ion battery separatorsacross the industry, but there is a lack of talent reserve in the lithium battery separator industry. Relying on a talent pool accumulated throughnearly 30 years of engagement in the BOPP film industry, which is similar to the lithium-ion battery separator industry, the Company hasestablished a well-functioning talent incentive mechanism to recruit talents worldwide. The Company has more than 100 employees with amaster’s degree or above working in the lithium battery separator segment, and has set up a core technological R&D team composed ofprofessional R&D staff from the United States, Japan, South Korea and other countries. Furthermore, through long-term efforts, the Companyhas established complete professional teams in production management, system construction, quality control, market expansion and equipmentdesign, installation and maintenance, etc. All teams of the Company have achieved fruitful results in their respective professional fields tojointly help the Company become an internationally competitive leader in the lithium-ion battery separator.
6. Market and customer resource advantages
During the Reporting Period, the Company continued to maintain a leading position in the wet-process lithium-ion battery separatormarket. So far, the Company has successfully entered the supply chain system of the world’s mainstream lithium battery manufacturers,including overseas lithium battery production giants such as Panasonic, LGES, ACC, Ultium Cells and a leading overseas automobile
manufacturer, as well as over 50 Chinese and overseas lithium battery enterprises such as CATL, EVE, CALB, BYD, Gotion High-tech, FarasisEnergy and Lishen. The Company has established close partnerships with downstream customers, with in-depth technical exchanges duringcooperation. Therefore, the Company has a profound understanding of customer needs, and can quickly respond to customer needs and providecorresponding services. With the continued development of the industry, the ramp-up of the Company’s global production capacity, andongoing technological advancements, the Company is poised to grow along with its downstream customers.IV. Analysis on Main Businesses
1. Overview
In 2024, the Company maintained its leading position in terms of business scale and market presence. However, the growth of tractionlithium batteries has experienced a phased slowdown, and intense competition in the downstream battery industry has led to tighter controlover upstream raw material costs, including separator products. Meanwhile, the lithium battery separator industry has seen a concentratedrelease of production capacity, intensifying competition within the sector. As a result, separator product prices have declined, putting pressureon overall industry profitability. In 2024, the Company recorded a consolidated operating income of RMB10.164 billion, down 15.60% yearon year. The Company’s net profit attributable to the shareholders of the listed company was RMB-556 million, down 122.02% year on year.
(1) Focus on film products, global presence and optimizing customer and market structure
The Company focuses on lithium battery separator business, steadily advances its global production capacity presence, and activelyexpands its Chinese and overseas markets. In addition, the Company also strengthens its market position and enhances its core competitiveness.The Company is leading in its production capacity size globally. The Company has built separator production bases in Shanghai, Zhuhai, Wuxi,Jiangxi, Suzhou, Chongqing, Changzhou, Jingmen, Hungary, etc. During the Reporting Period, everything went smoothly in Chineseproduction bases. The production lines for Jiangsu Energy power vehicle lithium battery separator industrialization project and the HubeiEnergy power vehicle lithium battery separator industrialization project were put into production. The civil construction for Phase I of the YuxiEnergy project is underway, with some production lines being installed and commissioned. In the long run, new energy vehicle and energystorage industry is promising in development prospects, especially overseas markets, which develops more slowly with low penetration ratecompared to the Chinese markets. A batch of excellent Chinese new energy industry chain companies, especially lithium battery manufacturersare now speeding up their overseas business presence. With the further expansion in their Chinese and overseas production capacities, marketdemands for lithium battery separators will also correspondingly increase. Based on supply continuity and safety and other factors, thoseenterprises with large-size quality production capacity and strong ability of continuous supply will more easily attract large customers. Duringthe Reporting Period, to further improve its global production capacity presence and meet overseas market demands for wet-process lithiumbattery separator products, the Company completed the construction of Phase I project of its Hungary lithium battery separator, and speededup advancing customer verification and pre-production work. The Company started the construction of its USA lithium battery coating filmfactory project during the Reporting Period. This project has a planned production capacity of about 700 million m
of coating films. TheCompany announced its Hungary Phase II project and Malaysia project, with a planned production capacity of about 800 million m
ofseparators and about 1 billion m
of separators respectively.Currently, the Company’s lithium battery separator products are characterized by good stability and high consistency. With a wide rangeof product categories, they are capable of meeting customers’ customized and diversified needs. The Company has entered the supply chainsystem of the world’s mainstream lithium battery manufacturers. Driven by its own advantages in product, technology, intellectual propertyrights, etc., the Company actively expands its Chinese and overseas markets and depends its long-term cooperation with downstream strategiccustomers. During the Reporting Period, the Company’s Hubei Energy’s power vehicle lithium battery separator industrialization project,jointly invested by the Company and EVE Energy, the Company’s leading enterprise customer in the lithium battery industry, had been putinto production. The Company also has entered into long-term supply agreements with its overseas customers, such as LGES and Ultium CellsLLC. In addition, the Company also has entered into separator supply guarantee agreements with multiple Chinese high-end customers, suchas Gotion High-tech. The Company continues to deepen its strategic cooperation with important customers in Chinese and overseas markets,further enhances its competitive advantages in market and attracting customers, so as to strengthen its market competitiveness.During the Reporting Period, the Company constantly enhanced its R&D efforts and consolidated its technology advantages. In terms ofproduction and manufacture, the Company continued to improve the product quality, reduce cost and increase efficiency by equipmentrenovation, process optimization, technology upgrade, etc. With the continuous promotion and application of its pioneering online coatingtechnique, the Company’s coating film products have been upgraded in terms of production efficiency and product quality. Meanwhile, byrelying on its technology advantages, the Company continues to renovate and upgrade equipment to increase single line production capacityand production efficiency. In terms of product R&D, the Company launched multiple products, such as high-porosity base film with enhancedperformance. In terms of forward-looking technology and product, Jiangsu Sanhe has the mass production capacity of semi-solid-state batteryseparator, and promotes the verification and technology exchange with multiple Chinese lithium battery enterprises. Hunan Energy focuses onthe R&D of solid-state battery materials and has developed lithium sulfide, sulfide solid electrolytes, and sulfide solid electrolyte film products.In particular, key metrics such as the ionic conductivity and particle size control of sulfide solid electrolyte powders have reached an industry-leading level.The Company’s dry-process lithium battery separator project has been put into production, serving Chinese top battery manufacturers.As of the end of the Reporting Period, the Company has established an annual production capacity of 100,000 tons of BOPP film. In2024, the revenue from BOPP film amounted to RMB56.5614 million, a year-on-year decrease of 17.01%, primarily due to intensified marketcompetition and a decline in product prices.
(2) Packaging and printing products, and specialty paper products
The Company’s aseptic packaging business is performing well. The Company serves mainly large dairy enterprise customers and regionalfamous dairy enterprise customers. By continuously developing new products, the Company provides customized services to customers andrealizes a rapid growth in the sale volume of the aseptic packaging products. In 2024, the Company’s aseptic packaging business developedsteadily and improved, achieving an operating income of RMB865 million, up 11.29% year on year, with about a sale volume of 4.6 billionunits. The Company’s aseptic packaging products features with excellent heat-sealing performance, strong adaptability to different machines,
low filling loss, etc. and its quality and performance indicators have reached the industry-leading level. In the future, the Company will continueto enhance market expansion, and seize market growth chances jointly with large dairy enterprises, to achieve a rapid development in its asepticpackaging business. During the Reporting Period, the Company actively advanced the construction of Hongchuang (Ma An Shan) project. Asat the end of the Reporting Period, Ma An Shan Aseptic Packaging Base Factory had been basically built, with the production equipment underinstallation and debugging. In addition, Hongchuang Packaging is also in the middle of R&D and application of new processes and newproducts such as, preparation technology of high cathodic barrier anti-corrosion paper-based aluminum-plastic composite material, plastic freecoating technology, and actively responds to the national dual carbon policy to fully minimize the pressure imposed on the natural environmentduring the product life cycle. Meanwhile, the Company is leveraging new products and processes to explore new markets, actively seekingnew growth drivers, and continuously increasing revenue scale and market share. The Company will continue to focus on packaging andprinting products, expanding market share by utilizing excellent product design, material optimization, customization capabilities, and timelyafter-sales service.During the Reporting Period, the Company’s cigarette label business achieved an operating income of RMB14.87 million, down 51.83%year on year and its specialty paper product business achieved an operating income of RMB75.94 million, down 48.44% year on year.
(3) Review of other work
The Company implemented 2024 Restricted Stock Incentive Plan and first granted a total of 8,708,604 restricted shares to 140 employees,including some directors, senior executives, management at middle level and core technology (business) personnel, which helped effectivelyattract and retain excellent talents and inspire team vitality.To increase the Company’s long-term investment value, improve the earnings per share and further enhance the investors’ confidence,during the Reporting Period, the Company repurchased 5,905,097 shares at a self-owned amount of RMB199.9973 million (excluding tradingfee) for cancellation and decrease of the Company’s registered capital.
Furthermore, driven by their confidence in the Company’s future development and their recognition of the Company’s long-terminvestment value, some directors, supervisors, senior executives and core employees increased their shareholding by 5,323,975 shares at a totalamount of RMB200.4397 million from October 28, 2023 to July 26, 2024.
2. Revenue and cost
(1)
Breakdown of operating revenue
Unit: RMB
| 2024 | 2023 | Year-on-year increase or decrease | |||
| Amount | Proportion in operating revenue | Amount | Proportion in operating revenue | ||
| Total operating revenue | 10,163,655,793.70 | 100% | 12,042,229,789.30 | 100% | -15.60% |
| By industry | |||||
| Manufacturing | 9,815,794,907.87 | 96.58% | 11,749,728,885.23 | 97.57% | -16.46% |
| Other business | 347,860,885.83 | 3.42% | 292,500,904.07 | 2.43% | 18.93% |
| By product | |||||
| Lithium battery separator | 8,254,655,982.64 | 81.22% | 10,082,122,418.04 | 83.72% | -18.13% |
| BOPP film | 565,613,743.82 | 5.57% | 681,506,139.96 | 5.66% | -17.01% |
| Cigarette label | 14,865,512.42 | 0.15% | 30,859,185.05 | 0.26% | -51.83% |
| Aseptic packaging | 865,382,993.75 | 8.51% | 777,626,183.85 | 6.46% | 11.29% |
| Specialty paper | 75,937,714.53 | 0.75% | 147,283,740.79 | 1.22% | -48.44% |
| Other product | 39,338,960.71 | 0.39% | 30,331,217.54 | 0.25% | 29.70% |
| Other business | 347,860,885.83 | 3.42% | 292,500,904.07 | 2.43% | 18.93% |
| By region | |||||
| Southwest China | 1,360,528,831.04 | 13.39% | 1,244,462,107.76 | 10.33% | 9.33% |
| East China | 3,627,958,348.90 | 35.70% | 5,489,000,474.42 | 45.58% | -33.90% |
| North China | 182,479,840.79 | 1.80% | 131,870,158.40 | 1.10% | 38.38% |
| South Central China | 2,727,132,318.26 | 26.83% | 3,091,888,271.61 | 25.68% | -11.80% |
| Northwest China | 28,108,418.95 | 0.28% | 22,092,075.52 | 0.18% | 27.23% |
| Northeast China | 24,173,501.59 | 0.24% | 45,904,469.23 | 0.38% | -47.34% |
| Overseas regions | 2,213,274,534.17 | 21.78% | 2,017,012,232.36 | 16.75% | 9.73% |
(2)
Industries, products, regions and sales models that account for more than 10% of the Company’s operating revenue oroperating profit?Applicable □Not applicable
The Company shall comply with the disclosure requirements for the chemical industry set forth in the Self-Regulatory Guidelines No. 3for Companies Listed on Shenzhen Stock Exchange – Industry Information Disclosure
Unit: RMB
| Operating revenue | Operating cost | Gross margin | Year-on-year increase or decrease in operating revenue | Year-on-year increase or decrease in operating cost | Year-on-year increase or decrease in gross margin | |
| By industry | ||||||
| Manufacturing | 9,815,794,907.87 | 8,976,180,560.42 | 8.55% | -16.46% | 19.90% | -27.73% |
| By product | ||||||
| Lithium battery separator | 8,254,655,982.64 | 7,644,538,560.33 | 7.39% | -18.13% | 26.01% | -32.44% |
| Aseptic packaging | 865,382,993.75 | 662,835,868.81 | 23.41% | 11.29% | 3.27% | 5.95% |
| By region | ||||||
| Southwest China | 1,360,528,831.03 | 1,205,941,175.20 | 11.36% | 9.33% | 33.64% | -16.13% |
| East China | 3,627,958,348.91 | 3,496,621,903.72 | 3.62% | -33.90% | 9.72% | -38.32% |
| South Central China | 2,727,132,318.26 | 2,794,650,948.96 | -2.48% | -11.80% | 31.90% | -33.95% |
| Overseas regions | 2,213,274,534.17 | 1,359,676,077.69 | 38.57% | 9.73% | 14.98% | -2.81% |
Under the circumstances that the statistic specifications for the Company’s data on main business were adjusted during the ReportingPeriod, the Company’s data on main business of this past year is calculated based on the adjusted statistic specifications at the end of theReporting Period.
□Applicable
?Not applicable
Unit: RMB
| Product name | Output | Sales | Revenue achieved | Movement in sales price during the Reporting Period | Reason for change |
| Lithium battery separator | 9.28 billion m2 | 8. 825 billion m2 | 8,254,655,982.64 | Declined | Fierce market competition |
Note: The “lithium battery separator” mentioned above include the dry-process and wet-process separator productsOperating revenue or net profit arising from offshore operations accounted for 10% or above of the Company’s audited operating revenueor net profit in the most recent fiscal year?Yes □No
| Name of overseas business | Details of the commencement | Impact of tax policy on overseas business during the Reporting Period | Company’s response |
| Lithium battery separator | Sales of lithium battery separator products to overseas customers through direct sales | There was no material change in tax policy during the Reporting Period as compared with the same period last year | Expanding overseas capacity and continuously exploring overseas markets to increase market share |
(3)
Whether the Company’s revenue from the sale of physical products is higher than the revenue from service charges?Yes □No
| Industry category | Item | Unit | 2024 | 2023 | Year-on-year increase or decrease |
| Lithium battery separator | Sales | m2 | 8,824,704,621.61 | 6,200,262,733.87 | 42.33% |
| Output | m2 | 9,280,478,278.17 | 7,099,497,791.79 | 30.72% | |
| Inventory | m2 | 2,424,820,504.84 | 1,969,046,848.28 | 23.15% | |
| BOPP film | Sales | Ton | 57,550.32 | 68,244.41 | -15.67% |
| Output | Ton | 57,190.25 | 69,878.89 | -18.16% | |
| Inventory | Ton | 5,855.52 | 6,215.59 | -5.79% | |
| Cigarette label | Sales | 10, 000 boxes | 7.08 | 22.29 | -68.24% |
| Output | 10, 000 boxes | 6.94 | -0.05 | -- | |
| Inventory | 10, 000 boxes | 0.81 | 0.95 | -14.34% | |
| Aseptic packaging | Sales | 10, 000 | 463,121.97 | 422,136.62 | 9.71% |
| Output | 10, 000 | 467,287.44 | 428,729.83 | 8.99% | |
| Inventory | 10, 000 | 42,625.42 | 38,459.95 | 10.83% | |
| Specialty paper | Sales | Ton | 5,423.25 | 8,026.38 | -32.43% |
| Output | Ton | 4,935.95 | 7,364.27 | -32.97% |
| Inventory | Ton | 1,299.15 | 1,786.46 | -27.28% |
Reasons for a year-on-year change of more than 30% in the relevant data?Applicable □Not applicable
① In 2024, the lithium battery separator products achieved a significant year-on-year rise in terms of both sales and output, mainly due tothe Company’s production capacity release and intensified market expansion efforts;
② The sales of cigarette labels, and the sales, output and inventory of the specialty paper decreased significantly due to fierce marketcompetition.
(4)
Execution of material sales contracts and material procurement contracts signed by the Company as of the Reporting Period
□Applicable
?Not applicable
(5)
Breakdown of operating cost
Product category
Unit: RMB
| Product category | Item | 2024 | 2023 | Year-on- year increase or decrease | ||
| Amount | Percentage of the operating cost | Amount | Percentage of the operating cost | |||
| Lithium battery separator | Raw material | 3,940,904,869.75 | 48.42% | 3,583,825,915.48 | 53.86% | 9.96% |
| Labor | 527,433,960.58 | 6.48% | 521,134,511.83 | 7.83% | 1.21% | |
| Manufacturing cost | 2,019,600,350.23 | 24.81% | 1,314,988,670.49 | 19.76% | 53.58% | |
| Energy and power | 1,650,695,604.77 | 20.28% | 1,234,432,905.41 | 18.55% | 33.72% | |
| BOPP film | Raw material | 420,713,716.67 | 85.15% | 502,904,792.58 | 85.59% | -16.34% |
| Labor | 25,997,717.76 | 5.26% | 33,268,451.80 | 5.66% | -21.85% | |
| Manufacturing cost | 27,229,894.23 | 5.51% | 27,273,572.65 | 4.64% | -0.16% | |
| Energy and power | 20,154,896.35 | 4.08% | 24,143,208.72 | 4.11% | -16.52% | |
| Cigarette label | Raw material | 8,045,520.34 | 37.55% | 11,439,116.45 | 48.15% | -29.67% |
| Labor | 3,364,475.30 | 15.70% | 6,464,506.27 | 27.21% | -47.95% | |
| Manufacturing cost | 9,645,711.93 | 45.02% | 5,053,470.32 | 21.27% | 90.87% | |
| Energy and power | 368,652.55 | 1.72% | 799,693.93 | 3.37% | -53.90% | |
| Aseptic packaging | Raw material | 587,265,769.36 | 88.60% | 568,677,917.68 | 88.60% | 3.27% |
| Labor | 43,244,970.96 | 6.52% | 42,628,863.02 | 6.64% | 1.45% | |
| Manufacturing cost | 21,857,030.86 | 3.30% | 20,466,257.07 | 3.19% | 6.80% | |
| Energy and power | 10,468,097.63 | 1.58% | 10,079,401.67 | 1.57% | 3.86% | |
| Specialty paper | Raw material | 58,248,137.17 | 89.38% | 100,096,543.76 | 89.41% | -41.81% |
| Labor | 2,406,303.96 | 3.69% | 4,009,313.17 | 3.58% | -39.98% | |
| Manufacturing cost | 3,486,536.32 | 5.35% | 5,930,569.64 | 5.30% | -41.21% | |
| Energy and power | 1,026,611.86 | 1.58% | 1,910,737.13 | 1.71% | -46.27% | |
| Other products | Raw material | 34,925,903.04 | 39.64% | 27,194,586.27 | 50.20% | 28.43% |
| Labor | 9,315,047.16 | 10.57% | 6,625,261.90 | 12.23% | 40.60% | |
| Manufacturing cost | 38,111,439.12 | 43.25% | 16,663,483.15 | 30.76% | 128.71% | |
| Energy and | 5,765,567.52 | 6.54% | 3,691,982.77 | 6.81% | 56.16% | |
power
Explanations:
① “Other products” refer to in the “Breakdown of operating revenue” and “Breakdown of operating cost” in Section 4 of this report mainlyinclude holographic hot stamping foils, film products, packaging films for wrapping by hand, aluminum laminated films, othermiscellaneous products and substandard products. These products account for a small volume of business, and the percentage of the salesof such products in the total sales is low. Thus, such products belong to the category of other products of main businesses.
② “Other businesses” refer to in the “Breakdown of operating revenue” in Section 4 of this report mainly refers to the Company’s revenuefrom the sale of materials, leased assets and the sale of leftover bits and pieces. Other businesses do not belong to the category of theCompany’s main businesses.
(6)
Whether the scope of the consolidated financial statements changed during the Reporting Period
?Yes □NoDuring the Reporting Period, compared to the previous period, the Company added 3 new entities into and eliminated 1 entityfrom its consolidated financial statements. These 3 new entities are respectively Shanghai Jiezhiyuan New MaterialTechnology Co., Ltd., Shanghai Hengjieyuan New Material Technology Co., Ltd., andSEMCO MALAYSIA SDN. BHD., whichwere all established during the Reporting Period. The eliminated 1 entity is Guangdong Energy New Materials Research Institute Co., Ltd.,which was cancelled during the Reporting Period.
(7)
Major changes or adjustments in the Company’s businesses, products or services during the Reporting Period
□Applicable
?Not applicable
(8)
Key customers and suppliers
The Company’s key customers
| Total sales of the top five customers (RMB) | 5,031,648,639.18 |
| Proportion of total sales of the top five customers over total sales for the year | 49.51% |
| Proportion of sales of related parties in the top five customers over total sales for the year | 0.00% |
Information on the Company’s top five customers
| No. | Customer name | Sales (RMB) | Percentage of total sales for the year |
| 1 | Customer 1 | 1,603,980,234.64 | 15.78% |
| 2 | Customer 2 | 1,585,042,385.44 | 15.60% |
| 3 | Customer 3 | 1,128,301,032.63 | 11.10% |
| 4 | Customer 4 | 372,020,193.02 | 3.66% |
| 5 | Customer 5 | 342,304,793.46 | 3.37% |
| Total | -- | 5,031,648,639.18 | 49.51% |
Other information on key customers?Applicable □Not applicableThe Company had no affiliated relationship with the top five customers. The Company’s directors, supervisors, senior executives, keytechnical personnel, shareholders holding more than 5% of shares, actual controllers, and other related parties do not directly or indirectlyhold any equity in the top five customers.The Company’s key suppliers
| Total sales of the top five suppliers (RMB) | 2,770,851,791.90 |
| Proportion of total sales of the top five suppliers over total sales for the year | 28.45% |
| Proportion of sales of related parties in the top five suppliers over total sales for the year | 5.38% |
Information on the Company’s top five suppliers
| No. | Supplier name | Purchase amount (RMB) | Percentage of the total purchase amount for the year |
| 1 | Supplier 1 | 791,577,343.29 | 8.13% |
| 2 | Supplier 2 | 546,595,113.74 | 5.61% |
| 3 | Supplier 3 | 524,250,154.26 | 5.38% |
| 4 | Supplier 4 | 517,549,584.08 | 5.31% |
| 5 | Supplier 5 | 390,879,596.53 | 4.01% |
| Total | -- | 2,770,851,791.90 | 28.45% |
Other information on key suppliers?Applicable □Not applicableIn the table above, except for Supplier 3, which is an affiliate controlled by the Company’s actual controller (with the procurement amountconsolidated), the Company has no affiliated relationship with the other suppliers in the top five. The Company’s directors, supervisors,senior executives, key technical personnel, shareholders holding more than 5% of shares, actual controllers, and other related parties donot directly or indirectly hold any equity in the other suppliers in the top five.
3. Expenses
Unit: RMB
| 2024 | 2023 | Year-on-year increase or decrease | Explanations of material changes | |
| Selling expenses | 145,263,407.26 | 89,338,734.45 | 62.60% | Mainly due to intensified efforts in market expansion in this Reporting Period |
| Administrative expenses | 600,164,938.14 | 383,415,488.72 | 56.53% | Mainly due to increase in the agent consulting fee in this Reporting Period |
| Financial expenses | 314,263,613.89 | 238,639,677.08 | 31.69% | Mainly due to change in exchange profit and loss in this Reporting Period |
| R&D expenses | 662,843,179.69 | 727,481,001.67 | -8.89% |
4. Investment in R&D
?Applicable □Not applicable
| Names of key R&D projects | Project purposes | Project progress | Objectives to be achieved | Expected impacts on the Company’s future development |
| Development of base films with high safety by using simultaneous biaxial stretching process | Volume orders from a top Japanese customer | Passed the customer’s technical validation, advancing the project implementation with the customer | Mass production and shipment | Improving the sales volume of the Company’s separator products, enhancing the stickiness of overseas high-quality key customers and establishing stable cooperative relations |
| Ultra-thin high-strength separators | Developing ultra-thin 5μm separator for high energy density lithium battery | Passed the customer’s validation | Mass production and shipment | Improving the competitiveness and sales volume of the Company’s separator products and increasing the Company’s market share |
| Mass production of semi- solid-state lithium-ion conductivity separators | Developing high energy density and high safety lithium battery separator with an energy density of above 250 wh/kg | Small batch production | Mass production and shipment | With the aid of technological innovation, meeting the demand for lithium batteries with high energy density and high safety, enhancing the Company’s technical leadership and overall competitiveness |
| Design and development of the third-generation base films with low shutdown temperature and high safety | Reducing the shutdown temperature and improving the safety of separators | Passed the customer’s technical validation, advancing the project implementation with the customer | Mass production and shipment | Improving the competitiveness and sales volume of the Company’s separator products and increasing the Company’s market share |
| Ultra-thin ceramic coating film | Ultra-thin, ultra-high heat-resistant coating for improving battery safety | Mass production | Mass production and shipment | Improving the competitiveness and sales volume of the Company’s separator products and increasing the Company’s market share |
| High puncture strength and high-porosity base film | Addressing the high energy density and fast charging capabilities demands of terminal batteries | Validated by top customers | Mass production and shipment | Expanding separator application scenarios and the Company’s business scope, and enhancing the Company’s overall competitiveness |
| Ultra-low cost base film | Development of ultra-low cost wet-process separators that are comparable to dry-process separators | Mass production | Mass production and shipment | Improving the competitiveness and sales volume of the Company’s separator products and increasing the Company’s market share |
| Self-capturing separator | Enhancing the binding performance of separators and plates, improving the cycle life and the structure stability of battery | Terminated the project as required by the client | Mass production and shipment | Improving the competitiveness and sales volume of the Company’s separator products and increasing the Company’s market share |
| Fourth-generation separator with low shutdown temperature, high puncture strength and high porosity | Reducing shutdown temperature, increasing puncture strength and improving separator safety | Market promotion stage | Mass production and shipment | Improving the competitiveness and sales volume of the Company’s separator products and increasing the Company’s market share |
| Development of high-throughput film (R&D of large and small pore separators) | Developed solid electrolyte separators with median pore size ≥ 100 nm and porosity ≥ 75% | Sample delivering and customer validating phase | Developed solid electrolyte separators with median pore size ≥ 100 nm and thickness of 15± 1μm | With the aid of technological innovation, enhancing the Company’s technical leadership and overall competitiveness |
| Development of high-hardness, long-cycle, low-expansion lithium battery separators (development of high-adhesion strength at low-temperature adhesive-coated separators) | Over 30% increment for the adhesive strength between separator and cathode compared to the same-type mass-produced separator | The formula has been finalized, sample delivering and customer validating phase. The separator adhesive has met the improvement requirements, with continuous optimization of formulations and processes | Mass production and shipment | Improving the competitiveness and sales volume of the Company’s separator products and increasing the Company’s market share |
| Development of low-cost, high-heat resistant lithium battery separators (development of wet-process PP separators) | Improving ionic conductivity of separator by 5% while maintaining high strength | 5% increase in ionic conductivity of separator has been achieved, and it is in the stage of mass production validation, with continuous optimization of formulations and processes | Optimization of physical properties to improve product cost performance | With the aid of technological innovation, enhancing the Company’s technical leadership and overall competitiveness |
| Development of high-wettability and long-cycle lithium battery separators (development of high-wettability modified PE separators) | Improving the electrolyte contact angle and wettability by 20% compared with the conventional base film | Wettability has been greatly enhanced, and it is in the validation stage of top customers | Improving the ionic conductivity by more than 5% compared with conventional base membranes, improving the multiplication rate and cycling performance | With the aid of technological innovation, enhancing the Company’s technical leadership and overall competitiveness |
| High-strength, high-conductivity lithium ion composite film for solid-state batteries | Development of composite electrolyte films for all-solid-state or quasi-solid-state batteries | Sample building phase | Mass production and shipment | With the aid of technological innovation, enhancing the Company’s technical leadership and overall competitiveness |
| Basic development of ultra-small pore size specialty filtration film | Expanding the Company’s business and increasing separator application scenarios | Sample delivering and customer validating phase | Production line modification and upgrading completed, mass production and shipment of roll samples achieved | Expanding separator application scenarios and the Company’s business scope, and enhancing the Company’s overall competitiveness |
| Development of water treatment film for municipal sewage and industrial wastewater | Expanding the Company’s business and increasing separator application scenarios | Ready for mass production | Operating model defined, mass production and shipment achieved | Expanding separator application scenarios and the Company’s business scope, and enhancing the Company’s overall competitiveness |
| Development of aluminum laminated films | Expanding the Company’s business | Stable batch supply of high insulation products has been achieved, high molding products are well applied in middle and high-end customers, with stable supply and high consistency, promotion to overseas customers is steadily advancing | Mass production and shipment have been achieved, product performance is improved constantly, and we have entered the supply chain of high-end customers | Comprehensively improving product performance to reach the globally advanced level, laying a good foundation for entering the high-end market, and enhancing the Company’s overall competitiveness |
| R&D of new degradable film | Technological reserves, adapting to market demand | Ready for mass production | The film materials are biodegradable | It meets the needs of ecological environmental protection, complies with the requirements of relevant regulations and policies, fulfills social responsibility, and is conducive to improving the competitiveness of the Company’s products in the market, as well as enhancing the Company’s economic efficiency and corporate image |
| R&D of highly smooth and antistatic film | Developing BOPP film products with high smoothness and high anti-static properties to meet the adaptability needs of high-speed printing machines, high-speed packaging machines, effectively improve the quality of prints and production efficiency, and improve the quality of product packaging | Sample building, delivering and customer validating phase | We have developed a series of highly smooth and anti-static film products for food, pharmaceutical, cosmetics and other packaging areas to meet the growing market demand | Highly smooth antistatic film is suitable for packaging in food, pharmaceuticals, cosmetics and other fields. Through the R&D of this project, it is conducive to improving the Company’s technological innovation ability and enhancing the competitiveness of the Company’s products in the market |
| R&D of bio-based polyethylene plastic caps | Technological reserves, adapting to market demand | Ready for mass production, depending on customer demand | Replacing petroleum-based polymer materials with bio-based polymer materials to achieve 100% natural degradation of packaging materials and sustainable development | Complying with the development concept of “ecological environmental protection, energy saving and carbon reduction,” and laying the foundation for the Company’s aseptic packaging products to open up the market of top packaging with caps |
| Scratch and sniff gable top box packaging | Expanding the market of liquid packaging product | Ready for mass production, being promoted across customer segments | Making conventional packaging interesting. Customers can smell the fragrance after scratching the designated area, improving the experience for end customers | Making packaging materials for liquid more innovative and attractive and enhancing the market competitiveness of the Company’s aseptic packaging products |
| High barrier oil packaging materials with Al-PE paper complex structure | Expanding the market of edible oil, soy sauce and other condiments | Mass production | Replacing traditional packaging for edible oil with molded pulp packaging to reduce the use of plastics | The material has a good barrier against light, water vapor and oxygen, thus improving the sealing of the Company’s aseptic packaging products and laying a foundation for the Company’s aseptic packaging products to develop diversified markets |
| R&D of environmentally-friendly high definition printed aseptic packaging boxes | Enhancing the competitiveness of the Company’s products | Mass production | By using new materials, process parameters, and formulas, we achieve environmentally friendly high-definition printing, promoting ecological sustainability, reducing production costs, and enhancing product quality | By ensuring water-based, environmentally-friendly printing, we can enhance the print durability of the printing plates, achieve clearer print quality, increase production efficiency, reduce costs, ensure product quality, and strengthen the competitiveness of the Company’s products |
Information on the Company’s R&D personnel
| 2024 | 2023 | Year-on-year change (%) | |
| Number of R&D employees | 533 | 507 | 5.13% |
| R&D employees as a percentage of total employees | 5.60% | 5.43% | 0.17% |
| Educational background structure of R&D personnel | |||
| Bachelor’s degree and below | 377 | 403 | -6.45% |
| Master’s degree and above | 156 | 104 | 50.00% |
| Age structure of R&D personnel | |||
| Under 30 | 207 | 224 | -7.59% |
| Aged 30-40 | 238 | 218 | 9.17% |
Information on investment in R&D
| 2024 | 2023 | Year-on-year change (%) | |
| Amount of investment in R&D (RMB) | 662,843,179.69 | 727,481,001.67 | -8.89% |
| Investment in R&D as a percentage of operating revenue | 6.52% | 6.04% | 0.48% |
| Capitalized investment in R&D (RMB) | 0.00 | 0.00 | |
| Capitalized investment in R&D as a percentage of total investment in R&D | 0.00% | 0.00% | 0.00% |
Reasons for and impacts of significant changes in the composition of the Company’s R&D personnel
□Applicable
?Not applicable
Reasons for significant year-on-year changes in investment in R&D as a percentage of operating revenue
□Applicable
?Not applicable
Reasons and justification for significant changes in the capitalization rate of investment in R&D
□Applicable
?Not applicable
5. Cash flow
Unit: RMB
| Item | 2024 | 2023 | Year-on-year increase or decrease |
| Subtotal of cash inflows from operating activities | 9,244,960,014.86 | 11,626,206,968.78 | -20.48% |
| Subtotal of cash outflows from operating activities | 8,086,710,959.76 | 8,958,753,709.46 | -9.73% |
| Net cash flows from operating activities | 1,158,249,055.10 | 2,667,453,259.32 | -56.58% |
| Subtotal of cash inflows from investment activities | 1,379,089,146.09 | 174,676,679.85 | 689.51% |
| Subtotal of cash outflows from investment activities | 4,011,404,413.06 | 8,164,800,691.58 | -50.87% |
| Net cash flows from investment activities | -2,632,315,266.97 | -7,990,124,011.73 | 67.06% |
| Subtotal of cash inflows from financing activities | 14,092,315,361.77 | 20,895,450,020.58 | -32.56% |
| Subtotal of cash outflows from financing activities | 13,678,642,439.98 | 15,758,526,797.94 | -13.20% |
| Net cash flows from financing activities | 413,672,921.79 | 5,136,923,222.64 | -91.95% |
| Net increase in cash and cash equivalents | -1,055,573,518.71 | -183,022,124.16 | -76.85% |
Main reasons for significant year-on-year changes in the relevant data?Applicable □Not applicable
①The significant year-on-year decrease in the cash flows from operating activities was mainly due to the year-on-year decrease in salesproceeds in the Reporting Period;
②The significant year-on-year increase in the net cash flows from investment activities was mainly due to a significant increase in therecovered investments caused by an increase in the amount of the financial management products upon maturity in the Reporting Periodcompared to last Reporting Period, as well as the decrease in the investment in the construction in progress in the Reporting Periodcompared to that in the previous Reporting Period;
③The significant year-on-year decrease in the net cash flows from financing activities was mainly due to the receipt of the funds raisedby non-public offering of stocks in the last Reporting Period and no occurrence of the related event in this Reporting Period.Reasons for the marked difference between net cash flow from operating activities during the Reporting Period and net profit for the year?Applicable □Not applicableThis marked difference was mainly due to the provision for asset impairment for the current period and the addition of a substantialamount of non-cash asset depreciation.
V. Analysis of Non-main Businesses
□Applicable
?Not applicable
VI. Analysis of Assets and Liabilities
1. Significant changes in the composition of assets
Unit: RMB
| End of 2024 | Beginning of 2024 | Percentage change | Reasons for significant changes | |||
| Amount | As a percentage of total assets | Amount | As a percentage of total assets | |||
| Monetary funds | 2,574,141,019.53 | 5.45% | 3,835,530,538.70 | 8.13% | -2.68% | Mainly due to the relative decrease in bank deposits |
| Accounts receivable | 6,102,048,232.51 | 12.93% | 6,719,699,762.18 | 14.24% | -1.31% | |
| Inventories | 2,963,026,794.82 | 6.28% | 3,000,558,853.64 | 6.36% | -0.08% | |
| Investment properties | 9,051,579.82 | 0.02% | 7,865,069.42 | 0.02% | 0.00% | |
| Long-term equity investments | 0.00 | 0.00% | 3,209,980.10 | 0.01% | -0.01% | |
| Fixed assets | 22,928,507,627.21 | 48.58% | 19,380,327,177.42 | 41.06% | 7.52% | Mainly due to the increase in investment in new production lines |
| Construction in progress | 5,863,245,023.13 | 12.42% | 6,207,408,467.99 | 13.15% | -0.73% | |
| Right-of-use assets | 1,752,245.09 | 0.00% | 2,387,711.07 | 0.01% | -0.01% | |
| Short-term borrowings | 8,136,897,962.50 | 17.24% | 7,290,694,906.27 | 15.45% | 1.79% | Mainly due to the new borrowings |
| Contract liabilities | 45,640,854.47 | 0.10% | 29,791,971.25 | 0.06% | 0.04% | |
| Long-term borrowings | 5,070,029,111.30 | 10.74% | 4,685,315,817.70 | 9.93% | 0.81% | |
| Lease liabilities | 182,663.88 | 0.00% | ||||
Overseas assets accounted for a high percentage of the Company’s total assets
□Applicable
?Not applicable
2. Assets and liabilities measured at fair value
?Applicable □Not applicable
Unit: RMB
| Item | Amount as at the beginning of the Reporting Period | Profit and loss from the fair value changes during the Reporting Period | Accumulated fair value changes recognized through equity | Impairment provided during the Reporting Period | Amount of purchase during the Reporting Period | Amount of sale during the Reporting Period | Other changes | Amount as at the end of the Reporting Period |
| Financial assets | ||||||||
| 4. Other investment in equity instruments | 89,000,000.00 | -11,000,000.00 | 78,000,000.00 | |||||
| Sub-total of financial assets | 89,000,000.00 | -11,000,000.00 | 78,000,000.00 | |||||
| Others | 408,354,641.63 | 408,092,531.80 | 408,354,641.63 | 408,092,531.80 | ||||
| Including: Bank acceptance bills | 408,354,641.63 | 408,092,531.80 | 408,354,641.63 | 408,092,531.80 | ||||
| Total | 497,354,641.63 | -11,000,000.00 | 408,092,531.80 | 408,354,641.63 | 486,092,531.80 | |||
| Financial liabilities | 0.00 | 0.00 | ||||||
Other changesAre there any significant changes in the measurement attributes of the Company’s major assets during the Reporting Period
□Yes
?No
3. Restriction of asset rights as of the end of the Reporting Period
| Item | December 31, 2024 | |||
| Book balance | Book value | Restriction type | Reason for restriction | |
| Monetary funds | 838,743,097.78 | 838,743,097.78 | Pledged | Margin, and account deposits under bank regulation |
| Other current assets | 50,178,767.12 | 50,178,767.12 | Pledged | Margin |
| Fixed assets | 1,305,145,941.74 | 1,155,206,200.49 | Mortgaged | Mortgaged loan |
| Construction in progress | 244,204,248.10 | 244,204,248.10 | Mortgaged | Mortgage-backed government subsidy |
| Intangible assets | 140,710,834.33 | 130,345,642.47 | Mortgaged | Mortgaged loan |
| Total | 2,578,982,889.07 | 2,418,677,955.96 | — | — |
VII. Analysis of Investments
1. Summary
?Applicable □Not applicable
| Total investment amount during the Reporting Period (RMB) | Total investment amount during the same period of last year (RMB) | Change (%) |
| 4,090,743,792.62 | 9,414,839,968.03 | -56.55% |
2. Substantial equity investments obtained during the Reporting Period
□Applicable
?Not applicable
3. Substantial ongoing non-equity investments during the Reporting Period
?Applicable □Not applicable
Unit: RMB
| Project name | Investment model | Whether it is an investment in fixed assets | Industries related to the investment project | Amount of investment during the Reporting Period | Accumulated actual investment as of the end of the Reporting Period | Source of funds | Project progress | Estimated revenue | Accumulated realized revenue as at the end of the Reporting Period | Reasons for failing to make planned progress and generate estimated revenue | Disclosure date (if any) | Disclosure index (if any) |
| Wuxi Energy New Material Industrial Base Phase II | Self-construction | Yes | Lithium battery separator | 3,630,511.23 | 2,409,502,311.18 | ①Self-owned and self-raised funds; ②Raised funds by way of non- public offering in 2020 | 99.15% | 387,828,195.40 | N/A | July 2, 2019 | Please refer to the Announcement on Capital Increase by Shanghai Energy to Wuxi Energy and Investment in Wuxi Energy New Material Industrial Base Phase II - Lithium Battery Separator (Announcement No.: 2019-076) disclosed at www.cninfo.com.cn | |
| Jiangxi Tonry Phase I Expansion | Self-construction | Yes | Lithium battery separator | 54,848,000.55 | 2,591,669,641.61 | ①Self-owned and self-raised funds; ②Raised funds by way of non- public offering in 2020 | 100.00% | 944,328,091.26 | N/A | November 2, 2018 | Please refer to the Announcement on A Controlled Subsidiary’s Acquisition of 100% Equity of Jiangxi Tonry New Energy Technology Development Co., Ltd. (Announcement No.: 2018-141) disclosed at www.cninfo.com.cn | |
| Hungary Lithium Battery Separator | Self-construction | Yes | Lithium battery separator | 412,077,908.17 | 3,103,989,427.92 | Self-owned and self-raised funds | 99.00% | 0.00 | N/A | November 11, 2020 | Please refer to the Announcement on Construction of Wet-process Lithium Battery Separator Project in Hungary (Announcement No.: 2020-204) disclosed at www.cninfo.com.cn | |
| Chongqing Energy High- performance Lithium Battery Micropore | Self-construction | Yes | Lithium battery separator | 188,012,707.33 | 1,852,930,303.79 | ①Self-owned and self-raised funds; ②Raised funds by way of non- | 90.00% | 106,559,156.62 | N/A | November 23, 2021 | Please refer to the Announcement on Plan for Non- public Offering of A Shares in 2021 (Announcement No.: 2021- |
| Separator (Phase II) | public offering in 2021 | 188) disclosed at www.cninfo.com.cn | ||||||||||
| Jiangsu Energy EV Lithium Battery Separator Industrialization Project | Self-construction | Yes | Lithium battery separator | 890,414,936.78 | 3,510,653,643.25 | ①Self-owned and self-raised funds; ②Raised funds by way of non- public offering in 2021 | 95.00% | -76,990,775.52 | N/A | November 23, 2021 | Please refer to the Announcement on Plan for Non- public Offering of A Shares in 2021 (Announcement No.: 2021-188) disclosed at www.cninfo.com.cn | |
| Jiangsu Ruijie EV Lithium Battery Aluminum Laminated Film Industrialization Project | Self-construction | Yes | Aluminum laminated film | 46,761,426.66 | 536,924,615.53 | ①Self-owned and self-raised funds; ②Raised funds by way of non- public offering in 2021 | 50.00% | -37,597,479.57 | N/A | November 23, 2021 | Please refer to the Announcement on Plan for Non- public Offering of A Shares in 2021 (Announcement No.: 2021-188) disclosed at www.cninfo.com.cn | |
| Suzhou GreenPower Annual Production of 200 million Square Meters of Lithium-ion Battery Coating Separators Project | Self-construction | Yes | Lithium battery separator (Coating films) | 21,084,318.92 | 612,417,947.73 | ①Self-owned and self-raised funds; ②Raised funds by way of non- public offering in 2021 | 99.00% | 318,983,110.52 | N/A | November 23, 2021 | Please refer to the Announcement on Plan for Non- public Offering of A Shares in 2021 (Announcement No.: 2021-188) disclosed at www.cninfo.com.cn | |
| Yuxi Energy lithium battery separator production line construction project with an annual production capacity of 1.6 billion square meters | Self-construction | Yes | Lithium battery separator | 997,147,262.99 | 1,005,383,793.90 | Self-owned and self-raised funds | 51.00% | 0.00 | N/A | March 30, 2022 | Announcement on the Progress on Yuxi Municipal People’s Government Signing the Strategic Cooperation Framework Agreement (Announcement No.: 2022-044) disclosed at www.cninfo.com.cn | |
| Dry-process Lithium-ion Battery Separator Films | Self-construction | Yes | Lithium battery separator (Dry- process) | 178,717,980.62 | 1,082,678,731.49 | Self-owned and self-raised funds | 60.00% | -71,303,565.84 | N/A | February 1, 2021 | Announcement on Gao’an Municipal People’s Government in Jiangxi Province Signing the Contract for the Construction of Dry- |
| Project | process Lithium-ion Battery Separators Project (Announcement No.: 2021-018) disclosed at www.cninfo.com.cn | |||||||||||
| Hubei Energy EV Lithium Battery Separator Industrialization Project | Self-construction | Yes | Lithium battery separator | 404,722,283.16 | 2,243,789,801.18 | Self-owned and self-raised funds | 90.00% | -125,526,779.63 | N/A | August 3, 2021 | Announcement on the Plan to Set Up a Joint Venture with EVE to Construct a Wet-Processing Lithium Battery Separator Project (Announcement No.: 2021-128) disclosed at www.cninfo.com.cn | |
| USA Energy | Self-construction | Yes | Lithium battery separator (Coating films) | 47,782,054.16 | 322,582,158.14 | Self-owned and self-raised funds | 35.00% | 0.00 | N/A | December 21, 2021 | Announcement to Construct a Lithium Battery Separator Film Project in USA (Announcement No.: 2022-077) disclosed at www.cninfo.com.cn | |
| Anhui Hongchuang Liquid Drinking Packaging Box Project with an annual production capacity of 12 billion packaging boxes | Self-construction | Yes | Aseptic packaging | 328,187,229.68 | 347,512,714.72 | Self-owned and self-raised funds | 55.85% | 0.00 | N/A | December 21, 2021 | Announcement on Energy Liquid Packaging Box Project Investment and Cooperation Agreement Entered into by and between Hongchuang Packaging and Jiangsu Jintan Economic Development Zone Management Committee (Announcement No.: 2021-207) disclosed at www.cninfo.com.cn | |
| Total | -- | -- | -- | 3,573,386,620.25 | 19,620,035,090.44 | -- | -- | 0.00 | 1,446,279,953.24 | -- | -- | -- |
4. Financial asset investments
(1) Investments in securities
□Applicable ?Not applicable
No investments in securities during the Reporting Period.
(2) Investments in derivatives
□Applicable
?Not applicable
No investments in derivatives during the Reporting Period
5. Use of funds raised
?Applicable □Not applicable
(1) Overall use of funds raised
?Applicable □Not applicable
Unit: RMB’0,000
| Year of raising funds | Way of raising funds | Date of listing of securities | Total amount of funds raised | Net amount of funds raised (1) | Total amount of funds used during the Reporting Period | Cumulative amount of funds used (2) | Proportion of proceeds utilized at the end of the Reporting Period (3)=(2)/(1) | Total amount of funds raised with changes of use during the Reporting Period | Total cumulative amount of funds raised with changes of use | Total cumulative amount of funds raised with changes of use as a percentage of the total amount of funds raised | Total amount of unused funds | Use and whereabouts of unused funds | Amount of funds raised that have been idle for more than two years |
| 2016 | Initial Public Offering | September 14, 2016 | 78,376.68 | 74,776.7 | 211.8 | 65,747.05 | 87.92% | 0 | 10,588.68 | 14.16% | 10,392.13 | Deposited in a designated bank account for fundraising | 9,029.65 |
| 2020 | Offering of convertible corporate bonds to non-specific investors | February 28, 2020 | 160,000 | 158,612.26 | 0 | 158,612.26 | 100. 00% | 0 | 0 | 0.00% | 0 | N/A | 0 |
| 2020 | Offering of shares to specific investors | September 4, 2020 | 500,000 | 498,250.46 | 0 | 503,663.58 | 101.09% | 0 | 0 | 0.00% | 0 | N/A | 0 |
| 2023 | Offering of shares to specific investors | June 20, 2023 | 750,000 | 745,354.61 | 63,860.11 | 718,348.31 | 96.38% | 0 | 0 | 0.00% | 31,360.73 | Of this amount, RMB250 million is deposited in the cash management special settlement account for fundraising opened by the Company with Huatai Securities Co., Ltd. for the purpose of cash management, while the remaining fundraising funds are held in a designated bank account for fundraising | 0 |
| Total | -- | -- | 1,488,376.68 | 1,476,994.03 | 64,071.91 | 1,446,371.2 | 97.93% | 0 | 10,588.68 | 0.72% | 41,752.86 | -- | 9,029.65 |
| Explanations of the overall use of the funds raised | |||||||||||||
| I. Initial Public Offering Upon the approval of the CSRC in Zheng Jian Xu Ke [2016] No. 1886, the Company made its initial public offering of 33.48 million RMB-denominated ordinary shares. China Merchants Securities Co., Ltd., the main underwriter, issued 33.48 million shares by combining offline enquiry and allotment to investors and online subscription based on market value to public investors. All of the 33.48 million shares issued are new shares, with no transfer of old shares. Among them, 3.348 million shares were allotted offline, 30.132 million shares were issued online at a price of RMB23.41 per share. After deducting RMB35.9998 million of newly increased external expenses directly related to the issuance of equity securities, such as online issuance fees, | |||||||||||||
prospectus printing fees, accountancy fees relating to filing the relevant documents, lawyer fees and valuation fees, the net amount of raised funds was RMB747.767 million. The availability of the above raised funds was verified by Dahua CPAs (SGP)with the capital verification report titled “Da Hua Yan Zi [2016] No. 000897.” As of September 30, 2016, the Company’s self-owned funds invested in the fundraising projects reached RMB236.6591 million, which was audited by Dahua CPAs (SGP)with the issuance of the report titled “Da Hua He Zi No. [2016] No. 004562.” In 2017, the total amount of raised funds used was RMB26,067,736.89. In 2018, the total amount of raised funds used was RMB36,288,006.85. In 2019, the total amount ofraised funds used was RMB24,728,775.11. In April 2019, the Company held the 27th meeting of the Third Board of Directors, and in May 2019, the 2018 Annual General Meeting, during which the Proposal on Adjustment of Certain FundraisingInvestment Projects was considered and approved. The original investment projects financed by the proceeds from IPO, namely the “Reconstruction and expansion project of high-grade environmental-friendly specialty papers with annual productionoutput of 13,000 tons” and the “R&D center construction project,” were changed to the “Energy Technology Research Institute Project,” which is being implemented by the wholly-owned subsidiary, Shanghai Energy New Materials Research Co., Ltd. In2023, Shanghai Energy New Materials Research Co., Ltd. began operations. The total amount of raised funds used was RMB13,472,295.56 in 2023. During the Reporting Period, the total amount of raised funds used was RMB2,117,999.66. As ofDecember 31, 2024, the balance of the special account was RMB103,921,272.77 (including the net interest income from the special fundraising account after deducting handling fees, amounting to RMB13,624,804.04).
II. Public Offering of Convertible Corporate Bonds in 2020Upon the approval of the CSRC with the Reply on Approving the Public Offering of Convertible Corporate Bonds of Yunnan Energy New Material Co., Ltd. (Zheng Jian Xu Ke [2019] No. 2701), the Company publicly issued 16 million convertiblecorporate bonds on February 11, 2020, with a face value of RMB100 each bond and a total amount of RMB1,600,000,000. After deducting the underwriting and sponsorship fees (pre-tax) of RMB9,433,962.26 and other offering expenses (pre-tax) ofRMB4,443,396.23 from the total amount of proceeds from the public offering of convertible corporate bonds, the net amount of proceeds from the offering by the Company was RMB1,586,122,641.51. The availability of funds raised this time was verifiedby Dahua CPAs (SGP) with the capital verification report titled “Da Hua Yan Zi [2020] No. 000047.” As verified by Dahua CPAs (SGP), the Company used the raised funds of RMB1,586,122,641.51 for the complete replacement of part of the self-raisedfunds that have been previously invested in the projects financed by the proceeds. As of December 31, 2020, funds raised from convertible corporate bonds issued by the Company were all used to replace self-raised funds, the balance of the special accountwas RMB0.00, and the Company had cancelled the special fundraising account.
III. Non-public Offering of Shares in 2020Upon the approval of the CSRC with the Reply on Approving the Non-public Offering of Shares of Yunnan Energy New Material Co., Ltd. (Zheng Jian Xu Ke [2020] No. 1476), the Company non-publicly issued 69,444,444 RMB-denominated ordinaryshares to 22 specific investors on August 17, 2020, with a face value of RMB1.00 each share, at the offering price of RMB72.00 per share, and the total amount of the funds raised from this offering was RMB4,999,999,968.00. After deducting theunderwriting and sponsorship fees (pre-tax) of RMB14,150,943.40 and other offering expenses (pre-tax) of RMB3,344,470.11 from the total amount of the funds raised from this offering, the net amount of funds raised from this offering by the Companywas RMB4,982,504,554.49. The availability of funds raised this time was verified by Dahua CPAs (SGP) with the capital verification report titled “Da Hua Yan Zi [2020] No. 000460.” As verified by Dahua CPAs (SGP), the Company used the raisedfunds of RMB254,221,260.11 for the replacement of the self-raised funds that have been previously invested in the projects financed by the proceeds. The amount of raised funds used was RMB1,999,307,646.21 in 2020. The amount of raised funds usedwas RMB2,637,743,136.15 in 2021. The amount of raised funds used was RMB145,363,757.34 in 2022. As of December 31, 2022, the balance of the fundraising account was RMB0.00, and the Company had cancelled the special fundraising account.
IV. Non-public Offering of Shares in 2021Upon the approval of the CSRC with the Reply on Approving the Non-public Offering of Shares of Yunnan Energy New Material Co., Ltd. (Zheng Jian Xu Ke [2022] No. 1343), the Company non-publicly issued 85,421,412 RMB-denominated ordinaryshares to specific investors on May 24, 2023, with a face value of RMB1.00 each share, at the offering price of RMB87.80 per share, and the total amount of the funds raised from this offering was RMB7,499,999,973.60. After deducting the pre-taxoffering expenses of RMB46,453,872.58, the actual amount of funds raised from this offering by the Company was RMB7,453,546,101.02. The availability of funds raised this time was verified by Dahua CPAs (SGP) with the capital verification reporttitled “Da Hua Yan Zi [2023] No. 000250.” As verified by Dahua CPAs (SGP), the Company used the raised funds of RMB3,998,086,272.07 for the replacement of the part of self-raised funds that have been previously invested in the projects financedby the proceeds. Due to the Company’s production and operational arrangements, as of December 31, 2024, there is an amount of RMB734,000.93 still to be transferred from the special fundraising account to the Company’s self-owned account. FromJune 14, 2023 to December 31, 2023, the Company used RMB2,546,795,768.34 of the raised funds. During the Reporting Period, RMB638,601,104.38 of the raised funds was used; and RMB250,000,000.00 of temporarily idle raised funds was used forwealth management during the Reporting Period. As of December 31, 2024, the balance of the raised funds is RMB313,607,340.77 (including the net interest income from the special fundraising account after deducting handling fees, amounting toRMB43,544,384.54), and the actual balance in the bank’s special account for raised funds is RMB64,341,341.70 (including the net interest income from the special fundraising account after deducting handling fees, amounting to RMB43,544,384.54).
(2) Projects in which the Company undertakes to invest the funds raised
?Applicable □Not applicable
Unit: RMB’0,000
| Name of financing project | Date of listing of securities | Projects in which the Company undertakes to invest the funds raised and the whereabouts of the over raised funds | Nature of project | Whether the project has been changed, including changes of some parts of the project | Total amount of funds the Company undertakes to invest | Total investment amount after the adjustment (1) | Investment amount during the Reporting Period | Cumulative investment amount as of the end of the Reporting Period (2) | Investment progress as of the end of the Reporting Period (3)＝(2)/(1) | Date on which the project will be ready for use | Benefits achieved during the Reporting Period | Cumulative benefits achieved as of the end of Reporting Period | Whether the expected benefits are achieved | Whether the feasibility of the project has changed significantly |
| Projects in which the Company undertakes to invest the funds raised | ||||||||||||||
| Initial Public Offering | September 14, 2016 | Reconstruction and expansion project of color packaging boxes with annual production output of 3 billion pieces | Production construction | No | 28,414.7 | 28,414.7 | 0 | 28,414.7 | 100.00% | August 15, 2019 | 11,250.06 | 35,194.11 | Yes | No |
| Initial Public Offering | September 14, 2016 | Reconstruction and expansion project of high-grade environmental-friendly specialty papers with annual production output of 13,000 tons | Production construction | Yes | 10,684.57 | 3,617.5 | 0 | 3,617.5 | 100.00% | 0 | N/A | Yes | ||
| Initial Public Offering | September 14, 2016 | R&D center construction project | R&D project | Yes | 4,993.17 | 1,471.56 | 0 | 1,471.56 | 100.00% | 0 | N/A | No | ||
| Initial Public Offering | September 14, 2016 | Repayment of bank loans | Repayment of loans | No | 20,000 | 20,000 | 0 | 20,000 | 100.00% | 0 | N/A | No | ||
| Initial Public Offering | September 14, 2016 | Addition to current capital | Replenishment of liquidity | No | 10,684.26 | 10,684.26 | 0 | 10,684.26 | 100.00% | 0 | N/A | No | ||
| Public Offering of Convertible Corporate Bonds in | February 28, 2020 | Lithium battery separator project (phase I) with an annual production output of 400 | Production construction | No | 58,612.26 | 58,612.26 | 0 | 58,612.26 | 100.00% | December 31, 2019 | 10,470.89 | 136,886.21 | No | No |
| 2020 | million square meters of Jiangxi Tonry New Energy Technology Development Co., Ltd. | |||||||||||||
| Public Offering of Convertible Corporate Bonds in 2020 | February 28, 2020 | Wuxi Energy New Material Industrial Base | Production construction | No | 100,000 | 100,000 | 0 | 100,000 | 100.00% | September 30, 2020 | -18,896.71 | 73,047.28 | No | No |
| Non-public Offering of Shares in 2020 | September 4, 2020 | Expansion project of lithium-ion battery separator (phase I) of Jiangxi Tonry New Energy Technology Development Co., Ltd. | Production construction | No | 148,250.46 | 148,250.46 | 0 | 149,909.24 | 10,112.00% | July 31, 2022 | 16,094.93 | 104,187.26 | No | No |
| Non-public Offering of Shares in 2020 | September 4, 2020 | Expansion of Wuxi Energy New Material Industrial Base Phase II | Production construction | No | 200,000 | 200,000 | 0 | 203,754.33 | 101.88% | October 31, 2022 | -28,145.61 | 47,831.79 | No | No |
| Non-public Offering of Shares in 2020 | September 4, 2020 | Addition to current capital | Replenishment of liquidity | No | 150,000 | 150,000 | 0 | 150,000 | 100.00% | 0 | N/A | No | ||
| Non-public Offering of Shares in 2021 | June 20, 2023 | Microporous membrane project of high-performance lithium-ion battery of Chongqing Energy (phase I) | Production construction | No | 41,010 | 41,010 | 0 | 41,010 | 100.00% | July 31, 2022 | -1,872.93 | 7,892.78 | No | No |
| Non-public Offering of Shares in 2021 | June 20, 2023 | Microporous membrane project of high-performance lithium-ion battery | Production construction | No | 140,630 | 140,630 | 0.00 | 140,630 | 100.00% | December 31, 2025 | -3,877.54 | 9,910.19 | No | No |
| of Chongqing Energy (phase II) | ||||||||||||||
| Non-public Offering of Shares in 2021 | June 20, 2023 | Suzhou GreenPower project with an annual output of 200 million square meters of lithium-ion battery coated separator | Production construction | No | 35,160 | 35,160 | 0 | 35,160 | 100.00% | November 30, 2023 | 4,438.32 | 6,023.98 | No | No |
| Non-public Offering of Shares in 2021 | June 20, 2023 | Jiangsu Energy EV Lithium Battery Separator Industrialization Project | Production construction | No | 281,250 | 281,250 | 56,973.93 | 282,673.94 | 100.51% | December 31, 2024 | -13,308.59 | -7,414.31 | No | No |
| Non-public Offering of Shares in 2021 | June 20, 2023 | Jiangsu Ruijie EV Lithium Battery Aluminum Laminated Film Industrialization Project | Production construction | No | 76,170 | 76,170 | 6,886.19 | 47,739.76 | 62.68% | December 31, 2025 | -3,759.75 | -3,759.75 | No | No |
| Non-public Offering of Shares in 2021 | June 20, 2023 | Addition to current capital | Replenishment of liquidity | No | 171,134.61 | 171,134.61 | 0 | 171,134.61 | 100.00% | 0 | N/A | No | ||
| Total of committed investment projects | -- | 1,476,994.03 | 1,466,405.35 | 63,860.12 | 1,444,812.16 | -- | -- | -27,606.93 | 409,799.54 | -- | -- | |||
| Whereabouts of the over raised funds | ||||||||||||||
| None | April 1, 2025 | None | Production construction | No | N/A | No | ||||||||
| Total | -- | 1,476,994.03 | 1,466,405.35 | 63,860.12 | 1,444,812.16 | -- | -- | -27,606.93 | 409,799.54 | -- | -- | |||
| Explanation for each project on the failure to meet planned progress, expected returns, and the reasons (including the reasons for selecting “N/A” for “Whether the expected benefits are achieved”) | The expected benefits refer to the annual profit after the project reaches a usable state and the full production capacity is released. As of December 31, 2024, the “Microporous membrane project of high-performance lithium-ion battery of Chongqing Energy (phase II)” and the “Jiangsu Ruijie EV Lithium Battery Aluminum Laminated Film Industrialization Project” have not yet been fully completed and put into production. The “Jiangsu Ruijie EV Lithium Battery Aluminum Laminated Film Industrialization Project” is still in the capacity ramp-up phase. The following projects have reached production capacity: “Lithium battery separator project (phase I) with an annual production output of 400 million square meters of Jiangxi Tonry New Energy Technology Development Co., Ltd,” “Expansion project of lithium-ion battery separator (phase I) of Jiangxi Tonry New Energy Technology Development Co., Ltd,” “Wuxi Energy New Material Industrial Base,” “Expansion of Wuxi Energy New Material Industrial Base Phase II,” “Microporous membrane project of high-performance lithium-ion battery of Chongqing Energy (phase I),” and “Suzhou GreenPower project with an annual output of 200 million square meters of lithium-ion battery coated separator.” However, due to the intensified market competition in the lithium-ion battery separator industry in recent years, combined with the downstream pressure to reduce costs, the price and gross margin of lithium battery separator products have decreased, leading to the failure to achieve the expected benefits this year. | |||||||||||||
| Explanation for material changes in the feasibility of projects | I. Initial Public Offering 1. The “Reconstruction and expansion project of high-grade environmental-friendly specialty papers with annual production output of 13,000 tons” was planned by the Company based on the market situation and the Company’s production capacity before listing. As time goes by, the market has changed dramatically. Since 2016, the procurement model of downstream tobacco manufacturers for special paper products has been adjusted from quantity allocation by cigarette manufacturers to the independent procurement mode through centralized bidding or commercial negotiation by cigarette label printing enterprises. Cigarette-related enterprises can expand their bargaining range from region to the entire country by means of tendering or commercial negotiation through public market inquiry and bargaining by themselves, breaking the original competitive landscape featuring fixed share and region. As a result, special paper manufacturers took active competition strategies like price cuts to snap up orders, and the industry pattern changed. As a result of the above industrial policy adjustments, the special paper industry has formed a new pattern featuring full market competition, with intensified market competition and a sharp decline in prices. If the “Reconstruction and expansion project of high-grade environmental-friendly specialty papers with annual production output of 13,000 tons” went on as scheduled, we may face risks that the utilization rate of raised funds may decline and the expected investment objective may not be achieved. Therefore, the Company terminated the implementation of the “Reconstruction and expansion project of high-grade environmental-friendly specialty papers with annual production output of 13,000 tons” in 2019. 2. The “R&D center construction project” was launched to meet the Company’s demand for R&D in its main businesses before listing. With the completion of major asset restructuring in 2018, the Company’s main businesses included lithium battery separator, which has high technological requirements. The manufacturing of lithium batteries has a high requirement for the characteristics of separator materials, especially consistency, and the size and uniformity of distribution of separator micropores. Based on the Company’s business development plan and market demand, to better implement its development strategy, the Company intends to integrate the technology centers currently scattered in subordinate companies, so as to ensure that the Company’s R&D technology can further improve production efficiency, product quality and new product development capacity. The above change was considered and approved by the 27th meeting of the Third Board of Directors of the Company, the 22nd meeting of the Third Supervisory Committee and the 2018 Annual General Meeting. |
| Amount, use and status of over raised funds | N/A |
| Changes in the location to implement the projects financed by the proceeds | Applicable |
| Occurred in the past | |
| Upon the consideration and approval of the Proposal on Adjustment of Certain Fundraising Investment Projects at the 27th meeting of the Third Board of Directors of the Company, it was agreed to terminate the “Reconstruction and expansion project of high-grade environmental-friendly specialty papers with annual production output of 13,000 tons” and the “R&D center construction project,” and invest the balance of the raised funds for these two projects, totaling RMB105.8868 million, and corresponding interest income, in the new investment project financed by the proceeds “Energy Research Institute Project.” The Company invested to establish a wholly-owned subsidiary as the entity to implement the “Energy Research Institute Project,” and leased the experimental building in the factory area of Shanghai Energy. The location to implement the project is changed to 155 Nanlu Road, Pudong New Area, Shanghai. On March 9, 2023, Shanghai Energy New Material Technology Co., Ltd. and the Company, the implementation body of the new investment project, completed the signing of the four-party supervision agreement of fundraising with the sponsor and the account opening bank. | |
| Adjustment to the implementation method of the projects financed by the proceeds | Applicable |
| Occurred in the past | |
| The Company’s 27th meeting of the third session of the Board of Directors considered and approved the Proposal on Changing the Investment Projects Supported by Some Raised Funds which agreed to terminate the implementation of the former raised funds supported projects, i.e. “Expansion construction of high-end environmentally friendly specialty paper project with an annual production capacity of 130,000 tons” and “R&D center construction project”, and to use the balance amounting RMB105.8868 million of raised funds for the abovementioned projects for new raised funds supported projects, i.e. “Energy Research Institute Project”, with Shanghai Energy New Materials Research Co., Ltd., the Company’s wholly-owned subsidiary, as its implementation entity. | |
| Previous investment in the projects financed by the proceeds and replacement with the funds raised | Applicable |
| I. Initial Public Offering Upon the consideration and approval of the Proposal on Replacing Self-raised Funds Previously Invested in Projects Financed by the Proceeds at the 18th meeting of the Second Board of Directors of the Company, it was agreed to replace the self-raised funds of RMB236.6591 million that had been invested in projects financed by the proceeds. RMB197.9357 million was previously invested in the “Reconstruction and expansion |
| project of color packaging boxes with annual production output of 3 billion pieces,” RMB24.2138 million was previously invested in the “Reconstruction and expansion project of high-grade environmental-friendly specialty papers with annual production output of 13,000 tons,” and RMB14.5096 million was previously invested in the “R&D center construction project.” II. Public Offering of Convertible Corporate Bonds in 2020 At the 42nd meeting of the Third Board of Directors of the Company, the Proposal on the Use of Proceeds from Convertible Corporate Bonds to Replace Self-Raised Funds Previously Invested in Projects Financed by the Proceeds was considered and approved, and it was agreed that the Company used the funds raised from this offering to replace some of the self-raised funds already invested in projects financed by the proceeds. As of March 16, 2020, the Company accumulatively invested self-raised funds of RMB1,697.9844 million in projects financed by the proceeds, and the net amount of funds raised from this offering of convertible corporate bonds was RMB1,586.1226 million, which was used fully to replace the previously invested self-raised funds. Specifically, RMB586.1226 million of self-raised funds invested in “Wuxi Energy New Material Industrial Base,” in which RMB596.8886 million was initially invested, was replaced; RMB1,000 million of self-raised funds invested in the “Lithium battery separator project (phase I) with an annual production output of 400 million square meters of Jiangxi Tonry New Energy Technology Development Co., Ltd,” in which RMB1,101.0959 million was previously invested, was replaced. III. Non-public Offering of Shares in 2020 At the 11th meeting of the Fourth Board of Directors and the 11th meeting of the Fourth Supervisory Committee, the Proposal on Replacing Previously Invested Self-Raised Funds in Projects Financed by the Proceeds from the Non-public Offering of A Shares in 2020 was considered and approved, and it was agreed to replace the self-raised funds of RMB254.2213 million already invested in the projects with the funds raised. Specifically, RMB157.1693 million was previously invested in the “Expansion project of lithium-ion battery separator (phase I) of Jiangxi Tonry New Energy Technology Development Co., Ltd,” and RMB97.052 million was previously invested in the “Expansion of Wuxi Energy New Material Industrial Base Phase II.” IV. Non-public Offering of Shares in 2021 At the sixth meeting of the Fifth Board of Directors and the sixth meeting of the Fifth Supervisory Committee, the Proposal on Replacing Previously Invested Self-Raised Funds in Projects Financed by the Proceeds from the Non-public Offering of A Shares in 2021 was considered and approved, and it was agreed to replace part of self-raised funds already invested in the projects financed by the proceeds with the funds raised. As of June 13, 2023, the amount previously invested by the Company in the projects financed by the proceeds with self-raised funds was RMB4,017,576,500.58, and the amount replaced with raised funds amounted to RMB3,998,086,272.07. Specifically, previously invested funds amounted to RMB411,491,379.33 for “Microporous membrane project of high-performance lithium-ion battery of Chongqing Energy (phase I),” and RMB410,100,000.00 of such funds were replaced. Previously invested funds amounted to RMB1,409,367,607.63 for “Microporous membrane project of high-performance lithium-ion battery of Chongqing Energy (phase II),” and RMB1,406,300,000.00 of such funds were replaced. Previously invested funds amounted to RMB1,421,550,504.48 for “Jiangsu Energy EV Lithium Battery Separator Industrialization Project,” and RMB1,421,550,504.48 of such funds were replaced. Previously invested funds amounted to RMB408,535,767.59 for “Jiangsu Ruijie EV Lithium Battery Aluminum Laminated Film Industrialization Project,” and RMB408,535,767.59 of such funds were replaced. Previously invested funds amounted to RMB366,631,241.55 for “Suzhou GreenPower project with an annual output of 200 million square meters of lithium-ion battery coated separator,” and RMB351,600,000.00 of such funds were replaced. For the reason of the Company’s production and operation arrangements, there was RMB734,000.93 to be transferred from the designated fundraising account to the Company’s self-owned account as at December 31, 2024. | |
| Use of idle funds raised to temporarily replenish working capital | Applicable |
| I. Initial Public Offering On February 24, 2020, at the 41st meeting of the Third Board of Directors and the 36th meeting of the Third Supervisory Committee, the Proposal on Using Some Idle Funds Raised to Temporarily Replenish Working Capital was considered and approved, and it was agreed to use idle funds raised of no more than RMB110 million to temporarily replenish working capital within 12 months from the date of the approval of the above proposal. Both independent directors and sponsor expressed opinions of agreeing upon the proposal. On August 26, 2020, the Company returned the aforementioned RMB110 million that was temporarily used to replenish working capital to a special fundraising account, and informed the sponsor CITIC Securities and sponsor representative of the return of the funds in a timely manner. II. Non-public Offering of Shares in 2020 On September 7, 2020, at the 11th meeting of the Fourth Board of Directors and the 11th meeting of the Fourth Supervisory Committee, the Proposal on Using Some Idle Funds Raised to Temporarily Replenish Working Capital was considered and approved, and it was agreed to use idle funds raised from the non-public offering of shares in 2020 of no more than RMB800 million to temporarily replenish working capital for production and operation activities related to the Company’s main business within 12 months from the date on which the Sixth Extraordinary General Meeting of 2020 approved the proposal. Both independent directors |
| and sponsor expressed opinions of agreeing upon the proposal. As of June 1, 2021, the Company returned the idle raised funds of RMB800 million used to temporarily replenish working capital to the Company’s special fundraising account, and timely informed the sponsor CITIC Securities and sponsor representative of the return of the funds. | |
| Amount of and reasons for any balance of the funds raised after the project implementation | N/A |
| Use and whereabouts of unused proceeds | On June 17, 2024, the Company convened the 27th meeting of the Fifth Board of Directors and the 23rd Meeting of the Fifth Supervisory Committee to consider and approve the Proposal on Use of Part of the Idle Proceeds for Cash Management. It was agreed that the Company shall use not more than RMB250 million of the idle proceeds from the non-public offering of A-shares in 2021 for cash management to purchase financial products or deposit products with high security, good liquidity and capital preservation sold by financial institutions with legal operating qualifications at an appropriate time, under the condition that the Company ensures that it will not affect the normal implementation of the fund-raising investment plan. The cash management period shall not exceed 12 months from the date when this matter was considered and approved by the Board of Directors, and the funds can be used on a rolling basis within the said amount and period, and the Chairman of the Company was also authorized to exercise the decision-making power for this investment and sign the relevant contract. The Company opened a special settlement account for fundraising financial products on June 27, 2024 with Huatai Securities Co., Ltd. Pursuant to the aforesaid resolution, the Company entered into the Heng Yi No. 24026 Income Certificate Product Subscription Agreement with Huatai Securities Co., Ltd. on June 28, 2024 for the purchase of principal-protected income certificates with temporarily idle proceeds of RMB250 million. The interest date of the product is July 1, 2024, and the expiration date is June 12, 2025. The remaining unused proceeds are deposited in the designated bank account for fundraising. |
| Problems and other situations in the utilization and disclosure of the raised funds | N/A |
(3) Project with changed use of funds raised
?Applicable □Not applicable
Unit: RMB’0,000
| Name of financing project | Way of raising funds | Project after the change | Project before the change | Total amount of intended investment from the funds raised in the project after the change (1) | Actual investment amount during the Reporting Period | Actual cumulative investment amount as at the end of the Reporting Period (2) | Investment progress as of the end of the Reporting Period (3)＝(2)/(1) | Date on which the project will be ready for use | Benefits achieved during the Reporting Period | Whether the expected benefits are achieved | Whether the project feasibility has changed significantly after the change |
| Initial Public Offering | Initial Public Offering | Energy Technology Research Institute Project | 1. Reconstruction and expansion project of high-grade environmental-friendly specialty papers with annual production output | 10,588.68 | 211.8 | 1,559.03 | 14.72% | 0 | N/A | No |
| of 13,000 tons; 2. R&D center construction project | |||||||||||
| Total | -- | -- | -- | 10,588.68 | 211.8 | 1,559.03 | -- | -- | 0 | -- | -- |
| Reason for change, decision making procedure and information disclosure (by specific project) | 1. The “Reconstruction and expansion project of high-grade environmental-friendly specialty papers with annual production output of 13,000 tons” was planned by the Company based on the market situation and the Company’s production capacity before listing. As time goes by, the market has changed dramatically. Since 2016, the procurement mode of downstream tobacco manufacturers for special paper products has been adjusted from quantity allocation by cigarette manufacturers to the independent procurement mode through centralized bidding or commercial negotiation by cigarette label printing enterprises. Cigarette-related enterprises can expand their bargaining range from region to the entire country by means of tendering or commercial negotiation through public market inquiry and bargaining by themselves, breaking the original competitive landscape featuring fixed share and region. As a result, special paper manufacturers took active competition strategies like price cuts to snap up orders, and the industry pattern changed. As a result of the above industrial policy adjustments, the special paper industry has formed a new pattern featuring full market competition, with intensified market competition and a sharp decline in prices. If the “Reconstruction and expansion project of high-grade environmental-friendly specialty papers with annual production output of 13,000 tons” went on as scheduled, we may face risks that the utilization rate of raised funds may decline and the expected investment objective may not be achieved. Therefore, the Company terminated the implementation of the “Reconstruction and expansion project of high-grade environmental-friendly specialty papers with annual production output of 13,000 tons” in 2019. 2. The “R&D center construction project” was launched to meet the Company’s demand for R&D in its main businesses before listing. With the completion of major asset restructuring in 2018, the Company’s main businesses included lithium battery separator, which has high technological requirements. The manufacturing of lithium batteries has a high requirement for the characteristics of separator materials, especially consistency, and the size and uniformity of distribution of separator micropores. Based on the Company’s business development plan and market demand, to better implement its development strategy, the Company intends to integrate the technology centers currently scattered in subordinate companies, so as to ensure that the Company’s R&D technology can further improve production efficiency, product quality and new product development capacity. The above change was considered and approved by the 27th Meeting of the Third Board of Directors of the Company, the 22nd Meeting of the Third Supervisory Committee and the 2018 Annual General Meeting. For details, please refer to the Announcement on Adjustment of Certain Fundraising Investment Projects (Announcement No.: 2019-041) published by the Company at www.cninfo.com.cn on April 26, 2019. | ||||||||||
| Status of and reason for failing to make planned progress or achieve expected returns (by specific project) | The main reason for the failure of the “Energy Technology Research Institute Project” to meet the planned schedule is that the implementation body of the project, Shanghai Energy New Materials Research Co., Ltd., encountered difficulties in industrial and commercial registration in the early stage. To ensure that the funds raised are earmarked for specific purposes, before the completion of the industrial and commercial procedures of the proposed implementation body of the project, the Company mainly used its own funds for R&D activities, R&D investment, equipment purchase, site expenses, etc. | ||||||||||
| Description of major changes in project feasibility after the change | The industrial and commercial registration of Shanghai Energy New Materials Research Co., Ltd, the implementation body of the “Energy Technology Research Institute Project,” has been completed. The Company attaches great importance to R&D investment and has demonstrated that there has been no significant change in the feasibility of the project. | ||||||||||
VIII. Sale of Significant Assets and Equity Interests
1.
Sale of significant assets
□Applicable
?Not applicable
The Company did not sell any significant assets during the Reporting Period.
2.
Sale of significant equity interests
□Applicable
?Not applicable
IX. Analysis of Major Companies in Which the Company Has a Stake or a Controlling Stake
?Applicable □Not applicable
Major subsidiaries and companies in which the Company has a stake with each contributing to over 10% of the Company’s net profit
Unit: RMB100 million
| Company name | Company Type | Main Business | Registered Capital | Total Assets | Net Assets | Operating revenue | Operating Profit | Net Profit |
| Shanghai Energy | Subsidiary | Lithium battery separator | RMB389,210,834 | 439.43 | 112.22 | 86.17 | -12.18 | -9.77 |
Acquisition and disposal of subsidiaries during the Reporting Period?Applicable □Not applicable
| Company name | Way of acquisition or disposal of subsidiaries during the Reporting Period | Impact on the Company’s overall production, operation and earnings |
| Shanghai Jiezhiyuan New Material Technology Co., Ltd. | Establishment by investment | No impact so far |
| Shanghai Hengjieyuan New Material Technology Co., Ltd. | Establishment by investment | No impact so far |
| SEMCO MALAYSIA SDN. BHD. | Establishment by investment | No impact so far |
| Guangdong Energy New Materials Research Institute Co., Ltd. | Cancellation | No impact |
Explanation on major companies in which the Company has a stake or a controlling stake
Shanghai Energy is a holding subsidiary of the Company. As at the end of the Reporting Period, the Company held a 95.22% stake inShanghai Energy, whose major product is lithium battery separator and major subsidiaries include Zhuhai Energy, Wuxi Energy, JiangxiTonry, Suzhou GreenPower, Newmi Tech and Chongqing Energy. Market competition intensified with the concentrated release of large-scale production capacity of separator companies. In 2024, Shanghai Energy achieved an operating revenue of RMB8.617 billion, down
16.97% year on year, and a net profit attributable to the owner of the parent company of RMB-879 million.
X. Structured Bodies Controlled by the Company
□Applicable
?Not applicable
XI. Outlook of the Company
1. Corporate strategy
The Company will focus on the lithium battery separator sector, march towards the vision to become a “world-class polymer materialresearch, development and production enterprise” and bear in mind the philosophy of creating value for customers with quality, price andservice. The Company will continuously improve its global capacity deployment, improve product quality, and strengthen R&D. TheCompany will enrich the product matrix, seek cost reduction and benefit enhancement through lean management, and build up technicalinnovation capacity. The Company will actively expand Chinese and overseas markets, improve the core market competitiveness, activelycapture development opportunities in the new energy sector, and dedicate itself to creating value for customers. The Company will alsoengage in aseptic packaging and BOPP film business and become the most competitive new material producer in China.
2. Operating plan for 2025
The global new energy sector has been thriving. As a leader in the wet-process lithium battery separator sector, the Company willpersist in advancing the construction for production bases both in China and overseas according to our established plans, hastening theprocess of globalization. The Company will continue to focus on and pay attention to the development of cutting-edge technology,promote the industrialization process of the solid electrolyte coating film project for semi-solid state batteries, enhance the R&D efforts
and industrialization investment in the key materials of all-solid state electrolyte, so as to improve its strategic deployment in the field ofseparator.Looking ahead, the Company will continue to enhance our product innovation capabilities by bolstering our R&D efforts. Given theintensifying market competition, the Company need to capitalize on our existing industry-leading scale and cost advantages, place greateremphasis on the development of new products and technologies to drive profitability and innovation-led growth in the long run. In2025, the Company will continue to actively promote overseas projects, ramp up efforts in overseas market development, accelerate ourglobal layout, optimize product portfolio using our core competitive advantages, and increase market share.Furthermore, in the face of intense competition and the need for future global development, the Company will continue to upgradeequipment, optimize processes, and improve quality, which ensure that the Company can continuously enhance production efficiency,improve product quality, and achieve cost reduction and efficiency enhancement, thereby solidifying its core competitive advantages.Under the strategic collaboration with globally renowned consulting firms, the Company has significantly elevated its management leveland efficiency. It has also cultivated a team with international management capabilities, positioning the Company to establish a corecompetitive edge for sustainable development. Leveraging cooperation with renowned Chinese enterprises like LUSTER, we haveintensified technological innovation and the digital “intelligent manufacturing” of separators. This has propelled the Company towardshigh-end and intelligent development, underpinned by industrial big data, artificial intelligence, and intelligent control technologies. TheIntelligent Control System for Multi-parameter Automatic Optimization of Base Film Thickness has been deployed in Wuxi, Zhuhai,Jingmen and other bases. We are now deploying AI visual inspection classification system in Wuxi Energy to realize on-line adaptivecontrol of separator thickness, real-time quality inspection, effectively guaranteeing high consistency of products, improving the“intelligent manufacturing” of separators, and promoting the Company’s high-quality development with new quality productive forces.
3. Risks the Company may face
(1) National regulatory risk relating to lithium battery separator business
In recent years, various countries have intensively introduced industry policies to support the development of the new energy vehicleindustry. Benefiting from policy support, the production value of the new energy vehicle industry quickly increased, driving the rapiddevelopment of the upstream lithium battery industry. If there are significant adverse changes in carbon emissions, renewable energyapplication and other relevant industry policies in the future, the relevant policies may have a negative impact on the development of theentire industry chain of new energy vehicle, thus having an adverse impact on the upstream lithium battery separator industry and theCompany’s operation result.
Countermeasures: By actively investing in the R&D of new applications of separator, the Company will explore its new commercialapplication market. At the same time, the Company also invests resources to distribute new product projects to diversify business risksand reduce the impact of policy fluctuations on the Company to a certain extent.
(2) Intensified market competition risk
In recent years, the rapid growth of the new energy vehicle industry has significantly propelled the swift development of the upstreamlithium-ion battery separator industry. The relatively high gross margin levels in the lithium-ion battery separator industry have attractednumerous Chinese enterprises to enter this sector. Substantial capital investments have led to a rapid increase in production capacity.Currently, competition in the Chinese lithium-ion battery separator industry is becoming increasingly fierce. If the Company fails toaccurately grasp the patterns of industry development, continuously innovate in technology, and improve operational management toenhance product quality and reduce production costs, the increasingly competitive market will have an adverse impact on the Company’sperformance.
Countermeasures: The Company’s lithium-ion battery separator business has formed industry leading advantages in productioncapacity, R&D capacity, product quality, lean management, customer and market and other aspects. The Company will continue to reducecosts and increase efficiency, improve the product quality and reduce the production costs through technological innovation, and developdiversified customer groups in Chinese and overseas markets to reduce the impact of Chinese and foreign market fluctuations on theCompany’s performance.
(3) Risk of price fluctuation of major raw materials
The major raw materials used by the Company are subjected to price fluctuation to some extent, especially polypropylene andpolyethylene, whose prices are affected by the strong fluctuations of the international crude oil price. If the prices of the main rawmaterials fluctuate significantly due to factors such as macroeconomic volatility and supply-demand conditions in the upstream anddownstream industries, it may still have a certain impact on the Company’s gross margin and thus have an adverse effect on theCompany’s performance.
Countermeasures: The Company has established long-term and stable cooperative relations with major suppliers, established astrategic purchase system as a whole, and improved the bargaining power and reduced the cost of raw materials by means of large-scalepurchase. The Company will also reduce the proportion of raw material cost in production cost through technological innovation, processand equipment flow transformation, production efficiency improvement and loss reduction.
(4) Risk relating to construction in progress
Current construction in progress includes Yuxi Energy, Hubei Energy, Jiangsu Ruijie, USA Energy and other production bases,which require a large amount of capital. If the Company fails to raise funds in time, complete and put into operation on schedule, it willhave a negative impact on the subsequent production and operation and future profits.
Countermeasures: The Company will continue to utilize equity financing, bank loans and other diversified financing methods,strengthen cooperation with financial institutions, and take various measures to ensure that the construction of the project has sufficientsources of funds, so as to ensure that the project can be completed smoothly and on schedule.
(5) Risk of technical leakage and loss of core personnel
An enterprise engaging in lithium battery separator requires advanced technology and process, rich management experience and in-depth understanding of the industry. To ensure the ability of constant innovation and the steady growth of business, the Company shouldhave teams consisting of steady high-quality employees in scientific research, management and sales. The Company constantly improvesthe mechanisms for talent cultivation, incentive, promotion and restriction, but there is still the possibility of the outflow of core employeesfrom the Company. In case of leakage of the core technology or the departure of core employees, the production and operation of theCompany may be adversely affected.
Countermeasures: The Company has implemented equity incentive to the core employees, so that the employees can share the valueof the growth of the enterprise, but also make the interests of the Company and the interests of employees deeply tied. The Company willcontinue to increase the introduction and training of core technical personnel, further maintain the stability of core employees, continueto maintain the company’s industry-leading technical level.
(6) Technological progress and product substitution risk
Lithium-ion battery is mainly used for mobile phones, computers, new energy vehicles, power station for energy storage and otherindustries. After development for many years, lithium-ion batteries have been superior to traditional storage batteries such as nickel-cadmium batteries, nickel-metal hydride batteries, lead-acid batteries in terms of volumetric specific energy, gravimetric specific energy,gravimetric specific power, cycle life, charge/discharge efficiency, etc., becoming a new energy industry with priority support and keydevelopment from national governments. Although the lithium-ion battery is the first choice for electronic products and pure electricvehicles, and it will take quite a long time to commercialize other emerging batteries such as all-solid-state batteries which are immaturetechnically, the market demands for lithium-ion batteries will be affected when emerging batteries such as all-solid-state batteries breakthe technical bottleneck, achieve mass production and are fully commercialized, and the lithium battery separator in the industry chainwill also be affected adversely.
Countermeasures: After years of R&D investment and technology accumulation, the Company has strong research on new productsand prospective technology reserves. The R&D Department of the Company continues to pay attention to the market development trend,and organizes a discussion group on film technology development, develops project development plans for R&D, and actively developsother new products and technologies of functional film. In addition, the Company strengthens strategic cooperation with well-knownlithium-ion battery manufacturers at home and abroad, develops products together with customers in-depth cooperation, timely graspsthe technical development trend and complies with the market demand.
(7) Risk of exchange rate fluctuation
The export sales volume of the Company increases constantly as the Company expands its business scale and gradually strengthensthe development in the international market. If the RMB exchange rate and the foreign exchange rate in the countries where our productswere sold fluctuate sharply in the future, the results of the Company may be affected to some extent.
Countermeasures: The Company will minimize the exchange risk with such measures as closely watching the exchange rate,adjusting the product prices in time based on the exchange rate to guarantee the product profit, strengthening cost control and conductingthe foreign exchange derivatives trading for the purpose of hedging.
(8) Risks arising from changes in the international business and trade environment
The international business and trade environment landscape is fraught with such fluctuations ranging from shifts in the globaleconomic climate to policy adjustments. Nevertheless, the Company’s globalization strategy remains paramount. However, withincreasing complexity of the international competitive landscape, major regions represented by Europe and America are progressivelyintroducing policies to support the development of Chinese manufacturing industries. Failing to swiftly align with these policies andexecute our globalization agenda could potentially impede the Company’s market penetration and overall performance.
Countermeasures: While paying close attention to the relevant policies of Europe and America, the Company will continuously payattention to the R&D efforts and technical improvement of products of various business systems, improve product quality and productionefficiency, constantly consolidate and strengthen its competitive advantages in technological R&D, capacity scale, product quality, costefficiency and other aspects, and reduce costs and increase efficiency on the premise of ensuring product quality. We will alsocontinuously expand market development in Chinese and overseas regions and actively establish stable cooperative relations with globalcustomers.
(9) Management risk after expansion of business scale
With the development of the Company’s business, the scale of the Company’s assets and business will be further expanded, whichraises higher requirements for the management level of the Company. The management risk arises if the capabilities of the Company tomanage the production, sales, quality control and risks cannot meet the requirements for scale expansion, and the systems for talentcultivation, organization pattern and management are not further improved.
Countermeasures: The Company will continuously improve the management system, ensure the efficient operation of production,quality control, sales, management and other business links, establish an effective incentive system, attract talents through the Company’sbroad development platform and effective incentive systems, strengthen talent training and deliver talents for the Company’s developmentthrough targeted training and training measures for employees and managers at all levels.
XII. Reception of Visitors to the Company for Purposes of Research, Communication, andInterview during the Reporting Period
?Applicable □Not applicable
| Reception Date | Reception Venue | Reception Mode | Type of Visitors | Visitors | Major Discussions and Materials Provided | Index to Main Enquiry Information |
| April 24, 2024 | Live streaming | Online communication on network platform and teleconference | Institutional investors, individual investors | Investors participating in the Company’s 2023 annual results communication meeting via network platforms and telephone | Presentation of the Company’s results for 2023 and 1Q 2024 | Record of Investor Relations Activities on April 24, 2024 disclosed at www.cninfo.com.cn |
| August 28, 2024 | Panorama Network “Investor Relations Interactive Platform” (http://ir.p5w.net) | Online communication on network platform | Institutional investors, individual investors | Investors participating in the Company’s 2024 interim results briefing via network platforms | Presentation of the Company’s interim results for 2024 | Record of Investor Relations Activities on August 28, 2024 disclosed at www.cninfo.com.cn |
| September 11, 2024 | Meeting room of Shanghai Energy | Field research | Institutional investors | Bernstein, JP Morgan Asia, DNB Asset Management, Investec Wealth & Investment, Letko Brosseau & Partners, Catamaran, Chanakya Capital Partners, Pzena Investment Management, Fullerton Fund Management | The Company’s development strategy, R&D and innovation of lithium battery separator technology, etc. | Record of Investor Relations Activities on September 11, 2024 disclosed at www.cninfo.com.cn |
| October 31, 2024 | Meeting room of Jiangxi Tonry New Energy Technology Development Co., Ltd. | Field research and teleconference | Institutional investors | Harvest Fund, Yinhua Fund, Zhengyuan Investment, Loyal Valley Capital, Sinolink Securities, Minsheng Securities, Orient Securities, Shennong Asset Management, Huafu Securities, China International Finance Co., Ltd, Hua Chuang Securities, TF Securities, Citigroup Global Markets Asia Limited, UBS Securities, CITIC Securities, Caitong Securities, etc. | The Company’s results in the first 3 quarters of 2024, product price trends, capital expenditure, cost reduction measures, etc. | Record of Investor Relations Activities on October 31, 2024 disclosed at www.cninfo.com.cn |
| November 14, 2024 | Teleconference | Teleconference | Institutional investors | Fullgoal Fund, Harvest Fund, ORIGIN, Huatai PineBridge, HSBC Asset Management Hong Kong, Citigroup Global Markets Asia Limited, Maxwealth Fund, BlackRock, Sequoia Capital, China Universal Asset Management, Southern Fund, CICC Securities, CITIC Securities, Caitong Securities, TF Securities, Minsheng Securities, Southwest Securities, etc. | Introduction to the Company’s all-solid state battery deployment, advantages of the Company’s lithium sulfide products and patents, etc. | Record of Investor Relations Activities on November 14, 2024 disclosed at www.cninfo.com.cn |
| November 29, 2024 | Meeting room of Shanghai Energy New Material Technology Co., Ltd. | Field research and teleconference | Institutional investors | Goldman Sachs, Alliance Bernstein Lp, Allianz Global Investors Asia Pacific Ltd, Dymon Asia Capital HK Ltd, Fullerton Inv Mgmt (Shanghai) Co Ltd, Millennium Mgmt LLC, Pinpoint Asset Mgmt Ltd, Point72 Asset Mgmt, Stoneylake Asset Mgmt (Hong Kong) Ltd, Sunshine Asset Management Co., Ltd, Guolian Securities, China Pacific Asset Management, etc. | The progress of overseas projects, the release of new production capacity, the ultra-thin separator products, etc. | Record of Investor Relations Activities on November 29, 2024 and attachments disclosed at www.cninfo.com.cn |
| December 26, 2024 | Meeting room of Shanghai Energy New Material Technology Co., Ltd. | Field research | Institutional investors | ORIGIN, Harvest Fund, Fullgoal Fund, ABC-CA FUND, China Pacific Asset Management, Caitong Fund Management, Hwabao WP Fund, Zijin Investment Group, China Asset Management, PICC Asset Management, Wanjia Asset, Xingquan Fund, Galaxy Asset Management, BOCOM Schroders, Huatai Asset Management, Guosen Securities Asset Management, Lion Fund, CITIC-Prudential, Greenwoods, Huatai PineBridge, UBS SDIC, BlackRock, Maxwealth Fund, CCB Life Asset Management, CICC Securities, Guosen Securities, Caitong Securities, Sinolink Securities, Guolian Securities, Changjiang Securities and other institutional investors | The development background and prospects of solid-state batteries, the definition and application scenarios of semi-solid batteries, the Company’s semi-solid layout, and the progress of key materials for the Company’s all-solid-state batteries, etc. | Record of Investor Relations Activities on December 26, 2024 disclosed at www.cninfo.com.cn |
XIII. Development and Implementation of Market Value Management System and ValuationEnhancement PlanWhether the Company has a market value management system in place.?Yes □NoWhether the Company has disclosed plans for valuation enhancement.
□ Yes ?No
The Company held the thirty-fifth meeting of the Fifth Board of Directors on December 27, 2024, and considered and approved theProposal on the Formulation of the Market Value Management System. To strengthen the market value management of the Company, furtherstandardize the Company’s market value management, and safeguard the legitimate rights and interests of the Company, investors and otherstakeholders, the Company formulated the Market Value Management System. The purpose of the market value management is to achieve
the dynamic equilibrium between the Company’s market value and its intrinsic value by formulating correct development strategies,perfecting corporate governance, improving operation and management, fostering core competitiveness, as well as through the tools of capitaloperation. Based on the systematic, scientific, normative and normal principles, the Company will focus on its main business, and enhanceits operational efficiency and profitability. In addition, we will take into account our own actual situation and comprehensively utilize mergersand acquisitions and reorganization, equity incentives and employee stock ownership plans, cash dividends, investor relations management,information disclosure, share repurchases and other legal and compliant methods to enhance the value of the Company’s investment.XIV. Implementation of the Action Plan for “Dual Improvements in Quality and Returns”
Whether the Company has disclosed the announcement on action plan for “Dual Improvements in Quality and Returns”.?Yes No
To safeguard the interests of all shareholders, enhance investor confidence, and promote the long-term healthy and sustainabledevelopment of the Company, we have formulated the action plan for “Dual Improvements in Quality and Returns.” Actions have beenformulated in the plan focusing on such aspects as “focusing on the main business and driving high-quality development with innovation,”“consolidating competitive advantages and realizing globalization,” “consolidating governance and improving standardized operation,”“investor-oriented and valuing investor returns,” “improving information disclosure and adhering to an investor demand-oriented approach.”For details, please refer to the Announcement on the Action Plan for “Dual Improvements in Quality and Returns” (Announcement No. 2024-039) disclosed by the Company on February 27, 2024 in the designated information disclosure media.
During the Reporting Period, the Company proactively advanced the implementation of the action plan for “Dual Improvements inQuality and Returns”. In terms of corporate governance perfection, the Company continued to improve and enhance its internal standardizedoperation and revised, issued and implemented multiple management systems in accordance with relevant laws and regulations. In respect ofinvestor returns, the Company implemented the annual profit distribution plan for 2023, under which a cash dividend of RMB15.426097 per10 shares was paid to all shareholders, totaling about RMB1.5 billion in cash dividends. In addition, the Company completed its sharerepurchase scheme. During the Reporting Period, the Company repurchased shares at an amount of RMB200 million for cancellation to enrichshareholders’ equity.The Company attaches importance to investor relations management. During the Reporting Period, the Company strengthened itscommunication with investors by more frequent, in-depth and targeted communications. By multiple channels, such as, organizing investoron-site visits and investigations, holding result briefings, making response via irm.cninfo.com.cn, and answering investor hotline calls, weproactively conveyed our long-term investment value to the market, which increased the information communication efficiency andtransparency. We focus on investors’ expectations and suggestions, and construct an ecology for good interactions with investors, with anaim to create long-term value for investors.
Section 4 Corporate Governance
I.
Basic Information of Corporate GovernanceThe Company established and improved the modern enterprise system in strict accordance with the Company Law, the Securities Law,the Rules Governing the Listing of Stocks on the Shenzhen Stock Exchange, the Code of Corporate Governance for Listed Companies inChina and other relevant laws and regulations, and constantly improved the corporate governance structure, improved the internal controlsystem and standardized the Company’s operation. During the Reporting Period, the Company established a special meeting system forindependent directors in accordance with the Company Law, the Securities Law, the Administrative Measures for Independent Directors ofListed Companies, the Rules Governing the Listing of Stocks on the Shenzhen Stock Exchange, the Self-regulatory Guideline No. 1 for ListedCompanies of the Shenzhen Stock Exchange – Standardized Operation of Companies Listed on the Main Board and other relevant laws,regulations and normative documents; formulated the Rules of Procedure of the Environment, Social and Governance (ESG) Committee,the Management Measures for Selection and Engagement of Accounting Firms, and the Market Value Management System, taking intoaccount the actual situation of the Company; and revised the Articles of Association, the Information Disclosure Management System, theInternal Control System, the Internal Reporting System for Material Information, the Foreign Exchange Hedging Business ManagementSystem, the Registration and Management System for Informants of Insider Information, the Investor Relations Management System, theInternal Audit System, the Management System for Controlled Subsidiaries, the Venture Capital Management System, the IndependentDirector System, the Entrusted Financial Management System, the Annual Reporting System of the Audit Committee of the Board ofDirectors, the System of Connected Transactions, the Work System of the Secretary of the Board of Directors, the Management System ofForeign Investments, the Management System of Raised Funds, the Authorization Management System, the External Guarantee System, theManagement Measures for the Shares Held by Directors, Supervisors, and Senior Management and Their Changes and other relevantsystems.
During the Reporting Period, the Company held 11 general meetings of shareholders, 19 Board meetings, 16 meetings of theSupervisory Committee and 4 special meetings of independent directors. The procedures for holding the meetings are legal and theresolutions are legal and effective.Were there any significant differences between the Company’s actual governance status and laws, administrative regulations, and theregulations issued by CSRC on listed company governance
□Yes
?
No
There was no difference between the Company’s actual governance status and laws, administrative regulations, and the regulations issuedby CSRC on listed company governance.
II.
Details of the Company’s Separation from the Controlling Shareholder and Actual Controllerwith Respect to Corporate Assets, Personnel, Finance, Organization, Business, etc.
The Company is independent of its shareholders in terms of business, assets, personnel, institutions, financial affairs, etc., has anindependent and complete business system and market-oriented independent operation ability, and has a complete supply, production andsales system.
1. Assets integrity
The Company has independent and complete business assets that can be used for business activities. The Company has complete sites,facilities, instruments and equipment, trademarks, patents, etc. required for production independent of shareholders and other relatedparties. The Company’s assets are strictly separated from the shareholders and actual controller, and there is no case that the shareholdersand actual controller encroach on the Company’s assets.
2. Personnel independence
The General Manager, Vice General Manager, Chief Financial Officer, Secretary of the Board and other senior executives of the Companyare all full- time working in the Company and receiving remuneration, and there is no case that they hold any post other than director orsupervisor at the controlling shareholder, actual controller and other enterprises under their control, or hold any position in other enterpriseswith the same or similar business with the Company. The Company’s financial personnel are not doing part-time job in the controllingshareholders, actual controllers and other enterprises under their control. The Company is completely independent in terms of socialsecurity and salary.
3. Financial independence
The Company has set up an independent financial department, and established an independent and complete financial accounting systemaccording to the current accounting standards and relevant laws and regulations, which can help make financial decisions independently.The Company has a standardized financial accounting system and financial management system. The Company has set up an independentbank account and, as an independent taxpayer, has gone through tax registration with the tax bureau of Yuxi High-tech Zone. The Companydoes not guarantee the debts of shareholders or other related parties with the Company’s assets, interests or reputation. The Company hascomplete control over all assets, and there is no case that monetary funds or other assets are occupied by shareholders and damage theCompany’s interests.
4. Institutional independence
The Company has a production and operation place and organization independent of the controlling shareholder, and there is no mixedoperation or joint office with the controlling shareholder. There is no interference of the controlling shareholder and any other units orindividuals in the Company’s organizational structure. In accordance with the requirements of the Company Law, the Company hasestablished and improved the organizational structure system of the general meeting of shareholders, the Board of Directors, theSupervisory Committee, and the management, and is completely independent of the affiliated enterprises in terms of institutional setting.The shareholder unit nominates directors to participate in the management of the Company in accordance with the provisions of the
Company Law and the Articles of Association, and does not directly interfere with the production and operation activities of the Company.
5. Business independence
The Company has an independent production, supply and marketing system, and independently carries out various businesses. There isno case of relying on or entrusting shareholders or other related parties to sell products, or relying on or entrusting shareholders or otherrelated parties to purchase raw materials. There is no horizontal competition with the controlling shareholder, actual controller and theenterprises under their control.
III.
Horizontal Competition
□Applicable
?Not applicable
IV.
Details about the Annual General Meeting and Extraordinary General Meeting of Shareholders Convened during the Reporting Period
1.
Details about the general meetings of shareholders during the Reporting Period
| Meeting | Meeting Type | Investor Participation | Date Convened | Disclosure Date | Meeting Resolution |
| The First Extraordinary General Meeting for 2024 | Extraordinary General Meeting | 40.11% | February 26, 2024 | February 27, 2024 | Announcement on Resolutions of the First Extraordinary General Meeting for 2024 (Announcement No. 2024-038) at www.cninfo.com.cn |
| The Second Extraordinary General Meeting for 2024 | Extraordinary General Meeting | 40.10% | March 7, 2024 | March 8, 2024 | Announcement on Resolutions of the Second Extraordinary General Meeting for 2024 (Announcement No. 2024-044) at www.cninfo.com.cn |
| The Third Extraordinary General Meeting for 2024 | Extraordinary General Meeting | 11.58% | April 26, 2024 | April 27, 2024 | Announcement on Resolutions of the Third Extraordinary General Meeting for 2024 (Announcement No. 2024-087) at www.cninfo.com.cn |
| 2023 Annual General Meeting | Annual General Meeting | 41.95% | May 16, 2024 | May 17, 2024 | Announcement on Resolutions of the 2023 Annual General Meeting (Announcement No. 2024-110) at www.cninfo.com.cn |
| The Fourth Extraordinary General Meeting for 2024 | Extraordinary General Meeting | 25.60% | June 4, 2024 | June 5, 2024 | Announcement on Resolutions of the Fourth Extraordinary General Meeting for 2024 (Announcement No. 2024-124) at www.cninfo.com.cn |
| The Fifth Extraordinary General Meeting for 2024 | Extraordinary General Meeting | 27.52% | June 24, 2024 | June 25, 2024 | Announcement on Resolutions of the Fifth Extraordinary General Meeting for 2024 (Announcement No. 2024-147) at www.cninfo.com.cn |
| The Sixth Extraordinary General Meeting for 2024 | Extraordinary General Meeting | 27.05% | July 5, 2024 | July 6, 2024 | Announcement on Resolutions of the Sixth Extraordinary General Meeting for 2024 (Announcement No. 2024-158) at www.cninfo.com.cn |
| The Seventh Extraordinary General Meeting for 2024 | Extraordinary General Meeting | 27.05% | July 8, 2024 | July 9, 2024 | Announcement on Resolutions of the Seventh Extraordinary General Meeting for 2024 (Announcement No. 2024-161) at www.cninfo.com.cn |
| The Eighth Extraordinary General Meeting for 2024 | Extraordinary General Meeting | 23.70% | September 13, 2024 | September 14, 2024 | Announcement on Resolutions of the Eighth Extraordinary General Meeting for 2024 (Announcement No. 2024-205) |
| at www.cninfo.com.cn | |||||
| The Ninth Extraordinary General Meeting for 2024 | Extraordinary General Meeting | 23.20% | November 15, 2024 | November 16, 2024 | Announcement on Resolutions of the Ninth Extraordinary General Meeting for 2024 (Announcement No. 2024-231) at www.cninfo.com.cn |
| The Tenth Extraordinary General Meeting for 2024 | Extraordinary General Meeting | 25.42% | December 30, 2024 | December 31, 2024 | Announcement on Resolutions of the Tenth Extraordinary General Meeting for 2024 (Announcement No. 2024-259) at www.cninfo.com.cn |
2.
Extraordinary general meeting requested by the preferred shareholder with restituted voting rights
□Applicable
?Not applicable
V.
Details on Directors, Supervisors, and Senior Management1.
Basic information
| Name | Gender | Age | Title | Service status | Start date | End date | Shares held at the beginning of the period (share) | Quantity of shares increased in the current period (share) | Quantity of shares decreased in the current period (share) | Other increased or decreased changes (share) | Quantity of shares held at the end of the period (share) | Reason for share increase/decrease |
| Paul Xiaoming Lee | Male | 67 | Chairman | Incumbent | April 20, 2011 | March 23, 2026 | 127,438,975 | 1,004,163 | 128,443,138 | Shareholding increase | ||
| Li Xiaohua | Male | 63 | Vice chairman and general manager | Incumbent | April 20, 2011 | March 23, 2026 | 67,750,989 | 668,600 | 346,500 | 68,766,089 | Shareholding increase, share repurchase | |
| Zhai Jun | Male | 51 | Director | Incumbent | August 7, 2023 | March 23, 2026 | 0 | 0 | ||||
| Xiang Ming | Male | 62 | Director | Incumbent | August 7, 2023 | March 23, 2026 | 0 | 0 | ||||
| Mai Weihua | Male | 58 | Director | Incumbent | November 22, 2021 | March 23, 2026 | 17,000 | 96,500 | 30,000 | 143,500 | Shareholding increase, granting of restricted shares under the 2024 Restricted Shares Incentive Plan | |
| Feng Jie | Male | 61 | Director | Incumbent | January 4, 2017 | March 23, 2026 | 82,000 | 82,000 | ||||
| Li Zhe | Male | 38 | Independent Director | Incumbent | December 29, 2023 | March 23, 2026 | 0 | 0 | ||||
| Pan Siming | Male | 48 | Independent Director | Incumbent | March 24, 2023 | March 23, 2026 | 0 | 0 | ||||
| Zhang Jing | Female | 64 | Independent | Incumbent | March 24, 2023 | March 23, 2026 | 0 | 0 |
| Director | ||||||||||||
| Zhang Tao | Male | 48 | Chairman of Supervisory Committee | Incumbent | January 3, 2019 | March 23, 2026 | 10,000 | 20,800 | 30,800 | Shareholding increase | ||
| Li Bing | Male | 58 | Supervisor | Incumbent | March 24, 2023 | March 23, 2026 | 11,000 | 11,400 | 22,400 | Shareholding increase | ||
| Kang Wenting | Female | 38 | Employee Representative Supervisor | Incumbent | April 8, 2020 | March 23, 2026 | 0 | 0 | ||||
| Yu Xue | Female | 38 | Board Secretary and Vice General Manager | Incumbent | November 4, 2021 | March 23, 2026 | 81,100 | 113,300 | 48,000 | 242,400 | Shareholding increase, granting of restricted shares under the 2024 Restricted Shares Incentive Plan, repurchase of restricted shares under 2022 Share Option and Restricted Share Incentive Plan for cancellation | |
| Li Jian | Male | 47 | Chief Financial Officer | Incumbent | September 30, 2020 | March 23, 2026 | 0 | 176,900 | 60,000 | 236,900 | Shareholding increase, granting of restricted shares under the 2024 Restricted Shares Incentive Plan | |
| Total | -- | -- | -- | -- | -- | -- | 195,391,064.00 | 2,091,663.00 | 0.00 | 484,500.00 | 197,967,227.00 | -- |
Whether there was any departure of Directors and Supervisors and dismissal of senior management during the term of office during the Reporting Period
Yes?NoChanges in Directors, supervisors and senior management of the CompanyApplicable?Not applicable
2.
Positions Held
Professional background, main working experience and main duties in the Company of current directors, supervisors, and seniorexecutives of the Company(I) Members of the Board of Directors
1. Paul Xiaoming Lee, Chairman of the Company, male, born in 1958, American nationality with the right of residence in foreigncountry, and master’s degree. He joined Kunming Plastic Research Institute of China in 1982, acted as the Vice President from 1984 to1989, graduated from the polymer material discipline at the University of Massachusetts of America in December 1992, and served asthe Manager of the Technical Department of Inteplast Corporation in America from 1992 to 1995. Since April 1996, he has successivelyserved as the Vice General Manager, General Manager, Vice Chairman and Chairman of Hongta Plastic, Chairman and General Managerof Dexin Paper, and Chairman of Chengdu Hongta Plastic. Mr. Lee joined Innovative Color Printing as the Chairman in 2006. He iscurrently the Chairman of Hongchuang Packaging, the Chairman of Shanghai Energy, the Chairman of Dexin Paper, the Chairman ofHongta Plastic, and the Chairman of the Company.
2. Li Xiaohua, Vice Chairman of the Company, male, born in 1962, Chinese nationality with the right of residence in foreigncountry, and master’s degree. He graduated from the polymer material discipline at the University of Massachusetts of America inFebruary 1993, and worked at World-Pak Corporation in the US from 1993 to 1996. Since April 1996, he has successively served as theVice General Manager and Vice Chairman of Hongta Plastic, the Vice Chairman of Dexin Paper, and the General Manager and ViceChairman of Chengdu Hongta Plastic, and joined Innovative Color Printing as the General Manager and Vice Chairman in 2006. He iscurrently the Director of Hongchuang Packaging, the Vice Chairman of Shanghai Energy, the Director of Jiangxi Enpo, the Director ofDexin Paper, and the General Manager and Vice Chairman of the Company.
3. Zhai Jun, Director of the Company, male, born in 1974, Chinese nationality, and master’s degree. He graduated from WuhanUniversity of Technology majoring in Vehicle Engineering in June 2000 and served as project manager in State Development andInvestment Corporation from April 2000 to January 2006. Mr. Zhai worked for Valeo Automotive Air Conditioning Hubei Co., Ltd. asa Director and Vice General Manager from January 2006 to March 2009; he served as a project manager of State Development and Hi-tech Investment Corporation from March 2009 to July 2009; and he also serves as a Managing Director of SDIC Investment ManagementCo., Ltd. from July 2009 to present. He is currently the Director of the Company.
4. Xiang Ming, Director of the Company, male, born in 1963, Chinese nationality, and doctoral candidate. He graduated from theInstitute of Polymer Research of Chengdu University of Science and Technology in 1988, and served in the Institute of Polymer Researchof Sichuan University since 1988, and retired in April 2023. Mr. Xiang served as the Chairman of Chengdu Huicheng Technology Co.,Ltd. since 2011. He is currently the Director of the Company.
5. Ma Weihua, Director of the Company, male, born in 1967, Chinese nationality, and bachelor’s degree, engineer. From 1989 to1997, he successively served as Deputy Section Chief of Equipment Section of Zhenyuan Gold Mine, Yunnan Province, and technicianof Equipment Section of Yuxi Hydropower Equipment Factory. From 1997 to 2016, he successively served as the Director of ProductionDepartment, Vice General Manager and Director of Hongta Plastic. He is currently the General Manager of Shanghai Energy and theDirector of the Company.
6. Feng Jie, Director of the Company, male, born in 1964, Chinese nationality, and bachelor’s degree and medium industrialeconomist. He served in Simao Industrial and Commercial Bank of China from 1981 to 1984; served as a statistician of theComprehensive Management Section, Director of the Computer Center and the Secretary of the Communist Youth League at YunnanOptical Instrument Factory from 1989 to 1997; served as a technician, statistical officer and Director of the General Manager’s Office atHongta Plastic from 1997 to 2005; and served as the Director of Chengdu Office of Hongta Plastic from 2005 to 2009. Since 2009, hehas successively served as the Director of the Sales Department, the Vice General Manager and General Manager of Chengdu HongtaPlastic. He is currently the Director of the Sales Department and the General Manager of Chengdu Hongta Plastic, and the Director ofthe Company.
7. Li Zhe, Independent Director of the Company, male, born in 1987, Chinese nationality, and doctoral candidate. He is the deputydirector of the Finance Department, associate professor of the School of Accounting, and the tutor of doctoral candidate of CentralUniversity of Finance and Economics. He has been an independent director of Leyard Optoelectronic Co., Ltd. from January 2023 topresent. Mr. Li serves as an independent director of Genertec Kunming Machine Tool Co., Ltd. from July 2023 to present. He is currentlyan Independent Director of the Company.
8. Pan Siming, Independent Director of the Company, born in 1977, Chinese nationality, and bachelor’s degree. He served asfinancial analysis of Huachen Automotive Group from July 2001 to December 2009. He served as financial manager of ZhejiangLongsheng Group Co., Ltd. from December 2009 to August 2012. Mr. Pan was appointed as the director of post-loan management ofthe small and medium-sized department of Minsheng Bank from August 2012 to April 2016, and has been appointed as the director ofpost-investment management of Yang Yue Shanghai Investment Management Ltd. from April 2016 to present. He is currently anIndependent Director of the Company.
9. Zhang Jing, Independent Director of the Company, born in 1961, Chinese nationality, professor and doctoral tutor of AppliedPhysics in the College of Science of Donghua University. She served as executive vice president of the College of Science of DonghuaUniversity and Secretary of the Party Committee of the College of Science. She was a director of Shanghai Energy from 2016 to 2018.She was a director of the Plasma Science and Technology Committee of the CSTAM from 2015 to 2020. Ms. Zhang has been a directorof Shanghai Sunshine Esailchem Technology Corp., Ltd. since 2018. Ms. Zhang is an associate editor of the journal Plasma Science andTechnology from 2021 to present. She is currently an Independent Director of the Company.
(II) Members of the Supervisory Committee
1. Zhang Tao, Chairman of the Supervisory Committee of the Company, male, born in 1977, Chinese nationality, and bachelor’sdegree. He worked as a financial analyst at the Financial Center of Beijing Marketing Company of Haci Co., Ltd. from July 2000 toJanuary 2001; worked as an accountant at the Finance Department of Hongta Plastic from August 2001 to August 2006; and served asthe Manager of the Finance Department of Dexin Paper from September 2006 to March 2019. He serves as the supervisor of Yuxi
Kunshasi Plastic Masterbatch Co., Ltd. from October 11, 2021 to December 11, 2024. He serves as the Deputy Chief Financial Officerfrom April 2019 to present. He is currently the Chairman of the Supervisory Committee of the Company.
2. Li Bing, Supervisor of the Company, male, born in 1967, Chinese nationality, and junior college degree, assistant engineer. Heserved as a technician in the process technology section of Yuxi Hydroelectric Equipment Factory from September 1988 to December1995. He served as a workshop supervisor and head of the process technology section of Yuxi Globe Colour Printing Carton Co., Ltd.from December 1995 to July 2004. He served as a sales manager of Yunnan Dexin Paper Co., Ltd. from October 2005 to February 2021.He served as a sales manager of Yunnan Energy New Material Co., Ltd. and Yunnan Dexin Paper Co., Ltd. from March 2021 to June2021. Mr. Li was appointed as the general manager of Yunnan Dexin Paper Co., Ltd. from July 2021 to present. He is currently aSupervisor of the Company.
3. Kang Wenting, Supervisor of the Company, female, born in 1987, Chinese nationality, and bachelor’s degree. She served as thePersonnel Supervisor of Kunming Xinghe Spa Resort & Hotel from 2013 to 2014, and from 2015 to March 2019, has successivelyserved as the Personnel Supervisor of the Human Resources Department of the Company. She served as the director of the OperationSupport Department of the Company from October 2019 to November 2024. From July 2024 to present, she serves as Human ResourcesDirector at Yuxi Energy and is currently the Director of the Administrative Department of the Company and Employee RepresentativeSupervisor of the Company.
(III) Senior Management
1. Li Xiaohua, born in 1962, Chinese nationality with the right of residence in foreign country, and master’s degree. He graduatedfrom the polymer material discipline at the University of Massachusetts in February 1993, and worked at World-Pak Corporation in theUS from 1993 to 1996. Since April 1996, he has successively served as the Vice General Manager and Vice Chairman of Hongta Plastic,the Vice Chairman of Dexin Paper, and the General Manager and Vice Chairman of Chengdu Hongta Plastic. Joined Innovative ColorPrinting as the General Manager and Vice Chairman in 2006. He is currently the Chairman of Hongchuang Packaging, the Chairmanof Shanghai Energy, the Director of Jiangxi Enpo, the Director of Dexin Paper, and the General Manager and the Vice Chairman of theCompany.
2. Yu Xue, Vice General Manager of the Company, Secretary of the Board of Directors, female, born in 1987, Chinese nationality,and master’s degree. She served as the Securities Affairs Representative of the Company from March 2013 to November 2021. She iscurrently the Chairman of Hubei Energy, the Director of Jiangxi Ruijie, the Vice General Manager and the Secretary of the Board ofDirectors of the Company.
3. Li Jian, Chief Financial Officer of the Company, male, born in 1978, Chinese nationality, and bachelor’s degree, ChineseCertified Public Accountant and Chinese Certified Tax Agent. From 1997 to October 2016, he served as the General Budget Accountantat Liujiaqiao Fiscal Office of the Finance Bureau of Chongren County, Jiangxi Province, the Financial Manager of Shunde OuyadianBuilding Material Co., Ltd., the Project Manager of Shenzhen Pengcheng Accounting Firm, the Assistant to the Chief Financial Officerof Jiangsu Safety Steel Rope Co., Ltd. and the Chief Financial Officer of Suzhou ALTON Electric Industry Co., Ltd. Since October2016, he served as the Chief Financial Officer of Shanghai Energy. He is currently the Chief Financial Officer of the Company.Positions held at the shareholder’s entity?Applicable Not applicable
| Name of person | Name of shareholder’s entity | Position held in shareholder’s entity | Start date | End date | Receiving remuneration and allowance at shareholder’s entity |
| Li Xiaohua | Yuxi Heyi Investment Co., Ltd. | Chairman | February 4, 2024 | No | |
| Zhai Jun | CMG-SDIC Capital Co., Ltd. | Managing director | October 31, 2017 | Yes |
Positions held at other entities?Applicable □Not applicable
| Name | Other Entity Names | Positions in other organizations | Start date | End date | Receiving remuneration and allowance at other entities |
| Paul Xiaoming Lee | Shanghai Ruiji New Material Technology Co., Ltd. | Director | November 19, 2024 | No | |
| Yuxi Kunshasi Plastic Masterbatch Co., Ltd. | Vice Chairman | May 1, 1996 | December 11, 2024 | No | |
| Li Xiaohua | Shanghai Ruiji New Material Technology Co., Ltd. | Chairman | January 20, 2020 | No | |
| Li Xiaohua | Yuxi Kunshasi Plastic Masterbatch Co., Ltd. | Director and General Manager | May 1, 1996 | December 11, 2024 | No |
| Li Xiaohua | Zhuhai Chenyu New Material Technology Co., Ltd. | Chairman | April 19, 2024 | No | |
| Li Xiaohua | Chenyu (Zhuhai Hengqin) New Material Technology Co., Ltd. | Chairman | November 15, 2024 | No | |
| Li Xiaohua | Changshu Chenyu New Material Technology Co., Ltd. | Chairman | May 7, 2024 | No | |
| Li Zhe | Central University of Finance and Economics | Associate Professor, Ph.D. Advisor, Deputy Director of the Finance Division | May 15, 2023 | Yes | |
| Li Zhe | Leyard Optoelectronic CO., LTD. | Independent Director | January 16, 2023 | Yes | |
| Li Zhe | Genertec Kunming Machine Tool Co., Ltd. | Independent Director | July 14, 2023 | Yes | |
| Zhang Tao | Yuxi Kunshasi Plastic Masterbatch Co., Ltd. | Supervisor | October 11, 2021 | December 11, 2024 | No |
| Xiang Ming | Chengdu Huicheng Technology Co., Ltd. | Chairman | July 6, 2011 | Yes | |
| Zhai Jun | SDIC Fund | Managing director | July 31, 2009 | Yes | |
| Zhai Jun | Kelong New Energy | Director | December 13, 2016 | No | |
| Zhai Jun | HXF Saw Co., Ltd. | Director | October 22, 2012 | No | |
| Zhai Jun | Shanghai Dianda Information Technology Co., Ltd. | Director | April 27, 2015 | September 30, 2024 | No |
| Zhai Jun | China Intelligent Vehicle Innovation Platform (Shanghai) Co., Ltd. | Director | November 30, 2021 | No | |
| Zhai Jun | Jingci Material Science Co., Ltd. | Director | June 11, 2018 | No | |
| Zhang Jing | College of Science, Dong Hua University | Professor, Doctoral Supervisor | January 30, 1989 | Yes | |
| Zhang Jing | Shanghai Sunshine Esailchem Technology Co., Ltd. | Director | December 11, 2017 | Yes | |
| Pan Siming | Shanghai Yangyue Investment Management Co., Ltd. | Director of Post-Investment Management | April 11, 2016 | Yes |
Penalties to the current directors, supervisors and senior management of the Company and those leaving office during the ReportingPeriod by securities regulatory agencies in the past three years
□Applicable
?Not applicable
3. Remuneration for Directors, Supervisors, and Senior Management
Decision-making procedures, determination basis and actual payment of remuneration for directors, supervisors, and senior management
1. Decision-making procedure for remunerations of directors, supervisors and senior management: The Remuneration & EvaluationCommittee of the Board of Directors of the Company studies and establishes the evaluation standard, remuneration policy and plan for thedirectors, General Manager and other senior management members of the Company, the Board of Directors reviews the remunerations forthe senior management, the General Meeting of Shareholders reviews the remunerations of the directors and the supervisors, and theHuman Resources Department and the Finance Department of the Company assist the Remuneration & Evaluation Committee of the Boardof Directors to implement the remuneration plan for the directors and the senior management of the Company.
2. Basis for determining the remunerations of directors, supervisors and senior management: The remunerations for the directorsand supervisors are determined in line with the actual working status of the Company and in combination of the current market situation.The remunerations of the senior management are determined in line with related provisions of the Company and in combination of theoperating objectives of the Company in 2024 and specific job responsibilities the senior management members of the Company take tocomplete the annual operating objectives.
3. Actual payment of remunerations to the directors, supervisors and senior management: The remunerations of the IndependentDirectors are paid to personal accounts based on the standard and schedule every quarter or every month. The remunerations of otherpeople are paid based on respective evaluation result on a monthly basis or at the time specified by the remuneration payment policy.
Remuneration for Directors, supervisors, and senior management during the Reporting Period
Unit: RMB0’000
| Name | Gender | Age | Title | Service status | Total pre-tax remunerations received from the Company | Whether remuneration was received from related parties of the Company |
| Paul Xiaoming Lee | Male | 67 | Chairman | Incumbent | 203.70 | No |
| Li Xiaohua | Male | 63 | Vice Chairman and General Manager | Incumbent | 174.60 | No |
| Mai Weihua | Male | 58 | Director | Incumbent | 101.40 | No |
| Feng Jie | Male | 61 | Director | Incumbent | 28.35 | No |
| Zhai Jun | Male | 51 | Director | Incumbent | 0.00 | Yes |
| Xiang Ming | Male | 62 | Director | Incumbent | 0.00 | No |
| Li Zhe | Male | 38 | Independent Director | Incumbent | 8.98 | No |
| Pan Siming | Male | 48 | Independent Director | Incumbent | 10.23 | No |
| Zhang Jing | Female | 64 | Independent Director | Incumbent | 10.23 | Yes |
| Zhang Tao | Male | 48 | Chairman of Supervisory Committee | Incumbent | 29.05 | No |
| Li Bing | Male | 58 | Supervisor | Incumbent | 29.98 | No |
| Kang Wenting | Female | 38 | Employee Representative Supervisor | Incumbent | 13.35 | No |
| Yu Xue | Female | 38 | Board Secretary and Vice General Manager | Incumbent | 84.48 | No |
| Li Jian | Male | 47 | Chief Financial Officer | Incumbent | 117.34 | No |
| Total | -- | -- | -- | -- | 811.69 | -- |
VI.
Performance of Directors during the Reporting Period1.
Meetings of the Board of Directors during the Reporting Period
| Meeting | Date Convened | Disclosure date | Meeting resolution |
| The 17th Meeting of the 5th Board of Directors | January 3, 2024 | January 4, 2024 | The meeting considered and approved the Proposal on Adjusting the US Lithium Battery Separator Project |
| The 18th Meeting of the 5th Board of Directors | January 4, 2024 | January 5, 2024 | The meeting considered and approved the Proposal on Not Revising the Share Transfer Price Downward |
| The 19th Meeting of the 5th Board of Directors | February 2, 2024 | February 3, 2024 | The meeting considered and approved the Proposal on Repurchase of Shares of the Company, the Proposal on the Company’s 2024 Restricted Share Incentive Plan (Draft) and Its Summary, the Proposal on Formulation of Management Measures for the Implementation and Evaluation of the Company’s 2024 Restricted Share Incentive Plan, the Proposal on Requesting the General Meeting to Authorize the Board of Directors to Handle Matters Relating to the Equity Incentive, and the Proposal on Convening the First Extraordinary General Meeting of the Company for 2024 |
| The 20th Meeting of the 5th Board of Directors | February 18, 2024 | February 19, 2024 | The meeting considered and approved the Proposal to Change the Purpose of the Repurchased Shares to Cancellation, and the Proposal to Convene the Second Extraordinary General Meeting of the Company for 2024 |
| The 21st Meeting of the 5th Board of Directors | March 18, 2024 | March 19, 2024 | The meeting considered and approved the Proposal to Cancel Certain Stock Options under the 2022 Stock Option and Restricted Share Incentive Plan |
| The 22nd Meeting of the 5th Board of Directors | April 10, 2024 | April 11, 2024 | The meeting considered and approved the Proposal on the Extension of the Shareholding Increase Plan for Certain Directors, Supervisors and Senior Management, the Proposal on the Change of Accounting Policies, and the |
| Proposal on the Convening of the Third Extraordinary General Meeting of the Company for 2024 | |||
| The 23rd Meeting of the 5th Board of Directors | April 24, 2024 | April 25, 2024 | The meeting considered and approved the Proposal on the 2023 Work Report of the Board of Directors, the Proposal on the 2023 Work Report of the General Manager, the Special Opinion on the Maintenance of Independence by Independent Directors in 2023, the Proposal on the 2023 Annual Financial Results Report, the Proposal on the 2023 Profit Distribution Plan, the Proposal on the 2023 Internal Control Evaluation Report, the Proposal on the 2023 Self-Inspection Form on the Implementation of Internal Control Rules, the Proposal on the 2023 Annual Report and Its Summary, the Proposal on the 2023 Environmental, Social and Governance Report (ESG Report), the Proposal on the Establishment of the Environmental, Social and Governance (ESG) Committee under the Board, the Proposal on the Establishment of Rules of Procedure for the Environmental, Social and Governance (ESG) Committee, the Proposal on the Renewal of the Appointment of Dahua CPAs (SGP) as the Company’s Financial Audit Institution and Internal Control Audit Institution for 2024, the Proposal on the Deposit and Utilization of the Company’s Proceeds in 2023, the Proposal on the Expected Daily Connected Transactions in 2024, the Proposal on the Remuneration of the Directors in 2023, the Proposal on the Remuneration of Senior Management of the Company for 2023, the Proposal on the Purchase of Liability Insurance by the Company for Directors, Supervisors and Senior Management, the Proposal on the Application for Comprehensive Credit Line from Banks for 2024, the Proposal on the Amount of Guarantees within the Scope of the Company’s Consolidated Statement of Account for 2024, the Proposal on the Investment Amount of Bank Wealth Management Products Purchased with Part of Idle Funds, the Proposal on Providing Financial Assistance to a Majority-owned Subsidiary and Its Subsidiaries, the Proposal on Revision of the Foreign Exchange Hedging Business Management System, the Proposal on Conducting Foreign Exchange Hedging Business in 2024, the Proposal on the First Quarterly Report for 2024, and the Proposal on the Convening of the 2023 Annual General Meeting |
| The 24th Meeting of the 5th Board of Directors | May 16, 2024 | May 17, 2024 | The meeting considered and approved the Proposal for Adjustment of Matters Relating to the 2024 Restricted Share Incentive Plan, the Proposal for Granting Restricted Share to Incentive Recipients of the First Grant under the 2024 Restricted Share Incentive Plan, the Proposal for Revision of the Company’s Relevant System, the Proposal for Revision of the Independent Director System, the Proposal for Revision of the External Guarantee System, the Proposal to Amend the Outbound Investment Management System, the Proposal to Amend the Connected Transaction System, the Proposal to Amend the Code of Conduct for Controlling Shareholders and Actual Controllers, the Proposal to Amend the Rules for the Implementation of Cumulative Voting, the Proposal to Amend the Internal Control System, the Proposal to Amend the Delegation of Authority Management System, the Proposal to Amend the Information Disclosure Management System, the Proposal to Amend the Measures for the Management of Shares Held by Directors, Supervisors and Senior Management of the Company and their Changes, the Proposal to Amend the Working System of the Secretary of the Board of Directors, the Proposal to Amend the Annual Reporting System of the Audit Committee of the Board of Directors, the Proposal to Amend the Venture Capital Management System, the Proposal to Amend the Management System for Majority-Controlled Subsidiaries, the Proposal to Amend the Management System for Raised Funds, Proposal to Amend the Internal Audit System, the Proposal to Amend the Investor Relations Management System, the Proposal to Amend the Internal Reporting System for Material Information, the Proposal to Amend the General Manager’s Work Rules, the Proposal on Revision of the Management System for Entrusted Financial Management, the Proposal on Revision of the Management System for the Registration of Informants of Insider Information, the Proposal to Amend the Criteria for Determining Internal Control Deficiencies, and |
| the Proposal to Convene the Fourth Extraordinary General Meeting for 2024 | |||
| The 25th Meeting of the 5th Board of Directors | May 24, 2024 | May 25, 2024 | The meeting considered and approved the Proposal on Changing the Registered Capital and Amending the Articles of Association of the Company and Handling the Industrial and Commercial Change Registration |
| The 26th Meeting of the 5th Board of Directors | June 6, 2024 | June 7, 2024 | The meeting considered and approved the Proposal to Cancel Certain Stock Options under the 2022 Stock Option and Restricted Share Incentive Plan, the Proposal for Repurchase and Cancellation of Certain Restricted Shares under the 2022 Stock Option and Restricted Share Incentive Plan and Adjustment of Repurchase Price, the Proposal on Changing the Registered Capital and Amending the Articles of Association of the Company and Handling the Industrial and Commercial Change Registration, and the Proposal to Convene the Fifth Extraordinary General Meeting for 2024 |
| The 27th Meeting of the 5th Board of Directors | June 17, 2024 | June 19, 2024 | The meeting considered and approved the Proposal on Use of Some Idle Proceeds for Cash Management, the Proposal on the Construction of the Second Phase of the Wet Process Lithium Battery Separator Project in Hungary, the Proposal on Adjustment of Allowances for Independent Directors, and the Proposal on Convening the Sixth Extraordinary General Meeting for 2024 |
| The 28th Meeting of the 5th Board of Directors | June 21, 2024 | June 22, 2024 | The meeting considered and approved the Proposal for Repurchase and Cancellation of Certain Restricted Shares under the 2024 Restricted Share Incentive Plan and Adjustment of Repurchase Price, the Proposal on Changing the Registered Capital and Amending the Articles of Association of the Company and Handling the Industrial and Commercial Change Registration, and the Proposal to Convene the Seventh Extraordinary General Meeting for 2024 |
| The 29th Meeting of the 5th Board of Directors | July 25, 2024 | July 26, 2024 | The meeting considered and approved the Proposal on Not Revising the Share Transfer Price Downward |
| The 30th Meeting of the 5th Board of Directors | August 27, 2024 | August 28, 2024 | The meeting considered and approved the Proposal on the Interim Report for 2024 and Its Summary, the Proposal on the Deposit and Utilization of the Proceeds in the First Half of 2024, the Proposal Regarding the Special Explanation on Funds Appropriated for Non-operating Purposes and Other Related Fund Transactions for the First Half of 2024, the Proposal on Changing the Registered Capital and Amending the Articles of Association of the Company and Handling the Industrial and Commercial Change Registration, and the Proposal to Convene the Eighth Extraordinary General Meeting for 2024 |
| The 31st Meeting of the 5th Board of Directors | September 23, 2024 | September 24, 2024 | The meeting considered and approved the Proposal on the Investment and Construction of a Lithium Battery Separator Project in Malaysia by a Majority Controlled Subsidiary |
| The 32nd Meeting of the 5th Board of Directors | October 16, 2024 | October 17, 2024 | The meeting considered and approved the Proposal on the Formulation of the Measures for the Administration of the Selection and Engagement of Accounting Firms |
| The 33rd Meeting of the 5th Board of Directors | October 29, 2024 | October 30, 2024 | The meeting considered and approved the Proposal on the Third Quarterly Report for 2024, the Proposal on Replacement of Accounting Firm, and the Proposal on Amending the Articles of Association of the Company and Handling the Industrial and Commercial Change Registration, and the Proposal to Convene the Ninth Extraordinary General Meeting for 2024 |
| The 34th Meeting of the 5th Board of Directors | December 13, 2024 | December 14, 2024 | The meeting considered and approved the Proposal on the Repurchase and Cancellation of Certain Restricted Shares, the Proposal on the Cancellation of Certain Stock Options under the 2022 Stock Option and Restricted Share Incentive Plan, the Proposal on the Amendment of the Fund Raising Management System, the Proposal on Changing the Registered Capital and Amending the Articles of Association of the Company and Handling the Industrial and Commercial Change Registration, and the Proposal to Convene the Tenth Extraordinary General Meeting for 2024 |
| The 35th Meeting of the 5th Board of Directors | December 27, 2024 | December 31, 2024 | The meeting considered and approved the Proposal on Application for a Consolidated Credit Line from Banks for 2025, the Proposal on the Amount of Guarantees within the Scope of the Company’s Consolidated Statement of Accounts for 2025, the Proposal on the Provision of Financial Assistance to |
Majority Controlled Subsidiaries, the Proposal on the Investment Amount of BankWealth Management Products Purchased with Part of Idle Funds, the Proposal onConducting Foreign Exchange Hedging Business in 2025, the Proposal to Amendthe Measures for the Management of Shares Held by Directors, Supervisors andSenior Management of the Company and Their Changes, the Proposal forEstablishment of Market Value Management System, and the Proposal forConvening the First Extraordinary Meeting of the Company for 2025
2.
Details of directors’ attendance at board meetings and shareholders’ general meetings
| Details of directors’ attendance at board meetings and shareholders’ general meetings | |||||||
| Name of director | Meetings required to attend during the Reporting Period (times) | Attendance in person (times) | Attendance by way of telecommunication (times) | Entrusted presence (times) | Absence (times) | Whether non- attendance in person for two consecutive times or not | Attendance in shareholders’ general meeting |
| Paul Xiaoming Lee | 19 | 19 | 0 | 0 | 0 | No | 11 |
| Li Xiaohua | 19 | 17 | 2 | 0 | 0 | No | 11 |
| Zhai Jun | 19 | 13 | 6 | 0 | 0 | No | 11 |
| Xiang Ming | 19 | 13 | 6 | 0 | 0 | No | 11 |
| Mai Weihua | 19 | 19 | 0 | 0 | 0 | No | 11 |
| Feng Jie | 19 | 19 | 0 | 0 | 0 | No | 11 |
| Li Zhe | 19 | 2 | 17 | 0 | 0 | No | 11 |
| Pan Siming | 19 | 2 | 17 | 0 | 0 | No | 11 |
| Zhang Jing | 19 | 2 | 17 | 0 | 0 | No | 11 |
Explanations for non-attendance in person for two consecutive times
3.
Details on directors’ objection to relevant matters
Whether Directors object to relevant matters of the Company
□Yes
?No
During the Reporting Period, no Directors objected to relevant matters of the Company.
4.
Other details about the performance of directorsWhether advice to the Company from Directors adopted?Yes □No
Explanation on advice to the Company from Directors being adopted or not adopted
During the Reporting Period, directors of the Company were diligent, conscientious, honest and self-disciplined, and faithfully performedthe responsibilities as directors. The directors carefully listened to the report of the Company’s relevant principals on project construction,development strategy, profit distribution plan, effectiveness of internal control, appointment of financial audit institutions, etc., andactively expressed opinions on the Board of Directors. Independent directors strictly abide by relevant laws and regulations, uphold theprinciples of independence, objectivity and impartiality, and faithfully perform their duties. During the Reporting Period, they activelyparticipated in the decision-making of the Board of Directors and convened special meetings of independent directors to consider majormatters such as connected transactions and financial assistance, understood the Company’s production and operation through on-site visits,discussed with other directors and management on the Company’s operation and development, and provided the Company withprofessional consultancy and advice, giving full play to their professional judgment and supervisory role, and effectively safeguarding thelawful rights and interests of the Company and its shareholders.
VII.
Details on Specialized Committees under the Board of Directors during the Reporting Period
| Committee Name | Members | Number of Meetings | Date convened | Meeting Content | Important Opinions and Suggestions Proposed | Other Duty Performance Information | Details on Objection to Matters (If any) |
| Strategy Committee of | Paul Xiaoming Lee, Li | 2 | June 11, 2024 | The meeting considered and approved the Proposal on the Construction of the | Unanimously adopted | None | None |
| the 5th Board of Directors | Xiaohua, Feng Jie, Li Zhe, Pan Siming | Second Phase of the Wet Process Lithium Battery Separator Project in Hungary | |||||
| September 20, 2024 | The meeting considered and approved the Proposal on the Investment and Construction of a Lithium Battery Separator Project in Malaysia by a Majority Controlled Subsidiary | Unanimously adopted | None | None | |||
| Audit Committee of the 5th Board of Directors | Li Zhe, Xiang Ming, Pan Siming | 5 | April 19, 2024 | The meeting considered and approved the Proposal on the 2023 Annual Report and Its Summary, the Proposal on the 2023 Internal Control Evaluation Report, the Proposal on the Renewal of the Appointment of Dahua CPAs (SGP) as the Company’s Financial Audit Institution and Internal Control Audit Institution for 2024, and the Proposal on the First Quarterly Report for 2024 | Unanimously adopted | None | None |
| August 26, 2024 | The meeting considered and approved the Proposal on the Interim Report for 2024 and Its Summary and the Proposal on the Interim Internal Audit Report for 2024 | Unanimously adopted | None | None | |||
| October 15, 2024 | The meeting considered and approved the Proposal on the Formulation of the Measures for the Administration of the Selection and Engagement of Accounting Firms, and the Proposal on the Selection and Engagement of Accounting Firms | Unanimously adopted | None | None | |||
| October 26, 2024 | The meeting considered and approved the Proposal on the Third Quarterly Report for 2024, the Proposal on the Internal Audit Report for the Third Quarter of 2024, and the Proposal on Replacement of Accounting Firm | Unanimously adopted | None | None | |||
| December 24, 2024 | The meeting considered and approved the Proposal on Conducting Foreign Exchange Hedging Business in 2025 | Unanimously adopted | None | None | |||
| The Remuneration and Appraisal Committee of the 5th Board of Directors | Li Zhe, Paul Xiaoming Lee, Zhang Jing | 4 | February 2, 2024 | The meeting considered and approved the Proposal on the Company’s 2024 Restricted Share Incentive Plan (Draft) and its Summary, and the Proposal on Formulation of Management Measures for the Implementation and Evaluation of the Company’s 2024 Restricted Share Incentive Plan | Unanimously adopted | None | None |
| April 19, 2024 | The meeting considered and approved the Proposal on the Remuneration of Directors of the Company for 2023, the Proposal on the Remuneration of Senior Management of the Company for 2023, and the Proposal on the Purchase of Liability Insurance by the Company for the Directors, Supervisors and | Unanimously adopted | None | None |
| Senior Management | |||||||
| May 6, 2024 | The meeting considered and approved the Proposal for Adjustment of Matters Relating to the 2024 Restricted Share Incentive Plan, and the Proposal for Granting Restricted Share to Incentive Recipients of the First Grant under the 2024 Restricted Share Incentive Plan | Unanimously adopted | None | None | |||
| June 11, 2024 | The meeting considered and approved the Proposal on Adjustment of Allowances for Independent Directors | Unanimously adopted | None | None | |||
| Environment, Social and Governance (ESG) Committee of the 5th Board of Directors | Li Xiaohua, Zhang Jing, Zhai Jun | 1 | April 24, 2024 | The meeting considered and approved the Proposal on the 2023 Environmental, Social and Governance Report (ESG Report) and the Proposal on the Establishment of Rules of Procedure for the Environmental, Social and Governance (ESG) Committee | Unanimously adopted | None | None |
VIII.
Details on the Work of the Supervisory Committee
Whether there were any risks in the Company according to the supervision of the Supervisory Committee during the ReportingPeriod
□Yes
?No
The Supervisory Committee raised no objection to matters under supervision during the Reporting Period.
IX.
Employees of the Company1.
Number of employees, composition by profession, and educational level
| Incumbent staff of parent company at the end of the Reporting Period (person) | 18 |
| Incumbent staff of major subsidiary at the end of the Reporting Period (person) | 8,097 |
| Total incumbent staff at the end of the Reporting Period (person) | 9,526 |
| Total staff receiving remunerations in current period (person) | 14,496 |
| Number of retirees whose expenses shall be borne by the parent company and major subsidiaries (person) | 0 |
| Composition by profession | |
| Category of profession | Number of persons by profession |
| Production staff | 7,909 |
| Sales people | 119 |
| Technician | 533 |
| Financial staff | 110 |
| Administrative staff | 855 |
| Total | 9,526 |
| Educational level | |
| Category of educational level | Number (person) |
| Doctor’s degree and above | 34 |
| Master’s degree | 247 |
| Bachelor’s degree | 1,089 |
| Junior college | 2,183 |
| Technical secondary school and below | 5,973 |
| Total | 9,526 |
2.
Remuneration policyDuring the Reporting Period, the Company observed the principles of distribution based on labor, efficiency priority combiningfairness and sustainable development, and on this basis, the Company made detailed policies in respect of staff’s remuneration, fringe
benefit, performance evaluation and other aspects. The Company built a new salary architecture featuring a wide range and“hierarchical ladder,” and implemented the two-level salary distribution mechanism. At the same time, the Company has linked thesalary and bonus to the working time at the Company, output, cost, fixed staff of every position, equipment maintenance and otherfactors, and established a reasonable evaluation mechanism. The Company has taken multifaceted measures, including diversificationof internal remuneration structure, to motivate employees and attract high-quality human resources. These measures have helped theCompany improve the overall performance, realized a sustainable development of the Company and made the Company morecompetitive in the market. The Company has actively explored and continuously deepened the income distribution system. In future,the Company will make a moderate adjustment to the remuneration system based on its performance, market situation and industrytrend.3.
Training planIn 2024, the Company kept taking in excellent talents, actively strengthened internal personnel training, established a soundtraining system and enhanced the professional development ability of employees. The Company has recorded a total of 9,036 trainingevents, including 8,905 internal training session and 131 external training sessions, and recorded a total of about 210,000 class hours.These trainings have benefited a total of about 210,000 people. These trainings cover new employee training, job skill training, riskmanagement training, quality and safety management training, food safety training, product knowledge training, anti-fraud training,general management training, certification training, safety training and reserve talent training.4.
Labor outsourcing?Applicable?Not applicable
X.
Profit Distribution and Conversion of Capital Reserve into Share Capital
Formulation, execution or adjustments of profit distribution policy, especially cash dividend policy, during the Reporting Period?Applicable □Not applicable
(I) According to the Articles of Association, the Company’s profit distribution policy is as follows:
1. The Company’s profit distribution policy shall focus on the reasonable investment return to investors, take into account thesustainable development of the Company, reflect the strong awareness of rewarding shareholders, and maintain continuity and stability.
2. Form of profit distribution, proportion of cash dividends: The Company pays dividends in cash or by shares in a positive manner.In particular, the cash dividend policy target is low normal dividend plus extra dividend. Where the Company’s audited net profit ispositive with no significant investment plan or significant cash expenditure in a year, the Company shall include the cash distribution inits profit distribution scheme for that year. The annual cash dividend of the Company shall not be less than 20% of the distributable profitrealized in the current year (excluding the undistributed profit at the beginning of the year). Where available, the Company may distributeinterim cash dividends. If the Company’s revenue grows rapidly and the Board of Directors considers that the stock price of the Companydoes not match the size of the Company’s share capital, it may plan for dividend distribution by stock while satisfying the aboverequirement for cash dividend distribution.
3. Interval for profit distribution: subject to the satisfaction of the cash dividend conditions stipulated in paragraph 4 below, theCompany shall, in principle, pay cash dividends once a year, and the Board of Directors of the Company may propose interim cashdividends based on the profit status and capital demands of the Company. The Board of Directors of the Company shall, taking intoaccount the characteristics of the industry in which it operates, its development stage, its own business model, its profitability level, andany plan of its significant capital expenditure, distinguish the following circumstances and propose a differentiated cash dividend policyin accordance with the procedures set forth in the Articles of Association of the Company:
(1) If the Company is in a maturity stage and has no plan of significant expenditure, the proportion of cash dividends in the overallprofit distribution shall account for at least 80%;
(2) If the Company is in a maturity stage and has any plan of significant expenditure, the proportion of cash dividends in the overallprofit distribution shall account for at least 40%;
(3) If the Company is in a growth stage and has any plan of significant expenditure, the proportion of cash dividends in the overallprofit distribution shall account for at least 20%;
(4) If it is difficult to distinguish the development stage of the Company and there are major capital expenditure arrangements,the profit distribution may be dealt with pursuant to the preceding item III.
4. Conditions for distributing cash dividends
(1) The remaining distributable profit of the Company is positive after the profit achieved in the current year is used for makingup for the losses of previous years and making provision for surplus reserves.
(2) The auditor of the Company issues a standard unqualified audit report on the financial statements of the Company in the currentyear.
(3) The Company has no significant investment plans or significant cash expenditure.
Significant investment plan or significant cash expenditure means that the accumulative expenditure of the Company for theproposed external investment, assets acquisition or equipment purchase within the next twelve months reaches or exceeds 30% of theCompany’s latest audited net assets and exceeds RMB300 million.
5. Conditions for distributing stock dividends: where the Company is well-run, with rapid growth of operating revenue and netprofit, and the Board of Directors believes that the Company is in the growth stage, the level of the Company’s net assets is high andthe stock price does not match the size of the share capital, it may propose a Plan for stock dividend distribution, subject to theconsideration and approval at the general meeting of shareholders of the Company. Stock dividend may be distributed separately or inconjunction with cash dividend.
6. The Company can refrain from distributing profits when any of the following circumstances exist:
(1) The most recent year’s audit report was unqualified or unqualified with a paragraph on material uncertainties related to goingconcern;
(2) Data from the most recent financial statements showed a gearing ratio of more than 70%;
(3) Net cash flows from operating activities for the period were negative;
(4) Other cases in which profit distribution is not appropriate.
(II) During the Reporting Period, the implementation of the 2023 annual equity distribution by the Company was in compliance withthe relevant provisions of the Articles of Association, with due consideration given to the reasonable demands of the investors and thelegitimate rights and interests of minority investors protected. On April 24, 2024, the Company convened the Twenty-third Meeting of theFifth Board of Directors to consider and approve the Proposal for the Profit Distribution Plan for 2023, which was implemented afterbeing considered and approved by the 2023 Annual General Meeting convened on May 16, 2024 by the Company. For details, please referto the Announcement on the Profit Distribution Plan for 2023 (Announcement No. 2024-069) and the Announcement on theImplementation of Equity Distribution for 2023 (Announcement No. 2024-119) published by the Company in the designated informationdisclosure media.
| Special explanation on cash dividend distribution policy | |
| Whether or not the policy is in compliance with the provisions of the Articles of Association or requirements of the resolutions of the general meeting of shareholders of the Company: | Yes |
| Whether or not the standard and proportion of dividends are clear and defined: | Yes |
| Whether or not the relevant decision-making process and mechanism are complete: | Yes |
| Whether or not the Independent Directors fully perform their duties and play their roles: | Yes |
| In case of not conducting cash dividend distribution, the Company shall disclose the specific reasons and the next steps to be adopted to enhance investor return level: | Not applicable |
| Whether or not minority shareholders have the opportunity to voice their opinions and demands, and whether or not their legitimate rights and interests are fully protected: | Yes |
| If the cash dividend policy is adjusted or amended, whether or not the conditions and procedures are compliant and transparent: | Not applicable |
The Company made a profit during the Reporting Period and the profit distributable to the shareholders of the parent Company waspositive, but it did not put forward a plan for cash dividend distribution to shareholders
□Applicable
?Not applicable
Profit distribution and conversion of capital reserve to share capital during the Reporting PeriodApplicable?Not applicableThere will be no cash dividends, no bonus shares, and no conversion of capital with provident fund for the year.
XI.
Implementation of any Equity Incentive Plan, Employee Stock Ownership Scheme or Other IncentiveMeasures for Employees?Applicable □Not applicable
1.
Equity Incentive
As of the end of the Reporting Period, the Company had two equity incentive plans in effect, as described below:
(I) 2022 Share Option and Restricted Share Incentive Plan
1. On January 24, 2022, the 41st meeting of the Fourth Board of Directors of the Company considered and approved the Proposalon the 2022 Stock Option and Restricted Share Incentive Plan (Draft) and its Summary, the Proposal on the Formulation of the Measuresfor the Administration of the Implementation and Evaluation of the 2022 Stock Option and Restricted Share Incentive Plan, and theProposal on Requesting the General Meeting to Authorize the Board of Directors to Handle Matters Relating to Equity Incentives. Theindependent directors expressed a concurring independent opinion with respect to the Incentive Plan and solicited proxy votes from allshareholders with respect to the Incentive Plan.
On January 24, 2022, the 35th meeting of the Fourth Supervisory Committee of the Company considered and approved the Proposalon the 2022 Stock Option and Restricted Share Incentive Plan (Draft) and its Summary, the Proposal on the Formulation of the Measuresfor the Administration of the Implementation and Evaluation of the 2022 Stock Option and Restricted Share Incentive Plan, and theProposal on Verifying the List of Incentive Recipients of the Company’s 2022 Stock Option and Restricted Share Incentive Plan.
For details, please refer to the Announcement on Resolutions of the Forty-first Meeting of the Fourth Board of Directors(Announcement No. 2022-012), the Announcement on Resolutions of the Thirty-fifth Meeting of the Fourth Supervisory Committee(Announcement No. 2022-018), and the Announcement on the 2022 Share Option and Restricted Share Incentive Plan (Draft) (Corrected)of the Company published by the Company on January 25, 2022 in the designated information disclosure media, including SecuritiesTimes, China Securities Journal, Securities Daily, Shanghai Securities News and www.cninfo.com.cn.
The Company published the names and titles of the incentive recipients under the Incentive Plan from January 26, 2022 to February6, 2022 on its intranet OA system. The Supervisory Committee of the Company did not receive any objections from any organization orindividual during the public announcement period. For details, please refer to the Supervisory Committee’s Verification Opinion on the
List of Incentive Recipients under the 2022 Stock Option and Restricted Share Incentive Plan and Explanation of Public Announcement(Announcement No. 2022-022), which was disclosed in the designated media for information disclosure on February 7, 2022.On February 14, 2022, the second extraordinary general meeting of the Company for 2022 considered and approved the Proposalon the 2022 Stock Option and Restricted Share Incentive Plan (Draft) and its Summary, the Proposal on the Formulation of the Measuresfor the Administration of the Implementation and Evaluation of the 2022 Stock Option and Restricted Share Incentive Plan, and theProposal on Requesting the General Meeting to Authorize the Board of Directors to Handle Matters Relating to Equity Incentives. TheCompany’s implementation of the 2022 Stock Option and Restricted Share Incentive Plan was approved, and the Board of Directors wasauthorized to set the grant date, to grant stock options and restricted shares to incentive recipients when they become eligible, and to handleall matters necessary for the grant. For details, please refer to the Announcement on the Resolutions of the Second Extraordinary GeneralMeeting of 2022 (Announcement No. 2022-026) disclosed by the Company on February 15, 2022 in the designated information disclosuremedia.The Company conducted a self-inspection on the trading of the Company’s shares by the persons who have knowledge of the insiderinformation of the Incentive Plan and the incentive recipients during the six months (i.e., from July 23, 2021 to January 24, 2022) prior tothe public disclosure of the draft Incentive Plan (Draft). For details, please refer to the Self-Investigation Report on the Trading of theCompany’s Shares by Incentive Recipients and Informants with Insider Information under the 2022 Stock Option and Restricted ShareIncentive Plan (Announcement No. 2022-027) disclosed by the Company in the designated information disclosure media on February 15,2022.
2. On March 7, 2022, the Company held the 43rd Meeting of the Fourth Board of Directors and the 37th Meeting of the FourthSupervisory Committee, which considered and approved the Proposal to Adjust the List of Stock Option Incentive Recipients and theNumber of Equity Granted under the 2022 Stock Option and Restricted Share Incentive Plan and the Proposal to Grant Stock Options toIncentive Recipients under the 2022 Stock Option and Restricted Share Incentive Plan. The independent directors of the Companyexpressed an independent opinion of “Agree.” The Supervisory Committee of the Company reviewed the list of incentive recipients onthe date of grant of stock options and issued a verification opinion. For details, please refer to the Announcement on Adjustment of the Listof Stock Option Incentive Recipients and the Number of Equity Granted under the 2022 Stock Option and Restricted Share Incentive Plan(Announcement No. 2022-034), the Announcement on Grant of Stock Options to Incentive Recipients under the 2022 Stock Option andRestricted Share Incentive Plan (Announcement No. 2022-035) and the Verification Opinion of the Supervisory Committee on the List ofIncentive Recipients on the Date of Grant of Stock Options under the 2022 Stock Option and Restricted Share Incentive Plan(Announcement No. 2022-037) disclosed by the Company in the designated information disclosure media on March 8, 2022.
On March 14, 2022, the Company completed the registration of stock option grants under the 2022 Stock Option and RestrictedShare Incentive Plan, granting 1,595,437 stock options to 877 incentive recipients. For details, please refer to the Announcement onCompletion of Registration of Stock Option Grants under the 2022 Stock Option and Restricted Share Incentive Plan (Announcement No.2022-040) disclosed by the Company on March 15, 2022 in the designated information disclosure media.
3. Pursuant to the authorization of the Board of Directors by the General Meeting in the Proposal on Requesting the GeneralMeeting to Authorize the Board of Directors to Handle Matters Relating to the Equity Incentive, which was considered and approved bythe Second Extraordinary General Meeting of 2022, on May 9, 2022, at the 49th meeting of the 4th Board of Directors and the 42ndmeeting of the 4th Supervisory Committee of the Company, the Proposal on the Adjustment of Matters Relating to Restricted Sharesunder the 2022 Stock Option and Restricted Share Incentive Plan and the Proposal on the Granting of Restricted Shares to IncentiveRecipients under the 2022 Stock Option and Restricted Share Incentive Plan were considered and approved. The independent directors ofthe Company expressed an independent opinion of “Agree.” The Supervisory Committee of the Company reviewed the list of incentiverecipients on the date of grant of restricted shares and issued a verification opinion. For details, please refer to the Announcement RegardingAdjustment of Matters Related to Restricted Shares under the 2022 Stock Option and Restricted Share Incentive Plan (Announcement No.2022-085), the Announcement on Grant of Restricted Shares to Incentive Recipients under the 2022 Stock Option and Restricted ShareIncentive Plan (Announcement No. 2022-086), and the Verification Opinion of the Supervisory Committee on the List of IncentiveRecipients on the Date of Grant of Restricted Shares under the 2022 Stock Option and Restricted Share Incentive Plan (AnnouncementNo. 2022-087) disclosed by the Company on May 10, 2022 in the designated information disclosure media.
On May 23, 2022, the Company completed the registration of restricted share grants under the 2022 Stock Option and RestrictedShare Incentive Plan, granting 1,595,437 restricted shares to 826 incentive recipients. For details, please refer to the Announcement onCompletion of Registration of Restricted Share Grants under the 2022 Stock Option and Restricted Share Incentive Plan (AnnouncementNo. 2022-098) disclosed by the Company on May 24, 2022 in the designated information disclosure media.
4. On June 25, 2023, pursuant to the authorization of the second extraordinary meeting of 2022, the seventh meeting of the FifthBoard of Directors and the seventh meeting of the Fifth Supervisory Committee of the Company considered and approved the Proposalon the Compliance with the Exercise Conditions of the First Exercise Period of the Company’s 2022 Stock Option and Restricted ShareIncentive Plan for Stock Options, and the Proposal to Adjust the Exercise Prices of Stock Options and Cancel Certain Stock Options underthe 2022 Stock Option and Restricted Share Incentive Plan, approving to cancel 123,477 stock options granted but not yet authorized forexercise for 90 persons. The independent directors of the Company expressed an independent opinion of “Agree.” For details, please referto the Announcement on Adjustment of Stock Option Exercise Prices and Cancellation of Certain Stock Options under the 2022 StockOption and Restricted Share Incentive Plan (Announcement No. 2023-102), and the Announcement Regarding Compliance with ExerciseConditions for the First Exercise Period of Stock Options under the Company’s 2022 Stock Option and Restricted Share Incentive Plan(Announcement No. 2023-103) disclosed by the Company on June 26, 2023 in the designated information disclosure media.
On July 3, 2023, the Company’s cancellation of certain stock options was completed upon the examination and confirmation byCSDC Shenzhen Branch, and the total number of stock options cancelled this time was 123,477 units. For details, please refer to theAnnouncement on the Completion of Cancellation of Certain Stock Options under the Company’s 2022 Stock Option and Restricted ShareIncentive Plan (Announcement No. 2023-116) disclosed by the Company on July 4, 2023 in the designated information disclosure media.
5. On June 25, 2023, the seventh meeting of the Fifth Board of Directors and the seventh meeting of the Fifth Supervisory Committeeof the Company considered and approved the Proposal on the Repurchase and Cancellation of Certain Restricted Shares under the 2022
Stock Option and Restricted Share Incentive Plan and the Proposal Regarding the First Unlocking Period of Restricted Shares under theCompany’s 2022 Stock Option and Restricted Stock Incentive Plan Meeting the Conditions for Unlocking. The conditions for unlockingthe restricted shares during the first unlocking period of the Company’s 2022 Stock Option and Restricted Share Incentive Plan weresatisfied. It was approved to unlock 598,537 restricted shares held by 765 incentive recipients; and the Company was approved torepurchase and cancel 88,630 restricted shares held by 68 incentive recipients in aggregate. The independent directors of the Companyexpressed an independent opinion of “Agree.” For details, please refer to the Announcement on Repurchase and Cancellation of CertainRestricted Shares under the 2022 Stock Option and Restricted Share Incentive Plan (Announcement No. 2023-104) and the AnnouncementRegarding the First Unlocking Period of Restricted Shares under the Company’s 2022 Stock Option and Restricted Stock Incentive PlanMeeting the Conditions for Unlocking (Announcement No. 2023-105) disclosed by the Company on June 26, 2023 in the designatedinformation disclosure media. The aforesaid repurchase and cancellation was considered and approved by the second extraordinary generalmeeting of the Company for 2023.On June 30, 2023, the Company disclosed the Suggestive Announcement on the Listing and Circulation of Shares in the FirstUnlocking Period of Restricted Shares under the Company’s 2022 Stock Option and Restricted Share Incentive Plan (Announcement No.2023-114) in the designated information disclosure media. The 598,537 restricted shares unlocked during the first unlocking period of theIncentive Plan were listed on July 3, 2023.On July 20, 2023, the Company disclosed the Announcement on the Completion of the Repurchase and Cancellation of CertainRestricted Shares under the 2022 Stock Option and Restricted Share Incentive Plan (Announcement No. 2023-123) in the designatedinformation disclosure media. The Company completed the procedures for the repurchase and cancellation of 88,630 restricted shares atthe CSDC Shenzhen Branch.
6. On March 18, 2024, the twenty-first meeting of the Fifth Board of Directors and the seventeenth meeting of the Fifth SupervisoryCommittee of the Company considered and approved the Proposal on Cancellation of Part of the Stock Options under the 2022 StockOption and Restricted Share Incentive Plan, approving the Company to cancel 584,593 stock options granted to 794 incentive recipientsbut not exercised as of the expiration of the first exercise period. For details, please refer to the Announcement on Cancellation of CertainStock Options under the 2022 Stock Option and Restricted Share Incentive Plan (Announcement No. 2024-047) disclosed by the Companyon March 19, 2024 in the designated information disclosure media.
On March 26, 2024, the Company disclosed the Announcement on the Completion of Cancellation of Certain Stock Options underthe 2022 Stock Option and Restricted Share Incentive Plan (Announcement No. 2024-050) in the designated information disclosure media.The Company completed the procedures for the cancellation of 584,593 stock options at CSDC Shenzhen Branch.
7. On June 6, 2024, the twenty-sixth meeting of the Fifth Board of Directors and the twenty-second meeting of the Fifth SupervisoryCommittee of the Company considered and approved the Proposal on the Repurchase and Cancellation of Certain Restricted Shares andAdjustment of Repurchase Prices under the 2022 Stock Option and Restricted Share Incentive Plan and the Proposal on the Cancellationof Certain Stock Options under the 2022 Stock Option and Restricted Share Incentive Plan. It was approved to repurchase and cancel anaggregate of 166,541 restricted shares held by 100 incentive recipients who have separated or demoted, and to cancel an aggregate of152,320 stock options held by 103 incentive recipients who have separated or demoted. As the performance assessment requirements atthe corporate level for the second unlocking period/exercise period of the Company’s 2022 Stock Option and Restricted Share IncentivePlan were not met, it was agreed to repurchase and cancel an aggregate of 365,858 restricted shares held by 665 incentive recipients, andto cancel an aggregate of 362,513 stock options that had been granted to 691 incentive recipients but had not yet been exercised. Meanwhile,in view of the Company’s 2022 annual equity distribution, 2023 semi-annual equity distribution and 2023 annual equity distribution, therepurchase price of the Company’s restricted shares was adjusted accordingly in accordance with the relevant regulations and theCompany’s 2022 Stock Option and Restricted Share Incentive Plan. For details, please refer to the Announcement on Cancellation ofCertain Stock Options under the 2022 Stock Option and Restricted Share Incentive Plan (Announcement No. 2024-127) andAnnouncement on the Repurchase and Cancellation of Certain Restricted Shares under the 2022 Stock Option and Restricted StockIncentive Plan and Adjustment of the Repurchase Price (Announcement No. 2024-128) disclosed by the Company on June 7, 2024 in thedesignated information disclosure media. The restricted share repurchase and cancellation was considered and approved by the fifthextraordinary general meeting of the Company for 2024.
On June 18, 2024, the Company disclosed the Announcement on the Completion of Cancellation of Certain Stock Options under the2022 Stock Option and Restricted Share Incentive Plan (Announcement No. 2024-133) in the designated information disclosure media.The Company completed the procedures for the cancellation of 514,833 stock options at CSDC Shenzhen Branch.On September 10, 2024, the Company disclosed the Announcement on the Completion of the Repurchase and Cancellation of CertainRestricted Shares (Announcement No. 2024-202) in the designated information disclosure media. The Company completed the proceduresfor the repurchase and cancellation of 532,399 restricted shares at the CSDC Shenzhen Branch.
8. On December 13, 2024, at the 34th meeting of the Fifth Board of Directors and the 28th meeting of the Fifth SupervisoryCommittee of the Company, the Proposal on the Repurchase and Cancellation of Certain Restricted Shares and the Proposal on theCancellation of Certain Stock Options under the 2022 Stock Option and Restricted Share Incentive Plan were considered and approved.It was approved to repurchase and cancel an aggregate of 18,638 restricted shares held by 37 departed incentive recipients, and to cancelan aggregate of 18,638 stock options granted but not yet authorized for exercise. For details, please refer to the Announcement onRepurchase and Cancellation of Certain Restricted Shares (Announcement No. 2024-243) and the Announcement on Cancellation ofCertain Stock Options under the 2022 Stock Option and Restricted Stock Incentive Plan (Announcement No. 2024-244) disclosed by theCompany on December 14, 2024 in the designated information disclosure media. The restricted share repurchase and cancellation wasconsidered and approved by the tenth extraordinary general meeting of the Company for 2024.
On January 10, 2025, the Company disclosed the Announcement on the Completion of the Cancellation of Certain Stock Optionsunder the 2022 Stock Option and Restricted Share Incentive Plan (Announcement No. 2025-009) in the designated information disclosuremedia. The Company completed the procedures for the cancellation of 18,638 stock options at CSDC Shenzhen Branch.
On March 22, 2025, the Company disclosed the Announcement on the Completion of Repurchase and Cancellation of CertainRestricted Shares (Announcement No. 2025-037) in the designated information disclosure media. The Company completed the proceduresfor the repurchase and cancellation of 18,638 restricted shares at CSDC Shenzhen Branch.(II) 2024 restricted share incentive plan
1. On February 2, 2024, the 19th meeting of the Fifth Board of Directors of the Company considered and approved the Proposal onthe 2024 Restricted Share Incentive Plan (Draft) and its Summary, the Proposal on the Formulation of the Measures for the Administrationof the Implementation and Evaluation of the 2024 Restricted Share Incentive Plan, and the Proposal on Requesting the General Meetingto Authorize the Board of Directors to Handle Matters Relating to Equity Incentives. The relevant proposals were considered and approvedby the Remuneration and Appraisal Committee of the Board of Directors of the Company and the Special Meeting of IndependentDirectors.
On February 2, 2024, the 15th meeting of the Fifth Supervisory Committee of the Company considered and approved the Proposalon the 2024 Restricted Share Incentive Plan (Draft) and Its Summary, the Proposal on the Formulation of the Measures for theAdministration of the Implementation and Evaluation of the 2024 Restricted Share Incentive Plan, and the Proposal on Verifying the Listof Incentive Recipients of the Company’s 2024 Restricted Share Incentive Plan. The Supervisory Committee of the Company verified andissued a verification opinion on matters relating to the Incentive Plan.
For details, please refer to the Announcement on Resolutions of the 19th Meeting of the Fifth Board of Directors (AnnouncementNo. 2024-019), the Announcement on Resolutions of the 15th Meeting of the Fifth Supervisory Committee (Announcement No. 2024-024),and the Announcement on the 2024 Restricted Share Incentive Plan of Yunnan Energy New Material Co., Ltd (Draft) published by theCompany on February 3, 2024 in the designated information disclosure media.
From February 6, 2024 to February 16, 2024, the names and positions of certain incentive recipients of the initial grant under theRestricted Share Incentive Plan were posted on the Company’s bulletin board. During the public announcement period, the SupervisoryCommittee did not receive any objections to the list of incentive recipients under the Restricted Share Incentive Plan. On February 20,2024, the Company disclosed in the designated information disclosure media the Verification Opinion of the Supervisory Committee onthe List of Incentive Recipients of the 2024 Restricted Share Incentive Plan and Explanation of Public Announcement (Announcement No.2024-034). On February 27, 2024, the Company disclosed the Self-Investigation Report on the Trading of the Company’s Shares byIncentive Recipients and Informants with Insider Information under the Restricted Share Incentive Plan (Announcement No. 2024-037).
On February 26, 2024, the first extraordinary general meeting of the Company for 2024 considered and approved the Proposal onthe 2024 Restricted Share Incentive Plan (Draft) and Its Summary, the Proposal on the Formulation of the Measures for the Administrationof the Implementation and Evaluation of the 2024 Restricted Share Incentive Plan, and the Proposal on Requesting the General Meetingto Authorize the Board of Directors to Handle Matters Relating to Equity Incentives. For details, please refer to the Announcement on theResolutions of the First Extraordinary General Meeting for 2024 (Announcement No. 2024-038) disclosed by the Company on February27, 2024 in the designated information disclosure media.
2. Pursuant to the authorization of the Board of Directors by the General Meeting in the Proposal on Requesting the GeneralMeeting to Authorize the Board of Directors to Handle Matters Relating to the Equity Incentive, which was considered and approved bythe First Extraordinary General Meeting of 2024, on May 16, 2024, at the 24th meeting of the 5th Board of Directors and the 20th meetingof the 5th Supervisory Committee of the Company, the Proposal on the Adjustment of Matters Relating to Restricted Shares under the2024 Restricted Share Incentive Plan and the Proposal on the Granting of Restricted Shares to Incentive Recipients under the 2024Restricted Share Incentive Plan were considered and approved. The Supervisory Committee of the Company verified the foregoing,reviewed the list of incentive recipients on the first grant date and expressed its verification opinion. Grandall Law Firm issued a legalopinion. For details, please refer to the Announcement Regarding Adjustment of Matters Related to Restricted Shares under the 2024Restricted Share Incentive Plan (Announcement No. 2024-105), the Announcement on Grant of Restricted Shares to Incentive Recipientsunder the 2024 Restricted Share Incentive Plan (Announcement No. 2024-106), and the Verification Opinion of the SupervisoryCommittee on the List of Incentive Recipients on the Date of Grant of Restricted Shares under the 2024 Restricted Share Incentive Plan(Announcement No. 2024-109) disclosed by the Company on May 17, 2024 in the designated information disclosure media.
On May 22, 2024, the Company completed the registration of the initial grant of restricted shares under the 2024 Restricted ShareIncentive Plan, granting 5,034,316 restricted shares to 140 incentive recipients. For details, please refer to the Announcement onCompletion of Registration of the First Grant under the 2024 Restricted Share Incentive Plan (Announcement No. 2024-113) disclosedby the Company on May 23, 2024 in the designated information disclosure media.
3. On June 21, 2024, at the twenty-eighth meeting of the Fifth Board of Directors and the twenty-fourth meeting of the FifthSupervisory Committee, the Proposal on the Repurchase and Cancellation of Certain Restricted Shares under the 2024 Restricted StockIncentive Plan and Adjustment of the Repurchase Price was considered and adopted, approving to repurchase and cancel the 40,700restricted shares held by the two separated incentive recipients. Meanwhile, in view of the Company’s 2023 annual equity distribution,the repurchase price of the Company’s restricted shares was adjusted accordingly in accordance with relevant regulations and theCompany’s 2022 Stock Option and Restricted Share Incentive Plan. For details, please refer to the Announcement on Repurchase andCancellation of Certain Restricted Shares under the 2024 Restricted Share Incentive Plan and Adjustment of Repurchase Price(Announcement No. 2024-143) disclosed by the Company on June 22, 2024 in the designated information disclosure media. The matterwas approved by the seventh extraordinary general meeting of the Company in 2024.
On September 10, 2024, the Company disclosed the Announcement on the Completion of the Repurchase and Cancellation ofCertain Restricted Shares (Announcement No. 2024-202) in the designated information disclosure media. The Company completed theprocedures for the repurchase and cancellation of 40,700 restricted shares at the CSDC Shenzhen Branch.
4. On December 13, 2024, the Proposal on the Repurchase and Cancellation of Certain Restricted Shares was considered andapproved at the thirty-fourth meeting of the Fifth Board of Directors and the twenty-eighth meeting of the Fifth Supervisory Committeeof the Company. It was agreed that a total of 45,600 restricted shares held by nine departed incentive recipients would be repurchased andcancelled. For details, please refer to the Announcement on Repurchase and Cancellation of Certain Restricted Shares (Announcement
No. 2024-243) disclosed by the Company on December 14, 2024 in the designated information disclosure media. The matter was approvedby the tenth extraordinary general meeting of the Company in 2024.On March 22, 2025, the Company disclosed the Announcement on the Completion of Repurchase and Cancellation of CertainRestricted Shares (Announcement No. 2025-037) in the designated information disclosure media. The Company completed the proceduresfor the repurchase and cancellation of 45,600 restricted shares at CSDC Shenzhen Branch.
Equity incentives granted to the Company’s Directors and senior management?Applicable □Not applicable
Unit: share
| Name | Post | The number of stock options held at the beginning of the year | The number of newly granted stock options during the Reporting Period | The number of exercisable options during the Reporting Period | The number of exercised options during the Reporting Period | The exercise price of the number of options exercised during the Reporting Period (RMB per share) | The number of stock options held at the end of the period | The market price at the end of the Reporting Period (RMB per share) | The number of restricted shares held at the beginning of the period | The number of unlocked shares during the current period | The number of newly granted restricted shares during the Reporting Period | The grant price of restricted shares (RMB per share) | The number of restricted shares held at the end of the period |
| Ma Weihua | Director | 0 | 0 | 0 | 0 | 0 | 0 | 30,000 | 24.59 | 30,000 | |||
| Yu Xue | Board Secretary | 40,000 | 0 | 16,000 | 0 | 12,000 | 24,000 | 0 | 60,000 | 24.59 | 72,000 | ||
| Li Jian | CFO | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 60,000 | 24.59 | 60,000 | ||
| Total | -- | 40,000 | 0 | 16,000 | 0 | -- | 12,000 | -- | 24,000 | 0 | 150,000 | -- | 162,000 |
| Remarks (if any) | As the assessment requirements at the corporate level during the second unlocking period of the Company’s 2022 Stock Option and Restricted Share Incentive Plan were not met, 12,000 restricted shares held by Yu Xue were repurchased and canceled during the Reporting Period. During the Reporting Period, the Company implemented the 2024 Restricted Stock Plan with a grant price of RMB24.59 per share. In view of the Company’s completion of the 2023 annual equity distribution on June 3, 2024, in accordance with the Administrative Measures for Equity Incentives of Listed Companies and the relevant provisions of the Company’s 2024 Restricted Share Incentive Plan, the relevant grant price was adjusted to RMB23.0474 per share accordingly as at the end of the Reporting Period. | ||||||||||||
Evaluation mechanism and incentive of senior managementThe Company has established a complete performance evaluation system, and the income of senior management is linked to the overall operating performance. During theReporting Period, the Board of Directors of the Company evaluated the work performance of senior management according to the annual operating performance of the Company, thejob responsibilities of senior management and the completion of annual work objectives, and prepared incentive compensation plans for senior management according to the evaluationresults. Such plans were submitted for review in accordance with regulations. The Company encouraged senior management with the equity incentive plan. The Company formulatedimplementation check-up management measures for all of the Company’s equity incentive plans. The Company’s check-up indicators are related to the Company’s medium and long-term development strategies and annual business objectives. According to the relevant check-up methods, the Company conducted individual level performance assessment on theincentive recipients according to the key work performance, work ability, work attitude and other indicators, and finally determined the number of restricted shares or options that shallbe unlocked by the incentive recipients based on the Company level and individual level assessment results.2.
Implementation of Employee Stock Ownership Plan
□Applicable
?Not applicable
3.
Other Employee Incentives
□Applicable
?Not applicable
XII.
Internal Control System Construction and Implementation during the Reporting Period
1.
Internal control construction and implementationDuring the Reporting Period, the Company, in accordance with the Basic Norms for the Internal Control of Enterprises and relatedguidelines, updated and perfected its internal control system in due time, and established an internal control system featuring scientificdesign, simplicity, applicability, and effective running. The Audit Committee of the Board of Directors and internal audit departmentjointly formed the Company’s risk management and internal control organization system to supervise and evaluate the internal controlmanagement of the Company. Through the operation, analysis and evaluation of the internal control system, the Company effectivelyprevented risks in operational management and promoted the fulfillment of internal control objectives.2.
Details on material weakness in the Company’s internal control during the Reporting Period
□Yes
?No
XIII.
The Company’s Management and Control of Subsidiaries during the Reporting Period
The Company will continue to exercise management and supervision over the standardized operations, information disclosure,financial matters, and business operations of its subsidiaries in accordance with relevant laws, regulations, and institutional requirementssuch as the Company Law and the Articles of Association. This includes timely monitoring of significant events such as the financialstatus of subsidiaries to ensure lawful and compliant operations, asset security, the authenticity and completeness of financial reportsand related information, thereby further enhancing the subsidiaries’ operational management and risk management capabilities.
XIV.
Internal Control Assessment Report or Internal Control Audit Report
1.
Assessment report on internal control
| Disclosure date of the assessment report on internal control | April 23, 2025 | |
| Disclosure index of the assessment report on internal control | 2024 Assessment Report on Internal Control disclosed at www.cninfo.com.cn on April 23, 2025 | |
| Ratio of total assets of the unit included in the assessment scope to the total assets on the Company’s consolidated financial statements | 100.00% | |
| Ratio of operating revenue of the unit included in the assessment scope to the operating revenue on the Company’s consolidated financial statements | 100.00% | |
| Defect identification criteria | ||
| Type | Financial report | Non-financial report |
| Qualitative criteria | General defects: There is little possibility that a failure to take any action will result in potential misstatement, economic loss or unachieved business objectives. Material defects: There is some possibility that a failure to take any action will result in potential misstatement, economic loss or unachieved business objectives. Major defects: There is the possibility that a failure to take any action will result in potential misstatement, economic loss or unachieved business objectives. | General defects: There is little possibility that a failure to take any action will result in potential misstatement, economic loss or unachieved business objectives. Material defects: There is some possibility that a failure to take any action will result in potential misstatement, economic loss or unachieved business objectives. Major defects: There is the possibility that a failure to take any action will result in potential misstatement, economic loss or unachieved business objectives. |
| Quantitative criteria | General defects: < 0.25% of Total Assets, < 0.5% of Operating revenue; material defects: ≥ 0.25% of Total Assets and < 1% of Total Assets, ≥ 0.5% of Operating revenue and < 1.5% of Operating revenue; major defects: ≥ 1% of Total Assets, ≥ 1.5% of Operating revenue. | General defects: < 0.25% of Total Assets, < 0.5% of Operating revenue; material defects: ≥ 0.25% of Total Assets and <1% of Total Assets, ≥ 0.5% of Operating revenue and < 1.5% of Operating revenue; major defects: ≥ 1% of Total Assets, ≥ 1.5% of Operating revenue. |
| Number of major defects in the financial report | 0 | |
| Number of major defects in the non-financial report | 0 | |
| Number of material defects in the financial report | 0 | |
| Number of material defects in the non-financial report | 0 | |
2.
Audit report on internal control
?Applicable □Not applicable
| Audit opinion in the audit report on internal control | |
| In our opinion, Energy Technology maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, in accordance with the Basic Norms for the Internal Control of Enterprises and related provisions. | |
| Disclosure of the audit report on internal control | Disclosed |
| Disclosure date of the full audit report on internal control | April 23, 2025 |
| Disclosure index of the audit report on internal control | The Audit Report on Internal Control of Yunnan Energy New Material Co., Ltd. (Rong Cheng Shen Zi [2025] No. 100Z2647) disclosed by the Company at www.cninfo.com.cn on April 23, 2025 |
| Type of opinion in the audit report on internal control | Unqualified opinion |
| Whether there was any major defect in the non-financial report | No |
Whether the accounting firm issued a qualified audit report on internal control or not
□Yes
?No
Whether the audit report on internal control issued by the accounting firm is consistent with the self-assessment report from theBoard of Directors or not?Yes □No
XV.
Rectification of Problems Found in Self-Inspection of the Special Operation on Improving CorporateGovernance of Listed CompaniesNot applicable
Section 5 Environment and Social ResponsibilityI. Major Environmental Protection IssuesWhether the listed company and its subsidiaries fell into major pollutant-discharge units published by the environmental protection authorities?Yes □NoEnvironmental protection related policies and industry standards
The Company strictly abided by the Environmental Protection Law of the People’s Republic of China, the Environmental Impact Assessment Law of the People’s Republic of China,the Water Law of the People’s Republic of China, the Energy Conservation Law of the People’s Republic of China, the Decision of the State Council on Strengthening Energy Conservation(Guo Fa [2006] No. 28) and other national and local laws and regulations in its daily production and operation. The Group discharges waste gas, waste water and solid waste in accordancewith the Integrated Emission Standard of Air Pollutants (GB 16297-1996), the Discharge Standard of Pollutants for Synthetic Resin Industry (GB31572-2015), the Integrated SewageDischarge Standard (GB 8978-1996) and the National Catalog of Hazardous Wastes (2021 Edition).
Environmental protection administrative permitsThe Company and its subsidiaries have completed the Pollutant Discharge Permit and other relevant environmental protection qualification procedures in accordance with the relevant lawsand regulations.Industry emission standards and specific conditions of pollutant emission involved in production and operation activities
| Name of Company or Subsidiary | Category of the Major Pollutants and Specific Pollutants | Name of the Major Pollutants and Specific Pollutants | Discharge Method | Number of Discharge Outlet | Distribution of Discharge Outlets | Concentration/Intensity of the Discharge | Pollutant Discharge Standards Implemented | Total Discharge (t/a) | Total Discharge Approved (t/a) | Excess Discharge |
| Suzhou GreenPower | Exhaust gas | Non-methane total hydrocarbon | Organized emission | 12 | Factory area | 0.95mg/m? | Discharge Standard of Pollutants for Synthetic Resin Industry (GB31572-2015) | 0.742 | 14.408 | Nil |
| Particulate matter | 7 | 2.2mg/m? | Emission Standard of Air Pollutants for Boilers (GB 32/4385-2022) | 1.022 | 2.9199 | |||||
| Sulfur dioxide | 7 | 3mg/m? | 2.316 | 3.9009 | ||||||
| Nitrogen oxide | 7 | 25mg/m? | 7.137 | 8.0227 | ||||||
| Carrene | 5 | 3mg/m? | Integrated Emission Standard of Air Pollutants (DB 32/4041-2021) | 3.084 | 15.242 | |||||
| Shanghai Energy | Solid waste | Waste paraffin oil | Handled by | / | Hazardous | / | National Catalog of | 29.51 | 100 | Nil |
| Waste oil | qualified disposal units | waste warehouse | Hazardous Wastes (2021 Edition) | 5.63 | 9.7 | |||||
| Waste oil film | 0.11 | 25 | ||||||||
| Waste activated carbon | 7.16 | 40.0 | ||||||||
| Waste packaging materials, adsorption medium | 7.91 | 10 | ||||||||
| Waste clay | 215.25 | 290.0 | ||||||||
| Waste adhesive bucket | 0.00 | 2 | ||||||||
| Laboratory waste | 7.53 | 15 | ||||||||
| Chongqing Energy | Solid waste | Waste clay | Handled by qualified disposal units | / | Hazardous waste warehouse | / | National Catalog of Hazardous Wastes (2021 Edition) | 638.32 | 1142.36 | Nil |
| Waste white oil | 22.92 | 5162.1 | ||||||||
| Waste motor oil | 2.765 | 4.5 | ||||||||
| Waste activated carbon | 27.93 | 86.34 | ||||||||
| Waste filter screen | 2.3 | 3 | ||||||||
| Jiangxi Tonry | Waste water | Ammonia nitrogen | Organized emission | 1 | Factory area | 4.80mg/L | Discharge Standard of Pollutants for Synthetic Resin Industry (GB31572-2015) | 0.2145 | 0.58 | Nil |
| Chemical oxygen demand (COD) | 37mg/L | Integrated Sewage Discharge Standard (GB 8978-1996) | 1.6531 | 4.44 | ||||||
| Exhaust gas | Particulate matter | Organized emission | 19 | Factory area | 7mg/m3 | Emission Standard of Air Pollutants for Boilers (GB 13271-2014) | / | / | Nil | |
| Sulfur dioxide | 1.5mg/m3 | / | / | |||||||
| Nitrogen oxide | 35.8mg/m3 | 18.018 | 89.8 | |||||||
| TVOC | Organized emission | 33 | Factory area | 6.74mg/m3 | Emission Standard of Volatile Organic Compounds – Part 4: Plastic Manufacturing Industry (DB 361101.4-2019), Integrated Emission Standard of Air Pollutants (DB 31/933-2015) | 32.1046 | 36.84 | Nil | ||
| Solid waste | Waste clay | Handled by | / | Hazardous | / | National Catalog of | 893.080 | / | Nil |
| Waste activated carbon | qualified disposal units | waste warehouse | Hazardous Wastes (2021 Edition) | 120.5278 | ||||||
| Waste paraffin oil | 110.4318 | |||||||||
| Waste containing paraffin oil (waste residue) | 1.6122 | |||||||||
| Waste filter cartridge | 0.3396 | |||||||||
| Wuxi Energy | Waste water | Chemical oxygen demand (COD) | Organized emission | 2 | Factory area | 19mg/L | Discharge Standard of Pollutants for Synthetic Resin Industry (GB31572-2015) | 2.42 | 31.2572 | Nil |
| Petroleum | 0.29mg/L | 0.0288 | 0.0892 | |||||||
| Total phosphorus | 0.16mg/L | 0.022 | 0.2652 | |||||||
| Exhaust gas | Particulate matter | Organized emission | 11 | Factory area | 2.3mg/m3 | Emission Standard of Air Pollutants for Boilers (DB/324385-2022) | 0.0322 | 2.5372 | Nil | |
| Sulfur dioxide | / | 0.0515 | 3.36 | |||||||
| Nitrogen oxide | 36.9mg/m3 | 3.7637 | 5.88 | |||||||
| Carrene | 16.5mg/m3 | Integrated Emission Standard of Air Pollutants (DB 32/4041-2021) 12 | 2.1052 | 49.6845 | ||||||
| Non-methane total hydrocarbon | 7mg/m3 | Discharge Standard of Pollutants for Synthetic Resin Industry (GB31572-2015) | 0.12344 | 0.224 | ||||||
| Solid waste | Sludge (containing oil) | Handled by qualified disposal units | / | Hazardous waste warehouse | / | National Catalog of Hazardous Wastes (2021 Edition) | 3.98 | 4 | Nil | |
| Waste clay | 590.4 | 600 | ||||||||
| Waste motor oil | 3.9 | 4 | ||||||||
| Waste filter screen | 7.37 | 10 | ||||||||
| Waste white oil | 88.5 | 90 | ||||||||
| Waste thermal oil | 5.3 | 50 | ||||||||
| Waste containing paraffin oil, waste residue | 0.5 | 10 | ||||||||
| Waste activated carbon (900-039-49) | 15.07 | 35 | ||||||||
| Waste packaging | 82.844 | 140.4 |
| bucket | |||
| Damaged waste packaging bucket | 0.6 | 12.7 | |
| Waste activated carbon (900-041-49) | 3.07 | 35 |
Disposal of PollutantsThe Company attaches great importance to the conservation of natural resources and strictly complies with the EnvironmentalProtection Law of the People’s Republic of China, the Environmental Impact Assessment Law of the People’s Republic of China, theWater Law of the People’s Republic of China, the Energy Conservation Law of the People’s Republic of China, the Law of the People’sRepublic of China on the Prevention and Control of Atmospheric Pollution, the Law of the People’s Republic of China on the Preventionand Control of Water Pollution, the Law of the People’s Republic of China on the Prevention and Control of Environmental Pollutionby Solid Waste, and other laws and regulations on the prevention and control of environmental pollution. We have formulated theCompilation of Environmental and Hazardous Waste Management Policies, the Management Regulations of Solid Waste, Waste Gas,Waste Water and Noise, the Responsibility System for Prevention and Control of Environmental Pollution by Solid Waste, Preventionand Protection of Pollution to Soil and Underground Water and other relevant policies. The Safety and Environmental ProtectionDepartment of each company conducts internal supervision, management and feedback on the discharge of exhaust gas, wastewater andwaste based on the standards set by local environmental protection authorities. Meanwhile, we regularly engage qualified third partyinspection units for inspections and accept external inspections from time to time to ensure that our emissions meet the relevant standards.
1. Exhaust Gas Emission
The Company strictly abides by the Law of the People’s Republic of China on the Prevention and Control of AtmosphericPollution, the Regulation of Shanghai City on the Prevention and Control of Atmospheric Pollution, the Implementation Scheme forAction Plan of Jiangsu Province on the Prevention and Control of Atmospheric Pollution and other national and local laws andregulations on exhaust gas emission management, and adheres to standards on emissions. The Company has formulated relevantexhaust gas management policies, including the Exhaust Gas Emission Management Policy, the Exhaust Gas Absorption SystemOperating Procedures, etc., and strictly implements them. We require that the exhaust gas absorption facilities and exhaust gastreatment systems of each workshop must operate normally, and we carry out regular repair and maintenance of related equipmentand adds relevant equipment as needed in a timely manner.The exhaust gas generated by the Company mainly comes from workshop exhaust gas and boiler exhaust gas, including VOCs(volatile organic compounds) emissions and nitrogen oxide emissions, among which VOCs mainly come from workshop exhaust gas,and nitrogen oxides mainly come from boiler exhaust gas. The Company continues to invest in waste gas recovery and treatmentdevices to reduce emissions. The VOCs exhaust gas online monitoring system has also been put into operation in certain factories ofWuxi Energy, Jiangxi Tonry, Yunnan Hongchuang, etc. and will become available in additional areas in the future, so that we willgradually achieve real- time monitoring of emission concentration. Also, Zhuhai Energy installed water spraying and activated carbonadsorption devices for lowering VOCs emission concentration. In addition, each base of the Company has dedicated personnel whoare responsible for safety and environmental protection work and regularly conduct on-site supervision and inspection to ensure thenormal running of the environmental protection facilities. In accordance with the requirements of relevant national laws andregulations, the Company has also engaged qualified third parties to conduct regular and ongoing monitoring of various indicators ofexhaust emissions.
2. Waste Water Discharge
The Company strictly complies with the Law of the People’s Republic of China on the Prevention and Control of Water Pollution,the Integrated Sewage Discharge Standards (Shanghai Landmarks), the Work Plan of Jiangsu Province on the Prevention and Controlof Water Pollution and other national and local laws and regulations on wastewater discharge management, and adheres to standardson emissions. Wastewater discharged by the Company includes domestic sewage and wastewater from other production activities.Production wastewater is treated by sewage treatment facilities in compliance with the relevant regulations based on the productionpractices in each region where we operate, and then reused or discharged into the municipal sewage pipe network. For domesticsewage, the Company engages qualified third parties for regular monitoring. Take Shanghai Energy as an example. Shanghai Energyhas a sewage treatment station, and the wastewater is discharged to the municipal pipe network after primary precipitation, secondaryprecipitation, anaerobism and oxygen consumption and filtration treatment. We conduct strict and effective internal monitoring on thecompliance of wastewater discharge to make sure it has no impact on the surrounding surface water by setting up relevant personnelto manually carry out inspections on a daily basis, and engaging a third party to check and issue reports on a monthly basis.
3. Waste Discharge
During the production and research and development process, the Company generates certain types and a small number ofhazardous wastes and non-hazardous wastes. We classify and collect such waste before storing and treating them in separate areas asrequired by the Law of the People’s Republic of China on the Prevention and Control of Solid Waste Pollution, and the NationalCatalog of Hazardous Wastes (2021 Edition). Among them, all hazardous wastes are taken away from the plants and handled byqualified third parties whose relevant qualifications are carefully confirmed in contracts signed between them and us. Hazardouswastes include laboratory wastes, waste activated carbon, etc. which are usually stored in separate hazardous waste warehouses anddisposed by qualified units more than three times a year according to the actual conditions. Whereas, among the non-hazardous wastes,the paper, plastic bottles, etc. are recycled through the recycling bins set up in the Group, and the household wastes are handled by thesanitation department.
Contingency plans for environmental emergencies
To effectively respond to the security risks arising from emergencies, each company, in accordance with the requirements of theEnvironmental Protection Law of the People’s Republic of China, the Management Measures for the Contingency Plan forEnvironmental Emergencies, the National Contingency Plan for Environmental Emergencies and other laws and regulations, hasformulated comprehensive and special contingency plans such as the Contingency Plan for Fire Accidents, the Contingency Plan forEnvironmental Emergencies, the Contingency Plan for Production Safety Accidents, the Contingency Plan for Crane Accidents andInjuries, and the Special Contingency Plan for Natural Gas Leakage, and regularly organizes its employees to conduct relevant drills,so as to ensure the effective deployment of its contingency plans.
Environmental self-monitoring plan
The Company and its subsidiaries have developed self-monitoring plans in accordance with the requirements of relevant lawsand regulations, installed automatic testing facilities in strict accordance with the plans, and regularly conduct or entrust qualifiedthird parties to organize self- monitoring of pollutants such as discharged exhaust gas, wastewater, and noise.Investment in environmental governance and protection and payment of environmental protection taxDuring the Reporting Period, the Company’s environmental protection expenditure amounted to RMB26,805,400, including theinvestment in environmental protection equipment and pollutant treatment facilities, and it fully paid an amount of RMB1,223,200 forenvironmental protection tax (excluding Hungary Energy).Measures taken to reduce carbon emissions during the Reporting Period and their effects?Applicable □Not applicableAs a company deeply willing to take its social responsibility, the Company has actively responded to and fully pushed up itscorporate sustainable low-carbon development strategies in a systematical method since the establishment of ESG Committee. Duringthe Reporting Period, the Company, starting with carbon accounting as the fundamental link, increased the proportion of greenelectricity usage to strengthen the data foundation. Based on this, it implemented emission reduction actions at the operational level,thereby driving emission reduction initiatives across the value chain.
1. Multiple products passed the third-party’s carbon footprint certifications, basically meeting the requirements of overseas corecustomers
The Company has established an improved whole-factory carbon calculation mechanism. Based on its independently establishedcarbon calculation model, it accurately calculates the carbon emissions of each production base, and flexibly calculates the carbonfootprints of lithium battery separator products under multiple standard systems, laying a solid data support for the Company’s low-carbon development. During the Reporting Period, multiple products of the Company passed the third-party’s carbon footprintcertifications, and the certification results basically met the requirements of overseas core customers.
2. Green electricity usage promotion
In terms of green electricity consumption, thanks to the Company’s diverse strategies such as self-established PV, purchasedgreen electricity and acquisition of green certificates, the Company’s green electricity consumption accounted for up to 59% in 2024.During the Reporting Period, the PV projects of Jiangsu Energy, Wuxi Energy, Jiangsu Ruijie were successfully put into production.During the Reporting Period, the PV power consumption was 31,657,000 kWh, marking a reduction of about carbon emission of17626.66 tons.
3. Carbon reduction in operation level
In terms of carbon reduction measures taken in operation level of the factory, during the Reporting Period, Yunnan Hongta Plasticused a set of biomass boilers, which enabled the replacement of the traditional fuel with the biomass particulate, leading to a reducedconsumption of natural gas, thus, realizing lower carbon emissions. Jiangxi Tonry implemented the use of the thermal oil boiler chimney,tail gas equipment analysis and air compressor waste heat recovery, which helped reduce the steam consumption, and thus realize energyconservation and consumption reduction. Suzhou Greenpower improved its low-pressure 0.4kV power supply system for energyconservation, and added an active power filter APF and a static reactive power generator SVG, significantly helping reducing electricityconsumption.Administrative penalties imposed on environmental issues during the Reporting Period
| Company or subsidiary name | Reason for penalties | Violations | Penalty results | Impact on the production and operation of the listed company | Rectified measures of the Company |
| Shanghai Energy | Air pollutant treatment facilities failed to keep normal running | Air pollutant treatment facility had a random failure, which lasted for no longer than one day with the discharged exhaust gas not exceeding the standard. After being noticed, the failure was rectified and repaired in a timely manner. | RMB100,000 only | No significant impact | Some accessories were replaced with strengthened daily patrol inspection and strengthened accountability system |
Other environmental information that shall be publicly disclosed: NoneOther environmental protection-related information: NoneThe Company shall comply with the disclosure requirements for the chemical industry set forth in the Self-Regulatory Guidelines No.3 for Companies Listed on Shenzhen Stock Exchange – Industry Information Disclosure
Information about environmental accidents occurring in the listed company: None
II. Social ResponsibilityFor details, please refer to the Environmental, Social and Governance Report 2024 (ESG report) disclosed by the Company atwww.cninfo.com.cn on April 23, 2025.
The Company shall comply with the disclosure requirements for the chemical industry set forth in the Self-Regulatory GuidelinesNo. 3 for Companies Listed on Shenzhen Stock Exchange – Industry Information DisclosureIII. Information about Efforts to Consolidate and Extend the Achievements of Poverty Alleviation andRural Revitalization
During the Reporting Period, Zhuhai Energy signed a Village-Enterprise Paired Assistance Agreement with Baiyun Village andTiandu Village, Baiyun Township, Chishui County, Zunyi City, Guizhou Province, under which the Company would support thesevillages so that they would speed up in building model villages “Four Essentials in Rural Homes · Beautiful Villages (四在农家·和美乡村)” to fully push up rural revitalization.
Section 6 Significant Events
I. Performance of commitments
1.
Commitments of the Company’s actual controller, shareholders, related parties and acquirer, as well as the Company and other commitment makersperformed during the Reporting Period or ongoing at the end of the Reporting Period
?Applicable □ Not applicable
| Commitment | Commitment made by | Type of commitment | Details of commitment | Time of commitment | Term of commitment | Performance of commitment |
| Commitments made during asset restructuring | The Company and all directors, supervisors and senior management | Commitment to submit true, accurate and complete information | 1. There are no false records, misleading statements or major omissions in the information disclosed and application documents submitted by Energy Technology, and those making the commitments shall be jointly and severally liable for the authenticity, accuracy and integrity of such documents 2. If the information provided or disclosed for this major assets restructuring contains false records, misleading statements or major omissions, and is put on file by the judicial organ for investigation or by the CSRC for investigation, before the conclusion of the investigation is made, those making the commitments will not transfer the shares with interests in Energy Technology, and will submit the application for suspending the transfer and share accounts to the Board of Directors of the Energy Technology within two trading days after receiving the notice of the investigation, and the Board of Directors shall apply for lockup to the stock exchange and the registration and clearing company on behalf of those making the commitments; if the Board of Directors fails to submit the lockup application within two trading days, it will authorize the Board of Directors to directly submit the identity and account information of those making the commitments to the stock exchange and the registration and clearing company after verification and apply for lockup; if the Board of Directors fails to submit the identity and account information of those making the commitments to the stock exchange and the registration and clearing company, those making the commitments will authorize the stock exchange and the registration and clearing company to directly lock up the related shares. If the investigation found that there is any violation of laws or regulations, those making the commitments promise to use voluntarily the shares locked up to compensate the related investors. | June 13, 2017 | Long term | Strictly performed |
| Commitments made during asset restructuring | The Company | Commitment on legal compliance | 1. The Company and its controlling shareholder and actual controller have not been investigated by judicial authorities for suspected crimes or investigated by the CSRC for suspected violations of laws and regulations in recent 3 years; 2. the Company and its controlling shareholders and actual controllers have not been publicly censured by the stock exchange and have no other major acts of dishonesty in the past 12 months; 3. The Company and its incumbent directors and senior management have not been investigated by judicial authorities for suspected crimes or investigated by the CSRC for suspected violations of laws and regulations. | June 13, 2017 | Long term | Strictly performed |
| Commitments made during asset restructuring | Directors and senior management of | Commitment on dilution of current return and remedial | 1. I hereby commit neither to tunnel to other units or individuals without compensation or under unfair conditions, nor to damage the Company’s interests in other ways. 2. I hereby commit to restrict my position-related consumption activities. 3. I hereby commit not to use the Company’s assets for investment and consumption activities not related to | May 25, 2017 | Long term | Strictly performed |
| the Company | measures | execution of my duties. 4. I hereby commit to link the remuneration system formulated by the Board of Directors or the Remuneration Committee or Assessment Committee of the Company with the execution of the return recovery measures. 5. I hereby commit to link the vesting conditions with the implementation of the return recovery measures if the Company will implement any share incentive scheme in the future. 6. Since the date of this commitment up to completion of this major asset restructuring, if the CSRC imposes other new regulatory requirements in relation to the return recovery measures and its commitments and such commitments cannot meet such rules of the CSRC, I commit to issue supplemental undertakings in accordance with the latest requirements of the CSRC. | ||||
| Commitments made during asset restructuring | Counterparty | Commitment to submit true, accurate and complete information | The counterparty will timely provide Energy Technology with information related to restructuring, and guarantee the authenticity, accuracy and completeness of the information provided. In case of any false record, misleading statement or major omission of the information provided, resulting in any loss to Energy Technology or investors, it shall be liable for compensation according to law. In case of any false record, misleading statement or major omission in the information provided or disclosed in this material assets restructuring, which is put on file by the judicial organ for investigation or by the CSRC for investigation, the counterparty will suspend the transfer of the shares with interests in Energy Technology until the case investigation conclusion is clear. | June 13, 2017 | Long term | Strictly performed |
| Commitments made during asset restructuring | Counterparty | Commitment on legal compliance | 1. Gao Xiang was the CFO of Shanghai Lvxin Packaging Materials Co., Ltd. (Shunhao). Due to Shunhao’s failure to disclose related party transactions with related natural persons according to law, in violation of the relevant provisions on information disclosure in the Securities Law and the Administrative Measures for Information Disclosure of Listed Companies, on July 27, 2016, Shanghai Securities Regulatory Bureau issued a warning to Shunhao and related parties, including Gao Xiang, and imposed an administrative penalty of RMB30,000 on Gao Xiang; on January 5, 2017, Shenzhen Stock Exchange made the Decision on Criticism to Shanghai Shunhao New Material Technology Co., Ltd. and Related Parties through Circulating Notices, and circulated notification of criticism to Shunhao and related parties, including Gao Xiang. In addition, other counterparties have not been subject to administrative or criminal penalties related to the securities market in the past five years, and have not involved in major civil litigation or arbitration related to economic disputes. 2. Counterparties are eligible to purchase shares not publicly offered by Energy Technology, and are not under any circumstances where they are not allowed to purchase shares not publicly offered by Energy Technology as stipulated by laws, regulations, rules or normative documents. 3. Over the last five years, the counterparties have not failed to repay a large amount of debts as scheduled, failed to fulfill their declaration, been subject to administrative measures by the CSRC or disciplined by the stock exchange and there are no ongoing or threatened administrative or judicial proceedings for investigation against my material violation of laws or regulations. | June 13, 2017 | Long term | Strictly performed |
| Commitments made during asset restructuring | Counterparty | Commitment on integrity of asset ownership | 1. Shares of Shanghai Energy held by counterparties according to law. The counterparty has performed its contribution obligation to Shanghai Energy in accordance with the law, and there is no false contribution, delayed contribution, withdrawal of capital and other acts in violation of its obligations and responsibilities as a shareholder, and there is no situation that may affect the legal survival of Shanghai Energy. 2. The equity of Shanghai Energy held by the counterparty is actually legally owned. There is no ownership dispute, there is no trust, entrusted shareholding or similar arrangement, and there is no pledge, freezing, sealing, property preservation or other rights restrictions on the equity of Shanghai Energy held by the counterparty. | June 13, 2017 | Long term | Strictly performed |
| Commitments made during asset restructuring | Counterparty | Commitment on no insider trading | I/the enterprise and its main management do not leak any insider information of Energy Technology or leverage insider information to conduct insider trading. If the above commitments are violated, all losses caused to the listed company will be borne. | June 13, 2017 | Long term | Strictly performed |
| Commitments made during asset restructuring | Heyi Investment, Paul Xiaoming Lee family | Commitment to regulate related party transactions | After the completion of the major asset restructuring, the enterprises that are controlled by those making the commitments will avoid and reduce the related party transactions with Energy Technology as far as possible. For those related party transactions that cannot be avoided or have reasonable reasons, the enterprises that are controlled by those making the commitments will sign agreements with Energy Technology and perform legal procedures in accordance with the principles of justice, fairness and compensation for equal value, and shall, in accordance with the provisions of relevant laws, regulations, other normative documents and the Articles of Association of Yunnan Energy New Material Co., Ltd., perform relevant internal decision-making approval procedures in accordance with the law and timely perform information disclosure obligations, guarantee not to trade with Energy Technology under unfair conditions compared with the market, guarantee not to illegally transfer the funds and profits of Energy Technology by using related party transactions, and do not use such transactions to engage in any behavior that damages the legitimate rights and interests of Energy Technology and other shareholders. If a breach of the above commitment results in damage to the interests of Energy Technology, those making the commitments will compensate the Energy Technology for the losses caused by the above acts to Energy Technology. | June 13, 2017 | Long term | Strictly performed |
| Commitments made during asset restructuring | Heyi Investment, Paul Xiaoming Lee family | Commitment to avoid horizontal competition | 1. At present, those making the commitments are not directly or indirectly engaged in the same or similar business with the existing business of Energy Technology or Shanghai Energy through other operating entities directly or indirectly controlled by it or in the name of natural person, and do not hold any position or act as any kind of consultant in any operating entity with the main business same as or similar to that in Energy Technology or Shanghai Energy, or engage in any other competition with Energy Technology or Shanghai Energy. 2. The commitment maker guarantees that after the completion of this major asset restructuring, it will not carry out or operate the same or similar business with the main business of Energy Technology or Shanghai Energy in its own way, directly or indirectly through other business entities under its direct or indirect control; do not hold any position or act as any kind of consultant in any operating entity with the same or similar business with Energy Technology or Shanghai Energy; do not provide technical services for existing customers of Energy Technology or Shanghai Energy in the name of other than Energy Technology or Shanghai Energy; avoid any horizontal competition. 3. If any loss is caused to Energy Technology or Shanghai Energy due to the commitment maker’s breach of the above commitments, the operating profit obtained shall be owned by Energy Technology and all losses suffered by Energy Technology or Shanghai Energy shall be compensated. | June 13, 2017 | Long term | Strictly performed |
| Commitments made during asset restructuring | Heyi Investment, Paul Xiaoming Lee family | Commitment on ensuring the independence of the listed company | Before this major asset restructuring, Energy Technology has been completely separated from other enterprises controlled by the commitment maker in terms of business, assets, institutions, personnel and finance. Energy Technology’s business, assets, institutions, personnel and finance are independent. After the completion of this major asset restructuring, the commitment maker undertakes not to use the identity of the controlling shareholder or actual controller of Energy Technology to affect the independence of Energy Technology, and to ensure the independence of Energy Technology in business, assets, institutions, personnel and finance as far as possible. | June 13, 2017 | Long term | Strictly performed |
| Commitments made during asset restructuring | Paul Xiaoming Lee family | Commitment on the existence of previous administrative penalty | There were administrative punishments in fire control and water affairs in Shanghai Energy. As of the date of this letter of commitment, Shanghai Energy and its subsidiaries do not have any administrative penalty that has not been implemented or rectified. In November 2015, Shanghai Pudong New Area Administration of Work Safety ordered Shanghai Energy to rectify the three dichloromethane storage tanks within a time limit. Shanghai Energy has completed the rectification, but has not completed the safety acceptance after the rectification. If the relevant competent departments in the local place where Shanghai Energy and its subsidiaries are located in have made administrative punishment to Shanghai Energy and its subsidiaries for fire control, water service or the three dichloromethane tanks at any time, the commitment maker promises to make cash compensation for all economic losses suffered by Shanghai | May 25, 2017 | Long term | Strictly performed |
| Energy or its subsidiaries within 30 days after the actual punishment or loss amount is determined, so as to ensure that it will not have a material impact on the production, operation and financial situation of Shanghai Energy and its subsidiaries. Joint and several liability shall be borne by those making the commitments. | ||||||
| Commitments made during asset restructuring | Li Xiaohua | Commitment on capital source of Shanghai Energy | Although I hold the certificate of permanent residence right of the United States, I have not changed my nationality, I am still a Chinese nationality; my own investment in Shanghai Energy is all China’s income, and does not involve the contribution of foreign exchange or foreign assets. | June 13, 2017 | Long term | Strictly performed |
| Commitments made during asset restructuring | Shanghai Hengzou Enterprise Management Firm (Limited Partnership (formerly known as Zhuhai Hengjie Enterprise Management Firm (Limited Partnership) | Commitment of the enterprise not belonging to private investment funds or a private fund manager | This enterprise is the employee stock ownership platform of Shanghai Energy, and the enterprise does not exist to raise funds in a non-public way to qualified investors. There is no asset management by the fund manager or general partner, nor does it serve as the manager of any private equity fund. Therefore, the enterprise does not belong to the private investment fund or a private fund manager in the Interim Measures for the Supervision and Administration of Private Investment Funds and the Measures for the Registration and Filing of Private Investment Fund Managers (for Trial Implementation), and does not need to follow the Interim Measures for the Supervision and Administration of Private Investment Funds and the Measures for the Registration and Filing of Private Investment Fund Managers (for Trial Implementation) and other relevant laws and regulations to fulfill the registration and filing procedures. | June 13, 2017 | Long term | Strictly performed |
| Commitments made during asset restructuring | Kunming Huachen Investment Co., Ltd | Commitment of the enterprise not belonging to private investment funds or a private fund manager | The Company is not established by raising funds from qualified investors in a non-public way, or doesn’t have the assets managed by the fund manager or the general partner, or act as the manager of any private investment fund. Therefore, the Company does not belong to the private investment funds or a private fund manager in the Interim Measures for the Supervision and Administration of Private Investment Funds and the Measures for the Registration and Filing of Private Investment Fund Managers (for Trial Implementation), and does not need to follow the Interim Measures for the Supervision and Administration of Private Investment Funds and the Measures for the Registration and Filing of Private Investment Fund Managers (for Trial Implementation) and other relevant laws and regulations to fulfill the registration and filing procedures. | June 13, 2017 | Long term | Strictly performed |
| Commitments made during asset restructuring | Paul Xiaoming Lee, Li Xiaohua | Non-competition commitment | During the term of office of Shanghai Energy or within 2 years after the resignation of Shanghai Energy, it will not directly or indirectly operate the same or similar business with Energy Technology or Shanghai Energy on its own or in the name of others, nor will it hold any post or provide any service in entities with the same or similar business with Energy Technology or Shanghai Energy; if they violate the aforesaid non-competition commitment, they shall pay a penalty of RMB5 million to Energy Technology, and shall turn over all the operating profits, wages, remuneration and other income earned by them due to the violation of the commitment to Energy Technology. If the aforesaid compensation still cannot make up for Energy Technology, Energy Technology has the right to request the breach party to be liable for the loss suffered by Energy Technology. | May 2, 2017 | Long term | Strictly performed |
| Commitments made during asset restructuring | Paul Xiaoming Lee, Li Xiaohua | Commitment on no part-time work | During the term of office at Shanghai Energy, without the consent of Energy Technology, it is not allowed to work part-time (except for directors and supervisors) in other companies, and the income violating the prohibition of concurrent operation shall be owned by Energy Technology. | May 2, 2017 | Long term | Strictly performed |
| Commitments made during asset | Jerry Yang Li | Commitment to ensure the | Due to the death of Ms. Wang Yuhua, a member of Paul Xiaoming Lee’s family who is the shareholder and actual controller of the Company, I, as one of the heirs, inherited 10,416,022 shares of the Company held by her according to | October 25, 2018 | Long term | Strictly performed |
| restructuring | independence of listed companies | her will and the contribution of the Company’s controlling shareholder Heyi Investment of RMB17.955 million. After succession, I directly and indirectly hold 54,655,167 shares of the Company through Heyi Investment, accounting for 11.53% of the total share capital of the Company. My directly held shares is acquired by Ms. Wang Yuhua as one of counterparties, through purchasing the equity of Shanghai Energy through issuing shares of the Company. Therefore, with regard to the independence of listed companies involved in this restructuring, I hereby make the following confirmation and commitment: before this restructuring, Shanghai Energy has been completely separated from other enterprises under my control in terms of business, assets, institutions, personnel and finance, and Shanghai Energy’s business, assets, institutions, personnel and finance are independent. After the completion of this restructuring, I promise not to use the identity of the actual controller of the listed company to affect the independence of the listed company, and to ensure the independence of the listed company in business, assets, institutions, personnel and finance as far as possible. | ||||
| Commitments made during asset restructuring | Jerry Yang Li | Commitment on regulating related party transactions | Due to the death of Ms. Wang Yuhua, a member of Paul Xiaoming Lee’s family who is the shareholder and actual controller of the Company, I, as one of the heirs, inherited 10,416,022 shares of the Company held by her according to her will and the contribution of the Company’s controlling shareholder Heyi Investment of RMB17.955 million. After succession, I directly and indirectly hold 54,655,167 shares of the Company through Heyi Investment, accounting for 11.53% of the total share capital of the Company. My directly held shares is acquired by Ms. Wang Yuhua as one of counterparties, through purchasing the equity of Shanghai Energy through issuing shares of the Company. To reduce and standardize the related party transactions that may occur with the listed company, I hereby make the following commitments: after the completion of this restructuring, the enterprises under my control will avoid and reduce the related party transactions with the listed company as much as possible. For the related party transactions that cannot be avoided or have reasonable reasons, the enterprises under my control will follow the principles of justice, fairness, equal value and compensation with the listed company in accordance with the law sign the agreement, perform the legal procedures, and in accordance with the provisions of relevant laws, regulations, other normative documents and the Articles of Association of Yunnan Energy New Material Co., Ltd., perform the relevant internal decision-making approval procedures in accordance with the law and timely perform the obligation of information disclosure, ensure that transactions with listed companies will not be conducted in an unfair manner compared with the market, and that the funds and profits of listed companies should not be transferred illegally by related party transactions, nor will they engage in any act that damages the legitimate rights and interests of listed companies and other shareholders. If there is any violation of the above commitments, resulting in damages to the interests of the listed company, I will compensate the listed company for the losses caused by the foregoing behavior to the listed Company. | October 25, 2018 | Long term | Strictly performed |
| Commitments made during asset restructuring | Jerry Yang Li | Commitment on avoiding horizontal competition | Due to the death of Ms. Wang Yuhua, a member of Paul Xiaoming Lee’s family who is the shareholder and actual controller of the Company, I, as one of the heirs, inherited 10,416,022 shares of the Company held by her according to her will and the contribution of the Company’s controlling shareholder Heyi Investment of RMB17.955 million. After succession, I directly and indirectly hold 54,655,167 shares of the Company through Heyi Investment, accounting for 11.53% of the total share capital of the Company. My directly held shares is acquired by Ms. Wang Yuhua as one of counterparties, through purchasing the equity of Shanghai Energy through issuing shares of the Company. Therefore, To protect the legitimate rights and interests of the listed company and other shareholders and avoid horizontal competition with the listed company, I hereby make the following solemn commitment: 1. At present, I have not directly or indirectly engaged in the same or similar business with the existing business of the listed company or Shanghai Energy through other business entities directly or indirectly controlled by me or in the name of natural | October 25, 2018 | Long term | Strictly performed |
| persons, have not held any position or acted as any kind of consultant in any business entity with the same or similar main business as the listed company or Shanghai Energy, or any other situation of horizontal competition with the listed company or Shanghai Energy. 2. I guarantee that after the completion of this transaction, I will not carry out or operate the same or similar business with the main business of the listed company and Shanghai Energy through other business entities directly or indirectly controlled by myself, directly or indirectly; I will not hold any position or serve as any form of consultant in any business entity with the same or similar business with the listed company or Shanghai Energy; do not provide technical services for listed companies or existing customers of Shanghai Energy in the name of listed companies or other than Shanghai Energy; avoid any horizontal competition. 3. If any loss is caused to the listed company or Shanghai Energy due to my violation of the above commitments, the operating profit obtained shall be owned by the listed company and all losses suffered by the listed company or Shanghai Energy shall be compensated. | ||||||
| Commitments made at the time of IPO or refinancing | The Company, controlling shareholders and the actual controller, directors, supervisors and senior management | Commitment on authenticity, accuracy and completeness of documents related to IPO | (I). Company’s commitment: 1. there are no false records, misleading statements or major omissions in the prospectus of the Company’s initial public offering. 2. If any competent authority finds that the initial prospectus issued by the Company has false records, misleading statements or major omissions, which will make a significant and substantial impact on judging whether it meets the requirements of the law, the Company will repurchase all the new shares of the IPO in accordance with the law. 3. Within 10 trading days after the competent authority determines that the prospectus of the Company has false records, misleading statements or major omissions that have a significant and substantial impact on the judgment of whether the Company complies with the issuance conditions stipulated by the law, the Board of Directors of the Company shall formulate the share repurchase plan and submit it to the General Meeting of Shareholders for consideration and approval, and after it is approved, reviewed or filed by the relevant competent department (if necessary), share repurchase measures will be started, and all new shares of the initial public offering will be repurchased according to law; the repurchase price (in case of ex-right and ex-dividend due to cash dividend, share distribution, conversion to share capital and new share issuance, the right shall be restored in accordance with the relevant provisions of Shenzhen Stock Exchange, the same below) shall be determined according to relevant laws and regulations, and shall not be lower than the issuance price of the initial public offering shares. 4. If the prospectus of the Company’s initial public offering contains false records, misleading statements or major omissions, which causes investors to suffer losses in securities trading, the Company will compensate investors for losses according to law. (II). Commitment of the controlling shareholder and actual controller of the Company: 1. there are no false records, misleading statements or major omissions in the prospectus of the Company’s initial public offering. 2. If any competent authority determines that there are false records, misleading statements or major omissions in the prospectus of the Company’s initial public offering, which have a significant and substantial impact on the judgment of whether it meets the issuance conditions prescribed by law, Heyi Investment and the family will buy back the transferred original restricted shares according to law; Heyi Investment and the family will formulate the share repurchase plan within 10 trading days after the above matters are identified, the original restricted shares issued by the Company’s shareholders at the time of initial public offering shall be repurchased in accordance with the law by means of centralized bidding transaction in secondary market, bulk transaction, agreement transfer, tender offer, etc. The repurchase price is determined according to the negotiated price or secondary market price, but not lower than the original transfer price and the price determined according to relevant laws and regulations and regulatory rules. If Heyi Investment and the family buy back the original restricted shares that have been transferred to trigger the tender offer conditions, Heyi Investment and the family will perform the tender offer procedures in accordance with the law and perform the corresponding information disclosure obligations. 3. If the prospectus of the Company’s initial public offering contains | September 14, 2016 | Long term | Strictly performed |
| false records, misleading statements or major omissions, which causes investors to suffer losses in securities trading, Heyi Investment and the family will compensate investors for losses according to law. (III). Commitment of directors, supervisors and senior managers of the Company: 1. the prospectus of the issuer’s initial public offering doesn’t contain false records, misleading statements or major omissions, and I am jointly and severally liable for its authenticity, accuracy and completeness. 2. If the prospectus of the issuer’s initial public offering contains false records, misleading statements or major omissions, which causes investors to suffer losses in securities trading, I will compensate investors for losses according to law. | ||||||
| Commitments made at the time of IPO or refinancing | Controlling shareholder, actual controller, and Shanghai Guohe Modern Services Equity Investment Fund Partnership (Limited Partnership) | About shareholding intention and reduction intention | (I). Commitment of controlling shareholders and actual controllers’ shareholding intention and reduction intention: 1. as the controlling shareholder and actual controller of the Company, Heyi Investment and the family hold the Company’s shares in strict accordance with the provisions of laws, regulations, normative documents and regulatory requirements, and abide by the share locking period; after the expiration of the locking period, the Company’s shares held by Heyi Investment and the family’s reduction shall comply with the requirements of relevant laws, regulations, normative documents and rules of the stock exchange; 2. Heyi Investment and the family shall not reduce the shares of the Company directly held within three years after the Company’s listing; after the Company’s listing for three years, the shares of the Company directly or indirectly held by Heyi Investment and the family transferred each year shall not exceed 25% of the total shares of the Company directly or indirectly held by them. 3. Within two years after the expiration of the equity lock-in period promised by Heyi Investment and the family, the shares of the Company shall be reduced at a price not lower than the issue price of the Company’s initial public offering shares (in case of ex-right and ex-dividend matters, the issue price shall be treated as ex-right and ex-dividend accordingly). Within two years after the expiration of the lock-up period, the total number of shares held by Heyi Investment and the family shall not exceed 30% of the total shares held by Heyi Investment and the family directly or indirectly before the issuance. 4. Within two years after the expiration of the shareholding lock-in period of Heyi Investment and the family’s commitment, the price of shares of the Company reduced by Heyi Investment and the family through the secondary market will be determined according to the market price at that time on the premise of meeting the commitments made by Heyi Investment and the family, and the specific reduction plan will be formulated according to the market situation at that time. 5. Heyi Investment and the family promise to make an announcement through the Company three trading days in advance when carrying out the reduction, and complete the announcement within six months, and fulfill the obligation of information disclosure accurately and completely in accordance with the rules of the stock exchange. (II). Shanghai Guohe’s commitment to shareholding intention and reduction intention: 1. Within two years after the expiration of the shareholding locking period promised by the Company, the Company intends to reduce its shareholding by means of, including but not limited to, centralized competitive trading in the secondary market, block trading, agreement-based transfer, etc. The reduction price will not be lower than the price of net assets per share, and the specific reduction price will be determined according to the market price at the time of the reduction on the premise of meeting the commitments made by the Company; the specific reduction plan will be based on the market conditions at that time. The specific reduction plan will be formulated in accordance with the market conditions and the operating condition of the Company. 2. The enterprise commits that it will make an announcement through the Company three days ahead of schedule in the implementation of the reduction. At the same time, it will fulfill the obligation of information disclosure accurately and completely in accordance with the rules of the stock exchange, except when it holds shares less than 5% equity of the Company. 3. The enterprise will strictly fulfill the above commitments, and promise to abide by the following binding measures: (1) if it fails to fulfill the above commitments, the Company’s | September 14, 2016 | Share holding period | Within the performance period, strictly performed |
| cash dividends I should receive will be withheld by the Company and owned by the Company; (2) if it fails to fulfill the above commitments, it will bear relevant legal liabilities according to laws and regulations. | ||||||
| Commitments made at the time of IPO or refinancing | Directors and senior management of Company | About shareholding intention and reduction intention | Paul Xiaoming Lee, Li Xiaohua, Xu Ming (resigned), Ma Weihua and Wang Xiaolu (resigned), directors and senior management of the Company, have made the following commitments: Within 36 months from the date of listing of the Company’s shares, I will not transfer or delegate the management of the Company’s shares directly or indirectly held prior to this offering, nor will I cause the Company to repurchase such shares. After the expiration of the lockup period of the above commitment, during the period when I am a director or senior management of the Company, the number of shares of the Company directly or indirectly held by me to be transferred each year shall not exceed 25% of the total number of shares of the Company held by me. I will not transfer the shares of the Company directly or indirectly held by me within 6 months after my departure. If I reduce my holding of the Company’s shares within two years after the expiration of the lock-up period, the price of the reduction shall not be lower than the issue price of the Company’s initial public offering. If the closing price of the Company’s shares is lower than the issue price for 20 consecutive trading days within 6 months after the listing of the Company, or if the closing price is lower than the issue price at the end of the 6-month period after the listing of the Company, the lock-up period of the Company’s shares will be automatically extended for 6 months. I will not affect the effectiveness of the commitment due to the change of position or resignation, and I will continue to fulfill the above commitment. | September 14, 2016 | During the period of shareholding and serving as a director and senior management of the Company | Within the performance period, strictly performed |
| Commitments made at the time of IPO or refinancing | The Company | Commitment on remedial measures for breaking faith | 1. If the Company fails to take the specific measures as promised to stabilize the stock price, the Company undertakes to accept the following binding measures: (1) the Company will publicly explain the specific reasons for not taking the above measures in the General Meeting of Shareholders and the newspapers designated by the CSRC, and apologize to the shareholders of the Company and the public investors; (2) If the investor suffers losses in the securities trading due to the failure to fulfill the commitments, the Company will compensate the investor for the losses according to law after being recognized by the CSRC, the stock exchange or the judicial organ; (3) The commitment of stock price stability is the true meaning of the Company. The responsible parties voluntarily accept the supervision of the regulatory body, self-discipline organization and the public. In case of the violation of the relevant commitments, the main body will bear corresponding responsibilities according to law. 2. If the controlling shareholder and the actual controller have delivered the notice of increase to the Company, but fail to fulfill the obligation of increasing the holdings, the Company has the right to detain the equal amount of the cash dividends payable to the controlling shareholder and the actual controller until the controlling shareholder and the actual controller fulfill their obligation to increase. 3. If a director or senior manager fails to fulfill his obligation to increase his or her holdings, the Company shall have the right to detain salaries and cash dividends of directors and senior management until the directors and senior managers fulfill their obligations to increase their holdings. 4. If there are any false records, misleading statements or major omissions in the prospectus of this public offering of shares, the Company will make a timely announcement, and the Company will disclose in its regular report that the Company, its controlling shareholders, actual controllers, and its directors, supervisors and senior management buy back shares due to information disclosure violations, performance of commitments such as acquisition of shares and compensation for losses, as well as remediation and correction in case of failure to perform commitments. 5. If the Company fails to perform, has failed to perform or fails to perform on schedule due to objective reasons beyond the control of the Company, such as changes in relevant laws and regulations, policies, natural disasters and other force majeure, the Company shall take the following measures: (1) Timely and fully disclose the specific reasons for the Company’s failure, failure to fulfill its commitments or failure to fulfill its commitments on schedule; (2) make supplementary or alternative commitments to the investors of the Company | September 14, 2016 | Long term | Strictly performed |
| (relevant commitments shall be subject to relevant approval procedures in accordance with laws, regulations and the articles of association), so as to protect the rights and interests of investors as much as possible. | ||||||
| Commitments made at the time of IPO or refinancing | Controlling shareholder, actual controller | Commitment on remedial measures for breaking faith | 1. If the controlling shareholder and the actual controller have delivered the notice of increase to the Company, but failed to fulfill the obligation of increasing the holdings, the Company has the right to detain the equal amount of the cash dividends payable to the controlling shareholder and the actual controller until the controlling shareholder and the actual controller fulfill their obligation to increase. 2. The controlling shareholder and the actual controller have signed the commitment letter of false record, misleading statement or major omission in the prospectus of this public offering of shares. The controlling shareholder and the actual controller take the profit distribution enjoyed by the controlling shareholder and the actual controller in the Company’s profit distribution plan of the current year and the following years as the performance guarantee of the above commitment, and if the controlling shareholder and the actual controller fail to fulfill the above-mentioned obligation of acquisition or compensation, the shares of the Company held by the controlling shareholder and the actual controller shall not be transferred before fulfilling the above-mentioned commitment. 3. The controlling shareholder and the actual controller have signed the promise of controlling shareholder and actual controller’s shareholding intention and reduction intention. The controlling shareholder and the actual controller will strictly carry out the above commitments and promise to abide by the following restraint measures: (1) If the above commitments are not performed, the cash dividends to be obtained by the controlling shareholder and the actual controller shall be withheld by the Company and owned by the Company; (2) if the above commitments are not performed, the controlling shareholder and the actual controller shall extend the lock-in period for six months after the lock-in period they promised; (3) The remuneration that the employees in the Company should receive from the Company shall be withheld by the Company and owned by the Company; (4) if the above commitments are not performed and the investors suffer losses in the securities trading, the controlling shareholder and the actual controller will compensate the investors for the losses according to law. 4. If the Company fails to perform, has failed to perform or fails to perform on schedule due to objective reasons beyond the control of the Company, such as changes in relevant laws and regulations, policies, natural disasters and other force majeure, the Company shall take the following measures: (1) Timely and fully disclose the specific reasons for the Company’s failure, failure to fulfill its commitments or failure to fulfill its commitments on schedule; (2) make supplementary or alternative commitments to the investors of the Company (relevant commitments shall be subject to relevant approval procedures in accordance with laws, regulations and the articles of association), so as to protect the rights and interests of investors as much as possible. | September 14, 2016 | Long term | Strictly performed |
| Commitments made at the time of IPO or refinancing | Directors, supervisors and senior managers | Commitment on remedial measures for breaking faith | 1. If any director or senior management of the Company fails to fulfill his obligation to increase the holdings, the Company shall have the right to detain directors and senior management salaries and cash dividends until the directors and senior managers fulfill their obligations to increase their holdings. 2. The directors, supervisors and senior managers have made corresponding commitments on the information disclosure of IPO and listing. The directors, supervisors and senior managers take the dividend of the Company in the current year and the following years obtained by holding the Company’s shares directly or indirectly and the salary received from the Company in the current year and the following years as the performance guarantee of the above commitments. If the director, supervisor or senior manager fails to perform, has failed to perform or fails to perform on schedule due to objective reasons beyond the control of the director, supervisor or senior manager such as changes in relevant laws and regulations, policies, natural disasters and other force majeure, the director, supervisor or senior manager shall take the following measures: (1) Timely and fully disclose the specific reasons for the Company’s failure, failure to fulfill its commitments or failure to fulfill its | September 14, 2016 | Long term | Strictly performed |
| commitments on schedule; (2) make supplementary or alternative commitments to the investors of the Company (relevant commitments shall be subject to relevant approval procedures in accordance with laws, regulations and the articles of association), so as to protect the rights and interests of investors as much as possible. | ||||||
| Commitments made at the time of IPO or refinancing | Paul Xiaoming Lee family, Heyi Investment and Heli Investment | Commitment on avoiding horizontal competition | 1. The undertaker does not, and will not, directly or indirectly engage in any activity that constitutes horizontal competition with the existing and future business of the Company and its holding subsidiaries, and is willing to assume compensation liability for the economic losses caused to the Company due to violation of the above commitments. 2. For other enterprises directly and indirectly controlled by the undertaker, the undertaker will adopt the representative office and personnel (including but not limited to directors, general managers, etc.) and the controlling position of the undertaker in such enterprises, to ensure that such enterprises perform the same obligations as the undertaker under this letter of commitment, to ensure that such enterprises do not compete with the Company and its holding subsidiaries in the same industry, and the undertaker is willing to bear all compensation liabilities for the economic losses caused to the Company due to violation of the above commitments. 3. If the Company further expands its scope of business on the basis of its existing business, and the undertaker and the enterprise controlled by the undertaker have carried out production and operation on this, the undertaker promises to transfer the possible horizontal competition business or equity held by this enterprise, and agrees that the Company has the priority to acquire and operate under the same commercial conditions. 4. Except for the investment in the Company, the undertaker will not invest in or operate the products (or similar products, or products with alternative function) developed, produced or operated by the Company and its holding subsidiaries in any way in any place. 5. This commitment letter is effective during the period when the undertaker and the company controlled by the undertaker are related parties of the Company. | November 10, 2012 | Effective during the period in which the undertaker and the companies he/she controls have relation with the Company | Strictly performed |
| Commitments made at the time of IPO or refinancing | The Company, controlling shareholder and actual controller, director and senior management | The commitment that the Company’s compensation measures can be effectively performed | 1. The Company and its controlling shareholder and the actual controller make a commitment to the Company’s ability to fill in the return measures. It does not exceed the authority to interfere in the Company’s management activities and does not occupy the Company’s interests. 2. Directors and senior managers make a commitment to fulfill the Company’s return measures: (1) Promise not to transfer interests to other units or individuals free of charge or under unfair conditions, and not to damage the interests of the Company in other ways; (2) Promise to restrict the post consumption behavior of directors and senior managers; (3) Promise not to use the Company’s assets to engage in investment and consumption activities unrelated to the performance of its duties; (4) Commit that the remuneration system formulated by the board of directors or remuneration committee is linked to the implementation of the Company’s measures to fill the return; (5) Promise that the exercise conditions of the Company’s equity incentive to be announced are linked to the implementation of the Company’s compensation measures. | September 14, 2016 | Long term | Strictly performed |
| Commitments made at the time of IPO or refinancing | Heyi Investment, a controlling shareholder, and family members of Paul Xiaoming Lee, the actual controllers of the Company | Commitment on avoiding occupation of the Company’s funds | The undertaker, close relative and the affiliated enterprise under control strictly restrict the funds of the Company and its subsidiary companies in the operating capital transactions between the Company and its subsidiaries; the Company and its subsidiaries shall not be required to pay wages, welfare, insurance, advertising and other expenses; the Company and its subsidiary funds are not directly or indirectly provided to the undertaker, close relatives and controlled affiliated enterprises, including: 1. to lend funds to the undertaker, close relatives and controlled affiliated enterprises for use with compensation or free of charge; 2. to provide entrusted loans without commercial substance to the undertaker, close relatives and controlled affiliated enterprises through banks or non-bank financial institutions; 3. to entrust the undertaker, close relatives and controlled affiliated enterprises to carry out investment activities without commercial substance; 4. to issue commercial acceptance bills without real transaction background for the undertaker, close relatives and controlled affiliated enterprises; 5. to repay debts on behalf of the undertaker, close relatives and controlled affiliated enterprises; 6. to provide funds to the undertaker, close relatives and controlled affiliated enterprises in other | September 14, 2016 | Long term | Strictly performed |
| ways without consideration for goods and services; 7. Other methods recognized by China Securities Regulatory Commission. | ||||||
| Commitments made at the time of IPO or refinancing | Jerry Yang Li | Commitment on remedial measures for breaking faith | Due to the death of Ms. Wang Yuhua, a member of Paul Xiaoming Lee’s family who is the shareholder and actual controller of the Company, I, as one of the heirs, inherited 10,416,022 shares of the Company held by her according to her will and the contribution of the Company’s controlling shareholder Heyi Investment of RMB17.955 million. I promise that I will strictly fulfill the commitments disclosed in the initial public offering and listing prospectus of the controlling shareholder and actual controller. If the commitments of the controlling shareholder and actual controller are not performed, cannot be performed or cannot be performed on schedule (except for objective reasons beyond the control of controlling shareholders and actual controllers such as changes in relevant laws and regulations, policies, natural disasters and another force majeure), I promise to strictly abide by the following measures: 1. If the controlling shareholder or the actual controller has served the Company with the increase notice but failed to fulfill the increase obligation, the Company has the right to withhold the cash dividends payable to the same amount until the controlling shareholder or the actual controller fulfills the increase obligation; 2. The controlling shareholder and the actual controller have signed the commitment letter of false record, misleading statement or major omission in the prospectus of this public offering of shares. The controlling shareholder and the actual controller take the profit distribution enjoyed by the controlling shareholder and the actual controller in the Company’s profit distribution plan of the current year and the following years as the performance guarantee of the above commitment, and if the controlling shareholder and the actual controller fail to perform the above-mentioned acquisition or compensation obligations, the shares of the Company held by the controlling shareholder and the actual controller shall not be transferred before the above- mentioned commitments are performed; 3. The controlling shareholder and the actual controller have signed the commitment of the controlling shareholder and the actual controller’s shareholding intention and reduction intention. The controlling shareholder and the actual controller will strictly perform the above commitments and promise to abide by the following binding measures: (1) If the above commitments are not performed, the cash dividends to be obtained by the controlling shareholder and the actual controller shall be withheld by the Company and owned by the Company; (2) if the above commitments are not performed, the controlling shareholder and the actual controller shall extend the lock-in period for half a year; (3) The remuneration that the employees in the Company should receive from the Company shall be withheld by the Company and owned by the Company; (4) if the above commitments are not performed and the investors suffer losses in the securities trading, the controlling shareholder and the actual controller will compensate the investors for the losses according to law; 4. If the Company fails to perform, has failed to perform or fails to perform on schedule due to objective reasons beyond the control of the Company, such as changes in relevant laws and regulations, policies, natural disasters and other force majeure, the Company shall take the following measures: (1) Timely and fully disclose the specific reasons for the Company’s failure, failure to fulfill its commitments or failure to fulfill its commitments on schedule; (2) make supplementary or alternative commitments to the investors of the Company (relevant commitments shall be subject to relevant approval procedures in accordance with laws, regulations and the articles of association), so as to protect the rights and interests of investors as much as possible. | October 25, 2018 | Long term | Strictly performed |
| Commitments made at the time of IPO or refinancing | Jerry Yang Li | Commitment on avoiding horizontal competition with Energy Technology | 1. The undertaker does not, and will not, directly or indirectly engage in any activity that constitutes horizontal competition with the existing and future business of the Company and its holding subsidiaries, and is willing to assume compensation liability for the economic losses caused to the Company due to violation of the above commitments. 2. For other enterprises directly and indirectly controlled by the undertaker, the undertaker will adopt the representative office and personnel (including but not limited to directors, general managers, etc.) and the controlling position of the | October 25, 2018 | Long term | Strictly performed |
| undertaker in such enterprises, to ensure that such enterprises perform the same obligations as the undertaker under this letter of commitment, to ensure that such enterprises do not compete with the Company and its holding subsidiaries in the same industry, and the undertaker is willing to bear all compensation liabilities for the economic losses caused to the Company due to violation of the above commitments. 3. If the Company further expands its scope of business on the basis of its existing business, and the undertaker and the enterprise controlled by the undertaker have carried out production and operation on this, the undertaker promises to transfer the possible horizontal competition business or equity held by this enterprise, and agrees that the Company has the priority to acquire and operate under the same commercial conditions. 4. Except for the investment in the Company, the undertaker will not invest in or operate the products (or similar products, or products with alternative function) developed, produced or operated by the Company and its holding subsidiaries in any way in any place. 5. This commitment letter is effective during the period when the undertaker and the company controlled by the undertaker are related parties of the Company. | ||||||
| Commitments made at the time of IPO or refinancing | Jerry Yang Li | Commitment on reduction intention | Due to the death of Ms. Wang Yuhua, a member of Paul Xiaoming Lee’s family who is the shareholder and actual controller of the Company, I, as one of the heirs, inherited 10,416,022 shares of the Company held by her according to her will and the contribution of RMB17.955 million by Heyi Investment, the Company’s controlling shareholder. With respect to the Company’s shares indirectly held by me through Heyi Investment, my shareholding intention and reduction intention are as follows: 1. as the actual controller of the Company, I hold the Company’s shares in strict accordance with the provisions of laws, regulations, normative documents and regulatory requirements, and abide by the share locking period; after the expiration of the locking period, I shall reduce my holding of the Company’s shares in accordance with the requirements of relevant laws, regulations, normative documents and rules of the stock exchange; 2. within three years after the listing of the Company, I will not reduce the shares of the Company I directly hold; upon expiry of three years after the listing of the Company, I will transfer the shares of the Company I directly hold each year not more than 25% of the total shares of the Company I directly hold; 3. within two years after the locking period I committed, the Company’s shares will be reduced at a price not lower than the initial public offering price of the Company. If the Company’s shares are subject to ex-right and ex-dividend during the period, such as dividend distribution, stock distribution, capital reserve converted to share capital, the issue price shall be ex-right and ex- dividend accordingly; 4. After two years after the expiration of my commitment to hold shares, the price at which I reduce my holdings of the Company’s shares through the secondary market will be determined based on the market price at the time of the reduction, provided that all my previously made commitments are fulfilled. The specific reduction plan will be drawn up according to the market situation at that time; 5. I promise that I will announce the implementation of the reduction through the Company three trading days in advance, and complete the announcement within six months. At the same time, I will fulfill the obligation of information disclosure accurately and completely in accordance with the rules of the stock exchange; 6. I will strictly fulfill the above commitments, and promise to abide by the following binding measures: (1) if I fail to fulfill the above commitments, the Company’s cash dividends I should receive will be withheld by the Company and owned by the Company; (2) the Company will own the profits I get from reducing the shares held in violation of the above commitments; (3) The remuneration that the employees in the Company should receive from the Company shall be withheld by the Company and owned by the Company; (4) if the above commitments are not performed and the investors suffer losses in the securities trading, I will compensate the investors for the losses in accordance with the law. | October 25, 2018 | Holding period | Within the performance period, strictly performed |
| Commitments made at the time | Jerry Yang Li | Commitment on avoiding capital | (1) Except for the capital occupation disclosed in writing to the relevant intermediary institutions, there is no other capital occupation that shall be disclosed but not disclosed in accordance with the laws and regulations and the relevant | October 25, 2018 | Long term | Strictly performed |
| of IPO or refinancing | occupation of Energy Technology | provisions of the CSRC for the time being by the undertaker, close relatives, controlled affiliated enterprises and the Company and its subsidiaries; (2) The undertaker, close relatives and controlled affiliated enterprises will strictly limit the occupation of funds of the Company and its subsidiaries in the operational capital transactions with the Company and its subsidiaries; (3) The undertaker, close relatives and controlled affiliated enterprises shall not require the Company and its subsidiaries to advance wages, welfare, insurance, advertising and other expenses, or require the Company and its subsidiaries to bear costs and other expenses on behalf of them; (4) The undertaker, close relatives and controlled affiliated enterprises do not seek to provide the funds of the Company and its subsidiaries directly or indirectly to the undertaker, close relatives and controlled affiliated enterprises in the following ways, including: a. To lend funds to the undertaker, close relatives and controlled affiliated enterprises for use with compensation or free of charge; b. Provide entrusted loans without commercial substance to the undertaker, close relatives and controlled affiliated enterprises through banks or non-bank financial institutions; c. Entrust the undertaker, close relatives and controlled affiliated enterprises to carry out investment activities without commercial substance; d. To issue commercial acceptance bills without real transaction background for the undertaker, close relatives and controlled affiliated enterprises; e. Repay debts on behalf of the undertaker, close relatives and controlled affiliated enterprises; f. Provide funds to the undertaker, close relatives and controlled affiliated enterprises in other ways without consideration for goods and services; g. Other methods recognized by China Securities Regulatory Commission; (5) If the undertaker, close relatives and controlled affiliated enterprises occupy the funds of the Company and its subsidiaries and require the Company and its subsidiaries to provide guarantees in violation of laws and regulations, the Company’s board of directors shall not transfer the shares of the Company held and controlled before all the occupied funds are returned and all the illegal guarantees are released, and handle the procedures of share locking for the relevant parties. The board of directors of the Company shall, within 5 trading days from the date of knowing the fact that the undertaker, close relatives and controlled affiliated enterprises occupy the funds of the Company and its subsidiaries, and the Company and its subsidiaries provide guarantees in violation of laws and regulations, handle the locking procedures for the relevant parties. | ||||
| Commitments made at the time of IPO or refinancing | Sherry Lee | Commitment on reduction intention | Due to the death of Ms. Wang Yuhua, a member of Paul Xiaoming Lee’s family who is the shareholder and actual controller of the Company, I, as one of the heirs, inherited 15,624,033 shares of the Company held by her according to her will and the contribution of the Company’s controlling shareholder Heyi Investment of RMB9.045 million. Before inheritance, I have held 27,593,884 shares of the Company, of which 15,997,000 shares were held at the time of IPO and listing of the Company, 11,596,884 shares of the Company acquired by the Company’s issuance of shares to purchase shares of Shanghai Energy. After inheritance, I hold directly and hold 65,503,802 shares of the Company indirectly through Heyi Investment, accounting for 13.82% of the total share capital of the Company. With respect to locking period for the Company’s shares directly and indirectly held by me, I commit as follows: 1. as the actual controller of the Company, I hold the Company’s shares in strict accordance with the provisions of laws, regulations, normative documents and regulatory requirements, and abide by the share locking period; after the expiration of the locking period, I shall reduce my holding of the Company’s shares in accordance with the requirements of relevant laws, regulations, normative documents and rules of the stock exchange; 2. within three years after the listing of the Company, I will not reduce the shares of the Company I directly hold; upon expiry of three years after the listing of the Company, I will transfer the shares of the Company I directly hold each year not more than 25% of the total shares of the Company I directly hold; 3. within two years after the locking period I committed, the Company’s shares will be reduced at a price not lower than the initial public offering price of the Company. If the Company’s shares are subject | October 25, 2018 | Share holding period | Within the performance period, strictly performed |
| to ex-right and ex-dividend during the period, such as dividend distribution, stock distribution, capital reserve converted to share capital, the issue price shall be ex-right and ex- dividend accordingly; 4. After two years after the expiration of my commitment to hold shares, the price at which I reduce my holdings of the Company’s shares through the secondary market will be determined based on the market price at the time of the reduction, provided that all my previously made commitments are fulfilled. The specific reduction plan will be drawn up according to the market situation at that time; 5. I promise that I will announce the implementation of the reduction through the Company three trading days in advance, and complete the announcement within six months. At the same time, I will fulfill the obligation of information disclosure accurately and completely in accordance with the rules of the stock exchange; 6. I will strictly fulfill the above commitments, and promise to abide by the following binding measures: (1) if I fail to fulfill the above commitments, the Company’s cash dividends I should receive will be withheld by the Company and owned by the Company; (2) the Company will own the profits I get from reducing the shares held in violation of the above commitments; (3) The remuneration that the employees in the Company should receive from the Company shall be withheld by the Company and owned by the Company; (4) if the above commitments are not performed and the investors suffer losses in the securities trading, I will compensate the investors for the losses in accordance with the law. | |||
| Commitments made at the time of IPO or refinancing | Directors and senior management of Company |
Commitment ondilution on currentreturns as a resultof the publicoffering ofconvertiblecorporate bonds,and the returnrecovery measures
| 1. Neither to tunnel to other units or individuals without compensation or under unfair conditions, nor to damage the Company’s interests in other ways; 2. to restrict my position-related consumption activities; 3. not to use the Company’s assets for investment and consumption activities not related to execution of my duties; 4. to link the remuneration system formulated by the Board of Directors or the Remuneration Committee or Assessment Committee of the Company with the execution of the return recovery measures; 5. to link the vesting conditions with the implementation of the return recovery measures if the Company will implement any share incentive scheme in the future; 6. since the date of this commitment up to completion of this public offering of convertible corporate bonds, if the CSRC imposes other new regulatory requirements in relation to the return recovery measures and its commitments and such commitments cannot meet such rules of the CSRC, I commit to issue supplemental undertakings in accordance with the latest requirements of the CSRC. To ensure the proper implementation of the return recovery measures, I commit to strictly perform the above commitments. If I breach or refuse to fulfill the above commitments, I will perform obligations of interpretation and apology as required under the Guiding Opinions on Matters relating to the Dilution on Current Returns as a result of Initial Public Offering, Refinancing and Major Asset Restructuring (CSRC Announcement No. [2015] 31), and agree that relevant regulatory or self-regulation measures shall be imposed or taken in accordance with the relevant provisions and rules specified or published by CSRC and Shenzhen Stock Exchange; if the Company or investors suffered losses as a result of my breach or refusal, I am willing to assume relevant liability for compensation. | May 14, 2019 | Long term | Strictly performed | |||
| Commitments made at the time of IPO or refinancing | Company’s actual controller and controlling shareholder | Commitment on dilution on current returns as a result of the public offering of convertible corporate bonds, and the return | 1. Not interfere with the operation and management activities of the Company beyond the authority, and not encroach on the interests of the Company; 2. since the date of this commitment up to completion of the convertible corporate bonds, if the CSRC imposes other new regulatory requirements in relation to the return recovery measures and its commitments and such commitments cannot meet such rules of the CSRC, I commit to issue supplemental undertakings in accordance with the latest requirements of the CSRC. To ensure the proper implementation of the return recovery measures, I commit to strictly perform the above commitments. If I breach or refuse to fulfill the above commitments, I will perform obligations of interpretation and apology as required under the Guiding Opinions on Matters relating to the Dilution on Current Returns as a result of Initial Public Offering, Refinancing and Major Asset Restructuring | May 14, 2019 | Long term | Strictly performed |
| recovery measures | (CSRC Announcement No. [2015] 31), and agree that relevant regulatory or self-regulation measures shall be imposed or taken in accordance with the relevant provisions and rules specified or published by CSRC and Shenzhen Stock Exchange; if the Company or investors suffered losses as a result of my breach or refusal, I am willing to assume relevant liability for compensation. | |||||
| Commitments made at the time of IPO or refinancing | All directors of Energy Technology | Commitment on the authenticity, accuracy and completeness of information submitted in connection with the non-public offering of A shares in 2020 | All directors of the Company commit that the report on this offering and the announcement on listing don’t contain false records, misleading statements or major omissions, and they will jointly and severally liable for its authenticity, accuracy and completeness. | September 3, 2020 | Long term | Strictly performed |
| Commitments made at the time of IPO or refinancing | Controlling shareholder and actual controller | Commitment on dilution on current returns as a result of the non-public offering of A shares in 2020, and the return recovery measures | 1. I promise not to interfere with the operation and management activities of the Company beyond the authority, and not encroach on the interests of the Company; 2. I commit to proper implementation of the current return recovery measures formulated by the Company and fulfill any commitment I make in relation to the current return recovery measures, and assume the liability for compensation to the Company or investors according to law if I violate such commitments and as a result cause any loss to the Company or investors; 3. since the date of this commitment up to completion of this non-public offering of shares by Energy Technology, if the CSRC imposes other new regulatory requirements in relation to the return recovery measures and its commitments and such commitments cannot meet such rules of the CSRC, I commit to issue supplemental undertakings in accordance with the latest requirements of the CSRC. | March 23, 2020 | Long term | Strictly performed |
| Commitments made at the time of IPO or refinancing | Directors and senior management of Company | Commitment on dilution on current returns as a result of the non-public offering of A shares in 2021, and the return recovery measures | 1. I promise not to tunnel to other units or individuals without compensation or under unfair conditions, or to damage the Company’s interests in other ways; 2. I commit to restrict my position-related consumption activities; 3. I commit to not use the Company’s assets for investment and consumption activities not related to execution of my duties; 4. I commit to link the remuneration system formulated by the Board of Directors or the Remuneration Committee or Assessment Committee of the Company with the execution of the return recovery measures; 5. I commit to link the vesting conditions with the implementation of the return recovery measures if the Company will implement any share incentive scheme in the future; 6. since the date of this commitment up to completion of this non-public offering of shares, if the CSRC imposes other new regulatory requirements in relation to the return recovery measures and its commitments and such commitments cannot meet such rules of the CSRC, I commit to issue supplemental undertakings in accordance with the latest requirements of the CSRC. | November 21, 2021 | Long term | Strictly performed |
| Commitments made at the time of IPO or refinancing | Controlling shareholder and actual controller | Commitment on dilution on current returns as a result of the non-public offering of A shares in 2021, and the return recovery measures | I promise not to interfere with the operation and management activities of the Company beyond the authority, and not encroach on the interests of the Company; I commit to proper implementation of the current return recovery measures formulated by the Company and fulfill any commitment I make in relation to the current return recovery measures, and assume the liability for compensation to the Company or investors according to law if I violate such commitments and as a result cause any loss to the Company or investors; since the date of this commitment up to completion of this non- public offering of shares by the Company, if the CSRC imposes other new regulatory requirements in relation to the return recovery measures and its commitments and such commitments cannot meet such rules of the CSRC, I commit to issue supplemental undertakings in accordance with the latest requirements of the CSRC. | November 21, 2021 | Long term | Strictly performed |
| Commitment on stock ownership incentive scheme | The Company | Other commitments | Not to offer loans or any other form of financial aids to the incentive recipients for them to obtain related stock options or restricted shares according to this incentive plan, including guaranteeing the loans. | January 24, 2022 | The period when the Company’s 2022 Stock Option and Restricted Share Incentive Plan was implemented | Strictly performed |
| Commitment on stock ownership incentive scheme | Incentive objects | Other commitments | In case of any false record, misleading statement or major omission in the information disclosed by the Company, resulting in incompliance with the arrangements for granting or exercising the interests, the incentive recipients will, upon acknowledgment of any false record, misleading statement or major omission existing in any related information disclosure document, return all interests obtained from the equity incentive plan. | January 24, 2022 | Long term | Strictly performed |
| Commitment on stock ownership incentive scheme | The Company | Other commitments | Not to offer loans or any other form of financial aids to the incentive recipients for them to obtain related restricted shares according to this incentive plan, including guaranteeing the loans. | February 2, 2024 | The period when the Company’s 2024 Restricted Share Incentive Plan was implemented | Strictly performed |
| Commitment on stock ownership incentive scheme | Incentive objects | Other commitments | In case of any false record, misleading statement or major omission in the information disclosed by the Company, resulting in incompliance with the arrangements for granting or exercising the interests, the incentive recipients will, upon acknowledgment of any false record, misleading statement or major omission existing in any related information disclosure document, return all interests obtained from the equity incentive plan. | February 2, 2024 | Long term | Strictly performed |
| Other commitments to small and medium shareholders of the Company | The Company | Shareholder return plan for the next three years (2021-2023) | The Company pays dividends in cash or by shares in a positive manner. Where the Company’s audited net profit is positive and no significant investment plan or significant cash expenditure in a year, the Company shall include the cash distribution in its profit distribution scheme for that year. The annual cash dividend of the Company shall not be less than 20% of the distributable profit realized in the current year (excluding the undistributed profit at the beginning of the year). Where available, the Company may distribute interim cash dividends. If the Company’s revenue grows rapidly and the Board of Directors considers that the stock price of the Company does not match the size of the Company’s share capital, it may make plans for dividend distribution by stock while satisfying the requirement for cash dividend distribution. | November 21, 2021 | November 21, 2021 - November 21, 2024 | Completed |
| Other commitments | Paul Xiaoming Lee | Undertaking not to reduce their shareholding in the Company | In view of his confidence in the future development prospects of the Company and his recognition of the long-term investment value, Mr. Paul Xiaoming Lee undertakes not to reduce his shareholding in the Company’ shares within six months from the date of this announcement on voluntary basis. During the above commitment period, any increase of shares due to reasons such as bonus shares, conversion of capital reserve to share capital and rights issue shall also comply with the above commitment of not to reduce his shareholdings. | August 24, 2023 | August 24, 2023 – February 23, 2024 | Completed |
| Other commitments | Certain directors, supervisors, senior management and core employees | Commitment on increase of shares in the Company | 1. The directors, supervisors and senior management undertake to strictly comply with the relevant laws and regulations on stock trading such as the CSRC and the Shenzhen Stock Exchange, and complete the share increase plan within the period for the implementation of the share increase plan; during the period for the implementation of the share increase plan and the statutory period, not to reduce the shares in the Company; no insider trading or short-term trading, and no trading of the Company’s shares during the window period. 2. During period for the implementation of the share increase plan and the statutory period, core management, technical and business employees undertake to complete the share increase plan, not to reduce the shares in the Company, and strictly comply with the relevant laws and regulations on stock trading such as the CSRC and the Shenzhen Stock Exchange. | October 28, 2023 | October 28, 2023 – July 27, 2024 | Strictly performed during the Reporting Period, completed on July 26, 2024 |
| Other commitments | All directors of the Company | Commitment on repurchase of shares of the Company | In this share repurchase, I will be honest and trustworthy, diligent and responsible, safeguard the interests of the Company and the legitimate rights and interests of shareholders. This repurchase will not impair the Company’s ability to fulfill its debts and its ability to continue operation. | February 2, 2024 | February 2, 2024 – August 1, 2024 | Strictly performed during the Reporting Period, completed on August 1, 2024 |
| Other commitments | Paul Xiaoming Lee, Li Xiaohua | Undertaking not to reduce their shareholding in the Company | In view of their confidence in the future development prospects of the Company and their recognition of the long-term investment value, Mr. Paul Xiaoming Lee and Mr. Li Xiaohua undertake not to reduce their shareholding in the Company’ shares within six months from the date of this announcement on voluntary basis. During the above commitment period, any increase of shares due to reasons such as bonus shares, conversion of capital reserve to share capital and rights issue shall also comply with the above commitment of not to reduce their shareholdings. | February 8, 2024 | February 8, 2024 – August 7, 2024 | Strictly performed during the Reporting Period, completed on August 7, 2024 |
| Other commitments | Actual controller | Commitment to repurchase in case of reduction in violation of regulations | The actual controller of the Company and its acting-in-concert parties undertake to use their own and self-financed funds to repurchase the shares of Energy Technology that have been disproportionately reduced and reduced in violation of regulations within the next 12 months, subject to the permission of rules. The actual controller and its acting-in-concert parties undertake to surrender the proceeds arising from the repurchase of the shares that have been disproportionately reduced and reduced in violation of regulations to Energy Technology. The actual controller and its acting-in-concert parties undertake to strictly fulfill the aforesaid commitments and strictly fulfill the information disclosure obligations. | July 23, 2024 | July 23, 2024 – July 22, 2025 | Within the performance period, strictly performed. As of the end of the Reporting Period, the actual controller and its acting-in-concert parties had repurchased 346,500 shares |
| Whether the commitment is performed on time | Yes | |||||
| If the commitments are overdue and have not been fulfilled, the specific reason for non-fulfilment and further work plan shall be explained in detail | Not applicable | |||||
2. Where any earnings forecast was made for any of the Company’s assets or projects and the Reporting Period is still within the forecast period, the Company shallexplain whether the performance of the asset or project reaches the earnings forecast and the reason
□Applicable?Not applicable
II. Occupation of the Listed Company’s Capital by the Controlling Shareholder or Its RelatedParties for Non-Operating Purposes
□Applicable?
Not applicable
In the Reporting Period, no controlling shareholder or its related party occupied capital of the listed company for non-operating purposes.
III. Illegal external guarantee
□Applicable?
Not applicable
The Company did not provide any illegal external guarantee during the Reporting Period.
IV. Explanation of the Board of Directors Regarding the “Non-standard Audit Report” Issuedfor the Latest Period
□Applicable?Not applicable
V. Explanation of the Board of Directors, the Supervisory Committee and IndependentDirectors (If Any) Regarding the “Non-standard Audit Report” Issued by the Accounting Firmfor the Reporting Period
□Applicable?Not applicable
VI. Reason for Changes in Scope of the Consolidated Financial Statements as Compared to theFinancial Report for the Previous Fiscal Year
?Applicable □Not applicable
(I) The Company held the twenty-second meeting of the Fifth Board of Directors and the eighteenth meeting of the Fifth SupervisoryCommittee on April 10, 2024, and considered and approved the Proposal on Changes in Accounting Policies. The Company has beenimplementing the Interpretation of Enterprise Accounting Standards No. 17 – “Accounting for Sale and Leaseback Transactions” issuedby the Ministry of Finance in 2023 since October 25, 2023. Such changes in accounting policies are reasonable as per the relevantregulations promulgated by the Ministry of Finance, which is in compliance with relevant regulatory requirements and the actual situationof the Company, without significant impact on the Company’s financial position, operating results and cash flow. For details, please referto the Announcement on Changes in Accounting Policies disclosed on designated information disclosure media by the Company on April11, 2024 (Announcement No. 2024-059).
(II) The Company held the thirty-seventh meeting of the Fifth Board of Directors and the thirty-first meeting of the Fifth SupervisoryCommittee on January 22, 2025, and considered and approved the Proposal on Changes in Accounting Policies. The Company has beenimplementing Interpretation of Accounting Standards for Business Enterprises No. 18 issued by the Ministry of Finance since December6, 2024. In accordance with the relevant regulations, the Company has changed its accounting policy accordingly, and the projectedliabilities arising from quality assurance are debited to “Main business cost” and “Other operating costs,” and are no longer recognized as“Cost of sales.” This change in accounting policy is a change made by the Company in accordance with the relevant regulations andrequirements of the Ministry of Finance and is in compliance with the relevant laws and regulations. The implementation of the changedaccounting policies can objectively and fairly reflect the Company’s financial position and results of operations. This change in accountingpolicy will not have any impact on the financial position, business results and cash flows of the Company, and will not be detrimental tothe interests of the Company and its shareholders. For details, please refer to the Announcement on Changes in Accounting Policies(Announcement No. 2025-021) disclosed by the Company on January 23, 2025 in the designated information disclosure media.VII. Reason for Changes in Scope of the Consolidated Financial Statements as Compared tothe Financial Report for the Previous Fiscal Year
?Applicable □ Not applicableDuring the Reporting Period, compared to the previous period, the Company added 3 new entities into and eliminated 1 entity from itsconsolidated financial statements. These 3 new entities are respectively Shanghai Jiezhiyuan New Material Technology Co., Ltd., ShanghaiHengjieyuan New Material Technology Co., Ltd., and SEMCO MALAYSIA SDN. BHD., which were all established during the Reporting
Period. The eliminated 1 entity is Guangdong Energy New Materials Research Institute Co., Ltd., which was cancelled during the ReportingPeriod.
VIII. Engagement and Disengagement of CPA Firm
CPA firm engaged at present
| Name of the domestic CPA firm | RSM CHINA (Special General Partnership) |
| Remuneration of the domestic CPA firm (RMB0’000) | 265 |
| Consecutive years of audit services provided by the domestic auditor | 1 year |
| Names of the certified public accountants from domestic accounting firm | Yao Rui, Yang Ganlin, Tian Guocheng |
| Consecutive years of audit services provided by the Certified Public Accountants from domestic accounting firm | Yao Rui, Yang Ganlin and Tian Guocheng provide audit services for 5 years, 1 year and 1 year respectively |
Whether the CPA firm was changed in the current period?Yes□
No
Whether the accounting firm was replaced during the audit period
□ Yes ?No
Whether the approval process for changing accounting firms was carried out?Yes □NoExplanation on the reappointment and change of accounting firms
Da Hua Certified Public Accountants Special General Partnership received the Decision on Administrative Penalty ([2024] No. 1)issued by Jiangsu Regulatory Bureau of China Securities Regulatory Commission on May 10, 2024, and was suspended from engaging insecurities service business for six months. In view of this and based on the principle of prudence, taking into account the needs of theCompany’s business development and future audits, the Company decided, after study, to appoint RSM China (Special General Partnership)as the auditor of the Company’s financial statements and internal control for 2024. The Audit Committee of the Board of Directors of theCompany fully reviewed the professional competence, investor protection, integrity and independence of RSM China, and appropriatenessof the reasons for the change of accounting firm. They believed that RSM China is a large reputable accounting firm with securitiesqualifications and high-quality practitioners, and agreed to engage RSM China as the auditor of the Company’s financial statements andinternal control for 2024. The proposal was submitted to the Board of Directors for consideration. The Company held the thirty-thirdmeeting of the Fifth Board of Directors on October 29, 2024, and the Ninth Extraordinary General Meeting on November 15, 2024, toconsider and approve the change of accounting firm. The Company’s change of accounting firm was in compliance with the Measures forthe Administration of Selection and Engagement of Accounting Firms by State-Owned Enterprises and Listed Companies (Cai Kuai [2023]No. 4) issued by the Ministry of Finance, the State-owned Assets Supervision and Administration Commission of the State Council and theCSRC.The Company has communicated with the former and current accounting firms regarding the change of the accounting firm, and all partieshave clearly noted this matter and confirmed that they have no objections.Engagement of any CPA firm, financial advisor or sponsor for internal control and audit?Applicable □ Not applicableDuring the Reporting Period, the Company engaged RSM China (Special General Partnership) as the internal control audit accounting firmand the audit fee was RMB600,000.IX. Possibility of Delisting after Disclosure of this Annual Report
□Applicable?
Not applicable
X. Matters Related to Bankruptcy and Reorganization
□Applicable?Not applicable
The Company was not bankrupt and reorganized during the Reporting Period.
XI. Material Litigation and Arbitration
?Applicable □Not applicable
| Basic information of litigation (arbitration) | Amount involved (RMB0’000) | Whether caused estimated liabilities | Progress in litigation (arbitration) | Hearing result and impact of litigation (arbitration) | Judgment execution of litigation (arbitration) | Disclosure date | Disclosure index |
| Shanghai Energy sued Hebei Gellec New Energy Science & Technology Co. Ltd (“Gellec”) for infringing the Company’s invention patent No. ZL201920914445.9 | 2,000 | No | Withdrawn in March 2023 | No impact on the Company’s profit for the current and subsequent periods | -- | May 22, 2023 | Announcement on Litigation Initiated by Subsidiary of the Company (Announcement No.: 2023-079) and Announcement on the Progress of Lawsuits Filed by Subsidiary of the Company (Announcement No. 2024-045) disclosed in the designated information disclosure media |
| Shanghai Energy sued Gellec for infringing the Company’s invention patent No. ZL201380061102.8 | 10,500 | No | Withdrawn in March 2025 | No impact on the Company’s profit for the current and subsequent periods | -- | August 9, 2023 | Announcement on Litigation Involving Subsidiary of the Company (Announcement No.: 2023-138) and Announcement on the Correction of Lawsuits Filed by Subsidiary of the Company (Announcement No. 2023-139) disclosed Item in the designated information disclosure media |
| Shanghai Energy sued Gellec for infringing the Company’s invention patent No. ZL201810710744.0 | 10,500 | No | Hearing commenced on April 17, 2024 | The final outcome of the judgment is still uncertain, and it is not possible to predict the impact on the Company’s profit for the current and subsequent periods. The final actual impact will be subject to the outcome of the court's effective | -- | August 9, 2023 | Announcement on Litigation Involving Subsidiary of the Company (Announcement No.: 2023-138) and Announcement on the Correction of Lawsuits Filed by Subsidiary of the Company (Announcement No. 2023-139) disclosed Item in the designated information disclosure media |
| judgment. | |||||||
| Gellec sued Shanghai Energy and Zhuhai Energy for infringing its invention patent No. ZL201810969215.2 | 5,000 | No | Received a ruling on October 25, 2024 regarding the withdrawal of the lawsuit by Gellec | No impact on the Company’s profit for the current and subsequent periods | -- | December 18, 2023 | Announcement on Litigation Involving Subsidiary of the Company (Announcement No.: 2023-223) and Announcement on the Progress of Lawsuits Involving Subsidiary of the Company (Announcement No. 2024-219) disclosed in the designated information disclosure media |
| Gellec sued Shanghai Energy and Zhuhai Energy for infringing its invention patent No. ZL201810859589.9 | 9,900 | No | Received a ruling on October 25, 2024 regarding the withdrawal of the lawsuit by Gellec | No impact on the Company’s profit for the current and subsequent periods | -- | December 18, 2023 | Announcement on Litigation Involving Subsidiary of the Company (Announcement No.: 2023-223) and Announcement on the Progress of Lawsuits Involving Subsidiary of the Company (Announcement No. 2024-219) disclosed in the designated information disclosure media |
| Zhuhai Energy sued Gellec for infringing the Company’s invention patent No. ZL201810751698.9 | 3,000 | No | Withdrawn in March 2023 | No impact on the Company’s profit for the current and subsequent periods | -- | May 22, 2023 | Announcement on Litigation Initiated by Subsidiary of the Company (Announcement No.: 2023-079) and Announcement on the Progress of Lawsuits Filed by Subsidiary of the Company (Announcement No. 2024-045) disclosed in the designated information disclosure media |
During the Reporting Period, the total amount involved in other litigation cases of the Company was RMB73.7117 million (includingRMB72.3747 million as plaintiff and RMB1.337 million as defendant). As of the end of the Reporting Period, the total amount involved inpending cases was RMB6.6855 million. These litigation matters will not have any material adverse impact on the Company’s financialposition or sustainable operating capacity.
XII. Punishments and Rectifications?Applicable
Not applicable
| Name | Type | Reason | Type of investigation penalty | Conclusion (if any) | Disclosure date | Disclosure index |
| The Company | Others | Inaccurate disclosure of information relating to persons acting in concert with the family of the actual controller | Administrative supervisory measures taken by the CSRC | Ordering for corrections and issuing warning letters to the Company | July 24, 2024 | Announcement on Receipt of Decision on Administrative Supervisory Measures from Yunnan Supervision |
| Paul Xiaoming Lee, Yan Ma, Sherry Lee, Li Xiaohua, Yanyang Hui, Jerry Yang Li, Heyi Investment | Actual controllers and their respective acting-in-concert parties | Inaccurate disclosure of persons acting in concert and interests in the family of actual controller of Energy Technology; Failure to timely disclose the required short-form report of changes in equity and to cease trading in the Company’s shares; Reduction of shares disproportionally and in violation of regulations. | Administrative supervisory measures taken by the CSRC | Ordering for corrections and issuing warning letters to Paul Xiaoming Lee, Yan Ma, Sherry Lee, Li Xiaohua, Yanyang Hui, Jerry Yang Li, Heyi Investment, Yuxi Heli Investment Co., Ltd. | July 24, 2024 | Bureau of China Securities Regulatory Commission (Announcement No. 2024-167) disclosed in the designated information disclosure media |
| Heli Investment | Others |
Notes: Yuxi Heli Investment Co., Ltd constituted a party acting in concert with the Family of Paul Xiaoming Lee, the actual controller ofEnergy Technology, prior to the change of its articles of association on September 27, 2021, and thereafter no longer constituted a partyacting in concert with the Family of Paul Xiaoming Lee, the actual controller.Explanations on rectification?Applicable □Not applicable
After receiving the above administrative and supervisory measures, the Company and the relevant persons attached great importanceto the matters involved therein. We have organized the relevant personnel to study the relevant laws and regulations again to deepen theirunderstanding of the relevant rules, and has conducted a deep reflection on the above matters, and sincerely apologized to the investors forthe adverse impact on the market caused by the act. The actual controller of the Company, Family of Paul Xiaoming Lee, the actualcontroller, Heyi Investment and Heli Investment published the report of changes in equity on July 24, 2024. The Company published theAnnouncement on the Actual Controller’s Apology for Reduction of Shareholding in Violation of Regulations and Commitment toRepurchase (Announcement No. 2024-168) in the designated information disclosure media on the same day. The actual controller of theCompany and its acting-in-concert parties undertook to use their own and self-financed funds to repurchase the shares of Energy Technologythat have been excessively reduced and illegally reduced within the next 12 months within the scope permitted by the rules, and surrenderthe proceeds arising from the repurchase of the shares excessively reduced and illegally reduced to Energy Technology. The actualcontroller and its acting-in-concert parties undertake to strictly fulfill the aforesaid commitments and strictly fulfill the informationdisclosure obligations. During the Reporting Period, the actual controller of the Company and its acting-in-concert parties repurchased346,500 shares through centralized bidding transactions. As of the date of this report, the actual controller of the Company and its acting-in-concert parties have repurchased a total of 651,400 shares through centralized bidding transactions. Subsequently, they will continue tofulfill the aforementioned commitments and disclose information in accordance with relevant regulations.XIII. The Company made no punishment or rectification during the Reporting Period.?Applicable □ Not applicableDuring the Reporting Period, the Company and its controlling shareholder and the actual controller were in good standing, and therewere no cases of non-performance of court judgments in force or large debts due but unpaid.
XIV. Significant related party transactions
1.
Related party transactions arising from routine operation
?Applicable □ Not applicable
Unit: RMB0’000
| Related transaction party | Relation | Type of related transaction | Details of related transaction | Pricing principle of the related transaction | Related transaction price | Related transaction amount (inclusive of tax) | Proportion in the total amount of transaction of the same type | Approved transaction limit | Whether the transaction exceeded the approved limit or not | Settlement mode for related transaction | Obtainable market price for the transaction of the same type | Disclosure date | Disclosure index |
| Yuxi Kunshasi Plastic Masterbatch Co., Ltd. | In the past twelve months, it was an equity-method investee of the Company, and the Company’s Chairman and Vice Chairman previously served as its Vice Chairman and director respectively. | Purchase raw materials from related parties | Purchase additives | Agreed by both parties based on market price | -- | 3,139.83 | 53.19% | 5,500 | No | T/T or acceptance bills | —— | April 25, 2024 | Announcement on the Expected Routine Related Transactions in 2024 (No.: 2024-075) disclosed at www.cninfo.com.cn |
| Sell products and commodities to related parties | Sell raw materials | -- | 1,076.52 | 66.12% | 2,000 | No | T/T | —— | |||||
| Lease to related parties | Lease workshop | -- | 2.4 | 1.34% | 2.4 | No | T/T | —— | |||||
| Yuxi Heyi Investment Co., Ltd. | An enterprise controlled by the Company’s actual | Lease to related parties | Lease office | Agreed by both parties based on market price | -- | 0.33 | 0.18% | 0.33 | No | T/T | —— |
| controller | |||||||||||||
| Yuxi Heli Investment Co., Ltd. | The Company’s employee stock ownership platform | Lease to related parties | Lease office | Agreed by both parties based on market price | -- | 0.24 | 0.13% | 0.24 | No | T/T | —— | ||
| Jiesheng Technology Co., Ltd. and its subsidiaries | An enterprise controlled by the Company’s actual controller | Purchase equipment and spare parts from related parties | Purchase equipment and spare parts | Agreed by both parties based on market price | -- | 48,143.36 | 10.19% | 65,903 | No | T/T or acceptance bills | —— | ||
| Zhuhai Chenyu New Material Technology Co., Ltd. and its subsidiaries | An enterprise controlled by the Company’s actual controller | Purchase materials from related parties | Purchase materials | Agreed by both parties based on market price | -- | 10,628.14 | 7.14% | 20,500 | No | T/T or acceptance bills | —— | ||
| An enterprise controlled by the Company’s actual controller | Sell packaging materials and others to related parties | Sell packaging materials | -- | 11.85 | 0.03% | 18 | No | T/T or acceptance bills | —— | ||||
| Total | -- | -- | 63,002.67 | -- | 93,923.97 | -- | -- | -- | -- | -- | |||
| Details of any sales return of a large amount | No | ||||||||||||
| Give the actual situation during the Reporting Period (if any) where a forecast had been made for the total amounts of routine related party transactions by type to occur in the current period | The actual routine transaction amount between the Company and the related parties did not exceed the total amount of routine related party transactions estimated by the Company by type. | ||||||||||||
| Reason for any significant difference between the transaction price and the market reference price (if applicable) | Not applicable | ||||||||||||
2.
Related party transactions relevant to acquisition and sales of assets or equities□Applicable?
Not applicable
The Company did not acquire or sell assets or equities during the Reporting Period.3.
Related party transactions in connection with joint external investments□Applicable?
Not applicable
The Company had no related party transaction in connection with joint external investments during the Reporting Period.
4. Credits and liabilities with related parties
?Applicable □ Not applicableWhether there were any credits or liabilities with related parties for non-operating purposes
□Yes
?
NoThe Company did not have any non-operating related-party debt or credit transactions during the Reporting Period.
5. Dealing with related financial companies
□Applicable?
Not applicable
There was no deposit, loan, credit granting or other financial business between the Company and the related financial companiesand the related parties.
6. Dealing between the financial companies controlled by the Company and the related parties
□Applicable?
Not applicable
There was no deposit, loan, credit granting or other financial business between the financial companies controlled by the Companyand the related parties.
7. Other significant related party transactions
?
Applicable □Not applicableThe Company has no other significant related party transactions during the Reporting Period.XV. Significant contracts and their execution
1. Trusteeships, Contracts, and Leases
(1) Trusteeships
□Applicable?
Not applicable
There was no trusteeship during the Reporting Period.
(2) Contracts
□Applicable?
Not applicable
There were no such cases during the Reporting Period.
(3) Leases
□Applicable?Not applicable
There were no leases during the Reporting Period.
2. Significant guarantees
?Applicable □Not applicable
Unit: RMB0’000
| External guarantees provided by the Company and its subsidiaries (excluding those for subsidiaries) | ||||||||
| Guaranteed party | Disclosure date of related announcement of guarantee quota | Guarantee quota | Actual occurrence date | Actual guarantee amount | Type of guarantee | Guarantee period | Performed or not | Guarantee for a related party or not |
| Guarantees provided by the Company to its subsidiaries | ||||||||
| Guaranteed party | Disclosure date of related announcement of guarantee quota | Guarantee quota | Actual occurrence date | Actual guarantee amount | Type of guarantee | Guarantee period | Performed or not | Guarantee for a related party or not |
| Zhuhai Energy | April 25, 2024 | 20,000 | February 21, 2023 | 12,000 | Joint-liability guarantee | 5 years | No | No |
| Zhuhai Energy | April 25, 2024 | 27,000 | February 7, 2022 | 17,762.87 | Joint-liability guarantee | 3 years | No | No |
| Zhuhai Energy | April 25, 2024 | 30,000 | July 13, 2023 | 29,980 | Joint-liability guarantee | 2 years | No | No |
| Zhuhai Energy | April 25, 2024 | 15,000 | May 29, 2023 | 0 | Joint-liability guarantee | 3 years | No | No |
| Zhuhai Energy | April 25, 2024 | 22,000 | December 1, 2023 | 20,000 | Joint-liability guarantee | 4 years | No | No |
| Zhuhai Energy | April 25, 2024 | 30,000 | January 15, 2024 | 17,845.97 | Joint-liability guarantee | 1 year | No | No |
| Zhuhai Energy | April 25, 2024 | 3,200 | March 1, 2024 | 0 | Joint-liability guarantee | 3 years | No | No |
| Zhuhai Energy | April 25, 2024 | 27,096.7 | April 12, 2024 | 0 | Joint-liability guarantee | 2 years | No | No |
| Zhuhai Energy | April 25, 2024 | 20,000 | April 12, 2024 | 2,640.22 | Joint-liability guarantee | 1 year | No | No |
| Zhuhai Energy | April 25, 2024 | 20,000 | April 24, 2024 | 12,917.26 | Joint-liability guarantee | 5 years | No | No |
| Zhuhai Energy | April 25, 2024 | 30,000 | April 25, 2024 | 14,000 | Joint-liability guarantee | 1 year | No | No |
| Zhuhai Energy, Shanghai Energy | April 25, 2024 | 35,682 | July 30, 2024 | 25,200 | Joint-liability guarantee | Indefinite term | No | No |
| Chongqing Energy | April 25, 2024 | 10,000 | February 23, 2024 | 9,950 | Joint-liability guarantee | 3 years | No | No |
| Chongqing Energy | April 25, 2024 | 8,000 | August 2, 2024 | 6,227.73 | Joint-liability guarantee | 1 year | No | No |
| Chongqing Energy | April 25, 2024 | 30,000 | November 8, 2024 | 28,500 | Joint-liability guarantee | 1 year | No | No |
| Newmi Tech | April 25, 2024 | 10,000 | August 13, 2024 | 10,000 | Joint-liability guarantee | 3 years | No | No |
| Newmi Tech | April 25, 2024 | 3,500 | October 24, 2024 | 0 | Joint-liability guarantee | 1 year | No | No |
| Hongta Plastic | April 25, 2024 | 4,400 | June 11, 2024 | 1,100 | Joint-liability guarantee | Indefinite term | No | No |
| Hongta Plastic | April 25, 2024 | 4,000 | November 9, 2020 | 0 | Joint-liability guarantee | 5 years | No | No |
| Hongta Plastic | April 25, 2024 | 7,800 | November 29, 2021 | 0 | Joint-liability guarantee | 3 years | No | No |
| Hongta Plastic | April 25, 2024 | 5,165 | May 5, 2022 | 4,000 | Joint-liability guarantee | 3 years | No | No |
| Hongta Plastic | April 25, 2024 | 12,900 | July 7, 2023 | 5,970.41 | Joint-liability guarantee | 3 years | No | No |
| Hongta Plastic | April 25, 2024 | 6,000 | July 15, 2023 | 5,071.46 | Joint-liability guarantee | 2 years | No | No |
| Hongta Plastic | April 25, 2024 | 7,000 | January 2, 2024 | 0 | Joint-liability guarantee | 3 years | No | No |
| Hongta Plastic | April 25, 2024 | 8,000 | January 12, 2024 | 5,900 | Joint-liability guarantee | 4 years | No | No |
| Hongta Plastic | April 25, 2024 | 10,000 | April 19, 2024 | 2,091.09 | Joint-liability guarantee | 1 year | No | No |
| Hongta Plastic | April 25, 2024 | 5,000 | November 15, 2024 | 0 | Joint-liability guarantee | 2 years | No | No |
| Hongchuang Packaging | April 25, 2024 | 6,600 | June 11, 2024 | 800 | Joint-liability guarantee | Indefinite term | No | No |
| Hongchuang Packaging | April 25, 2024 | 5,000 | February 23, 2022 | 0 | Joint-liability guarantee | 5 years | No | No |
| Hongchuang Packaging | April 25, 2024 | 16,200 | March 21, 2022 | 9,063.4 | Joint-liability guarantee | 3 years | No | No |
| Hongchuang Packaging | April 25, 2024 | 6,000 | September 22, 2023 | 1,593.94 | Joint-liability guarantee | 3 years | No | No |
| Hongchuang Packaging | April 25, 2024 | 9,000 | January 2, 2024 | 0 | Joint-liability guarantee | 3 years | No | No |
| Hongchuang Packaging | April 25, 2024 | 12,000 | January 15, 2024 | 5,373.7 | Joint-liability guarantee | 1 year | No | No |
| Hongchuang Packaging | April 25, 2024 | 725.88 | March 29, 2024 | 725.88 | Joint-liability guarantee | 1 year | No | No |
| Hongchuang Packaging | April 25, 2024 | 2,000 | January 29, 2024 | 0 | Joint-liability guarantee | 3 years | No | No |
| Hongchuang Packaging | April 25, 2024 | 13,000 | April 26, 2024 | 6,566.66 | Joint-liability guarantee | 1 year | No | No |
| Hongchuang Packaging | April 25, 2024 | 4,000 | April 30, 2024 | 0 | Joint-liability guarantee | 1 year | No | No |
| Hongchuang Packaging | April 25, 2024 | 1,366.78 | August 21, 2024 | 1,366.78 | Joint-liability guarantee | 1 year | No | No |
| Hongchuang Packaging | April 25, 2024 | 4,000 | September 29, 2024 | 2,000 | Joint-liability guarantee | 1 year | No | No |
| Hongchuang Packaging | April 25, 2024 | 10,000 | November 13, 2024 | 0 | Joint-liability guarantee | 1 year | No | No |
| Hongchuang Packaging | April 25, 2024 | 10,000 | December 26, 2024 | 7,583.51 | Joint-liability guarantee | 3 years | No | No |
| Dexin Paper | April 25, 2024 | 2,000 | January 2, 2024 | 0 | Joint-liability guarantee | 3 years | No | No |
| Dexin Paper | April 25, 2024 | 1,000 | January 12, 2024 | 0 | Joint-liability guarantee | 4 years | No | No |
| Yuxi Energy | April 25, 2024 | 100,000 | March 1, 2023 | 26,761.47 | Joint-liability guarantee | 3 years | No | No |
| Yuxi Energy | April 25, 2024 | 80,000 | October 26, 2023 | 0 | Joint-liability guarantee | 9 years | No | No |
| Yuxi Energy | April 25, 2024 | 70,000 | April 10, 2024 | 2,640.66 | Joint-liability guarantee | 3 years | No | No |
| Yuxi Energy | April 25, 2024 | 100,000 | July 16, 2024 | 43,823.98 | Joint-liability guarantee | 10 years | No | No |
| Wuxi Energy | April 25, 2024 | 10,000 | January 5, 2024 | 3,277.63 | Joint-liability guarantee | 4 years | No | No |
| Wuxi Energy | April 25, 2024 | 10,000 | July 12, 2024 | 0 | Joint-liability guarantee | 1 year | No | No |
| Wuxi Energy | April 25, 2024 | 15,000 | August 21, 2024 | 7,570.55 | Joint-liability guarantee | 1 year | No | No |
| Wuxi Energy | April 25, 2024 | 10,000 | September 24, 2024 | 4,000 | Joint-liability guarantee | 5 years | No | No |
| Wuxi Energy | April 25, 2024 | 20,000 | September 2, 2024 | 9,720 | Joint-liability guarantee | 1 year | No | No |
| Suzhou GreenPower | April 25, 2024 | 10,400 | March 9, 2022 | 0 | Joint-liability guarantee | 5 years | No | No |
| Suzhou GreenPower | April 25, 2024 | 10,000 | December 27, 2023 | 0 | Joint-liability guarantee | 1 year | No | No |
| Suzhou GreenPower | April 25, 2024 | 18,000 | January 9, 2024 | 3,600 | Joint-liability guarantee | 5 years | No | No |
| Suzhou GreenPower | April 25, 2024 | 14,000 | March 5, 2024 | 8,000 | Joint-liability guarantee | 3 years | No | No |
| Suzhou GreenPower | April 25, 2024 | 20,000 | November 14, 2024 | 19,583.47 | Joint-liability guarantee | 1 year | No | No |
| Suzhou GreenPower | April 25, 2024 | 10,000 | December 10, 2024 | 0 | Joint-liability guarantee | 5 years | No | No |
| Shanghai Energy | April 25, 2024 | 85,600 | September 28, 2020 | 51,600 | Joint-liability guarantee | 7 years | No | No |
| Shanghai Energy | April 25, 2024 | 66,000 | February 7, 2022 | 0 | Joint-liability guarantee | 5 years | No | No |
| Shanghai Energy | April 25, 2024 | 24,000 | June 5, 2022 | 1,000 | Joint-liability guarantee | 3 years | No | No |
| Shanghai Energy | April 25, 2024 | 4,622.59 | June 10, 2022 | 0 | Joint-liability guarantee | 5 years | No | No |
| Shanghai Energy | April 25, 2024 | 30,000 | August 18, 2022 | 0 | Joint-liability guarantee | 5 years | No | No |
| Shanghai Energy | April 25, 2024 | 120,000 | August 1, 2023 | 59,992.5 | Joint-liability guarantee | 15 years | No | No |
| Shanghai Energy | April 25, 2024 | 16,500 | October 27, 2023 | 15,000 | Joint-liability guarantee | 2 years | No | No |
| Shanghai Energy | April 25, 2024 | 50,000 | December 22, 2023 | 0 | Joint-liability guarantee | 4 years | No | No |
| Shanghai Energy | April 25, 2024 | 80,000 | March 20, 2024 | 25,000 | Joint-liability guarantee | 1 year | No | No |
| Shanghai Energy | April 25, 2024 | 21,308.4 | April 16, 2024 | 20,000 | Joint-liability guarantee | 3 years | No | No |
| Shanghai Energy | April 25, 2024 | 20,000 | April 18, 2024 | 20,000 | Joint-liability guarantee | 1 year | No | No |
| Shanghai Energy | April 25, 2024 | 20,000 | April 24, 2024 | 20,000 | Joint-liability guarantee | 1 year | No | No |
| Shanghai Energy | April 25, 2024 | 21,358.49 | June 24, 2024 | 10,000 | Joint-liability guarantee | Indefinite term | No | No |
| Shanghai Energy | April 25, 2024 | 20,000 | June 17, 2024 | 10,000 | Joint-liability guarantee | 1 year | No | No |
| Shanghai Energy | April 25, 2024 | 90,000 | August 9, 2024 | 82,000 | Joint-liability guarantee | 3 years | No | No |
| Shanghai Energy | April 25, 2024 | 19,600 | August 20, 2024 | 4,000 | Joint-liability guarantee | 1 year | No | No |
| Shanghai Energy | April 25, 2024 | 50,000 | August 22, 2024 | 47,150 | Joint-liability guarantee | 1 year | No | No |
| Shanghai Energy | April 25, 2024 | 87,500 | August 27, 2024 | 49,000 | Joint-liability guarantee | 1 year | No | No |
| Shanghai Energy | April 25, 2024 | 20,900 | September 2, 2024 | 19,000 | Joint-liability guarantee | 1 year | No | No |
| Shanghai Energy | April 25, 2024 | 15,000 | September 6, 2024 | 10,000 | Joint-liability guarantee | 3 years | No | No |
| Shanghai Energy | April 25, 2024 | 20,000 | September 11, 2024 | 19,250 | Joint-liability guarantee | 1 year | No | No |
| Shanghai Energy | April 25, 2024 | 54,600 | December 3, 2024 | 21,000 | Joint-liability guarantee | 1 year | No | No |
| Shanghai Energy | April 25, 2024 | 5,000 | December 30, 2024 | 5,000 | Joint-liability guarantee | 1 year | No | No |
| Shanghai Energy Trading Co., Ltd. | April 25, 2024 | 1,000 | September 20, 2024 | 1,000 | Joint-liability guarantee | 3 years | No | No |
| Jiangxi Tonry | April 25, 2024 | 150,000 | September 17, 2019 | 27,550 | Joint-liability guarantee | 5 years | No | No |
| Jiangxi Tonry | April 25, 2024 | 25,000 | June 25, 2024 | 24,900 | Joint-liability guarantee | 1 year | No | No |
| Jiangxi Tonry | April 25, 2024 | 5,000 | June 25, 2024 | 4,950 | Joint-liability guarantee | 1 year | No | No |
| Jiangxi Tonry | April 25, 2024 | 20,000 | October 8, 2024 | 19,956.72 | Joint-liability guarantee | 1 year | No | No |
| Jiangxi Tonry | April 25, 2024 | 1,000 | October 9, 2024 | 1,000 | Joint-liability guarantee | 2 years | No | No |
| Jiangxi Tonry | April 25, 2024 | 4,000 | October 9, 2024 | 4,000 | Joint-liability guarantee | 2 years | No | No |
| Jiangxi Tonry | April 25, 2024 | 13,500 | October 31, 2024 | 10,000 | Joint-liability guarantee | 3 years | No | No |
| Jiangxi Tonry | April 25, 2024 | 10,000 | November 11, 2024 | 10,000 | Joint-liability guarantee | 1 year | No | No |
| Jiangxi Tonry | April 25, 2024 | 20,000 | December 2, 2024 | 0 | Joint-liability guarantee | 1 year | No | No |
| Jiangxi Ruijie | April 25, 2024 | 40,000 | April 12, 2023 | 29,812.5 | Joint-liability guarantee | 7 years | No | No |
| Jiangxi Enpo | April 25, 2024 | 43,350 | April 28, 2024 | 43,350 | Joint-liability guarantee | 8 years | No | No |
| Jiangsu Energy | April 25, 2024 | 20,000 | November 18, 2024 | 14,763.64 | Joint-liability guarantee | 1 year | No | No |
| Hubei Energy | April 25, 2024 | 49,500 | May 24, 2023 | 10,593.59 | Joint-liability guarantee | 5 years | No | No |
| Hubei Energy | April 25, 2024 | 165,000 | May 24, 2023 | 111,531.83 | Joint-liability guarantee | 6 years | No | No |
| Hongta Plastic (Chengdu) Co., Ltd. | April 25, 2024 | 3,000 | January 12, 2024 | 2,758.78 | Joint-liability guarantee | 4 years | No | No |
| Anhui Hongchuang | April 25, 2024 | 21,000 | November 15, 2023 | 6,945.38 | Joint-liability guarantee | 2 years | No | No |
| Anhui Hongchuang | April 25, 2024 | 55,000 | July 23, 2024 | 4.29 | Joint-liability guarantee | 6 years | No | No |
| Chuangxin New Material (Hong Kong) Co., Ltd. | April 25, 2024 | 10,160.01 | February 1, 2024 | 0 | Joint-liability guarantee | Indefinite term | No | No |
| Chuangxin New Material (Hong Kong) Co., Ltd. | April 25, 2024 | 120,643.9 | April 12, 2024 | 5,226.64 | Joint-liability guarantee | Indefinite term | No | No |
| Wuxi Energy, Jiangxi Tonry, Suzhou GreenPower, Chongqing Energy, Jiangxi Ruijie, Jiangsu Energy, Jiangsu Ruijie, Jiangxi Enpo, Hubei Energy, Jiangsu Sanhe, Yuxi Energy, Xiamen | April 25, 2024 | 200,000 | March 1, 2024 | 0 | Joint-liability guarantee | 1 year | No | No |
Energy, JiangxiEnergy
Wuxi Energy,Jiangxi Tonry,SuzhouGreenPower,ChongqingEnergy, JiangxiRuijie, JiangsuEnergy, JiangsuRuijie, JiangxiEnpo, HubeiEnergy, YuxiEnergy,XiamenEnergy, JiangxiEnergy, AnhuiHongchuang
| April 25, 2024 | 150,000 | April 10, 2024 | 0 | Joint-liability guarantee | 3 years | No | No | |
| Wuxi Energy, Jiangxi Tonry, Suzhou GreenPower, Chongqing Energy, Jiangxi Ruijie, Jiangsu Energy, Jiangsu Ruijie, Jiangxi Enpo, Hubei Energy, Jiangsu Sanhe, Yuxi Energy | April 25, 2024 | 70,000 | May 6, 2022 | 0 | Joint-liability guarantee | 4 years | No | No |
| Wuxi Energy, Jiangxi Tonry, Suzhou GreenPower, Chongqing Energy, Jiangxi Ruijie, Jiangsu | April 25, 2024 | 150,000 | April 11, 2022 | 0 | Joint-liability guarantee | 3 years | No | No |
| Energy, Jiangsu Ruijie, Jiangxi Enpo, Hubei Energy, Jiangsu Sanhe, Yuxi Energy, Xiamen Energy, Jiangxi Energy | ||||||||
| Hongchuang Packaging, Shanghai Energy, Wuxi Energy, Jiangsu Energy | April 25, 2024 | 39,224.9 | November 30, 2020 | 28,500 | Joint-liability guarantee | 8 years | No | No |
| Suzhou GreenPower | April 25, 2024 | 55,000 | May 24, 2022 | 18,261.95 | Joint-liability guarantee | 5 years | No | No |
| Zhuhai Energy | April 25, 2024 | 75,000 | August 1, 2019 | 0 | Joint-liability guarantee | 6 years | No | No |
| Chongqing Energy | April 25, 2024 | 160,000 | April 26, 2022 | 78,434.36 | Joint-liability guarantee | 6 years | No | No |
| Wuxi Energy | April 25, 2024 | 116,000 | December 1, 2020 | 27,005.29 | Joint-liability guarantee | 9 years | No | No |
| Zhuhai Energy | April 25, 2024 | 20,000 | September 6, 2023 | 10,046.4 | Joint-liability guarantee | 3 years | No | No |
| Total line of guarantees granted to subsidiaries during the Reporting Period (B1) | 5,769,300 | Total actual amount of guarantees in favour of subsidiaries during the Reporting Period (B2) | 1,395,711.96 | |||||
| Total line of guarantees granted to subsidiaries as at the end of the Reporting Period (B3) | 5,769,300 | Total actual amount of guarantees in favour of subsidiaries as at the end of the Reporting Period (B4) | 1,374,792.53 | |||||
| Guarantees provided by subsidiaries for subsidiaries | ||||||||
| Guaranteed party | Disclosure date of related announcement of guarantee quota | Guarantee quota | Actual occurrence date | Actual guarantee amount | Type of guarantee | Guarantee period | Performed or not | Guarantee for a related party or not |
| Shanghai Energy Trading Co., Ltd. | April 25, 2024 | 1,000 | December 11, 2023 | 1,000 | Joint-liability guarantee | 1 year | No | No |
| Jiangsu Ruijie | April 25, 2024 | 70,000 | May 9, 2024 | 16,900 | Joint-liability guarantee | 8 years | No | No |
| Jiangsu Energy | April 25, 2024 | 160,000 | June 30, 2022 | 0 | Joint-liability guarantee | 3 years | No | No |
| Total line of guarantees granted to subsidiaries during the Reporting Period (C1) | 231,000 | Total line of guarantees granted to subsidiaries during the Reporting Period (C2) | 17,900 | |||||
| Total line of guarantees granted to subsidiaries as at the end of the Reporting Period (C3) | 231,000 | Total actual amount of guarantees in favour of subsidiaries as at the end of the Reporting Period (C4) | 17,900 | |||||
| Total guarantee amount provided by the Company (sum of the aforesaid three categories) | ||||||||
| Total line of guarantees granted during the Reporting Period (A1+B1+C1) | 6,000,300 | Total actual amount of guarantees during the Reporting Period (A2+B2+C2) | 1,413,611.96 | |||||
| Total line of guarantees granted as at the end of the Reporting Period (A3+B3+C3) | 6,000,300 | Total actual amount of guarantees as at the end of the Reporting Period (A4+B4+C4) | 1,392,692.53 | |||||
| Actual total guarantees (A4+B4+C4) in proportion to net asset of the Company | 56.91% | |||||||
| Including: | ||||||||
| Balance of guarantees given for shareholders, actual controllers and their related parties (D) | 0 | |||||||
| Balance of debt guarantees direct or indirectly given for guarantee parties with gearing ratio of over 70% (E) | 1,678,896.38 | |||||||
| Amount of total guarantees in excess of 50% of net assets (F) | 2,542,979.66 | |||||||
| Total of the above three guarantee amounts (D+E+F) | 2,542,979.66 | |||||||
| For unexpired guarantees, descriptions about the guarantee liabilities or possible joint and several liabilities of repayment occurred during the Reporting Period (if any) | Nil | |||||||
| External guarantees in breach of procedural requirements (if any) | Nil | |||||||
Circumstances in which composite guarantees are used
3. Entrusted cash assets management
(1) Entrusted wealth management
?Applicable □ Not applicable
Overview of entrusted wealth management during the Reporting Period
Unit: RMB0’000
| Type | Source of capital under the entrusted wealth management | Amount of the Entrusted wealth management | Undue amount | Overdue amount not recovered | Impairment of overdue wealth management not recovered |
| Wealth management products offered by brokerage firms | Raised funds | 25,000 | 25,000 | 0 | 0 |
| Wealth management products offered by bank | Self-owned funds | 55,144.96 | 55,144.96 | 0 | 0 |
| Total | 80,144.96 | 80,144.96 | 0 | 0 | |
Particulars of high-risk entrusted wealth management with significant single amount or low security and low liquidity
□Applicable?Not applicable
Whether there is the case where the principal cannot be recovered at maturity or other case where impairment may occur
□Applicable?Not applicable
(2) Entrusted loans
□Applicable?
Not applicable
There were no entrusted loans during the Reporting Period.
4. Other major contracts
?Applicable Not applicable
| Contracting party (the Company’s side) | Contracting party (the other side) | Contract object | Date of signature | Pricing principle | Transaction content | Related party transaction or not | Disclosure date | Disclosure index |
| Shanghai Energy | Huizhou EVE Energy Co., Ltd. | Lithium battery separator | November 22, 2024 | Market price | It is expected that from 2025 to 2031, a total of no less than 3 billion square meters of battery separators will be procured from Shanghai Energy and its affiliates | No | November 25, 2024 | Announcement on the Signing of Global Strategic Cooperation Framework Agreement between a Majority Controlled Subsidiary and EVE (Announcement No. 2024-235) |
| with controlling stakes in the markets such as Southeast Asia and Europe, with specific quantities subject to purchase orders. | disclosed at www.cninfo.com.cn | |||||||
| Shanghai Energy | Hefei Gotion High-tech Power Energy Co., Ltd. | Lithium battery separator | December 20, 2024 | Market price | Shanghai Energy will serve as the main separator supplier for Gotion High-tech, supplying lithium battery separators to them in 2025, with specific quantities subject to Gotion High-tech’s purchase orders. | No | December 21, 2024 | Announcement on the Signing of Annual Purchase Contract between a Majority Controlled Subsidiary and Gotion High-Tech (Announcement No. 2024-248) disclosed at www.cninfo.com.cn |
| SEMCORP Hungary Kft. | Ultium Cells LLC | Lithium battery separator | December 23, 2024 | Market price | In 2025, Ultium Cells LLC will procure lithium battery separators from SEMCORP Hungary Kft. for an amount not exceeding USD66.25 million, with specific quantities subject to purchase orders. | No | December 24, 2024 | Announcement on Signing of Significant Contracts by Subsidiaries (Announcement No. 2024-251) disclosed at www.cninfo.com.cn |
As of the end of the Reporting Period, all of the above contracts are being performed normally.
XVI. Explanation for Other Significant Events
?Applicable □ Not applicable
1. Based on their confidence in the Company’s future development prospects and recognition of its long-term investment value,
Mr. Paul Xiaoming Lee and Mr. Li Xiaohua voluntarily undertook not to reduce their holdings of the Company’s shares within six monthsfrom February 8, 2024. For details, please refer to the Announcement on the Commitment of the Actual Controller of the Company Not toReduce the Shareholding of the Company (Announcement No. 2024-028) published by the Company in the designated informationdisclosure media on February 8, 2024. As of August 7, 2024, this commitment was fulfilled.
2. From December 11, 2023 to January 4, 2024, the Company’s convertible bond “Energy Convertible Bonds” triggered the clauseof downward revision of the conversion price. At the 18th meeting of the 5th Board of Directors of the Company, it was resolved that theconversion price would not be revised downwards from January 5, 2024 to July 4, 2024. For details, please refer to the Announcement onNot Revising the Share Transfer Price Downward (Announcement No. 2024-007) published by the Company on January 5, 2024 in thedesignated information disclosure media. From March 19, 2024 to May 6, 2024, the conditional resale terms of “Energy Convertible Bonds”became effective, and the resale filing period was from May 10, 2024 to May 16, 2024. As of the close of business on May 16, 2024, thenumber of valid declarations for the resale of Energy Convertible Bonds was 30, and the amount of the resale was RMB3,013.17 (includinginterest and tax). For details, please refer to the Announcement on the Results of the Resale of Energy Convertible Bonds (AnnouncementNo. 2024-111) published by the Company on May 18, 2024 in the designated information disclosure media.
3. In accordance with the Company Law, the Securities Law and the relevant provisions of laws, regulations and normativedocuments such as the Self-Regulatory Guidelines No. 1 for Companies Listed on the Shenzhen Stock Exchange - Standardized Operationof Companies Listed on the Main Board and other laws, regulations and normative documents, during the Reporting Period, the Companyheld the twenty-fourth meeting of the Fifth Board of Directors and the twentieth meeting of the Fifth Supervisory Committee to revise andimprove some of the Company’s internal control systems, taking into account the actual situation of the Company. Some of these internalcontrol systems which are subject to the approval of the general meeting have been considered and approved by the fourth extraordinarygeneral meeting of the Company in 2024. For details, please refer to the Announcement on Resolutions of the Twenty-fourth Meeting ofthe Fifth Board of Directors (Announcement No. 2024-104) and the Announcement on Resolutions of the Fourth Extraordinary GeneralMeeting for 2024 (Announcement No. 2024-124), which were published by the Company in the designated media for the disclosure ofinformation on May 17, 2024 and June 5, 2024, respectively.
4. Based on the confidence in the future development of the Company and the recognition of long-term investment value, some ofthe Company’s directors, supervisors, senior management and core management, technical and business personnel increased theirshareholdings of the Company’s shares by an aggregate of 5,323,975 shares by means of centralized bidding during the period fromOctober 28, 2023 to July 26, 2024 with their own funds of RMB200.4397 million. For details, please refer to the Announcement on theCompletion of the Plan to Increase the Shareholdings of the Company by Certain Directors, Supervisors, Senior Management and CorePersonnel (Announcement No. 2024-172) published by the Company in the designated information disclosure media on July 27, 2024.
5. From February 5, 2024 to July 30, 2024, the Company repurchased a total number of 5,905,097 shares for cancellation with itsown funds of RMB199.9973 million (excluding transaction fees) by means of centralized bidding transactions through a special accountfor repurchase, to reduce the registered capital of the Company and increase shareholders’ equity. The above repurchased shares werecancelled on November 5, 2024. For details, please refer to the Announcement on Completion of Cancellation of Repurchased Shares andChanges in Shares (Announcement No. 2024-227) published by the Company on November 6, 2024 in the designated informationdisclosure media.
6. To standardize the Company’s selection and appointment (including renewal, reappointment and dismissal) of accounting firms,improve the quality of auditing work and financial information, and effectively safeguard the legitimate interests of shareholders, duringthe Reporting Period, the Company held the thirty-second meeting of the Fifth Board of Directors to consider and pass the Proposal onthe Formulation of the Administrative Measures for the Selection and Engagement of Accounting Firms, and formulated the Company’sAdministrative Measures for the Selection and Engagement of Accounting Firms, in accordance with the Company Law, the SecuritiesLaw, the Administrative Measures for the Selection and Engagement of Accounting Firms by State-Owned Enterprises and ListedCompanies and other relevant laws, administrative regulations, departmental rules and normative documents, and taking into account theCompany’s actual situation. Taking into account the business development of the Company and the needs of future auditing, the thirty-third meeting of the Fifth Board of Directors and the twenty-seventh meeting of the Fifth Supervisory Committee of the Companydeliberated and passed the Proposal on Proposed Change of Accounting Firm. The Company appointed RSM China (Special GeneralPartnership) as the auditor of the Company’s financial statements and internal control for the year 2024. For details, please refer to theAnnouncement on Resolutions of the Twenty-fourth Meeting of the Fifth Board of Directors (Announcement No. 2024-220) andAnnouncement on Proposed Change of Accounting Firm (Announcement No. 2024-222) published by the Company in the designatedinformation disclosure media on October 30, 2024. The matter was approved by the ninth extraordinary general meeting of the Companyin 2024.
7. To further improve the corporate governance and standardize the operation of the Company, the Company convened the thirty-third meeting of the Fifth Board of Directors and the twenty-seventh meeting of the Fifth Session of the Supervisory Committee to amendthe Articles of Association of Yunnan Energy New Materials Co., Ltd, in accordance with the Company Law, the Securities Law, the RulesGoverning the Listing of Stocks on the Shenzhen Stock Exchange, the Guidelines on the Articles of Association of Listed Companies andother relevant laws, regulations and standardized documents, and in light of the actual situation of the Company. For details, please referto the Announcement on the Amendment of the Articles of Association (Announcement No. 2024-223) published by the Company onOctober 30, 2024 in the designated information disclosure media. The matter was approved by the ninth extraordinary general meeting ofthe Company in 2024.
8. During the Reporting Period, the Company held the thirty-fourth meeting of the Fifth Board of Directors to consider and approvethe Proposal on Revision of the Fund-Raising Management System and revised the Fund-Raising Management System of the Company.For details, please refer to the Announcement on Resolutions of the Thirty-fourth Meeting of the Fifth Board of Directors (AnnouncementNo. 2024-242) published by the Company on December 14, 2024 in the designated information disclosure media.
XVII. Significant Events of the Company and Its Subsidiaries?Applicable □ Not applicable
1. To accelerate the process of the Company’s U.S. lithium battery separator project, so as to respond quickly to the needs ofcustomers in North America and to enhance the global market share of the Company’s diaphragm products, on January 3, 2024, theseventeenth meeting of the Fifth Board of Directors of the Company considered and approved the Proposal on Adjustment to the U.S.Lithium Battery Separator Project, adjusting the investment in the U.S. lithium battery barrier film project from approximately US$916million to approximately US$276 million, and adjusting the construction of base film production line with annual capacity of 1.0-1.2billion square meters and supporting coating equipment to the construction of 14 lithium battery coated diaphragm production lines withannual capacity of 700 million square meters. Except for the foregoing adjustments, the project implementation entity, SEMCORPManufacturing USA LLC, the implementation location, and the funding source remain unchanged. For details, please refer to the ProgressAnnouncement on the Investment and Construction of Lithium Battery Separation Film Project in the United States (Announcement No.2024-004) published by the Company on January 4, 2024 in the designated information disclosure media.
2. To meet the demand of the Company’s customers in overseas regions for the stability and timeliness of the supply of theCompany’s wet lithium battery separator products, on June 17, 2024, the twenty-seventh meeting of the Fifth Board of Directors of theCompany considered and approved the Proposal on the Construction of the Second Phase of the Wet-Process Lithium Battery SeparatorProject in Hungary. Through its subsidiary SEMCORP Hungary Kft, the Company invested in the construction of the second phase ofwet-process lithium battery separator production line and ancillary plants in Debrecen, Hungary, to carry out manufacturing and sales oflithium battery wet base film and functional coated separator. According to the project plan, 4 fully automatic imported film productionlines and supporting coating lines will be built, with a total capacity of about 800 million square meters/year, and the total investment ofthe project is expected to be about 447 million Euros. For details, please refer to the Announcement on the Construction of Phase II Wet-Process Lithium Battery Separator Project in Hungary (Announcement No. 2024-136) published by the Company on June 19, 2024 in thedesignated information disclosure media.
3. To further promote the smooth advancement of the Company’s overseas business and strengthen the Company’s leading marketposition in the field of lithium battery separator, on September 23, 2024, the thirty-first meeting of the Fifth Board of Directors of theCompany considered and approved the Proposal on the Investment and Construction of a Lithium Battery Separator Project in Malaysiaby the Majority Controlled Subsidiary of the Company. Shanghai Energy would set up a new subsidiary in Malaysia to invest in theconstruction of lithium battery separator project, with the planned construction capacity of about 1 billion square meters/year, and the totalproject investment of about RMB2 billion. For details, please refer to the Announcement on the Investment and Construction of LithiumBattery Separator Project in Malaysia by a Majority Controlled Subsidiary (Announcement No. 2024-209) published by the Company inthe designated media for information disclosure on September 24, 2024.
Section 7 Share Changes and Shareholder DetailsI. Changes in Shares
1. Changes in shares
Unit: shares
| Before the change | Increase or decrease (＋,－) | After the change | |||||||
| Number of shares | Proportion | New shares issued | Bonus issuance | Conversion of reserve into share | Others | Subtotal | Number of shares | Proportion | |
| I. Shares subject restriction on sale | 147,417,868 | 15.08% | 6,749,460 | 6,749,460 | 154,167,328 | 15.87% | |||
| 1. Shares held by state | 0 | 0.00% | 0 | 0.00% | |||||
| 2. Shares held by state-owned legal persons | 0 | 0.00% | 0 | 0.00% | |||||
| 3. Shares held by other domestic investors | 51,833,337 | 5.30% | 5,953,889 | 5,953,889 | 57,787,226 | 5.95% | |||
| Including: Shares held by domestic legal persons | 0 | 0.00% | 0 | 0.00% | |||||
| Shares held by domestic natural persons | 51,833,337 | 5.30% | 5,953,889 | 5,953,889 | 57,787,226 | 5.95% | |||
| 4. Shares held by overseas investors | 95,584,531 | 9.78% | 795,571 | 795,571 | 96,380,102 | 9.92% | |||
| Including: Shares held by overseas legal persons | 0 | 0.00% | 0 | 0.00% | |||||
| Shares held by overseas natural persons | 95,584,531 | 9.78% | 795,571 | 795,571 | 96,380,102 | 9.92% | |||
| II. Shares not subject to restrictions on sale | 830,336,693 | 84.92% | -13,224,865 | -13,224,865 | 817,111,828 | 84.13% | |||
| 1. Renminbi denominated common shares | 830,336,693 | 84.92% | -13,224,865 | -13,224,865 | 817,111,828 | 84.13% | |||
| 2. Domestically-listed foreign shares | 0 | 0.00% | 0 | 0.00% | |||||
| 3. Foreign shares listed overseas | 0 | 0.00% | 0 | 0.00% | |||||
| 4. Others | 0 | 0.00% | 0 | 0.00% | |||||
| III. Total shares | 977,754,561 | 100.00% | -6,475,405 | -6,475,405 | 971,279,156 | 100.00% |
Reason for changes in shares?Applicable □Not applicable
1. Conversion of convertible corporate bonds into shares
Under the approval granted by the CSRC under the Reply on Approving the Public Offering of Convertible Corporate Bonds byYunnan Energy New Material Co., Ltd. (Zheng Jian Xu Ke [2019] No. 2701), the Company made a public offering of 16 million convertiblecorporate bonds (bond abbreviation: Energy Convertible Bond, bond code: 128095) on February 11, 2020 and started trading at ShenzhenStock Exchange on February 28, 2020. The conversion period of “Energy Convertible Bonds” started on August 17, 2020. During theReporting Period, a total of 2,791 shares were converted from the bonds, and by the end of the Reporting Period, a total of 17,632,476shares were converted from the bonds.
2. Repurchase and cancellation of partial restricted shares under 2022 Stock Option and the Restricted Stock Incentive Plan
During the Reporting Period, according to the requirements of the Management Measures for the Stock Incentives of the ListedCompanies, the Company’s 2022 Stock Option and the Restricted Stock Incentive Plan, and other relevant laws, regulations and normativedocuments, the Company repurchased and cancelled 532,399 restricted shares that had been granted but not subject to unlocking for thereason of failure to meet the performance requirements in the company level in the second unlocking period under the 2022 Stock Optionand the Restricted Stock Incentive Plan, as well as for the reason of the resignation or demotion of 100 incentive recipients under the plan.On September 9, 2024, the Company completed the cancellation of the abovementioned repurchased 532,399 restricted shares.
3. 2024 Restricted Stock Incentive Plan
During the Reporting Period, the Company implemented the 2024 Restricted Stock Incentive Plan. On May 22, 2024, the Companycompleted the registration of the first grant of the restricted shares under this plan. The Company granted a total of 5,034,316 shares to atotal of 140 incentive recipients.
According to the relevant requirements of the Management Measures for the Stock Incentives of the Listed Companies, and otherrelevant laws, regulations and normative documents, as well as the Company’s 2024 Restricted Stock Incentive Plan, the Companyrepurchased and cancelled 40,700 restricted shares that had been granted but not subject to unlocking for the reason of the resignation of2 grantees under the plan. On September 9, 2024, the Company completed the cancellation of the abovementioned repurchased 40,700restricted shares.
4. Cancellation of repurchased shares in 2024
From February 5, 2024 to July 30, 2024, the Company repurchased its 5,905,097 shares at a self-owned amount ofRMB199,997,253.55 (excluding the trading fees) for cancellation of the same and reducing its registered capital. On November 5, 2024,the Company completed the cancellation of the abovementioned repurchased 5,905,097 shares.
5. Changes in the locked-up shares held by the senior management
The shares held by the Company’s directors, supervisors, senior management have been managed and locked up as required by theRules Governing the Listing of Stocks on the Shenzhen Stock Exchange, the Shenzhen Stock Exchange Detailed Implementation Rules forShareholding Decrease by Shareholders as well as Directors, Supervisors and Senior Management of Companies Listed on Shenzhen StockExchange, the Self-Regulatory Guidelines No. 18 for Companies Listed on Shenzhen Stock Exchange - Shareholding Decrease byShareholders, Directors, Supervisors and Senior Management, and other relevant provisions.
Driven by their confidence in the Company’s future development and their recognition of the value of the long-term investment inthe Company, certain of the Company’s directors, supervisors and senior management increased their shareholding by a total of 2,208,063shares of the Company from October 28, 2023 to July 26, 2024, some of which shares were locked in accordance with the provisions of theabovementioned relevant regulations.Approval of changes in shares?Applicable □Not applicable
1. Conversion of convertible corporate bonds into shares
Under the approval granted by the CSRC under the Reply on Approving the Public Offering of Convertible Corporate Bonds byYunnan Energy New Material Co., Ltd. (Zheng Jian Xu Ke [2019] No. 2701), the Company made a public offering of 16 million convertible
corporate bonds (bond abbreviation: Energy Convertible Bond, bond code: 128095) on February 11, 2020 and started trading at ShenzhenStock Exchange on February 28, 2020. The conversion period of “Energy Convertible Bonds” started on August 17, 2020.
2. Repurchase and cancellation of partial restricted shares under 2022 Stock Option and the Restricted Stock Incentive PlanOn June 6, 2024, the 26
th meeting of the 5
th Board of Directors and the 22
nd meeting of the 5
thSupervisory Committee consideredand adopted the Proposal on Repurchase and Cancellation of Certain Restricted Shares under the 2022 Stock Option and Restricted StockIncentive Plan. On June 24, 2024, the Company held the 5
thExtraordinary General Meeting of Shareholders of 2024, at which it consideredand approved the above proposal. On September 9, 2024, after approval by the CSDC Shenzhen Branch and the Shenzhen Stock Exchange,the Company completed the cancellation of the related repurchased restricted shares.
3. 2024 Restricted Stock Incentive Plan
On February 2, 2024, the Company held the 19
th
meeting of the 5
th Board of Directors and the 15
th
meeting of the 5
thSupervisoryCommittee, at both of which it considered and approved the Proposal on the Company’s 2024 Restricted Stock Incentive Plan (Draft) andIts Summary, the Resolution on Formulating the Company’s Assessment and Management Measures for Implementing 2024 RestrictedStock Incentive Plan, etc. Related resolutions have been considered and adopted at a meeting of the Company’s Remuneration andAppraisal Committee of the Board of Directors and a special meeting of the Company’s independent directors. From February 6, 2024 toFebruary 16, 2024, the Company made publicity on its bulletin board the name and position of the incentive recipients of the restrictedshares under this restricted share incentive plan in the first grant. During this publicity period, the Supervisory Committee received noobjection against this name list. On February 26, 2024, the Company held its 1
stExtraordinary General Meeting of Shareholders of 2024,at which it considered and approved the abovementioned related resolution. On May 16, 2024, according to the authorization from theCompany’s 1
st
Extraordinary General Meeting of Shareholders of 2024, the Company held its 24
th
meeting of the 5
thBoard of Directorsand the 20
th meeting of the 5
thSupervisory Committee, at both of which it considered and adopted the Proposal on Adjustments to RelevantMatters of 2024 Restricted Stock Incentive Plan, and the Proposal on Granting Restricted Shares to the Incentive Recipients of theRestricted Shares under 2024 Restricted Stock Incentive Plan in the First Grant. On May 22, 2024, the Company completed the registrationof the first grant of the restricted shares under 2024 Restricted Stock Incentive Plan with the CSDC Shenzhen Branch.On June 21, 2024, the Company held the 28
th
meeting of the 5
th Board of Directors and the 24
th meeting of the 5
thSupervisoryCommittee, at which it considered and approved the Proposal on Repurchase and Cancellation of Partial Restricted Shares under 2024Restricted Stock Incentive Plan and Adjustments to the Repurchase Price. On July 8, 2024, the Company held the 7
thExtraordinary GeneralMeeting of Shareholders of 2024, at which it considered and approved the abovementioned resolution. After approval by the CSDCShenzhen Branch and the Shenzhen Stock Exchange, the Company completed the cancellation of the related repurchased restricted shareson September 9, 2024.
4. Repurchase and cancellation of shares in 2024
On February 2, 2024 and February 18, 2024, the Company respectively held the 19
th
meeting of the 5
thBoard of Directors and the
th meeting of the 5
thBoard of Directors, at both of which it considered and adopted the Proposal on Repurchase of the Company’sShares, and the Proposal on Changing the Purpose of the Repurchased Shares to Cancellation. On March 7, 2024, the Company held the
ndExtraordinary General Meeting of Shareholders of 2024, at which it considered and approved the Proposal on Changing the Purposeof the Repurchased Shares to Cancellation. On August 27, 2024 and September 13, 2024, the Company respectively held the 30
th
meetingof the 5th
Board of Directors and the 8
th
Extraordinary General Meeting of Shareholders of 2024, at both of which it considered and adoptedthe Proposal on Changing Registered Capital and Revising the Articles of Association as well as Registration of Change of Business,which was related to this cancellation of the repurchased shares. After approval by the CSDC Shenzhen Branch and the Shenzhen StockExchange, the Company completed the cancellation of the related repurchased restricted shares on November 5, 2024.Transfer of share ownership?Applicable □Not applicable
1. Conversion of convertible corporate bonds into shares
A total of 2,791 shares were converted from “Energy Convertible Bonds” during the Reporting Period, and a total of 17,632,476shares were converted from “Energy Convertible Bonds” as of the end of the Reporting Period.
2. Repurchase and cancellation of partial restricted shares under the 2022 Stock Option and Restricted Stock Incentive Plan and the2024 Restricted Stock Incentive Plan
The Company completed the repurchase and cancellation of a total of 573,099 restricted shares which were granted but not releasedfrom restriction under the 2022 Stock Option and Restricted Stock Incentive Plan, and the 2024 Restricted Stock Incentive Plan, at thesum of the repurchase price plus the interest on deposits with the bank for the same period. The repurchase and cancellation of certainrestricted shares by the Company was verified by Daxin CPAs (SGP), which issued the Capital Verification Report (Da Xin Yan Zi [2024]No. 1-00058. On September 9, 2024, the aforesaid repurchase and cancellation was reviewed and confirmed by CSDC Shenzhen Branchand the process was completed.
3. Cancellation of repurchased shares in 2024
From February 5, 2024 to July 30, 2024, the Company repurchased its 5,905,097 shares at a self-owned amount ofRMB199,997,253.55 (excluding the trading fees) for cancellation of the same and reducing its registered capital. After the review andconfirmation by the CSDC Shenzhen Branch, the Company completed the cancellation of the abovementioned repurchased 5,905,097shares on November 5, 2024.Effects of change in shares on the basic EPS, diluted EPS, net assets per share attributable to ordinary shareholders of the Company, and
other financial indicators for the prior year and the latest period.?Applicable □Not applicable
① During the Reporting Period, the conversion of a small number of 2,791 shares from the “Energy Convertible Bonds” had smallimpact on the Company’s basic earnings per share, diluted earnings per share and net assets per share attributable to ordinary shareholdersof the Company;
② During the Reporting Period, the Company repurchased and cancelled a total of 573,099 restricted shares under the stockincentive plan, which had a small impact on the Company’s basic earnings per share, and diluted earnings per share, and had an impact onthe net assets per share attributable to ordinary shareholders of the Company by RMB0.02/share;
③ During the Reporting Period, the Company repurchased a number of 5,905,097 shares for cancellation of the same, which had asmall impact on the Company’s basic earnings per share, and diluted earnings per share, and had an impact on the net assets per shareattributable to ordinary shareholders of the Company by RMB0.04/share;Other contents that the Company considers it necessary to disclose or that are required by the security regulatory authorities to disclose
□Applicable ?Not applicable
2. Changes in restricted shares
?Applicable □Not applicable
Unit: Shares
| Name of shareholder | Number of restricted shares at the beginning of period | Increase of restricted shares in the current period | Number of restricted shares unlocked in the current period | Number of restricted shares at the end of period | Reason for restriction | Date of unlocking |
| Paul Xiaoming Lee | 95,579,231 | 753,121 | 96,332,352 | Locked-up shares held by senior executives | A director can unlock 25% of the total shares he or she holds every year | |
| Li Xiaohua | 50,813,242 | 1,220,797 | 52,034,039 | Locked-up shares held by senior executives | A director can unlock 25% of the total shares he or she holds every year | |
| Feng Jie | 61,500 | 61,500 | Locked-up shares held by senior executives | A director can unlock 25% of the total shares he or she holds every year | ||
| Ma Weihua | 12,750 | 102,375 | 115,125 | ①Locked-up shares held by senior executives ②Restricted shares for equity incentive | ①A director can unlock 25% of the total shares he or she holds every year; ② The restricted shares under the 2024 Restricted Stock Incentive Plan of the Company will be released in three installments 12 months after the completion of the first grant registration | |
| Shou Chunyan | 300 | 150 | 450 | Locked-up shares held by senior executives | She resigned from the position of the independent director on December 31, 2023, from when to six months after the expiration of the term determined when she held the position, she |
| can unlock 25% of the total shares she holds every year. | ||||||
| Zhang Tao | 7,500 | 15,600 | 23,100 | Locked-up shares held by senior executives | A supervisor can unlock 25% of the total shares he or she holds every year | |
| Li Bing | 8,250 | 8,550 | 16,800 | Locked-up shares held by senior executives | A supervisor can unlock 25% of the total shares he or she holds every year | |
| Yu Xue | 60,825 | 144,975 | 12,000 | 193,800 | ①Locked-up shares held by senior executives; ②Restricted shares for equity incentive | ①A secretary of the Board can unlock 25% of the total shares he or she holds every year; ②The restricted shares held under the 2022 Stock Option and Restricted Stock Incentive Plan of the Company will be released in three installments 12 months after the completion of the first grant registration. During the Reporting Period, 12,000 shares were repurchased and released by the Company for the reason of failure to meet the performance assessment goal in the company level in the second unlocking period; ③The restricted shares held under the 2024 Restricted Stock Incentive Plan of the Company will be released in three installments 12 months after the completion of the first grant registration. |
| Li Jian | 0 | 192,675 | 192,675 | ①Locked-up shares held by senior executives; ②Restricted shares for equity incentive | ①A financial director can unlock 25% of the total shares he or she holds every year; ②The restricted shares held under the 2024 Restricted Stock Incentive Plan of the Company will be released in three installments 12 months after the completion of |
| the first grant registration. | ||||||
| Other incentive recipients under 2022 Stock Option and Restricted Stock Incentive Plan (other than directors and senior executives) | 874,270 | 520,399 | 353,871 | Restricted shares for equity incentive | The restricted shares held under the 2022 Stock Option and Restricted Stock Incentive Plan of the Company will be released in three installments 12 months after the completion of the first grant registration; During the Reporting Period, 520,399 shares were repurchased and released by the Company for the reason of failure to meet the performance assessment goal in the company level in the second unlocking period, and also for the reason of resignation or demotion of some grantees thereunder. | |
| Other incentive recipients under 2024 Restricted Stock Incentive Plan (other than directors, supervisors and senior executives) | 0 | 4,884,316 | 40,700 | 4,843,616 | Restricted shares for equity incentive | The restricted shares held under the 2024 Restricted Stock Incentive Plan of the Company will be released in three installments 12 months after the completion of the first grant registration. During the Reporting Period, 40,700 shares were repurchased and released by the Company for the reason of resignation or demotion of some recipients thereunder. |
| Total | 147,417,868 | 7,322,559 | 573,099 | 154,167,328 | -- | -- |
II. Issuance and Listing of Securities
1. Issuance of securities (excluding preferred shares) during the Reporting Period
□Applicable ?Not applicable
2. Statement on changes in total shares and shareholder structure of the Company, and changes in assetsand liabilities of the Company?Applicable □Not applicable
At the beginning of the Reporting Period, the Company recorded a total share capital of 977,754,561 shares (of which, 147,417,868shares were restricted shares, and the remaining 830,336,693 shares were unrestricted shares) and a gearing ratio of 39.23%. During theReporting Period, the “Energy Convertible Bonds” were converted into 2,791 shares. The Company first granted a total of 5,034,316restricted shares under 2024 Restricted Stock Incentive Plan. The Company repurchased and cancelled a total of 532,399 restricted sharesnot meeting the unlocking conditions under the 2022 Stock Option and Restricted Stock Incentive Plan. The Company also repurchasedand cancelled a total of 40,700 restricted shares not meeting the incentive conditions under the 2024 Restricted Stock Incentive Plan. Third,the Company cancelled a total of 5,905,097 shares the Company repurchased from February 5, 2024 to July 30, 2024. As at the end of theReporting Period, the Company recorded a total share capital of 971,279,156 (of which, 154,167,328 shares were restricted shares, and theremaining 817,111,828 shares were unrestricted shares) and a gearing ratio of 44.48%.
3. Existing shares held by internal employees of the Company
□Applicable ?Not applicable
III. Details of Shareholders and Actual Controllers
1．Number of shareholders and their shareholdings
Unit: shares
| Total ordinary shareholders at the end of the Reporting Period | 96,900 | Total ordinary shareholders at the end of the previous month before annual report disclosure date | 96,765 | Total preferred shareholders resuming voting right at the end of the Reporting Period (if any) (see Note 8) | 0 | Total preferred shareholders resuming voting right at the end of the previous month before annual report disclosure date (if any) (see Note 8) | 0 | |
| Shareholders holding more than 5% of shares or shareholdings of the top 10 shareholders (excluding shares lent through securities lending and refinancing) | ||||||||
| Name of shareholder | Nature of shareholder | Shareholding ratio | Number of shares held at the end of the Reporting Period | Increase or decrease of shares during the Reporting Period | Number of restricted shares held | Number of unrestricted shares held | Pledged, tagged or frozen | |
| Status of shares | Number of shares | |||||||
| Paul Xiaoming Lee | Overseas natural person | 13.22% | 128,443,138 | 1,004,163 | 96,332,352 | 32,110,786 | Pledged | 62,300,000 |
| Yuxi Heyi Investment Co., Ltd. | Domestic non-state-owned legal person | 12.30% | 119,449,535 | 0 | 0 | 119,449,535 | Pledged | 80,737,597 |
| SHERRY LEE | Overseas natural person | 7.34% | 71,298,709 | 0 | 0 | 71,298,709 | Not applicable | 0 |
| Li Xiaohua | Domestic natural person | 7.08% | 68,766,089 | 1,015,100 | 52,034,039 | 16,732,050 | Pledged | 40,170,000 |
| China Merchants Bank Co., Ltd. – Origin Xuyuan three-year mixed securities investment fund | Others | 2.78% | 27,012,180 | 12,583,432 | 0 | 27,012,180 | Not applicable | 0 |
| Hong Kong Securities | Overseas legal person | 2.68% | 26,035,055 | -24,896,531 | 0 | 26,035,055 | Not applicable | 0 |
| Clearing Company Limited | ||||||||
| Kunming Huachen Investment Co., Ltd. | Domestic non-state-owned legal person | 1.65% | 16,001,013 | 2,017,100 | 0 | 16,001,013 | Not applicable | 0 |
| JERRY YANG LI | Overseas natural person | 1.52% | 14,735,754 | 0 | 0 | 14,735,754 | Pledged | 14,735,754 |
| Zhang Yong | Domestic natural person | 1.25% | 12,175,707 | -1,742,200 | 0 | 12,175,707 | Frozen | 9,922,907 |
| Shanghai Hengzou Enterprise Management Office (Limited Partnership) | Domestic non-state-owned legal person | 1.20% | 11,645,173 | 0 | 0 | 11,645,173 | Pledged | 3,300,000 |
| Strategic investors or general legal persons who have become top 10 shareholders due to new share allotment (if any) (see Note 3) | The Company issued 85,421,412 A shares to specific investors in 2021, of which Origin Asset Management Co., Ltd. subscribed 3,416,856 shares in cash, which were locked up for a period of 6 months, and were released from restriction and listed for trading on December 20, 2023. The shareholdings of China Merchants Bank Co., Ltd - Origin Xuyuan three-year mixed securities investment fund are shown in the table above. | |||||||
| Statement on related party relationship or concerted action between above-mentioned shareholders | Paul Xiaoming Lee, Sherry Lee, Li Xiaohua and Jerry Yang Li are all the family members of the Company’s actual controller Paul Xiaoming Lee and Heyi Investment represents the person acting in concert with the actual controller. Shanghai Hengzou Enterprise Management Office (Limited Partnership) is the Company’s employee stock ownership platform and it is not the person acting in concert with the Company’s any other shareholders. The other shareholders are not known as to whether they have the related party relationships between them or constitute the persons acting in concert. | |||||||
| Explanation of delegation/acceptance of voting right and waiver of voting right involving the above shareholders | Not applicable | |||||||
| Special explanation on the existence of designated repurchase account among the top 10 shareholders (if any) (see Note 10) | Not applicable | |||||||
| Top 10 shareholders holding unrestricted shares (excluding shares lent through securities lending and refinancing, and locked-up shares held by senior executives) | ||||||||
| Name of shareholder | Number of unrestricted shares held at the end of the Reporting Period | Types of shares | ||||||
| Type of shares | Number of shares | |||||||
| Yuxi Heyi Investment Co., Ltd. | 119,449,535.00 | Renminbi denominated common shares | 119,449,535.00 | |||||
| SHERRY LEE | 71,298,709.00 | Renminbi denominated common shares | 71,298,709.00 | |||||
| Paul Xiaoming Lee | 32,110,786.00 | Renminbi denominated common shares | 32,110,786.00 | |||||
| China Merchants Bank Co., Ltd. | 27,012,180.00 | Renminbi | 27,012,180.00 | |||||
| – Origin Xuyuan three-year mixed securities investment fund | denominated common shares | ||
| Hong Kong Securities Clearing Company Limited | 26,035,055.00 | Renminbi denominated common shares | 26,035,055.00 |
| Li Xiaohua | 16,732,050.00 | Renminbi denominated common shares | 16,732,050.00 |
| Kunming Huachen Investment Co., Ltd. | 16,001,013.00 | Renminbi denominated common shares | 16,001,013.00 |
| JERRY YANG LI | 14,735,754.00 | Renminbi denominated common shares | 14,735,754.00 |
| Zhang Yong | 12,175,707.00 | Renminbi denominated common shares | 12,175,707.00 |
| Shanghai Hengzou Enterprise Management Office (Limited Partnership) | 11,645,173.00 | Renminbi denominated common shares | 11,645,173.00 |
| Statement on related party relationships or concerted action between top 10 shareholders holding unrestricted outstanding shares and between top 10 shareholders holding unrestricted outstanding shares and top 10 shareholders | Paul Xiaoming Lee, Sherry Lee, Li Xiaohua and Jerry Yang Li are all the family members of the Company’s actual controller Paul Xiaoming Lee and Heyi Investment represents the person acting in concert with the actual controller. Shanghai Hengzou Enterprise Management Office (Limited Partnership) is the Company’s employee stock ownership platform and it is not the person acting in concert with the Company’s any other shareholders. The other shareholders are not known as to whether they have the related party relationships between them or constitute the persons acting in concert. | ||
| Statement on top 10 ordinary shareholders’ participation in securities margin trading business (if any) (see Note 4) | Not applicable | ||
Shares lent through securities lending and refinancing by shareholders holding more than 5% of shares, the top 10 shareholders and thetop 10 holding unrestricted outstanding shares
□Applicable ?Not applicable
Change in the top 10 shareholders and the top 10 shareholders holding unrestricted outstanding shares from the previous period forshares lent or returned through securities lending and refinancing
□Applicable ?Not applicable
Did any of the top 10 ordinary shareholders or top 10 unrestricted ordinary shareholders of the Company conduct any transactions onagreed repurchase during the Reporting Period
□Yes ?No
The Company’s top 10 ordinary shareholders and the top 10 unrestricted ordinary shareholders did not conduct any transactions onagreed repurchase during the Reporting Period.
2. Details about the controlling shareholder of the Company
Nature of controlling shareholder: The nature of the controlling entity is unclearType of controlling shareholder: Natural person
| Controlling shareholder’s name | Nationality | Acquisition of right of residence in other countries or regions |
| Paul Xiaoming Lee | American | Yes |
| Major occupation and position | Paul Xiaoming Lee serves as the Chairman of the Company | |
| Equities in other Chinese and overseas listed companies under its control or in which it participated during the Reporting Period | Not applicable | |
Change of controlling shareholder during the Reporting Period
□Applicable ?Not applicable
The controlling shareholder of the Company has not changed during the Reporting Period
3. Details about the actual controller and persons acting in concert
Nature of actual controller: Domestic natural person, overseas natural person, other domestic organizationsType of actual controller: Natural person
| Name of actual controller | Relationship with actual controller | Nationality | Acquisition of right of residence in other countries or regions |
| Paul Xiaoming Lee | Act in concert (including agreement, kinship and common control) | American | Yes |
| Yan Ma | Act in concert (including agreement, kinship and common control) | American | Yes |
| Sherry Lee | Act in concert (including agreement, kinship and common control) | American | Yes |
| Li Xiaohua | Act in concert (including agreement, kinship and common control) | Chinese | Yes |
| Yanyang Hui | Act in concert (including agreement, kinship and common control) | American | Yes |
| Jerry Yang Li | Act in concert (including agreement, kinship and common control) | American | Yes |
| Heyi Investment (the person acting in concert with the actual controller) | Act in concert (including agreement, kinship and common control) | Chinese | No |
| Major occupation and position | Paul Xiaoming Lee serves as the Chairman of the Company. Li Xiaohua serves as the Vice Chairman and General Manager of the Company. Yan Ma, Yanyang Hui, Sherry Lee and Jerry Yang Li take no positions at the Company. | ||
| Control over Chinese and overseas listed companies over past 10 years | None | ||
Change of actual controller during the Reporting Period
□Applicable ?Not applicable
The actual controller of the Company has not changed during the Reporting Period.
A block diagram of the property rights and control relationship between the Company and the actual controller
The actual controller controls the Company through trust or other asset management methods
□Applicable ?Not applicable
4. The accumulated number of pledged shares of the Company’s controlling shareholder or the largestshareholder of the Company and its persons acting in concert accounted for 80% of the Company’s sharesheld
□Applicable ?Not applicable
5. Other corporate shareholders holding more than 10% of the shares
?Applicable □Not applicable
| Name of legal person shareholder | Legal representative/principal of organization | Date of incorporation | Registered capital | Major operating activities or management activities |
| Heyi Investment | Li Xiaohua | November 10, 2010 | RMB30 million | Conduct venture capital activities with free capital; make project investment and manage investment project; investment management, investment consulting and social and economic consultation. |
6. Details about restrictions on reduction of shareholdings of controlling shareholders, actual controllers,restructuring parties, and other entities making commitments
□Applicable ?Not applicable
IV. Information on implementation of share repurchase during the Reporting Period
Progress in implementation of share repurchase?Applicable □Not applicable
| Scheme disclosure date | Number of shares proposed to be repurchased (shares) | Percentage of the total capital | Proposed amount for repurchase (RMB0’000) | Proposed repurchase period | Repurchase purpose | Number of shares repurchased (shares) | Ratio of shares repurchased to the underlying shares under the stock incentive plan (if any) |
| February 3, 2024 | 1,296,900 shares to 2,593,700 shares | 0.13% to 0.27% | RMB100 million to RMB200 million | Within 6 months from February 2, 2024 | For cancellation to reduce its registered capital | 5,905,097 | N/A |
Progress of centralized bidding for reduction of shares repurchased
□Applicable ?Not applicable
Section 8 Details about Preferred Shares
□Applicable
?Not applicable
During the Reporting Period, there were no preferred shares in the Company.
Section 9 Details about Bonds?Applicable □Not applicable
I.
Corporate bonds
□Applicable
?Not applicable
During the Reporting Period, there were no corporate bonds of the Company.
II.
Debentures
□Applicable
?Not applicable
During the Reporting Period, there were no debentures of the Company.
III.
Debt financing instruments of non-financial enterprises
□Applicable
?Not applicable
During the Reporting Period, there were no non-financial enterprise debt financing tool of the Company.
IV.
Convertible corporate bonds
?Applicable □Not applicable
1.
All Previous Adjustments to the Conversion Price
Upon the approval of the file “Zheng Jian Xu Ke [2019] No. 2701” promulgated by China Securities Regulatory Commission, theCompany publicly issued 16 million convertible bonds on February 11, 2020, with face value of RMB100 each, total issue amount ofRMB1.6 billion, and a term of 6 years. With the approval of the file “Shen Zheng Shang [2020] No. 109” of Shenzhen Stock Exchange,the Company’s convertible bonds of RMB1.6 billion would be listed and traded in Shenzhen Stock Exchange from February 28, 2020.The bond is referred to as “Energy Convertible Bond” and the bond code is “128095.” The initial conversion price of “Energy ConvertibleBond” is RMB64.61/share.
In May 2020, the Company implemented the annual profit distribution plan for 2019: Based on the total share capital of theCompany, namely 805,370,770 shares, distribute RMB1.25 in cash (inclusive of tax) for every 10 shares to all shareholders, distribute atotal cash dividend of RMB100,671,346.25 (inclusive of tax), distribute no dividend shares, convert no surplus reserve into share capital,and set the ex-dividend date as May 21, 2020. Pursuant to related articles concerning the adjustment of the conversion price for theconvertible corporate bonds, the Company has made corresponding adjustment to the conversion price of “Energy Convertible Bonds”from RMB64.61/share before the adjustment to RMB64.49/share after adjustment, and the conversion price after adjustment took effecton May 21, 2020.
In September 2020, upon the approval of the China Securities Regulatory Commission with the Reply on Approving the Non-publicOffering of Shares of Yunnan Energy New Material Co., Ltd. (Zheng Jian Xu Ke [2020] No. 1476), the Company made a private offeringof 69,444,444 shares (A shares) to 22 specific investors. These shares started trading at an issuing price of RMB72.00/share at ShenzhenStock Exchange on September 4, 2020. Pursuant to related articles concerning the adjustment of the conversion price for the convertiblecorporate bonds, the Company has made corresponding adjustment to the conversion price of “Energy Convertible Bonds” fromRMB64.49/share before the adjustment to RMB65.09/share after adjustment, and the conversion price after adjustment took effect onSeptember 4, 2020.
In September 2020, the Company repurchased and canceled a total of 23,120 restricted shares held by 4 incentive recipients witha personal assessment rating of “good” when the 2017 Restricted Stock Incentive Plan was unlocked for the third time. The repurchaseprice was RMB8.426 per share. The cancellation for repurchase was completed on September 28, 2020. Due to the small number ofshares canceled in this repurchase, the conversion price of “Energy Convertible Bonds” remained unchanged at RMB65.09 per shareafter calculating in accordance with the relevant terms regarding the adjustment to the conversion price of convertible corporate bonds.
In April 2021, the Company implemented the annual profit distribution plan for 2020: Based on the total share capital of theCompany, namely 888,160,636 shares, distribute RMB1.696948 in cash (inclusive of tax) for every 10 shares to all shareholders,distribute a total cash dividend of RMB150,716,245.67 (inclusive of tax), distribute no dividend shares, convert no surplus reserve intoshare capital, and set the ex-dividend date as April 30, 2021. Pursuant to related articles concerning the adjustment of the conversionprice for the convertible corporate bonds, the Company has made a corresponding adjustment to the conversion price of “EnergyConvertible Bonds” from RMB65.09/share to RMB64.92/share, and the conversion price after adjustment took effect on April 30, 2021.
In May 2022, the Company implemented the 2021 annual profit distribution plan: based upon the 890,823,196 shares of theCompany’s total capital on the share registration date (i.e. May 13, 2022) minus 1,585,437 shares in the special securities account forrepurchase, RMB3.030904 (including tax) in cash will be paid to all shareholders for every 10 shares without bonus shares. No capitalreserve shall be converted as capital increase. In accordance with relevant provisions on the adjustment to the conversion price ofconvertible corporate bonds, the conversion price of “Energy Convertible Bond” was adjusted from RMB64.92 per share to RMB64.62per share, and the adjusted conversion price would take effect from May 16, 2022.
Upon the approval of the China Securities Regulatory Commission with the Reply on Approving the Non-public Offering of Sharesof Yunnan Energy New Material Co., Ltd. (Zheng Jian Xu Ke [2022] No. 1343), the Company made a non-public offering of 85,421,412RMB-denominated ordinary shares (A shares) to 21 specific investors, which were listed for trading on the Shenzhen Stock Exchangeon June 20, 2023. Pursuant to related articles concerning the adjustment of the conversion price for the convertible bonds, the Company
has made corresponding adjustment to the conversion price of “Energy Convertible Bonds”. Starting from June 20, 2023, the price of“Energy Convertible Bonds” has been adjusted to RMB66.64/share.On June 25, 2023, the 7th meeting of the 5th Board of Directors and the 7th meeting of the 5th Supervisory Committee of theCompany considered and approved the Proposal on the Repurchase and Cancellation of Partial Restricted Shares under the 2022 StockOption and Restricted Stock Incentive Plan. As 60 incentive recipients of restricted shares under the 2022 Stock Option and RestrictedStock Incentive Plan resigned due to personal reasons, one incentive recipient died other than as a result of the performance of his duties,four incentive recipients received a personal performance appraisal rating of B, two incentive recipients received a personal performanceappraisal rating of C, and one incentive recipient received a personal performance appraisal rating of D, the Company repurchased andcancelled a total of 88,630 restricted shares granted to the above 68 incentive recipients but not yet unlocked at a repurchase price ofRMB64.18 per share (excluding interest on bank deposits for the same period). As the proportion of shares repurchased and cancelled isrelatively small compared to the total share capital of the Company, after the completion of the repurchase and cancellation, theconversion price of “Energy Convertible Bonds,” upon calculation, remains unchanged at RMB66.64 per share. In August 2023, theCompany implemented the 2022 annual profit distribution plan: Based on the 976,282,205 shares calculated by the total share capital of977,752,005 shares deducting 1,469,800 shares from the designated securities account for repurchase, a total of RMB173,778,232.00,representing RMB1.78 (including tax) per 10 shares, will be paid to all shareholders without bonus shares. No capital reserve will beconverted to share capital. Pursuant to related articles concerning the adjustment of the conversion price for the convertible corporatebonds, corresponding adjustment was made to the conversion price of “Energy Convertible Bonds” from RMB66.64/share before theadjustment to RMB66.46/share after adjustment, with the conversion price after adjustment being effective on August 21, 2023.
In September 2023, the Company implemented the 2023 interim profit distribution plan: Based on the 976,283,180 sharescalculated by the total share capital of 977,752,980 shares deducting 1,469,800 shares from the designated securities account forrepurchase, a total of RMB200,137,953.50, representing RMB2.05 (including tax) per 10 shares, will be paid to all shareholders withoutbonus shares. No capital reserve will be converted to share capital. Pursuant to related articles concerning the adjustment of the conversionprice for the convertible corporate bonds, corresponding adjustment was made to the conversion price of “Energy Convertible Bonds”from RMB66.46/share before the adjustment to RMB66.26/share after adjustment, with the conversion price after adjustment beingeffective on September 21, 2023(ex-dividend and ex-rights day).
In June 2024, the Company implemented the 2023 annual equity distribution plan: based on the 972,378,123 shares (the total sharecapital of 977,756,063 shares less the 5,377,940 shares in the Company’s special securities account for repurchase), the Company woulddistribute RMB15.426097 in cash (inclusive of tax) for every 10 shares to all shareholders, with no bonus shares and no increase incapital by conversion of capital reserve. In accordance with the terms of the conversion price adjustment of convertible bonds, theCompany adjusted the conversion price of Energy Convertible Bonds accordingly. The conversion price of Energy Convertible Bondswas adjusted from RMB66.26/share to RMB64.73/share starting from June 3, 2024 (ex-rights and ex-dividend date).
On September 9, 2024, the Company completed the procedures for the repurchase and cancellation of 532,399 restricted shares ofthe Company held by 765 incentive recipients under the 2022 Stock Option and Restricted Share Incentive Plan, and 40,700 restrictedshares of the Company held by 2 incentive recipients under the initial grant of the 2024 Restricted Share Incentive Plan. Because theshares for repurchase and cancellation accounted for a small proportion of the Company’s total share capital, it was estimated that afterthe completion of the repurchase and cancellation, the conversion price of Energy Convertible Bonds would remain unchanged atRMB64.73/share.
On November 5, 2024, the Company completed the cancellation of 5,905,097 repurchased shares. In accordance with the terms ofthe conversion price adjustment of convertible bonds, the Company adjusted the conversion price of Energy Convertible Bondsaccordingly. The conversion price of Energy Convertible Bonds was adjusted from RMB64.73/share to RMB64.92/share fromNovember 6, 2024 onwards.
2.
Cumulative Share Conversion
?Applicable □Not applicable
| Abbreviation for convertible bond | Start and end date of share conversion | Total volume of bond issuance (number of bonds) | Total amount of issuance (RMB) | Cumulative conversion amount (RMB) | Cumulative number of shares converted (shares) | Ratio of the number of shares converted to the total issued shares of the Company before the start of the conversion | Amount of shares not yet converted (RMB) | Ratio of amount of shares not yet converted to the total amount of issuance |
| Energy Convertible Bonds | August 17, 2020 to February 11, 2026 | 16,000,000 | 1,600,000,000.00 | 1,147,089,100.00 | 17,632,476 | 2.19% | 452,910,900.00 | 28.31% |
3.
Top Ten Holders of Convertible Bonds
| No. | Name of holder of convertible bonds | Nature of holder of convertible bonds | Number of convertible bonds held at the end of the Reporting | Amount of convertible bonds held at the end of the Reporting | Percentage of convertible bonds held at the end of the Reporting |
| Period (number of convertible bonds) | Period (RMB) | Period | |||
| 1 | UBS AG | Overseas legal person | 327,795 | 32,779,500.00 | 7.24% |
| 2 | BlackRock (Singapore) Limited - BlackRock Global Funds - China Bond Fund (Exchange Traded) | Overseas legal person | 224,589 | 22,458,900.00 | 4.96% |
| 3 | China Merchants Bank Co., Ltd - Bosera CSI Convertible and Exchangeable Bond Traded Open-ended Index Fund | Others | 219,029 | 21,902,900.00 | 4.84% |
| 4 | E Fund Yixin Allocation Mixed Pension Product - Bank of China Limited | Others | 213,760 | 21,376,000.00 | 4.72% |
| 5 | ICBC Credit Suisse Tianfeng Fixed Income Pension Product - Bank of China Limited | Others | 204,219 | 20,421,900.00 | 4.51% |
| 6 | E Fund Robust Allocation Mixed Pension Product - Industrial and Commercial Bank of China Limited | Others | 200,150 | 20,015,000.00 | 4.42% |
| 7 | E Fund Anying Return Fixed Income Pension Product - Industrial and Commercial Bank of China Limited | Others | 200,060 | 20,006,000.00 | 4.42% |
| 8 | Dajia Asset Management - CITIC Bank - Houkun No. 40 Pooled Asset Management Product of Dajia Asset Management | Others | 129,755 | 12,975,500.00 | 2.86% |
| 9 | Dajia Asset Management - Minsheng Bank - Dajia Asset Management - Robust Selection No.3 (the Fifth Tranche) Pooled Asset Management Product | Others | 106,150 | 10,615,000.00 | 2.34% |
| 10 | Huaxia Fund Extended Life No.2 Fixed Income Pension Product-Bank of China Ltd. | Others | 97,892 | 9,789,200.00 | 2.16% |
4.
Significant Changes in the Guarantor’s Profitability, Asset Status, and Credit Status
□Applicable
?Not applicable
5.
The Company’s Liabilities and Credit Changes at the End of the Reporting Period, and CashArrangements for Debt Repayment in Future Years
(1) The Company’s liabilities: relevant indicators such as the asset-liability ratio, interest coverage multiple, and loan repayment rate atthe end of the Reporting Period, and year-on-year changes are detailed in the “VIII. Major Accounting data and financial indicators ofthe Company in the recent two years as at the end of the Reporting Period.”
(2) Changes in the Company’s credit standing: According to the Follow-up Rating Report on Public Offering of Convertible Corporate
Bonds by Yunnan Energy New Material Co., Ltd. (No. Follow-up Rating on Corporate Bonds by Shanghai Brilliance (2020) 100053,Follow-up Rating on Corporate Bonds by Shanghai Brilliance (2021) 100043, Follow-up Rating on Corporate Bonds by ShanghaiBrilliance (2022) 100280), Follow-up Rating on Corporate Bonds by Shanghai Brilliance (2023) 100005), and Follow-up Rating onCorporate Bonds by Shanghai Brilliance (2024) 100211) issued by the credit rating agency - Shanghai Brilliance Credit Rating &Investors Service Co, Ltd., the credit rating of the Company on the whole was AA, the credit rating of “Energy Convertible Bonds” was
AA, and the said bonds were affirmed with a “stable” outlook. The above-mentioned follow-up rating results have not changed comparedwith the previous rating results. For details about the above-mentioned follow-up rating reports, refer to www.cninfo.com.cn.
(3) Cash arrangements for debt repayment in future years: The Company’s credit status is good, the asset-liability structure is reasonable,
and banks and other financial institutions grant sufficient comprehensive credit to the Company. The Company can quickly and effectivelyobtain financing support from financial institutions. The Company has stable operations and good performance, and can obtain stableoperating cash flow through endogenous growth. At the same time, the Company actively promotes the implementation of fundraisingprojects through convertible corporate bonds to further enhance its profitability. If the Company meets the put provision and redemptionclauses and repayment of principal and interest when due as disclosed in the prospectus of convertible corporate bonds, the Companycan pay the bondholders’ principal and interest with its own funds and financing.V.
Losses in the scope of consolidated statements during the Reporting Period exceeding 10% of the netassets as at the end of the prior year□Applicable
?Not applicableVI.
Overdue repayment of interest-bearing debt other than bonds as at the end of the Reporting Period
□Applicable
?Not applicable
VII.
Violation of rules and regulations during the Reporting Period
□Yes
?
No
VIII.
Major accounting data and financial indicators of the Company in the recent two years as at theend of the Reporting Period
Unit: RMB’0,000
| Item | At the end of the Reporting Period | At the end of the prior year | Increase or decrease at the end of the current Reporting Period compared with the end of prior year |
| Current ratio | 101.320000 | 141.300000 | -28.29% |
| Asset-liability ratio | 44.48% | 39.23% | 5.25% |
| Quick ratio | 69.510000 | 101.920000 | -31.80% |
| The Reporting Period | The corresponding period of prior year | Increase or decrease of the Reporting Period compared with the corresponding period of prior year | |
| Net profit after deduction of non- recurring gains and losses | -61,329.80 | 246,125.79 | -124.92% |
| Debt-to-EBITDA ratio | 6.23% | 26.38% | -20.15% |
| Interest coverage ratio | -1.270000 | 7.880000 | -116.12% |
| Cash interest coverage ratio | 3.770000 | 7.990000 | -52.82% |
| EBITDA interest coverage ratio | 3.370000 | 11.310000 | -70.20% |
| Loan repayment rate | 100.00% | 100.00% | 0.00% |
| Interest coverage rate | 100.00% | 100.00% | 0.00% |
Section 10 Financial Report
I. Audit Report
| Type of audit opinion | Unqualified opinion |
| Signature date of audit report | April 22, 2025 |
| Audit organization name | RSM CHINA (Special General Partnership) |
| Audit report number | Rong Cheng Shen Zi [2025] No. 100Z2646 |
| Name of the certified public accountants (CPAs) | Yao Rui, Yang Ganlin, Tian Guocheng |
Body of the audit reportTo all shareholders of Yunnan Energy New Material Co., Ltd.:
I. Audit OpinionsWe have audited the financial statements of Yunnan Energy New Material Co., Ltd. (“Energy Technology”), including theconsolidated and the parent company’s balance sheets as of December 31, 2024, the consolidated and parent company’s income statement,the consolidated and the parent company’s cash flow statement, the consolidated and the parent company’s statement of changes in equityfor 2024, and the relevant notes to financial statements. In our opinion, the enclosed financial statements were prepared in accordance withthe Accounting Standards for Business Enterprises in all material aspects and fairly reflected the Energy Technology’s consolidated andthe parent company’s financial positions as of December 31, 2024 as well as the consolidated and the parent company’s operation resultsand cash flow for 2024.
II. Basis for Audit OpinionsWe carried out the audit work according to the Auditing Standards for Chinese CPA. Our responsibilities under the Standards arefurther described under the section titled “responsibilities of CPA for auditing financial statements” in this audit report. We are independentfrom Energy Technology and have fulfilled the obligations in terms of professional ethics according to Code of Professional Conduct forChinese CPAs. We believe that the evidences we obtained are adequate and proper, and lay a solid foundation for the audit opinion.III. Key Audit MattersKey audit matters are those that we believe are of most significance in the audit of the financial statements of the current period basedon professional judgment. These matters are addressed in the context of our audit of the financial statements as a whole, and in formingour opinion thereon, and we do not provide a separate opinion on these matters.(I) Revenue recognition matters
1. Description of matters
Please refer to Note III-27 “Revenue recognition principles and measurement methods” and Note V-44 “Operating revenue andoperating costs” of the financial statements for the relevant information disclosure. The operating revenue of Energy Technology in 2024amounted to RMB10,163,655,800, which was the main source of its profit and affected its key performance indicators. In addition,according to the industry practice, after signing the sales order with customer, Energy Technology arranges production based on customer’srequirements, delivers it to customers pursuant to the agreed delivery method, obtains the customer’s evidence on the transfer of theownership of goods, and then recognizes the sales revenue. Since the time of revenue recognition is later than the product delivery, and thedelivery time and delivery document recognition are all dependent on the customer, there may be significant risk of misstatement if thesales revenue is fully included in the appropriate accounting period. Therefore, we recognize revenue as a key audit matter.
2. Audit Response
Our key audit procedures for revenue recognition include:
(1) Understand and evaluate the design of internal control of revenue recognition by the management, and test the effectiveness of
key control implementation;
(2) Obtain a major business contract, identify terms and conditions related to the transfer of commodity ownership, and assesswhether the income recognition policy of Energy Technology is in line with the relevant provisions of the enterprise accounting standards;
(3) Perform analytical review procedures on revenue and gross profit based on the product types and customer conditions of Energy
Technology, and determine the reasonableness of the changes in sales revenue and gross profit margin;
(4) Understand the background and basic information of the main customers, identify whether they are related parties, and confirmthe accounts receivable balance and sales amount of the main customers by confirmation letters;
(5) Select samples from the sales revenue ledger, check the relevant documents such as contracts (orders), invoices, delivery
documents, pay attention to the delivery time, and check the revenue recognition time point;
(6) Check the sales revenue recognized before and after the balance sheet date with supporting documents of sales revenuerecognition, and implement the cut-off test and subsequent inspection procedures for revenue recognition;
(7) Assess whether the management’s disclosure of income statement is appropriate.
With the audit procedures and the evidence we have obtained, we believe that the income of Energy Technology is real and recordedcorrectly during the accounting period.
(II) Provision for bad debts of accounts receivable
1. Description of matters
Please refer to Note III-11 “Financial instruments” and Note V-3 “Accounts receivable” of the financial statements for the relevantinformation disclosure. On December 31, 2024, the original book value of accounts receivable of Energy Technology wasRMB6,228,597,700, the bad debt provision was RMB126,549,500 and the net value was RMB6,102,048,200, accounting for 12.93% of
the total assets at the end of the period.
Based on the financial situation of the counterparty, the management evaluates the guarantee obtained to the accounts receivable,the aging of the accounts receivable, the credit rating and historical repayment record of the counterparty, and with reference to thehistorical credit loss experience, combined with the current situation and the forecast of the future economic situation, the managementconsiders to accrue bad debt for the accounts receivable according to the expected credit loss in the whole duration. As the determinationof the amount of bad debt provision requires the management to use significant accounting estimates and judgments, and accountsreceivable is important to the financial statements, therefore, we regard the bad debt provision of accounts receivable as a key audit matter.
2. Audit response
Our key audit procedures for the bad debt provision include:
(1) Understand and evaluate the management’s key internal control over the daily management and provision for accountsreceivable, and carry out the corresponding walk-through test;
(2) For accounts receivable with significant single amount and credit impairment occurred after initial recognition, the bases for themanagement’s assessment of the expected future available cash flow shall be reviewed to analyze whether it is reasonable;
(3) For the accounts receivable of bad debt provision withdrawn by the management according to the combination of credit riskcharacteristics, combined with the credit risk characteristics and aging analysis, evaluate the rationality of the withdrawal of bad debtprovision by the management;
(4) Evaluated the adequacy of the management’s provision for bad debt in combination with the check of payment collection afterthe period;
(5) Assess whether the management’s disclosure of accounts receivable financial statements is appropriate. Based on the auditprocedures we have implemented and the evidence we have obtained, we believe that the accounting estimates of the bad debt provisionof accounts receivable made by Energy Technology are fully reasonable.
(III) Provision for inventory impairment
1. Description of matters
Please refer to Note V-13 “Inventories” and Note V-7 “Inventories” of the financial statements for the relevant informationdisclosure.
As of December 31, 2024, the carrying amount of inventory was RMB3,601,034,800, with a provision for inventory impairment ofRMB638,008,000, resulting in a net carrying value of RMB2,963,026,800.
The recognition of inventory impairment provision depends on the estimation of the net realizable value (NRV) of inventory, whichis determined as the estimated selling price less estimated selling expenses and related taxes. In assessing NRV, management mustconsider the actual condition of inventory, aging, market value (or comparable market data), and reasonably estimate selling expensesand taxes required to realize the sale. These assessments involve significant management judgment and estimation. Therefore, weidentified the inventory impairment provision as a key audit matter.
2. Audit Response
Our key audit procedures for the inventory impairment provision include:
(1) Evaluate and test the design and operating effectiveness of internal controls related to inventory impairment recognition;
(2) Perform physical inventory observation at the Company’s production bases using audit sampling methods to verify year-endinventory quantities; inspect inventory conditions and examine aged inventory items;
(3) Obtain inventory aging reports and impairment calculation worksheets to verify compliance with accounting policies andanalyzing changes in prior-year provisions to assess adequacy;
(4) Recalculate NRV by comparing management’s estimated selling prices against actual transaction prices, considering marketdemand/supply and industry trends, and benchmarking estimated selling expenses/taxes against historical data;
(5) Evaluate the appropriateness of financial statement disclosures about inventory. Based on our audit procedures and evidenceobtained, we conclude that Energy Technology’s accounting estimates for inventory impairment provisions are reasonable and adequate.
IV. Other Information
Energy Technology’s management is responsible for the other information. The other information comprises all of the informationincluded in the 2024 annual report of Energy Technology other than the financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusionthereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, considerwhether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwiseappears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of the other information, we arerequired to report that fact. We have nothing to report in this regard.
V. Responsibilities of Management and Those Charged with Governance for Financial Statements
Energy Technology’s management is responsible for the preparation of the financial statements that give a fair view in accordancewith CAS, and for designing, implementing and maintaining such internal control as the management determines is necessary to enablethe preparation of financial 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 Energy Technology’s ability to continue as agoing concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless themanagement either intends to liquidate Energy Technology or to cease operations, or have no realistic alternative but to do so.
Those charged with governance are responsible for overseeing Energy Technology’s financial reporting process.
VI. Responsibilities of CPA for Auditing Financial Statements
Our 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 a high
level of assurance, but is not a guarantee that an audit conducted in accordance with CAS will always detect a material misstatement whenit exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonablybe expected to influence the economic decisions of users taken on the basis of these financial statements.As part of an audit in accordance with CAS, we exercise professional judgment and maintain professional skepticism throughout theaudit. We also:
1. 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 basis for ouropinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud mayinvolve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
2. Obtain an understanding of internal control relevant to the audit To design audit procedures that are appropriate in thecircumstances.
3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosuresmade by the management.
4. Conclude on the appropriateness of the management’s use of the going concern basis of accounting. Based on the audit evidenceobtained, conclude on whether a material uncertainty exists related to events or conditions that may cast significant doubt on EnergyTechnology’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required by CAS to drawusers’ attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modifyour opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events orconditions may cause Energy Technology to cease to continue as a going concern.
5. Evaluate the overall presentation, structure and content of the financial statements, and whether the financial statements
represent the underlying transactions and events in a manner that achieves fair presentation.
6. Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities withinEnergy Technology to express an opinion on the financial statements. We are responsible for the direction, supervision and performanceof the Company audit and remain 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 requirements regardingindependence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our 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 key audit matters. We describe these matters in our auditor’sreport unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine thata matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected tooutweigh the public interest benefits of such communication.II．Financial Statements
The unit of notes to financial statements is: RMB1.
Consolidated balance sheetPrepared by: Yunnan Energy New Material Co., Ltd.
December 31, 2024
Unit: RMB
| Item | Closing balance | Opening balance |
| Current assets: | ||
| Monetary funds | 2,574,141,019.53 | 3,835,530,538.70 |
| Settlement reserves | ||
| Loans to banks and other financial institutions | ||
| Held-for-trading financial assets | ||
| Derivative financial assets | ||
| Notes receivable | 370,653,110.87 | 760,968,387.25 |
| Accounts receivable | 6,102,048,232.51 | 6,719,699,762.18 |
| Receivable financing | 408,092,531.80 | 408,354,641.63 |
| Prepayments | 160,423,760.33 | 175,605,702.96 |
| Premiums receivable | ||
| Reinsurance premium receivable | ||
| Reinsurance contract provision receivable | ||
| Other receivables | 28,221,493.60 | 26,568,094.26 |
| Including: Interest receivable | ||
| Dividends receivable | 1,347,859.55 | |
| Financial assets held under resale agreements |
| Inventories | 2,963,026,794.82 | 3,000,558,853.64 |
| Including: Data resources | ||
| Contractual assets | ||
| Held-for-sales assets | ||
| Non-current assets due within one year | 215,940,873.29 | 618,295,576.83 |
| Other current assets | 1,001,879,072.11 | 746,345,684.12 |
| Total current assets | 13,824,426,888.86 | 16,291,927,241.57 |
| Non-current assets: | ||
| Loans and advances to customers | ||
| Debt investment | ||
| Other debt investment | ||
| Long-term receivables | ||
| Long-term equity investments | 0.00 | 3,209,980.10 |
| Investments in other equity instruments | 78,000,000.00 | 89,000,000.00 |
| Other non-current financial assets | ||
| Investment properties | 9,051,579.82 | 7,865,069.42 |
| Fixed assets | 22,928,507,627.21 | 19,380,327,177.42 |
| Construction in progress | 5,863,245,023.13 | 6,207,408,467.99 |
| Productive biological assets | ||
| Oil and gas assets | ||
| Right-of-use assets | 1,752,245.09 | 2,387,711.07 |
| Intangible assets | 1,130,776,649.65 | 1,119,341,214.09 |
| Including: Data resources | ||
| Development expenditures | ||
| Including: Data resources | ||
| Goodwill | 519,105,553.36 | 520,230,679.65 |
| Long-term unamortized expenses | 1,280,992.77 | 524,481.50 |
| Deferred income tax assets | 632,495,685.27 | 432,868,864.70 |
| Other non-current assets | 2,210,995,255.06 | 3,145,825,748.18 |
| Total non-current assets | 33,375,210,611.36 | 30,908,989,394.12 |
| Total assets | 47,199,637,500.22 | 47,200,916,635.69 |
| Current liabilities: | ||
| Short-term borrowings | 8,136,897,962.50 | 7,290,694,906.27 |
| Borrowings from the central bank | ||
| Placements from banks and other financial institutions | ||
| Held-for-trading financial liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | 514,689,404.62 | 802,933,704.02 |
| Accounts payable | 2,009,858,521.55 | 1,608,309,616.46 |
| Advances from customers | ||
| Contractual liabilities | 45,640,854.47 | 29,791,971.25 |
| Financial assets sold under repurchase agreements | ||
| Customer bank deposits and due to banks and other financial institutions | ||
| Customer brokerage deposits | ||
| Securities underwriting brokerage deposits | ||
| Employee benefits payable | 88,966,332.21 | 87,688,714.29 |
| Taxes payable | 116,901,868.52 | 180,293,856.11 |
| Other payables | 212,623,069.42 | 244,698,302.33 |
| Including: Interest payable | ||
| Dividends payable | 9,778,239.09 | 95,117,453.54 |
| Fees and commissions payable |
| Reinsurance amounts payable | ||
| Held-for-sale liabilities | ||
| Non-current liabilities due within one year | 1,781,854,472.71 | 1,095,554,519.11 |
| Other current liabilities | 736,298,107.85 | 189,792,221.12 |
| Total current liabilities | 13,643,730,593.85 | 11,529,757,810.96 |
| Non-current liabilities: | ||
| Insurance contract reserves | ||
| Long-term borrowings | 5,070,029,111.30 | 4,685,315,817.70 |
| Bonds payable | 440,251,699.82 | 435,900,486.76 |
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | 182,663.88 | |
| Long-term payables | 172,792,328.77 | |
| Long-term payroll payable | ||
| Estimated liabilities | ||
| Deferred income | 1,382,766,781.07 | 994,974,995.96 |
| Deferred income tax liabilities | 22,264,253.52 | 308,332,028.16 |
| Other non-current liabilities | 262,804,248.10 | 564,217,694.55 |
| Total non-current liabilities | 7,350,908,422.58 | 6,988,923,687.01 |
| Total liabilities | 20,994,639,016.43 | 18,518,681,497.97 |
| Owners’ equity: | ||
| Share capital | 971,279,156.00 | 977,754,217.00 |
| Other equity instruments | 50,222,020.25 | 50,242,778.32 |
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserve | 14,596,889,137.16 | 15,070,954,107.76 |
| Less: treasury stock | 337,939,102.37 | 607,261,671.95 |
| Other comprehensive income | -97,799,317.85 | 89,911,398.03 |
| Special reserve | ||
| Surplus reserve | 421,806,734.33 | 399,014,802.99 |
| General risk provision | ||
| Undistributed profits | 8,866,770,927.54 | 10,945,879,862.09 |
| Total owners’ equity attributable to parent company | 24,471,229,555.06 | 26,926,495,494.24 |
| Minority interests | 1,733,768,928.73 | 1,755,739,643.48 |
| Total owners’ equity | 26,204,998,483.79 | 28,682,235,137.72 |
| Total liabilities and owners’ equity | 47,199,637,500.22 | 47,200,916,635.69 |
Legal Representative: Paul Xiaoming Lee Chief Financial Officer: Li Jian Financial Manager: Deng Jinhuan
2.
Balance sheet of the parent company
Unit: RMB
| Item | Closing balance | Opening balance |
| Current assets: | ||
| Monetary funds | 82,426,833.46 | 1,382,521,361.78 |
| Held-for-trading financial assets | ||
| Derivative financial assets | ||
| Notes receivable | 300,000.00 | |
| Accounts receivable | 14,842,141.47 | |
| Receivable financing | ||
| Prepayments | 200,000.00 | 315,497.60 |
| Other receivables | 13,698,147,397.56 | 14,132,822,217.29 |
| Including: Interest receivable | ||
| Dividends receivable | 786,539,232.73 | 2,011,040,000.00 |
| Inventories | 3,428,717.82 | 3,831,510.64 |
| Including: Data resources |
| Contractual assets | ||
| Held-for-sales assets | ||
| Non-current assets due within one year | ||
| Other current assets | 252,775,000.00 | |
| Total current assets | 14,036,977,948.84 | 15,534,632,728.78 |
| Non-current assets: | ||
| Debt investment | ||
| Other debt investment | ||
| Long-term receivables | ||
| Long-term equity investments | 4,971,553,501.90 | 4,959,728,962.52 |
| Investments in other equity instruments | 72,000,000.00 | 89,000,000.00 |
| Other non-current financial assets | ||
| Investment properties | ||
| Fixed assets | 15,676,027.90 | 18,234,472.92 |
| Construction in progress | 38,178,294.59 | 1,595,104.80 |
| Productive biological assets | ||
| Oil and gas assets | ||
| Right-of-use assets | ||
| Intangible assets | 35,933,713.42 | 37,069,860.82 |
| Including: Data resources | ||
| Development expenditures | ||
| Including: Data resources | ||
| Goodwill | ||
| Long-term unamortized expenses | ||
| Deferred income tax assets | 9,542,089.43 | 5,349,914.01 |
| Other non-current assets | 15,000.00 | |
| Total non-current assets | 5,142,883,627.24 | 5,110,993,315.07 |
| Total assets | 19,179,861,576.08 | 20,645,626,043.85 |
| Current liabilities: | ||
| Short-term borrowings | 103,633,690.22 | 59,543,098.59 |
| Held-for-trading financial liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | ||
| Accounts payable | 11,036,560.48 | 20,301,025.31 |
| Advances from customers | ||
| Contractual liabilities | ||
| Employee benefits payable | 113,900.14 | 84,981.79 |
| Taxes payable | 14,543,612.91 | 35,169,433.18 |
| Other payables | 530,573,265.87 | 519,178,786.86 |
| Including: Interest payable | ||
| Dividends payable | ||
| Held-for-sale liabilities | ||
| Non-current liabilities due within one year | 7,403,847.66 | 6,070,366.96 |
| Other current liabilities | 300,000.00 | |
| Total current liabilities | 667,304,877.28 | 640,647,692.69 |
| Non-current liabilities: | ||
| Long-term borrowings | ||
| Bonds payable | 440,251,699.82 | 435,900,486.76 |
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | ||
| Long-term payables |
| Long-term payroll payable | ||
| Estimated liabilities | ||
| Deferred income | ||
| Deferred income tax liabilities | ||
| Other non-current liabilities | ||
| Total non-current liabilities | 440,251,699.82 | 435,900,486.76 |
| Total liabilities | 1,107,556,577.10 | 1,076,548,179.45 |
| Owners’ equity: | ||
| Share capital | 971,279,156.00 | 977,754,217.00 |
| Other equity instruments | 50,222,020.25 | 50,242,778.32 |
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserve | 16,650,858,056.65 | 17,125,627,483.84 |
| Less: treasury stock | 337,939,102.37 | 607,261,671.95 |
| Other comprehensive income | -28,500,000.00 | -15,750,000.00 |
| Special reserve | ||
| Surplus reserve | 394,054,223.34 | 371,262,292.00 |
| Undistributed profits | 372,330,645.11 | 1,667,202,765.19 |
| Total owners’ equity | 18,072,304,998.98 | 19,569,077,864.40 |
| Total liabilities and owners’ equity | 19,179,861,576.08 | 20,645,626,043.85 |
3.
Consolidated income statement
Unit: RMB
| Item | 2024 | 2023 |
| I. Total operating revenue | 10,163,655,793.70 | 12,042,229,789.30 |
| Including: Operating revenue | 10,163,655,793.70 | 12,042,229,789.30 |
| Interest income | ||
| Earned premium | ||
| Fee and commission incomes | ||
| II. Total operating cost | 10,857,553,669.18 | 9,048,863,438.70 |
| Including: operating cost | 9,038,746,050.98 | 7,535,223,456.34 |
| Interest expense | ||
| Fee and commissions expenses | ||
| Cash surrender amount | ||
| Net payments for insurance claims | ||
| Net provision for insurance liability contract reserves | ||
| Policy dividend expenses | ||
| Reinsurance expenses | ||
| Taxes and surcharges | 96,272,479.22 | 74,765,080.44 |
| Selling expenses | 145,263,407.26 | 89,338,734.45 |
| Administrative expenses | 600,164,938.14 | 383,415,488.72 |
| R&D expenses | 662,843,179.69 | 727,481,001.67 |
| Financial expenses | 314,263,613.89 | 238,639,677.08 |
| Including: Interest expense | 353,090,934.03 | 376,997,402.81 |
| Interest income | 61,700,514.83 | 84,200,436.11 |
| Add: Other income | 306,039,826.91 | 209,120,211.75 |
| Investment income (loss is indicated with “-”) | 1,412,808.29 | 16,784,148.14 |
| Including: Income from investment in associates and joint ventures | 1,347,859.55 | 1,351,086.12 |
| Derecognized financial assets measured by amortized cost | -13,173,229.23 | -21,537,307.12 |
| Exchange gain (loss is indicated with “-”) |
| Net exposure hedging income (loss is indicated with “- ”) | ||
| Income from changes in fair value (loss is indicated with “-”) | ||
| Credit impairment losses (loss is indicated with “-”) | 7,366,782.82 | -3,872,510.61 |
| Asset impairment losses (loss is indicated with “-”) | -462,221,619.95 | -186,376,180.23 |
| Income from disposal of assets (loss is indicated with “-”) | 2,755,562.94 | 204,866.12 |
| III. Operating profit (loss is indicated with “-”) | -838,544,514.47 | 3,029,226,885.77 |
| Add: Non-operating revenue | 5,473,245.96 | 2,516,231.14 |
| Less: Non-operating expenses | 11,730,389.99 | 5,400,590.27 |
| IV. Total profit (total loss is indicated with “-”) | -844,801,658.50 | 3,026,342,526.64 |
| Less: Income tax expense | -184,904,499.33 | 376,128,124.08 |
| V. Net profit (net loss is indicated with “-”) | -659,897,159.17 | 2,650,214,402.56 |
| (I) Classified according to operating continuity | ||
| 1. Net profit from continuing operations (net loss is indicated with “-”) | -659,897,159.17 | 2,650,214,402.56 |
| 2. Net profit from discontinuing operations (net loss is indicated with “-”) | ||
| (II) Classified according to attribution of the ownership | ||
| 1. Net profit attributable to shareholders of the parent company | -556,317,501.09 | 2,526,688,570.92 |
| 2. Profit or loss of minority interest | -103,579,658.08 | 123,525,831.64 |
| VI. Other comprehensive income, net of tax | -178,927,768.79 | 87,088,686.32 |
| Other comprehensive income attributable to owners of parent company, net of tax | -187,710,715.88 | 82,137,147.11 |
| (I) Other comprehensive income that cannot be reclassified to profit or loss | -12,750,000.00 | -16,500,000.00 |
| 1. Changes arising from re-measurement of the defined benefit plan | ||
| 2. Other comprehensive income that cannot be reclassified into profit or loss under the equity method | ||
| 3. Changes in fair value of other equity instrument investments | -12,750,000.00 | -16,500,000.00 |
| 4. Changes in fair value of the enterprise’s credit risk | ||
| 5. Others | ||
| (II) Other comprehensive income that will be reclassified subsequently to profit or loss | -174,960,715.88 | 98,637,147.11 |
| 1. Other comprehensive income that can be reclassified into profit or loss under the equity method | ||
| 2. Changes in fair value of other debt investments | ||
| 3. Amount of the financial asset reclassified into other comprehensive income | ||
| 4. Provision for credit impairment of other debt investment | ||
| 5. Cash flow hedging reserve | ||
| 6. Exchange differences from translation of statements denominated in foreign currencies | -174,960,715.88 | 98,637,147.11 |
| 7. Others | ||
| Other comprehensive income attributable to minority interests, net of tax | 8,782,947.09 | 4,951,539.21 |
| VII. Total comprehensive income | -838,824,927.96 | 2,737,303,088.88 |
| Total comprehensive income attributable to owners of parent company | -744,028,216.97 | 2,608,825,718.03 |
| Total comprehensive income attributable to minority interests | -94,796,710.99 | 128,477,370.85 |
| VIII. Earnings per share: | ||
| (I) Basic earnings per share | -0.57 | 2.68 |
| (II) Diluted earnings per share | -0.8733 | 2.5788 |
If a business combination occurs under common control in the current period, the net profit realized by the merged party before the combination was:
RMB0.00, and the net profit realized by the merged party in the previous period was: RMB0.00.Legal Representative: Paul Xiaoming Lee Chief Financial Officer: Li Jian Financial Manager: Deng Jinhuan
4.
Income statement of parent company
Unit: RMB
| Item | 2024 | 2023 |
| I. Operating revenue | 4,921,856.56 | 63,116,038.61 |
| Less: Operating cost | 3,817,079.74 | 49,925,691.72 |
| Taxes and surcharges | 2,641,575.31 | 4,034,635.44 |
| Selling expenses | 4,300.56 | 576,692.02 |
| Administrative expenses | 109,229,825.51 | 23,590,872.61 |
| R&D expenses | 0.00 | 2,671,152.31 |
| Financial expenses | -350,793,346.89 | -316,352,130.41 |
| Including: Interest expense | 29,724,498.01 | 33,567,175.48 |
| Interest income | 380,539,036.00 | 350,004,443.73 |
| Add: Other income | 653,663.13 | 611,188.63 |
| Investment income (loss is indicated with “-”) | 47,775,000.00 | 1,850,000,000.00 |
| Including: Income from investment in associates and joint ventures | ||
| Derecognized financial assets measured by amortized cost (loss is indicated with “-”) | ||
| Net exposure hedging income (loss is indicated with “- ”) | ||
| Income from changes in fair value (loss is indicated with “-”) | ||
| Credit impairment losses (loss is indicated with “-”) | 90,215.80 | -160,407.34 |
| Asset impairment losses (loss is indicated with “-”) | 0.00 | -135,155.16 |
| Income from disposal of assets (loss is indicated with “-”) | -98,230.98 | 596.59 |
| II. Operating profit (loss is indicated with “-”) | 288,443,070.28 | 2,148,985,347.64 |
| Add: Non-operating revenue | 950,479.05 | 22,748.59 |
| Less: Non-operating expenses | 76,623.88 | 105,542.48 |
| III. Total profit (total loss is indicated with “-”) | 289,316,925.45 | 2,148,902,553.75 |
| Less: Income tax expense | 61,397,612.07 | 75,202,959.73 |
| IV. Net profit (net loss is indicated with “-”) | 227,919,313.38 | 2,073,699,594.02 |
| (I) Net profit from continuing operations (net loss is indicated with “-”) | 227,919,313.38 | 2,073,699,594.02 |
| (II) Net profit from discontinuing operations (net loss is indicated with “-”) | 0.00 | 0.00 |
| V. Other comprehensive income, net of tax | -12,750,000.00 | -16,500,000.00 |
| (I) Other comprehensive income that cannot be reclassified to profit or loss | -12,750,000.00 | -16,500,000.00 |
| 1. Changes arising from re-measurement of the defined benefit plan | ||
| 2. Other comprehensive income that cannot be reclassified into profit or loss under the equity method | ||
| 3. Changes in fair value of other equity instrument investments | -12,750,000.00 | -16,500,000.00 |
| 4. Changes in fair value of the enterprise’s credit risk | ||
| 5. Others | ||
| (II) Other comprehensive income that will be reclassified subsequently to profit or loss | ||
| 1. Other comprehensive income that can be reclassified into profit or loss under the equity method | ||
| 2. Changes in fair value of other debt investments | ||
| 3. Amount of the financial asset reclassified into other comprehensive income | ||
| 4. Provision for credit impairment of other debt investment | ||
| 5. Cash flow hedging reserve | ||
| 6. Exchange differences from translation of statements denominated in foreign currencies | ||
| 7. Others | ||
| VI. Total comprehensive income | 215,169,313.38 | 2,057,199,594.02 |
| VII. Earnings per share: |
| (I) Basic earnings per share | ||
| (II) Diluted earnings per share |
5.
Consolidated cash flow statement
Unit: RMB
| Item | 2024 | 2023 |
| I. Cash flows from operating activities: | ||
| Cash received from the sale of goods or rendering of services | 8,385,508,715.46 | 10,446,360,770.22 |
| Net increase in deposits from customers and placements from corporations in the same industry | ||
| Net increase in borrowings from the central bank | ||
| Net increase in placements from other financial institutions | ||
| Cash received from premium of original insurance contract | ||
| Net cash received from reinsurance business | ||
| Net increase in deposits of the insured and investment | ||
| Cash received from interests, fees and commissions | ||
| Net increase in placements from banks and other financial institutions | ||
| Net increase in repurchasing | ||
| Net cash received from agency sale of securities | ||
| Receipts of tax refunds | 325,570,298.59 | 721,095,698.04 |
| Other cash receipts related to operating activities | 533,881,000.81 | 458,750,500.52 |
| Subtotal of cash inflows from operating activities | 9,244,960,014.86 | 11,626,206,968.78 |
| Cash payments for goods purchased and services received | 5,239,581,120.39 | 6,188,542,330.43 |
| Net increase in loans and advances | ||
| Net increase in deposits in the Central Bank and other financial institutions | ||
| Cash paid for claim settlements on original insurance contract | ||
| Net increase in placements to banks and other financial institutions | ||
| Cash paid for interests, fees and commissions | ||
| Cash paid for policy dividends | ||
| Cash paid to and on behalf of employees | 1,458,936,664.56 | 1,163,303,301.00 |
| Payments of all types of taxes | 730,297,460.12 | 1,069,293,242.57 |
| Other cash payments relating to operating activities | 657,895,714.69 | 537,614,835.46 |
| Subtotal of cash outflows due to operating activities | 8,086,710,959.76 | 8,958,753,709.46 |
| Net cash flows from operating activities | 1,158,249,055.10 | 2,667,453,259.32 |
| II. Cash flows from investment activities: | ||
| Cash received from disposal of investments | 1,271,927,500.00 | 132,832,319.38 |
| Cash received from procuring investment income | 69,705,379.85 | 14,079,456.62 |
| Net amount of cash received from disposal of fixed assets, intangible assets and other long-term assets | 37,456,266.24 | 27,764,903.85 |
| Net cash received from disposals of subsidiaries and other business units | ||
| Other cash received relating to investment activities | ||
| Subtotal of cash inflows from investment activities | 1,379,089,146.09 | 174,676,679.85 |
| Cash paid for acquisition of fixed assets, intangible assets and other long-term assets | 2,858,791,026.20 | 7,823,808,926.29 |
| Cash paid for acquisition of investments | 1,107,449,569.44 | 300,000,000.00 |
| Net increase in pledge loans | ||
| Net cash payments for acquisitions of subsidiaries and other business units | ||
| Other cash paid relating to investment activities | 45,163,817.42 | 40,991,765.29 |
| Subtotal of cash outflows due to investment activities | 4,011,404,413.06 | 8,164,800,691.58 |
| Net cash flows from investment activities | -2,632,315,266.97 | -7,990,124,011.73 |
| III. Cash flows from financing activities: |
| Cash received from absorbing investment | 200,628,666.09 | 8,036,235,783.60 |
| Including: Cash received from subsidiaries’ absorbing minority shareholder investment | 91,912,750.86 | 582,691,751.93 |
| Cash received from borrowings | 13,731,686,695.68 | 12,859,214,236.98 |
| Other cash received relating to financing activities | 160,000,000.00 | 0.00 |
| Subtotal of cash inflows from financing activities | 14,092,315,361.77 | 20,895,450,020.58 |
| Cash paid for debt repayment | 10,856,843,142.85 | 13,704,612,776.52 |
| Cash paid for distributing dividends and profits or paying interests | 1,911,093,566.49 | 719,029,212.87 |
| Including: Dividends and profits paid to minority shareholders by subsidiaries | ||
| Cash payments relating to other financing activities | 910,705,730.64 | 1,334,884,808.55 |
| Subtotal of cash outflows from financing activities | 13,678,642,439.98 | 15,758,526,797.94 |
| Net cash flows from financing activities | 413,672,921.79 | 5,136,923,222.64 |
| IV. Effect of changes in exchange rate on cash and cash equivalents | 4,819,771.37 | 2,725,405.61 |
| V. Net increase in cash and cash equivalents | -1,055,573,518.71 | -183,022,124.16 |
| Add: Opening balance of cash and cash equivalents | 2,789,034,001.85 | 2,972,056,126.01 |
| VI. Closing balance of cash and cash equivalents | 1,733,460,483.14 | 2,789,034,001.85 |
6.
Cash flow statement of parent company
Unit: RMB
| Item | 2024 | 2023 |
| I. Cash flows from operating activities: | ||
| Cash received from the sale of goods or rendering of services | 20,018,970.93 | 71,880,593.33 |
| Receipts of tax refunds | 127,596.89 | 96,584.46 |
| Other cash receipts related to operating activities | 57,140,549.04 | 53,858,322.26 |
| Subtotal of cash inflows from operating activities | 77,287,116.86 | 125,835,500.05 |
| Cash payments for goods purchased and services received | 15,328,134.69 | 32,907,746.19 |
| Cash paid to and on behalf of employees | 4,642,314.82 | 16,383,482.17 |
| Payments of all types of taxes | 96,043,205.00 | 135,972,576.99 |
| Other cash activities | 160,138,345.40 | 29,098,017.34 |
| Subtotal of cash outflows due to operating activities | 276,151,999.91 | 214,361,822.69 |
| Net cash flows from operating activities | -198,864,883.05 | -88,526,322.64 |
| II. Cash flows from investment activities: | ||
| Cash received from disposal of investments | ||
| Cash received from procuring investment income | 1,269,500,767.27 | 50,000,000.00 |
| Net amount of cash received from disposal of fixed assets, intangible assets and other long-term assets | 34,862.09 | 39,908,191.62 |
| Net cash received from disposals of subsidiaries and other business units | ||
| Other cash activities | 729,915,831.56 | 758,017,645.64 |
| Subtotal activities | 1,999,451,460.92 | 847,925,837.26 |
| Cash paid for acquisition of fixed assets, intangible assets and other long-term assets | 1,626,660.66 | 214,338.12 |
| Cash paid for acquisition of investments | 299,235,709.57 | 186,000,000.00 |
| Net cash payments for acquisitions of subsidiaries and other business units | ||
| Other cash paid relating to investment activities | 1,186,964,114.48 | 5,997,573,198.61 |
| Subtotal of cash outflows due to investment activities | 1,487,826,484.71 | 6,183,787,536.73 |
| Net cash flows from investment activities | 511,624,976.21 | -5,335,861,699.47 |
| III. Cash flows from financing activities: | ||
| Cash received from absorbing investment | 140,029,540.01 | 7,453,546,101.02 |
| Cash received from borrowings | 103,500,000.00 | 59,500,000.00 |
| Other cash activities | 196,000,000.00 | 469,700,000.00 |
| Subtotal of cash inflows from financing activities | 439,529,540.01 | 7,982,746,101.02 |
| Cash paid for debt repayment | 59,500,000.00 | 290,190,000.00 |
| Cash paid for distributing dividends and profits or paying interests | 1,509,256,418.75 | 383,380,310.88 |
| Cash payments relating to other financing activities | 488,785,366.91 | 764,644,041.58 |
| Subtotal of cash outflows from financing activities | 2,057,541,785.66 | 1,438,214,352.46 |
| Net cash flows from financing activities | -1,618,012,245.65 | 6,544,531,748.56 |
| IV. Effect of changes in exchange rate on cash and cash equivalents | ||
| V. Net increase in cash and cash equivalents | -1,305,252,152.49 | 1,120,143,726.45 |
| Add: Opening balance of cash and cash equivalents | 1,381,874,707.34 | 261,730,980.89 |
| VI. Closing balance of cash and cash equivalents | 76,622,554.85 | 1,381,874,707.34 |
7.
Consolidated statement of changes in owners’ equity
Amount of current period
Unit: RMB
| Item | 2024 | ||||||||||||||
| Owners’ equity attributable to parent company | Minority interests | Total owners’ equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: treasury stock | Other comprehensive income | Special reserve | Surplus reserve | General risk provision | Undistributed profits | Others | Subtotal | |||||
| Preferred stock | Perpetual bonds | Others | |||||||||||||
| I. Closing balance of the previous year | 977,754,217.00 | 0.00 | 0.00 | 50,242,778.32 | 15,070,954,107.76 | 607,261,671.95 | 89,911,398.03 | 0.00 | 399,014,802.99 | 0.00 | 10,945,879,862.09 | 0.00 | 26,926,495,494.24 | 1,755,739,643.48 | 28,682,235,137.72 |
| Add: Effects of changes in accounting policies | |||||||||||||||
| Effects of correction of prior year errors | |||||||||||||||
| Others | |||||||||||||||
| II. Opening balance of the current year | 977,754,217.00 | 0.00 | 0.00 | 50,242,778.32 | 15,070,954,107.76 | 607,261,671.95 | 89,911,398.03 | 0.00 | 399,014,802.99 | 0.00 | 10,945,879,862.09 | 0.00 | 26,926,495,494.24 | 1,755,739,643.48 | 28,682,235,137.72 |
| III. Increase/decrease for the period (decrease is indicated with “-”) | -6,475,061.00 | 0.00 | 0.00 | -20,758.07 | -474,064,970.60 | -269,322,569.58 | -187,710,715.88 | 0.00 | 22,791,931.34 | 0.00 | -2,079,108,934.55 | 0.00 | -2,455,265,939.18 | -21,970,714.75 | -2,477,236,653.93 |
| (I) Total comprehensive income | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | -187,710,715.88 | 0.00 | 0.00 | 0.00 | -556,317,501.09 | 0.00 | -744,028,216.97 | -94,796,710.99 | -838,824,927.96 |
| (II) Contribution and withdrawal of capital by owners | -6,475,061.00 | 0.00 | 0.00 | -20,758.07 | -474,064,970.60 | -269,322,569.58 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | -211,238,220.09 | 72,825,996.24 | -138,412,223.85 |
| 1. Common shares invested by owner | 0.00 | 0.00 | 0.00 | 0.00 | 3,584,059.30 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 3,584,059.30 | 74,459,563.62 | 78,043,622.92 |
| 2. Capital invested by other equity instrument holders | 2,791.00 | 0.00 | 0.00 | -20,758.07 | 202,223.94 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 184,256.87 | 0.00 | 184,256.87 |
| 3. Amount of share payment credited to owners’ equity | -572,755.00 | 0.00 | 0.00 | 0.00 | -278,551,196.83 | -269,322,569.58 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | -9,801,382.25 | -1,633,567.38 | -11,434,949.63 |
| 4. Others | -5,905,097.00 | 0.00 | 0.00 | 0.00 | -199,300,057.01 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | -205,205,154.01 | 0.00 | -205,205,154.01 |
| (III) Profit distribution | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 22,791,931.34 | 0.00 | -1,522,791,433.46 | 0.00 | -1,499,999,502.12 | 0.00 | -1,499,999,502.12 |
| 1. Withdrawal of surplus reserve | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 22,791,931.34 | 0.00 | -22,791,931.34 | 0.00 | 0.00 | 0.00 | 0.00 |
| 2. Provision for general risk | |||||||||||||||
| 3. Distribution to owners (or shareholders) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | -1,499,999,502.12 | 0.00 | -1,499,999,502.12 | 0.00 | -1,499,999,502.12 |
| 4. Others | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| (IV) Internal carry-forward of owners’ equity | |||||||||||||||
| 1. Conversion of capital reserve into capital (or shares) | |||||||||||||||
| 2. Conversion of surplus reserve into capital (or shares) | |||||||||||||||
| 3. Making good of loss with surplus reserve | |||||||||||||||
| 4. Carry-forward of changes in the defined benefit plan for retained earnings | |||||||||||||||
| 5. Carry-forward of other comprehensive income for retained earnings | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserve | |||||||||||||||
| 1. Amount withdrawn in the period | |||||||||||||||
| 2. Amount utilized in the period | |||||||||||||||
| (VI). Others |
| IV. Closing balance for the period | 971,279,156.00 | 0.00 | 0.00 | 50,222,020.25 | 14,596,889,137.16 | 337,939,102.37 | -97,799,317.85 | 0.00 | 421,806,734.33 | 0.00 | 8,866,770,927.54 | 0.00 | 24,471,229,555.06 | 1,733,768,928.73 | 26,204,998,483.79 |
Amount of previous period
Unit: RMB
| Item | 2023 | ||||||||||||||
| Owners’ equity attributable to parent company | Minority interests | Total owners’ equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: treasury stock | Other comprehensive income | Special reserve | Surplus reserve | General risk provision | Undistributed profits | Others | Subtotal | |||||
| Preferred stock | Perpetual bonds | Others | |||||||||||||
| I. Closing balance of the previous year | 892,411,690.00 | 0.00 | 0.00 | 50,317,083.84 | 7,685,332,598.80 | 101,753,346.66 | 7,774,250.92 | 0.00 | 191,644,843.59 | 0.00 | 9,000,475,751.88 | 0.00 | 17,726,202,872.37 | 1,128,220,442.77 | 18,854,423,315.14 |
| Add: Effects of changes in accounting policies | |||||||||||||||
| Effects of correction of prior year errors | |||||||||||||||
| Others | |||||||||||||||
| II. Opening balance of the current year | 892,411,690.00 | 0.00 | 0.00 | 50,317,083.84 | 7,685,332,598.80 | 101,753,346.66 | 7,774,250.92 | 0.00 | 191,644,843.59 | 0.00 | 9,000,475,751.88 | 0.00 | 17,726,202,872.37 | 1,128,220,442.77 | 18,854,423,315.14 |
| III. Increase/decrease for the period (decrease is indicated with “-”) | 85,342,527.00 | 0.00 | 0.00 | -74,305.52 | 7,385,621,508.96 | 505,508,325.29 | 82,137,147.11 | 0.00 | 207,369,959.40 | 0.00 | 1,945,404,110.21 | 0.00 | 9,200,292,621.87 | 627,519,200.71 | 9,827,811,822.58 |
| (I) Total comprehensive income | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 82,137,147.11 | 0.00 | 0.00 | 0.00 | 2,526,688,570.92 | 0.00 | 2,608,825,718.03 | 128,477,370.85 | 2,737,303,088.88 |
| (II) Contribution and withdrawal of capital by owners | 85,342,527.00 | 0.00 | 0.00 | -74,305.52 | 7,385,621,508.96 | 505,508,325.29 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 6,965,381,405.15 | 584,381,044.31 | 7,549,762,449.46 |
| 1. Common shares invested by owner | 85,421,412.00 | 0.00 | 0.00 | 0.00 | 7,368,252,287.14 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 7,453,673,699.14 | 582,564,153.80 | 8,036,237,852.94 |
| 2. Capital invested by other equity instrument holders | 10,089.00 | 0.00 | 0.00 | -74,305.52 | 732,247.16 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 668,030.64 | 0.00 | 668,030.64 |
| 3. Amount of share payment credited to owners’ equity | -88,974.00 | 0.00 | 0.00 | 0.00 | 16,636,974.66 | 505,508,325.29 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | -488,960,324.63 | 1,816,890.51 | -487,143,434.12 |
| 4. Others | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| (III) Profit distribution | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 207,369,959.40 | 0.00 | -581,284,460.71 | 0.00 | -373,914,501.31 | -85,339,214.45 | -459,253,715.76 |
| 1. Withdrawal of surplus reserve | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 207,369,959.40 | 0.00 | -207,369,959.40 | 0.00 | 0.00 | 0.00 | 0.00 |
| 2. Provision for general risk | |||||||||||||||
| 3. Distribution to owners (or shareholders) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | -373,914,501.31 | 0.00 | -373,914,501.31 | -85,339,214.45 | -459,253,715.76 |
| 4. Others | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| (IV) Internal carry-forward of owners’ equity | |||||||||||||||
| 1. Conversion of capital reserve into capital (or shares) | |||||||||||||||
| 2. Conversion of surplus reserve into capital (or shares) | |||||||||||||||
| 3. Making good of loss with surplus reserve | |||||||||||||||
| 4. Carry-forward of changes in the defined benefit plan for retained earnings | |||||||||||||||
| 5. Carry-forward of other comprehensive income for retained earnings | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserve | |||||||||||||||
| 1. Amount withdrawn in the period | |||||||||||||||
| 2. Amount utilized in the period | |||||||||||||||
| (VI) Others |
| IV. Closing balance for the period | 977,754,217.00 | 0.00 | 0.00 | 50,242,778.32 | 15,070,954,107.76 | 607,261,671.95 | 89,911,398.03 | 0.00 | 399,014,802.99 | 0.00 | 10,945,879,862.09 | 0.00 | 26,926,495,494.24 | 1,755,739,643.48 | 28,682,235,137.72 |
8.
Statement of changes in owners’ equity of parent companyAmount of current period
Unit: RMB
| Item | 2024 | |||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: treasury stock | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profits | Others | Total owners’ equity | |||
| Preferred stock | Perpetual bonds | Others | ||||||||||
| I. Closing balance of the previous year | 977,754,217.00 | 0.00 | 0.00 | 50,242,778.32 | 17,125,627,483.84 | 607,261,671.95 | -15,750,000.00 | 0.00 | 371,262,292.00 | 1,667,202,765.19 | 0.00 | 19,569,077,864.40 |
| Add: Effects of changes in accounting policies | ||||||||||||
| Effects of correction of prior year errors | ||||||||||||
| Others | ||||||||||||
| II. Opening balance of the current year | 977,754,217.00 | 0.00 | 0.00 | 50,242,778.32 | 17,125,627,483.84 | 607,261,671.95 | -15,750,000.00 | 0.00 | 371,262,292.00 | 1,667,202,765.19 | 0.00 | 19,569,077,864.40 |
| III. Increase/decrease for the period (decrease is indicated with “-”) | -6,475,061.00 | 0.00 | 0.00 | -20,758.07 | -474,769,427.19 | -269,322,569.58 | -12,750,000.00 | 0.00 | 22,791,931.34 | -1,294,872,120.08 | 0.00 | -1,496,772,865.42 |
| (I) Total comprehensive income | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | -12,750,000.00 | 0.00 | 0.00 | 227,919,313.38 | 0.00 | 215,169,313.38 |
| (II) Contribution and withdrawal of capital by owners | -6,475,061.00 | 0.00 | 0.00 | -20,758.07 | -474,769,427.19 | -269,322,569.58 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | -211,942,676.68 |
| 1. Common shares invested by owner | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| 2. Capital invested by other equity instrument holders | 2,791.00 | 0.00 | 0.00 | -20,758.07 | 202,223.94 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 184,256.87 |
| 3. Amount of share payment credited to owners’ equity | -572,755.00 | 0.00 | 0.00 | 0.00 | -280,879,494.58 | -269,322,569.58 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | -12,129,680.00 |
| 4. Others | -5,905,097.00 | 0.00 | 0.00 | 0.00 | -194,092,156.55 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | -199,997,253.55 |
| (III) Profit distribution | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 22,791,931.34 | -1,522,791,433.46 | 0.00 | -1,499,999,502.12 |
| 1. Withdrawal of surplus reserve | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 22,791,931.34 | -22,791,931.34 | 0.00 | 0.00 |
| 2. Distribution to owners (or shareholders) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | -1,499,999,502.12 | 0.00 | -1,499,999,502.12 |
| 3. Others | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| (IV) Internal carry-forward of owners’ equity | ||||||||||||
| 1. Conversion of capital reserve into capital (or shares) | ||||||||||||
| 2. Conversion of surplus reserve into capital (or shares) | ||||||||||||
| 3. Making good of loss with surplus reserve | ||||||||||||
| 4. Carry-forward of changes in the defined benefit plan for retained earnings | ||||||||||||
| 5. Carry-forward of other comprehensive income for retained earnings | ||||||||||||
| 6. Others | ||||||||||||
| (V) Special reserve | ||||||||||||
| 1. Amount withdrawn in the period | ||||||||||||
| 2. Amount utilized in the period | ||||||||||||
| (VI) Others | ||||||||||||
| IV. Closing balance for the period | 971,279,156.00 | 0.00 | 0.00 | 50,222,020.25 | 16,650,858,056.65 | 337,939,102.37 | -28,500,000.00 | 0.00 | 394,054,223.34 | 372,330,645.11 | 0.00 | 18,072,304,998.98 |
Amount of previous period
Unit: RMB
| Item I | 2023 | |||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: treasury stock | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profits | Others | Total owners’ equity | |||
| Preferred stock | Perpetual bonds | Others | ||||||||||
| I. Closing balance of the previous year | 892,411,690.00 | 0.00 | 0.00 | 50,317,083.84 | 9,738,751,318.24 | 101,753,346.66 | 750,000.00 | 0.00 | 163,892,332.60 | 174,787,631.88 | 0.00 | 10,919,156,709.90 |
| Add: Effects of changes in accounting policies | ||||||||||||
| Effects of correction of prior year errors | ||||||||||||
| Others | ||||||||||||
| II. Opening balance of the current year | 892,411,690.00 | 0.00 | 0.00 | 50,317,083.84 | 9,738,751,318.24 | 101,753,346.66 | 750,000.00 | 0.00 | 163,892,332.60 | 174,787,631.88 | 0.00 | 10,919,156,709.90 |
| III. Increase/decrease for the period (decrease is indicated with “-”) | 85,342,527.00 | 0.00 | 0.00 | -74,305.52 | 7,386,876,165.60 | 505,508,325.29 | -16,500,000.00 | 0.00 | 207,369,959.40 | 1,492,415,133.31 | 0.00 | 8,649,921,154.50 |
| (I) Total comprehensive income | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | -16,500,000.00 | 0.00 | 0.00 | 2,073,699,594.02 | 0.00 | 2,057,199,594.02 |
| (II) Contribution and withdrawal of capital by owners | 85,342,527.00 | 0.00 | 0.00 | -74,305.52 | 7,386,876,165.60 | 505,508,325.29 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 6,966,636,061.79 |
| 1. Common shares invested by owner | 85,421,412.00 | 0.00 | 0.00 | 0.00 | 7,368,124,689.02 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 7,453,546,101.02 |
| 2. Capital invested by other equity instrument holders | 10,089.00 | 0.00 | 0.00 | -74,305.52 | 732,247.16 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 668,030.64 |
| 3. Amount of share payment credited to owners’ equity | -88,974.00 | 0.00 | 0.00 | 0.00 | 18,019,229.42 | 505,508,325.29 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | -487,578,069.87 |
| 4. Others | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| (III) Profit distribution | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 207,369,959.40 | -581,284,460.71 | 0.00 | -373,914,501.31 |
| 1. Withdrawal of surplus reserve | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 207,369,959.40 | -207,369,959.40 | 0.00 | 0.00 |
| 2. Distribution to owners (or shareholders) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | -373,914,501.31 | 0.00 | -373,914,501.31 |
| 3. Others | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| (IV) Internal carry-forward of owners’ equity | ||||||||||||
| 1. Conversion of capital reserve into capital (or shares) | ||||||||||||
| 2. Conversion of surplus reserve into capital (or shares) |
| 3. Making good of loss with surplus reserve | ||||||||||||
| 4. Carry-forward of changes in the defined benefit plan for retained earnings | ||||||||||||
| 5. Carry-forward of other comprehensive income for retained earnings | ||||||||||||
| 6. Others | ||||||||||||
| (V) Special reserve | ||||||||||||
| 1. Amount withdrawn in the period | ||||||||||||
| 2. Amount utilized in the period | ||||||||||||
| (VI) Others | ||||||||||||
| IV. Closing balance for the period | 977,754,217.00 | 0.00 | 0.00 | 50,242,778.32 | 17,125,627,483.84 | 607,261,671.95 | -15,750,000.00 | 0.00 | 371,262,292.00 | 1,667,202,765.19 | 0.00 | 19,569,077,864.40 |
III. Corporate InformationYunnan Energy New Material Co., Ltd. (hereinafter referred to as the “Company” or “our Company”) was formerly YunnanYuxi Innovation Color Printing Co., Ltd. With the approval of Department of Commerce of Yunnan Province document YSZ [2011]No.50, the shareholders of the Company signed the sponsor agreement on March 28, 2011, unanimously agreed to change theCompany as a whole into a company limited by share, and obtained the business license of enterprise legal personNo.530400400000009 issued by Yunnan Provincial Administration for Industry and Commerce, which is now changed to the unifiedsocial credit code 91530000727317703K. In accordance with the Approval of Initial Public Offering of Shares of Yunnan InnovativeNew Materials Co., Ltd. (Zheng Jian Xu Ke [2016] No. 1886) issued by China Securities Regulatory Commission, the Companyissued RMB-denominated ordinary shares (A shares) of 33,480,000 to the public. It was priced and issued to the public investors onSeptember 6, 2016, with a par value of RMB1.00 per share, a subscription price of RMB23.41 per share, and the actual net amountof raised funds is RMB747,767,000.00. The shares of the Company were listed on Shenzhen Stock Exchange on September 14, 2016.After several changes and capital increases, the Company’s current total registered capital is RMB971,279,156.00. Theheadquarters is located at No.125, Fuxian Road, High-tech Zone, Yuxi City, Yunnan Province. The Company’s legal representativeis PAUL XIAOMING LEE.
The main products of the Company can be divided into three categories: (1) film products, mainly including lithium-ionseparator, BOPP film and specialty paper. Lithium-ion separator products include base film and coating film, and BOPP film productsinclude smoke film and flat film; (2) packaging and printing products, mainly including cigarette label and aseptic packaging; (3)paper products packaging, mainly including specialty paper products, holographic anti-counterfeiting electrified aluminum, transferfilm and other products. Specialty paper products include laser transfer anti-counterfeiting paper, direct plating paper and coatedpaper.Approval Date of Financial Statements: These financial statements were approved for issuance by the Company’s Board ofDirectors on April 22, 2025.IV. Basis for Preparation of Financial Statements
1.
Basis for preparation
The Company prepares its financial statements on a going concern basis, recognizing and measuring transactions and eventsbased on their actual occurrence in accordance with the Accounting Standards for Business Enterprises, their application guidelines,and related interpretations. In addition, the Company discloses financial information in compliance with the Compilation Rule forInformation Disclosure by Companies Offering Securities to the Public No. 15 - General Provisions on Financial Reports (2023revised) issued by the China Securities Regulatory Commission.2.
Going concern basis
The Company has evaluated the ability to continue as a going concern for 12 months from the end of the Reporting Periodand has not identified any factors that would impact its ability to continue as a going concern. It is reasonable for the Company toprepare its financial statements on a going concern basis.V. Significant Accounting Policies and Accounting Estimates
Reminders on specific accounting policies and accounting estimates:
The following significant accounting policies and accounting estimates of the Company are formulated in accordance with theAccounting Standards for Business Enterprises. For matters not mentioned, the relevant accounting policies in the AccountingStandards for Business Enterprises will be applied.1.
Statement of compliance with the accounting standards for business enterprises
The financial statements are in compliance with the requirements of accounting standards for business enterprises, and trulyand completely reflect the financial status, operating results, changes in owners’ equity, cash flow and other relevant information ofthe Company.2.
Accounting period
The Company’s accounting year starts on January 1 and ends on December 31.
3.
Operating cycle
The Company’s normal operating cycle is one year.4.
Functional currency
The Company’s functional currency is Renminbi (RMB). Overseas subsidiaries take the currency in the main economic environment inwhich they operate as the functional currency.5.
Methods for determination and basis for selection of the materiality criteria
?Applicable □Not applicable
| Items | Materiality Criteria |
| Significant receivables for allowance for bad debts provided on individual basis | ≥RMB1 million |
| Significant receivables written off | ≥RMB1 million |
| Significant other receivables written off | ≥RMB1 million |
| Significant construction in progress | Top 10 engineering projects in book value of construction in progress |
| Significant payables ageing over 1 year | ≥RMB5 million |
| Significant other payables ageing over 1 year or overdue | ≥RMB5 million |
| Significant other gains | ≥RMB5 million |
6.
Accounting treatments for business combination under common control and not under commoncontrol
(1) Business combination under common control
The assets and liabilities acquired by the Company in a business combination are measured at the carrying amount in theconsolidated financial statements of the ultimate controlling party on the acquisition date. In cases where the acquired company usesdifferent accounting policies or periods compared to the Company before the business combination, the accounting policies and periodsare aligned based on the principle of materiality. Specifically, the carrying amounts of the acquired assets and liabilities are adjustedaccording to the Company’s accounting policies and periods. If there is a difference between the carrying amount of the net assetsacquired in the business combination and the consideration paid, the capital reserve (capital premium or capital stock premium) isadjusted first. If the balance of the capital reserve (capital premium or capital stock premium) is insufficient, it is then sequentiallyadjusted against the surplus reserve and retained earnings.
For the accounting treatment of business combinations under common control achieved through step transactions, refer to Note V-7 of this Section.
(2) Business combination not under the common control
The identifiable assets and liabilities of the acquired party in a business combination are measured at their fair value on theacquisition date. In cases where the acquired party uses different accounting policies or periods compared to the Company before thebusiness combination, the accounting policies and periods are aligned based on the principle of materiality. Specifically, the carryingamounts of the acquired assets and liabilities are adjusted according to the Company’s accounting policies and periods. If the Company’sacquisition cost on the acquisition date exceeds the fair value of the identifiable assets and liabilities acquired in the business combination,the difference is recognized as goodwill. If the acquisition cost is less than the fair value of the identifiable assets and liabilities acquired,the acquisition cost and the fair value of the acquired identifiable assets and liabilities are reviewed. After review, if the acquisition costis still less than the fair value of the identifiable assets and liabilities acquired, the difference is recognized as a gain in the current period’sconsolidated profit or loss.
For the accounting treatment of business combinations under different control achieved through step transactions, refer to NoteV-7 of this Section.
(3) Treatment of transaction costs in a business combination
The audit, legal services, valuation, consulting, and other intermediary fees, as well as other related administrative expensesincurred for the purpose of a business combination, are recognized as expenses in the current period when incurred. Transaction costsrelated to equity securities or debt securities issued as part of the merger consideration are included in the initial recognition amount ofthe equity securities or debt securities.7.
Criteria for judgement of control and methods for preparation of the consolidated financial statements
(1) Criteria for judgement of control and scope of consolidation
Control refers to the Company’s power over the investee, the variable returns it can obtain through participation in the investee’srelevant activities, and the ability to use its power over the investee to affect the amount of returns. The definition of control includes threekey elements: 1) The investor has power over the investee. 2) The investor has rights to enjoy variable returns from its involvement with theinvestee. 3) The investor has the ability to use its power over the investee to affect the amount of returns. When the Company’s investmentin the investee meets these three elements, it indicates that the Company has control over the investee.The scope of consolidation in the consolidated financial statements is determined based on control, and includes not only subsidiariesdetermined by voting rights (or similar rights) alone or in combination with other arrangements but also structured entities determined byone or more contractual arrangements.A subsidiary refers to an entity controlled by the Company (including businesses, separable parts of an investee, and structured entitiescontrolled by the Company). A structured entity refers to an entity designed in such a way that voting rights or similar rights are not thedeciding factor in determining its controlling party (Note: sometimes also called a Special Purpose Entity, or SPE).
(2) Special provisions regarding the parent company as an investment entity
If the parent company is an investment entity, only those subsidiaries that provide services related to the investment activities of theinvestment entity are included in the consolidation scope. Other subsidiaries are not consolidated. Equity investments in subsidiaries notincluded in the consolidation scope are recognized as financial assets measured at fair value, with changes in fair value recorded in thecurrent period’s profit or loss.
A parent company is considered an investment entity if it meets the following conditions:
① The company’s purpose is to provide investment management services to investors and obtain funds from one or more investors.
② The company’s sole business purpose is to provide returns to investors through capital appreciation, investment income, or both.
③ The company measures and evaluates the performance of almost all of its investments at fair value.
When a parent company transitions from a non-investment entity to an investment entity, it will consolidate only those subsidiariesthat provide relevant services for its investment activities in the consolidated financial statements. From the transition date onward, thecompany will no longer consolidate other subsidiaries and will handle them in accordance with the principle of partial disposal of subsidiaryequity without losing control.
When a parent company transitions from an investment entity to a non-investment entity, it must include subsidiaries that werepreviously excluded from the consolidation scope in the consolidated financial statements as of the transition date. The fair value of thesesubsidiaries on the transition date is treated as the acquisition price, and the accounting treatment follows the method for businesscombinations not under the common control.
(3) Method of preparing consolidated financial statements
The Company prepares consolidated financial statements based on the financial statements of itself and its subsidiaries and otherrelevant information.
While preparing consolidated financial statements, the Company treats the entire enterprise group as an accounting entity, and inaccordance with the requirements for confirmation, measurement and presentation of relevant enterprise accounting standards, and based onunified accounting policies and periods, reflects the overall financial status, operating results and cash flow of the enterprise group.
① Consolidate the assets, liabilities, owners’ equity, revenue, expenses, and cash flows of the parent company and its subsidiaries.
② Offset the long-term equity investments of the parent company in its subsidiaries against the portion of owners’ equity held by
the parent company in the subsidiaries.
③ Offset the effects of internal transactions between the parent company and its subsidiaries, as well as between subsidiaries. Ifinternal transactions indicate impairment losses of related assets, the full amount of the loss shall be recognized.
④ Adjust special transactions from the perspective of the enterprise group.
(4) Treatment of changes in subsidiaries during the Reporting Period
① Increase in subsidiary or business
A. Subsidiaries or businesses acquired in a business combination under common control(a) When preparing the consolidated balance sheet, adjust the opening balances of the consolidated balance sheet and also adjust therelevant items of the comparative financial statements. It is treated as if the combined reporting entity has existed since the point when theultimate controlling party started controlling.(b) When preparing the consolidated income statement, include the revenue, expenses, and profits of the acquired subsidiary orbusiness from the beginning of the period to the end of the Reporting Period in the consolidated income statement. Also, adjust the relevantitems of the comparative financial statements, treating the combined reporting entity as if it has existed since the point when the ultimatecontrolling party started controlling.(c) When preparing the consolidated cash flow statement, include the cash flows of the acquired subsidiary or business from thebeginning of the period to the end of the Reporting Period in the consolidated cash flow statement. Also, adjust the relevant items of thecomparative financial statements, treating the combined reporting entity as if it has existed since the point when the ultimate controllingparty started controlling.
B. Subsidiaries or businesses acquired in a business combination not under common control
(a) When preparing the consolidated balance sheet, do not adjust the opening balances of the consolidated balance sheet.(b) When preparing the consolidated income statement, include the revenue, expenses, and profits of the acquired subsidiary orbusiness from the acquisition date to the end of the Reporting Period in the consolidated income statement.(c) When preparing the consolidated cash flow statement, include the cash flows of the acquired subsidiary or business from theacquisition date to the end of the Reporting Period in the consolidated cash flow statement.
② Disposal of subsidiary or business
A. When preparing the consolidated balance sheet, do not adjust the opening balances of the consolidated balance sheet.B. When preparing the consolidated income statement, include the revenue, expenses, and profits of the disposed subsidiary orbusiness from the beginning of the period to the disposal date in the consolidated income statement.C. When preparing the consolidated cash flow statement, include the cash flows of the disposed subsidiary or business from thebeginning of the period to the disposal date in the consolidated cash flow statement.
(5) Special considerations in consolidation eliminations
① The long-term equity investments held by subsidiaries in the parent company shall be treated as treasury stock and deducted fromequity. In the consolidated balance sheet, they shall be presented under the “Equity” item as “Less: treasury stock.”Long-term equity investments held between subsidiaries shall be offset with the corresponding portion of equity held in the subsidiary,following the same elimination method as for the parent company’s equity investments in its subsidiaries.
② The “Special reserve” and “General risk provision” items, since they do not belong to paid-in capital (or share capital) or capitalreserves, and differs from retained earnings or undistributed profits, shall be restored to the portion attributable to the parent company’sshareholders after offsetting long-term equity investments with the owners’ equity in subsidiaries.
③ If offsetting unrealized internal sales profits results in temporary differences between the book value of assets and liabilities in theconsolidated balance sheet and their tax bases, deferred income tax assets or liabilities shall be recognized in the consolidated balance sheet.Additionally, income tax expense shall be adjusted in the consolidated income statement, excluding deferred taxes related to transactionsdirectly recorded in equity or related to business combinations.
④ Unrealized internal transaction profits or losses from the sale of assets by the parent to subsidiaries shall be fully offset against“Net profit attributable to shareholders of the parent company” in the consolidated income statement. Unrealized internal transaction profitsor losses from the sale of assets by subsidiaries to the parent shall be allocated and offset between “Net profit attributable to shareholders ofthe parent company” and “Profit or loss of minority interest” according to the parent company’s shareholding in the subsidiary. Unrealizedinternal transaction profits or losses from the sale of assets between subsidiaries shall be allocated and offset between “Net profit attributableto shareholders of the parent company” and “Profit or loss of minority interest” based on the parent company’s shareholding in the sellingsubsidiary.
⑤ If losses attributable to minority shareholders for the current period exceed their share of equity in the subsidiary at the beginningof the period, the excess should still be deducted from minority shareholders’ equity.
(6) Accounting treatment of special transactions
① Purchase of minority shareholder equity
When the Company purchases the minority shareholder equity in its subsidiary, the investment cost of the new long-term equityinvestment acquired from the purchase of minority equity shall be measured at the fair value of the consideration paid in the individualfinancial statements. In the consolidated financial statements, the difference between the new long-term equity investment acquired throughthe purchase of minority equity and the portion of the subsidiary’s net assets starting from the purchase date or consolidation date, calculatedbased on the new shareholding ratio, shall be adjusted to capital reserves (capital premium or capital stock premium). If capital reserves areinsufficient, it shall be adjusted sequentially to surplus reserves and retained earnings.
② Step-by-step acquisition of control over a subsidiary
A. Business combination under common control through multiple transactionsOn the consolidation date, in the individual financial statements, the initial investment cost of the long-term equity investment shallbe determined based on the share of the subsidiary’s net assets in the final controlling entity’s consolidated financial statements. Thedifference between the initial investment cost and the sum of the book value of the equity investment prior to the consolidation and the newlypaid consideration on the consolidation date shall be adjusted to capital reserves (capital premium or capital stock premium). If capitalreserves are insufficient, it shall be adjusted sequentially to surplus reserves and retained earnings.
In the consolidated financial statements, the assets and liabilities of the acquired entity shall be measured at the book value on theconsolidation date, except for adjustments made due to differences in accounting policies and periods. The difference between the bookvalue of the pre-acquisition investment and the new paid consideration on the consolidation date and the net asset book value acquired shallbe adjusted to capital reserves (capital stock premium /capital premium). If capital reserves are insufficient, it shall be adjusted to retainedearnings.
For equity investments held by the parent company before the acquisition of control, all relevant profits and losses, othercomprehensive income, and other changes in equity that have been recognized from the date the parent and the subsidiary were undercommon control until the consolidation date shall be adjusted in the opening retained earnings for the comparative period or profits andlosses for the current period.
B. Business combination not under common control through multiple transactionsOn the consolidation date, in the individual financial statements, the initial investment cost of the long-term equity investment shallbe the sum of the book value of the pre-existing equity investment and the new investment cost on the consolidation date.
In the consolidated financial statements, for the equity held in the acquiree before the purchase date, it shall be remeasured at the fairvalue on the purchase date. If the equity held before the purchase date is designated as a financial asset measured at fair value with changesrecorded in other comprehensive income, the difference between the fair value and its book value shall be recorded in retained earnings,and the cumulative fair value changes previously recognized in other comprehensive income shall be transferred to retained earnings. Ifthe equity held before the purchase date is classified as a financial asset measured at fair value through profit or loss, or as a long-termequity investment accounted for using the equity method, the difference between the fair value and its book value shall be recorded asinvestment income for the current period. If the equity held before the purchase date involves other comprehensive income under the equitymethod, as well as other changes in owners’ equity under the equity method excluding net profit or loss, other comprehensive income, andprofit distribution, the related other comprehensive income shall be accounted for in the same manner as the direct disposal of related assets
or liabilities by the investee, and the related other owners’ equity changes shall be transferred to investment income for the current periodon the purchase date.
③ Disposal of long-term equity investment in a subsidiary without losing control
When the parent company disposes of part of its equity investment in a subsidiary without losing control, in the consolidated financialstatements, the difference between the disposal consideration and the subsidiary’s net asset portion from the purchase date or consolidationdate, shall be adjusted to capital reserves (capital premium or capital stock premium). If capital reserves are insufficient, it shall be adjustedsequentially to retained earnings.
④ Disposal of long-term equity investment in a subsidiary and loss of control
A. Disposal in a single transaction
If the parent company disposes of part of its equity investment and loses control over the investee, in the preparation of consolidatedfinancial statements, the remaining equity shall be remeasured at its fair value on the date of loss of control. The difference between thedisposal consideration and the fair value of the remaining equity, minus the net asset portion and goodwill from the original subsidiary,shall be recognized as investment income in the period of losing control.
Other comprehensive income related to the original subsidiary’s equity investment shall be accounted for based on the same treatmentas if the related assets or liabilities of the original subsidiary were directly disposed of. Other changes in equity under the equity methodrelated to the original subsidiary shall be transferred to current profit and loss upon losing control.
B. Step-by-step disposal in multiple transactions
In the consolidated financial statements, it should first be determined whether the step-by-step transaction constitutes a “packagetransaction.”
If it is not considered a “package transaction,” in the individual financial statements, each disposal of equity before losing controlshall be accounted for by transferring the corresponding book value of the long-term equity investment to the disposal price, with thedifference recognized as current investment income. In the consolidated financial statements, it shall be handled according to the relevantrules for “Disposal of long-term equity investment in a subsidiary without losing control.”
If the step-by-step transaction is a “package transaction,” all transactions shall be treated as one transaction involving the disposalof a subsidiary and the loss of control. In the individual financial statements, the disposal price of each transaction before losing controlshall be transferred to other comprehensive income, which will be transferred to profit and loss when control is lost. In the consolidatedfinancial statements, for each transaction before losing control, the difference between the disposal price and the portion of the subsidiary’snet assets shall be recognized as other comprehensive income, which will be transferred to profit and loss when control is lost.
Multiple transactions are generally treated as a “package transaction” if any of the following terms, conditions and economic impactsare met:
(a) The transactions are entered into simultaneously or with consideration of each other’s impact.
(b) The transactions as a whole are aimed at achieving a complete business result.
(c) The occurrence of one transaction depends on the occurrence of at least one other transaction.
(d) A single transaction would not be economically feasible, but it becomes economically viable when considered together withother transactions.
⑤ Dilution of the parent company’s ownership in subsidiary due to capital increase by minority shareholders
When other shareholders (minority shareholders) of the subsidiaries increase capital in the subsidiary, thereby diluting the parentcompany’s equity interest in the subsidiary, in the consolidated financial statements, the share of the subsidiary’s net assets before thecapital increase, calculated based on the parent company’s ownership ratio, shall be adjusted to capital reserves (capital premium or capitalstock premium). If capital reserves are insufficient, it shall be adjusted to retained earnings.8.
Classification of joint venture arrangements and accounting treatment method for joint operations
A joint arrangement refers to an arrangement that is jointly controlled by two or more participants. The Company’s joint arrangementsare classified into joint operations and joint ventures.
(1) Joint operations
A joint operation refers to a joint arrangement in which the Company enjoys the related assets and assumes the related liabilities ofthe arrangement.
The Company recognizes the following items related to the share of interests in joint operations and makes accounting treatmentaccording to the relevant ASBE:
① Recognizes the assets held separately, and the assets held jointly according to its proportion;
② Recognizes the liabilities assumed separately, and the liabilities assumed jointly according to its proportion;
③ Recognizes the income from the sales of its share in the outputs of joint operation;
④ Recognizes the income from the sales of the outputs of joint operation according to its proportion;
⑤ Recognizes the expenses incurred separately, and recognize the expenses incurred jointly according to its proportion.
(2) Joint ventures
A joint venture refers to a joint arrangement in which the Company only has rights to the net assets of the arrangement.The Company accounts for its investment in the joint venture in accordance with the equity method of accounting for long-term equityinvestments.
9.
Determination standards for cash and cash equivalents
Cash refers to the Company’s on-hand cash and deposits that can be used for payment at any time. Cash equivalents refer toinvestments that are of short duration (generally those due within three months from the date of purchase), highly liquid, easily convertibleinto known amounts of cash, and with minimal risk of value fluctuation.10.
Foreign currency business and foreign currency statement translation
(1) Method for determining the exchange rate for foreign currency transactions
The Company uses the spot exchange rate on the transaction date or an exchange rate approximating the spot rate on the transactiondate, determined by a reasonable method in the system, to convert foreign currency transactions into the functional currency at initialrecognition.
(2) Translation method for foreign currency monetary items at the balance sheet date
At the balance sheet date, foreign currency monetary items are translated using the spot exchange rate at the balance sheet date.Exchange differences arising from the difference between the spot exchange rate at the balance sheet date and the spot exchange rate at thetime of initial recognition or the previous balance sheet date are recognized in the current profit or loss. For foreign currency non-monetaryitems measured at historical cost, the spot exchange rate at the transaction date is still used for translation. For inventories measured at thelower of cost or net realizable value, if the inventory is purchased in foreign currency and the net realizable value of the inventory at thebalance sheet date is reflected in foreign currency, the net realizable value is first translated into the functional currency at the spot exchangerate at the balance sheet date, and then compared with the cost of the inventory reflected in the functional currency to determine the endingvalue of the inventory. For foreign currency non-monetary items measured at fair value, the spot exchange rate at the fair value determinationdate is used for translation. For financial assets measured at fair value through profit or loss, the difference between the translated functionalcurrency amount and the original functional currency amount is recognized in the current profit or loss. For non-trading equity investmentsdesignated as measured at fair value through other comprehensive income, the difference between the translated functional currency amountand the original functional currency amount is recognized in other comprehensive income.
(3) Translation method for foreign currency financial statements
Before translating the financial statements of overseas operations, adjustments should first be made to align the accounting periodsand accounting policies of the overseas operations with those of the enterprise. After making these adjustments to the accounting policiesand periods, the financial statements in corresponding currencies (other than the functional currency) shall be prepared according to theadjusted accounting policies and periods. Then, the financial statements of the overseas operations shall be translated according to thefollowing methods:
① The assets and liabilities items in the balance sheet shall be treated at the spot exchange rate on the balance sheet date. Except forthe “undistributed profit” items, other owners’ equity items shall be translated at the spot exchange rate at the time of occurrence.
② The income and expense items in the income statement shall be translated using the spot exchange rate at the transaction date oran exchange rate close to the spot rate at the transaction date.
③ For foreign currency cash flows and the cash flows of foreign subsidiaries, the spot exchange rate at the cash flow transaction dateor an exchange rate close to the spot rate shall be used for translation. The impact of exchange rate fluctuations on cash shall be treated asan adjustment item and reported separately in the cash flow statement.
④ The foreign currency translation differences arising from the financial statement translation shall be presented under the “Othercomprehensive income” item in the owners’ equity section of the consolidated balance sheet when preparing the consolidated financialstatements.
When disposing of an overseas operation and losing control, the foreign currency translation differences related to the overseasoperation, listed under the owners’ equity section of the balance sheet, shall be fully or proportionally transferred to the profit or loss forthe period of disposal.11.
Financial instruments
Financial Instruments refer to contracts that create financial assets for one party and financial liabilities or equity instrumentsfor another party.
(1) Recognition and derecognition of financial instruments
When the Company becomes a party to a financial instrument contract, it recognizes the relevant financial asset or financialliability.
A financial asset should be derecognized when it satisfies one of the following conditions:
① The contractual right to receive cash flows from the financial asset expires;
② The financial asset has been transferred, and the transfer meets the derecognition conditions for financial asset transfer.
A financial liability (or part of it) is derecognized when its current obligation has been discharged. If the Company (borrower)enters into an agreement with the lender to replace an original financial liability with a new financial liability, and the contract terms
of the new liability are significantly different from those of the original liability, the original liability is derecognized and a newfinancial liability is recognized simultaneously. If the Company makes a substantial modification to the contract terms of the originalfinancial liability (or part of it), the original financial liability should be derecognized, and a new financial liability should berecognized based on the modified terms.
Regular buying and selling of financial assets are recognized and derecognized on the transaction date. Regular buying and sellingof financial assets refer to the delivery of financial assets as per the terms of the contract, and at the time determined by regulationsor market practices. A transaction date refers to the date on which the Company commits to buying or selling financial assets.
(2) Classification and measurement of financial assets
Upon initial recognition, the Company classifies financial assets based on the business model for managing the assets and thecontractual cash flow characteristics of the financial asset into: financial assets measured at amortized cost; financial assets measuredat fair value with changes recognized in profit or loss; financial assets measured at fair value with changes recognized in othercomprehensive income. The financial assets shall not be reclassified after initial recognition unless the Company changes its businessmodel for managing financial assets. In this case, all affected relevant financial assets will be reclassified on the first day of the firstReporting Period following the change in the business model.
Financial assets are initially measured at fair value. For financial assets measured at fair value with changes recognized in profitor loss, the related transaction costs are directly included in the current profit or loss. For other categories of financial assets,transaction costs are included in the initial recognition amount. Accounts receivable and notes receivable arising from the sale ofgoods or services, where significant financing components are not included or considered, are initially measured by the Companyaccording to the transaction price defined in the revenue standards.
Subsequent measurement of financial assets depends on their classification:
① Financial assets measured at amortized cost
A financial asset that meets the following conditions shall be classified as a financial asset measured at amortized cost: TheCompany’s business model for managing the financial asset is to collect contractual cash flows; the contractual terms of the financialasset specify that the cash flows generated at specific dates are solely payments of principal and interest on the outstanding principalamount. For such financial assets, the effective interest method is used for subsequent measurement at amortized cost. The gains orlosses arising from derecognition, amortization using the effective interest method, or impairment are recognized in the current profitor loss.
② Financial assets measured at fair value with changes recognized in other comprehensive income
A financial asset that meets the following conditions shall be classified as a financial asset measured at fair value with changesrecognized in other comprehensive income: The Company’s business model for managing the financial asset is both to collectcontractual cash flows and to sell the financial asset; the contractual terms of the financial asset specify that the cash flows generatedat specific dates are solely payments of principal and interest on the outstanding principal amount. For such financial assets,subsequent measurement is at fair value. Except for impairment losses or gains and foreign exchange gains or losses, which arerecognized in the current profit or loss, changes in the fair value of these financial assets are recognized in other comprehensiveincome until derecognition. At that point, the accumulated gains or losses are transferred to current profit or loss. However, interestincome for such financial assets, calculated using the effective interest method, is recognized in the current profit or loss.
The Company irrevocably elects to designate certain non-trading equity investments as financial assets measured at fair valuewith changes recognized in other comprehensive income. Only the related dividend income is recognized in the current profit or loss,and changes in the fair value are recognized in other comprehensive income. Upon derecognition of the financial asset, theaccumulated gains or losses are transferred to retained earnings.
③ Financial assets measured at fair value with changes recognized in current profit or loss
Financial assets other than those classified as financial assets measured at amortized cost or financial assets measured at fairvalue with changes recognized in other comprehensive income shall be classified as financial assets measured at fair value withchanges recognized in profit or loss. For such financial assets, subsequent measurement is at fair value, and all changes in fair valueare recognized in the current profit or loss.
(3) Classification and measurement of financial liabilities
The Company classifies financial liabilities into financial liabilities measured at fair value with changes recognized in currentprofit or loss, loan commitments at below-market interest rates, financial guarantee contract liabilities, and financial liabilitiesmeasured at amortized cost.
The subsequent measurement of financial liabilities depends on their classification:
① Financial liabilities measured at fair value with changes recognized in current profit or loss
This type of financial liability includes trading financial liabilities (including derivative instruments that are financial liabilities)and financial liabilities designated at fair value through profit or loss. After initial recognition, these financial liabilities aresubsequently measured at fair value, with gains or losses (including interest expenses) arising from changes in fair value recognizedin current profit or loss, except for those related to hedge accounting. However, for financial liabilities designated at fair value throughprofit or loss, changes in fair value arising from changes in the Company’s own credit risk are recognized in other comprehensiveincome. When the financial liability is derecognized, the cumulative gains and losses previously recognized in other comprehensiveincome should be reclassified from other comprehensive income to retained earnings.
② Loan commitments and financial guarantee contract liabilities
A loan commitment is a promise made by the Company to provide a loan to a customer under predetermined contractual termswithin the commitment period. Loan commitments are subject to impairment losses under the expected credit loss model.
A financial guarantee contract refers to a contract where, in the event that a specific debtor fails to repay the debt according tothe original or modified terms of the debt instrument, the company is required to compensate the contract holder for a specific amountof loss. The financial guarantee contract liability is subsequently measured at the higher of the loss allowance determined based onthe impairment principles for financial instruments, and the balance after deducting the cumulative amortization recognized underthe revenue recognition principles from the initial recognition amount.
③ Financial liabilities measured at amortized cost
After initial recognition, other financial liabilities are subsequently measured at amortized cost using the effective interest ratemethod.
Except in special circumstances, financial liabilities and equity instruments are distinguished according to the followingprinciples:
① If the Company cannot unconditionally avoid fulfilling a contract obligation by delivering cash or other financial assets, the
contract obligation meets the definition of a financial liability. Some financial instruments, although they do not explicitly containterms and conditions requiring the delivery of cash or other financial assets, may still indirectly create a contractual obligation throughother terms and conditions.
② If a financial instrument is settled, or may be settled, using the Company’s own equity instruments, it is necessary to considerwhether the Company’s own equity instruments used for settlement are a substitute for cash or other financial assets, or whether theyrepresent the remaining equity in the assets of the issuer after deducting all liabilities. If the former, the instrument is a financialliability of the issuer; if the latter, the instrument is an equity instrument of the issuer. In some cases, a financial instrument contractmay require or allow settlement using the Company’s own equity instruments, where the amount of contractual rights or obligationsis equal to the number of equity instruments that can be obtained or delivered, multiplied by their fair value at settlement. In this case,regardless of whether the amount of the contractual rights or obligations is fixed or changes partially or entirely based on variablesother than the market price of the Company’s own equity instruments (such as interest rates, commodity prices, or prices of otherfinancial instruments), the contract is classified as a financial liability.
(4) Derivative financial instruments and embedded derivative instruments
Derivatives are initially measured at fair value on the date the derivative contract is signed and subsequently measured at fairvalue. A derivative with a positive fair value is recognized as an asset, while a derivative with a negative fair value is recognized asa liability.
Except for the portion of cash flow hedges that are effective and recognized in other comprehensive income, which is reclassifiedto profit or loss when the hedged item affects profit or loss, gains or losses arising from changes in the fair value of derivatives aredirectly recognized in profit or loss for the current period.
For hybrid instruments that contain embedded derivatives, if the host contract is a financial asset, the hybrid instrument as awhole applies the relevant financial asset classification rules. If the host contract is not a financial asset and the hybrid instrument isnot measured at fair value with changes recognized in profit or loss, and the embedded derivative is not closely related to the hostcontract in terms of economic characteristics and risks, and an instrument that is identical to the embedded derivative and existsseparately would meet the definition of a derivative, the embedded derivative is separated from the hybrid instrument and treated asa separate derivative financial instrument. If the fair value of the embedded derivative cannot be separately measured at theacquisition date or on subsequent balance sheet dates, the hybrid instrument as a whole is designated as a financial asset or financialliability measured at fair value with changes recognized in current profit or loss.
(5) Impairment of financial instruments
The Company recognizes loss provisions based on expected credit losses for financial assets measured at amortized cost, debtinvestments measured at fair value with changes recognized in other comprehensive income, contract assets, lease receivables, loancommitments, and financial guarantee contracts.
① Measurement of expected credit loss
Expected credit loss refers to the weighted average of the credit losses of financial instruments weighted by the risk of default.Credit loss refers to the difference between all contractual cash flows discounted at the original effective interest rate and receivableaccording to the contract and all cash flows expected to be collected of the Company, i.e. the present value of all cash shortfalls.Among them, credit-impaired purchased or originated financial assets of the Company shall be discounted at the credit-adjustedeffective interest rate of such financial assets.
The expected credit loss over the entire life of a financial instrument refers to the expected credit loss arising from all potentialdefault events that may occur during the entire expected life of the instrument.
The expected credit loss within the next 12 months refers to the expected credit loss resulting from default events that may occurwithin the next 12 months after the balance sheet date (or the expected life if the instrument's expected life is shorter than 12 months),and is a part of the expected credit loss over the entire life of the instrument.
At each balance sheet date, the Company measures the expected credit loss for financial instruments in different stages separately.If the credit risk of the financial instrument has not significantly increased since initial recognition, it is classified into Stage 1, andthe loss provision is measured based on the expected credit loss over the next 12 months. If the credit risk has significantly increasedbut no credit impairment has occurred since initial recognition, it is classified into Stage 2, and the loss provision is measured basedon the expected credit loss over the entire life of the instrument. If the financial instrument has already incurred credit impairmentsince initial recognition, it is classified into Stage 3, and the loss provision is measured based on the expected credit loss over theentire life of the instrument.
For financial instruments with low credit risk at the balance sheet date, the Company assumes that their credit risk has not
significantly increased since initial recognition, and the loss provision is measured based on the expected credit loss over the next 12months.For financial instruments in Stage 1, Stage 2, and those with low credit risk, the Company calculates interest income based ontheir carrying amount before impairment provisions and the effective interest rate. For financial instruments in Stage 3, interest incomeis calculated based on their carrying amount after impairment provisions and the effective interest rate.For receivables, contract assets, receivable financing, and contract assets, the Company measures loss provisions based on theexpected credit loss over the entire life of the instrument, regardless of whether there is a significant financing component.A. Receivables /contract assetsFor notes receivable, accounts receivable, other receivables, receivable financing, contract assets, and long-term receivableswhere there is objective evidence of impairment, as well as other items that are subject to individual impairment testing, the Companyperforms individual impairment tests to recognize expected credit losses and make provisions for individual impairments.For notes receivable, accounts receivable, other receivables, receivable financing, contract assets, and long-term receivableswhere there is no objective evidence of impairment, or when it is not possible to reasonably assess the expected credit loss forindividual financial assets, the Company classifies these financial instruments into groups based on their credit risk characteristics.The expected credit loss is then calculated on a portfolio basis. The criteria for grouping are as follows:
The criteria for grouping notes receivable are as follows:
Group 1: Commercial acceptance billsGroup 2: Bank acceptance billsFor notes receivable grouped into categories, the Company refers to historical credit loss experience, current conditions, andforecasts of future economic conditions. The expected credit loss is calculated based on default risk exposure and the expected creditloss rate over the entire life of the instrument.The criteria for grouping accounts receivable are as follows:
Group 1: Companies outside the consolidation scopeGroup 2: Companies within the consolidation scopeFor accounts receivable grouped into categories, the Company refers to historical credit loss experience, current conditions, andforecasts of future economic conditions. A comparison table is prepared that aligns the aging of accounts receivable with the expectedcredit loss rate over the entire life of the instrument. The expected credit loss is then calculated.The criteria for grouping other receivables are as follows:
Group 1: Companies outside the consolidation scopeGroup 2: Companies within the consolidation scopeFor other receivables grouped into categories, the Company refers to historical credit loss experience, current conditions, andforecasts of future economic conditions. The expected credit loss is calculated based on default risk exposure and the expected creditloss rate over the next 12 months or the entire life of the instrument.
The criteria for grouping receivable financing are as follows:
Group 1: Bank acceptance bill groupFor receivable financing grouped into categories, the Company refers to historical credit loss experience, current conditions,and forecasts of future economic conditions. The expected credit loss is calculated based on default risk exposure and the expectedcredit loss rate over the entire life of the instrument.B. Debt investments and other debt investmentsFor debt investments and other debt investments, the Company calculates expected credit losses based on the nature of theinvestment, various types of counterparty risk exposures, and default risk exposure, using the expected credit loss rate over the next12 months or the entire life of the instrument.
② Low credit risk
If the default risk of a financial instrument is low, the borrower has a strong ability to fulfill its contractual cash flow obligationsin the short term, and even if adverse economic conditions and operating environments persist over a longer period, they may notnecessarily reduce the borrower’s ability to fulfill its contractual cash flow obligations, then the financial instrument is considered tohave low credit risk.
③ Significant increase of credit risk
The Company determines whether the credit risk of a financial instrument has significantly increased since initial recognition bycomparing the default probability over the expected life of the financial instrument at the balance sheet date with the default probabilitydetermined at initial recognition. This helps assess the relative change in the likelihood of default over the instrument’s expected life.In evaluating whether there has been a significant increase in credit risk since initial recognition, the Company considersreasonable and supported information that can be obtained without unnecessary additional costs or efforts, including forward-lookinginformation. The information the Company considers includes:
A. Whether there has been a significant change in internal price indicators due to changes in credit risk;
B. Whether there have been adverse changes in the business, financial, or economic conditions that are expected to significantlyaffect the debtor’s ability to meet its debt obligations;
C. Whether the actual or expected operating results of the debtor have changed significantly; whether the regulatory, economicor technological environment of the debtor has undergone significant adverse changes;
D. Whether the following items have changed significantly: the value of collateral as debt mortgage, or the guarantee providedby a third party, or the quality of credit enhancement; these changes will reduce the debtor’s economic motivation to repay the loanwithin the time limit stipulated in the contract or impact the probability of default;
E. Whether there has been a significant change in the economic incentives expected to reduce the debtor’s motivation to repayaccording to the contractual terms;
F. Expected changes to the loan contract, including whether violations of the contract might lead to the exemption or revision ofcontractual obligations, the provision of interest-free periods, interest rate hikes, requests for additional collateral or guarantees, orother changes to the contractual framework of the financial instrument;
G. Whether the debtor’s expected performance and repayment behavior have changed significantly;
H. Whether the contract payment is overdue for 30 days or more.
Based on the nature of the financial instrument, the Company evaluates whether the credit risk has significantly increased on anindividual instrument or portfolio basis. When evaluating on a portfolio basis, the Company can classify financial instruments basedon common credit risk characteristics, such as overdue information and credit risk ratings.
Generally, if the payment is overdue for more than 30 days, the Company determines that the credit risk of the financial instrumenthas significantly increased. However, unless the Company can obtain reasonable and supported information, without incurringexcessive cost or effort, that proves the credit risk has not significantly increased since initial recognition, even though the payment ismore than 30 days overdue, the credit risk will be considered significantly increased.
④ Financial assets with credit impairment
The Company assesses, at the balance sheet date, whether financial assets measured at amortized cost and debt investmentsmeasured at fair value through other comprehensive income have experienced credit impairment. If one or more events have adverseeffects on the expected future cash flow of a financial asset, the financial asset will become a financial asset that has suffered creditimpairment. The following observable information can be regarded as evidence of credit impairment of financial assets:
The issuer or debtor is in serious financial difficulties; the debtor breaches the contract, such as default or overdue payment ofinterest or principal, etc.; the creditor gives concessions to the debtor due to economic or contractual considerations related to thedebtor’s financial difficulties; the concessions will not be made under any other circumstances; there is a great possibility of bankruptcyor other financial restructuring of the debtor; the financial difficulties of the issuer or debtor cause the disappearance of the activemarket for the financial asset; the purchase or origin of a financial asset at a substantial discount that reflects the fact that a credit losshas occurred.
⑤ Presentation of expected credit loss provisions
To reflect the changes in the credit risk of financial instruments since initial recognition, the Company remeasures the expectedcredit loss at each balance sheet date. The increase or reversal of the loss provision resulting from this remeasurement should berecognized as impairment losses or gains in the current period's profit or loss. For financial assets measured at amortized cost, the lossprovision reduces the carrying amount of the financial asset presented on the balance sheet. For debt investments measured at fair valuethrough other comprehensive income, the Company recognizes the loss provision in other comprehensive income, without reducingthe carrying amount of the financial asset.
⑥ Write-off
If the Company no longer reasonably expects that the contractual cash flows of a financial asset can be fully or partially recovered,it will directly reduce the carrying amount of the financial asset. This reduction constitutes the derecognition of the relevant financialasset. This situation typically occurs when the Company determines that the debtor has no assets or income sources capable ofgenerating sufficient cash flows to repay the amount being written off.
If the previously written-off financial asset is later recovered, the recovery is recognized as a reversal of the impairment loss andincluded in the profit or loss for the current period.
(6) Transfer of financial assets
The transfer of financial assets refers to the following two situations:
A. Transferring the contractual right to receive the cash flows of a financial asset to another party;
B. Transferring all or part of a financial asset to another party, while retaining the contractual right to receive the cash flows ofthe financial asset and assuming the contractual obligation to pay the received cash flows to one or more payees.
① Derecognition of transferred financial assets
If almost all the risks and rewards of ownership of a financial asset have been transferred to the transferee, or if neither the risksand rewards of ownership nor the control of the financial asset have been retained, but the control of the financial asset has beenrelinquished, the financial asset should be derecognized.
When determining whether control of the transferred financial asset has been relinquished, the Company considers thetransferee’s ability to sell the financial asset. If the transferee can unilaterally sell the transferred financial asset to an unrelated third
party without additional conditions restricting the sale, the Company has relinquished control of the financial asset.In assessing whether the transfer of a financial asset meets the conditions for derecognition, the Company focuses on the substanceof the transfer of the financial asset.When the transfer of a financial asset as a whole meets the derecognition criteria, the difference between the following twoamounts should be recognized in the current period's profit or loss:
A. The carrying amount of the transferred financial asset;B. The consideration received for the transfer, plus the amount related to the derecognized portion from the accumulated fairvalue changes previously recognized in other comprehensive income (this applies to financial assets classified as fair value throughother comprehensive income under Article 18 of Accounting Standards for Business Enterprises No. 22 - Recognition and Measurementof Financial Instruments).When a partial transfer of a financial asset meets the derecognition criteria, the carrying amount of the entire transferred financialasset should be allocated between the derecognized portion and the portion that is not derecognized (in this case, the retained servicingasset is treated as part of the continuing recognition of the financial asset), based on their relative fair values at the transfer date. Thedifference between the following two amounts should be recognized in current profit or loss:
A. The carrying amount of the derecognized portion at the derecognition date;B. The consideration received for the derecognized portion, plus the amount corresponding to the derecognized portion from theaccumulated fair value changes previously recognized in other comprehensive income (this applies to financial assets classified as fairvalue through other comprehensive income under Article 18 of Accounting Standards for Business Enterprises No. 22 - Recognitionand Measurement of Financial Instruments).
② Continued involvement in the transferred financial asset
If neither substantially all the risks and rewards of ownership of the financial asset have been transferred nor retained, and controlof the financial asset has not been relinquished, the Company should recognize the relevant financial asset to the extent of its continuedinvolvement in the transferred financial asset, and correspondingly recognize the related liability.
The extent of continued involvement in the transferred financial asset refers to the degree of risk or reward the Company retainsregarding changes in the value of the transferred financial asset.
③ Continuing Recognition of the Transferred Financial Asset
If the Company retains substantially all the risks and rewards of ownership of the transferred financial asset, it should continueto recognize the entire transferred financial asset and recognize the consideration received as a financial liability.
The financial asset and the recognized related financial liability must not be offset against each other. In subsequent accountingperiods, the Company should continue to recognize the income (or gains) arising from the financial asset and the expense (or losses)arising from the financial liability.
(7) Offset of financial assets and financial liabilities
In the balance sheet, financial assets and financial liabilities are shown separately without offsetting each other. However, if thefollowing conditions are met at the same time, the net amount after offset will be listed in the balance sheet:
The Company has the legal right, which is currently enforceable, to offset the confirmed amount;
The Company plans to settle on a net basis, or realize the financial assets and settle the financial liabilities at the same time.
For the transfer of financial assets that do not meet the derecognition criteria, the transferor must not offset the transferredfinancial asset against the related liability.
(8) Determination of fair value of financial instruments
The methods for determining the fair value of financial assets and financial liabilities are provided in Note V-12 of this Section.
12. Measurement at fair value
Fair value is the price that market participants would receive from selling an asset or pay to transfer a liability in an orderlytransaction on the measurement date.
The Company determines the fair value of assets or liabilities based on the prices in the primary market. If a primary market doesnot exist, the Company measures the fair value of relevant assets or liabilities using the most market-advantageous price. The Companyadopts the assumptions that market participants would use when pricing the asset or liability, aiming to maximize its economic benefits.
The term “primary market” refers to the market with the highest transaction volume and the most active trading of the relevantassets or liabilities. The “most market-advantageous market” is the market where the relevant assets can be sold for the highest priceor the liabilities transferred at the lowest cost, after accounting for transaction and transportation expenses.
For financial assets or liabilities with an active market, the Company uses the quoted market price to determine their fair value.When an active market is not available, the Company employs valuation techniques to determine their fair value.
When a non-financial asset is valued at fair value, consideration is given to a market participant’s ability to utilize the asset in itsmost advantageous way to generate economic benefits or to sell it to another market participant capable of doing so.
① Valuation technology
The Company employs valuation techniques that are appropriate for the current period and are supported by sufficient data andother relevant information. These techniques primarily include the market method, the income method, and the cost method. Whendetermining fair value, the Company uses the method(s) that best align with these techniques. If multiple valuation methods are used,the Company assesses the reasonableness of each result and selects the most representative amount that accurately reflects fair valuein the current circumstances.
In applying valuation techniques, the Company prioritizes the use of relevant observable input values. Only when such observableinputs are unavailable or impractical to obtain does the Company resort to unobservable inputs. Observable inputs are those deriveddirectly from market data, reflecting the assumptions that market participants use when pricing the asset or liability. Unobservableinputs, on the other hand, are those that cannot be obtained from market data and are instead estimated based on the best availableinformation regarding market participants’ assumptions in pricing the asset or liability.
② Fair value hierarchy
The Company classifies the inputs used for fair value measurement into three levels. It uses Level 1 inputs first, followed byLevel 2, and then Level 3. Level 1 inputs consist of unadjusted quoted prices in active markets for identical assets or liabilities at themeasurement date. Level 2 inputs are observable for the underlying asset or liability, either directly or indirectly, but are not Level 1.Level 3 inputs are unobservable inputs for the relevant asset or liability.
13. Inventory
(1) Inventory classification
Inventories refer to finished products or goods held by the Company for sale as part of its daily operations, work-in-progress items invarious stages of production, as well as materials and supplies used in manufacturing or providing labor services, such as raw materials,work-in-progress items, self-produced finished products, finished goods, inventory stock, and turnover materials.
(2) Pricing method for delivered inventory
The Company’s inventories are valued using the weighted average method upon delivery.
(3) Inventory management system
The Company adopts a perpetual inventory system, with inventories to be checked at least once a year. Any inventory gains or losseswill be included in profits and losses for the current year.
(4) Standards for recognizing and calculating the provision for inventory impairment
On the balance sheet date, inventory should be valued at the lower of cost and net realizable value. If the inventory’s cost exceedsits net realizable value, the provision for inventory impairment shall be recognized in current profits and losses.
The net realizable value of inventories is determined based on reliable evidence, considering the purpose of holding the inventories,the effects of events occurring after the balance sheet date, and other relevant factors.
① During normal production and operations, the net realizable value of inventories intended for sale—such as finished products,commodities, and materials—is determined by subtracting estimated selling expenses and relevant taxes from the expected selling price ofthe inventories. For inventories held to fulfill sales or labor contracts, their net realizable value is based on the contract price. If the quantityof inventories exceeds the amount specified in the sales contract, the excess inventory’s value is assessed based on the general market sellingprice. For materials designated for sale, their net realizable value is measured using the prevailing market price.
② During normal production and operation, the net realizable value of processed materials is determined by subtracting estimatedcosts to complete, estimated selling expenses, and applicable taxes from the estimated selling price of the finished products. If the netrealizable value of the finished products exceeds their cost, the materials are valued at cost. However, if a decline in the material’s priceindicates that the net realizable value of the finished products is lower than their cost, the materials should be valued at their net realizablevalue. The provision for inventory impairment shall be recognized for the difference.
③ The Company typically calculates and deducts the provision for inventory impairment based on individual inventory items. Forlarge quantities of low-priced items, the provision is determined and applied according to inventory categories.
④ On the balance sheet date, if the factors that led to the previous inventory impairment no longer exist, the amount of the impairmentshall be reversed. This reversal shall not exceed the original provision for inventory impairment, and the reversed amount should berecognized as part of the profits and losses for the current period.
(5) Amortization method for turnover materials
① Amortization method for low-value consumables: a one-time write-off is applied at the time of collection.
② Amortization method for packing materials: a one-time write-off is applied at the time of collection.
14. Contract assets and contract liabilities
The Company reports contract assets and contract liabilities on the balance sheet based on the relationship between performanceobligations and customer payments. Amounts the Company is entitled to receive for transferring goods or providing services—excludingtime-based factors—are recognized as contract assets. Obligations to deliver goods or services in exchange for consideration already receivedor receivable from customers are recorded as contract liabilities.
The Company’s approach to estimating and accounting for expected credit losses on contract assets is detailed in Note V-11 of thisSection.
Contract assets and contract liabilities are presented separately on the balance sheet. When both arise from the same contract, they areoffset and shown as a net amount. If the net balance is a debit, it is reported as “Contract assets” or “Other non-current assets,” depending onits liquidity. If the net balance is a credit, it is recognized as “Contract liabilities” or “Other non-current liabilities,” based on its liquidity.Contract assets and contract liabilities from different contracts cannot be offset against each other.
15. Long-term equity investment
The Company’s long-term equity investments include holdings that allow it to exercise control or significant influence over theinvestees, as well as investments in joint ventures. When the Company is able to exert significant influence over an investee, that entity isconsidered an associated enterprise.
(1) Criteria for establishing joint control and significant influence over the investee
Joint control refers to shared authority over an arrangement, governed by the relevant agreement. Decisions regarding thearrangement's activities can only be made with the unanimous consent of all participants sharing control. To determine whether joint controlexists, the first step is to assess whether all participants or a specific group collectively control the arrangement. If these participants mustact together to make decisions about the arrangement’s activities, they are considered to have joint control. Next, it must be evaluated whetherdecisions related to the arrangement require the approval of those who collectively control it. Joint control does not exist when two or moreparticipants simply share control without requiring joint decision-making. Additionally, protective rights held by individual participants arenot considered when assessing the existence of joint control.Significant influence refers to the investor’s right to participate in the decision-making processes regarding the financial andoperational policies of the investee. However, it does not grant the investor control or joint control over the formulation of these policies.When assessing whether the investor has significant influence over the investee, consider both the voting shares directly or indirectly ownedby the investor and the potential impact of current executable voting rights held by the investor and other parties. This includes the effects ofconvertible instruments such as warrants, stock options, and corporate bonds issued by the investee that could be converted into equity.When the Company owns 20% or more but less than 50% of the voting shares of the investee, directly or indirectly through itssubsidiaries, it is generally regarded as having a significant influence over the investee. This assumption holds unless there is clear evidenceindicating that the Company is unable to participate in the investee’s production and operational decisions under those circumstances, anddoes not exercise significant influence.
(2) Determining the initial investment cost
① The investment cost of long-term equity investments resulting from enterprise mergers shall be determined in accordance with thefollowing provisions:
A. For a business combination under common control, if the merging party provides cash, transfers non-cash assets, or assumes debtsas consideration, the book value of the merged entity’s owners’ equity in the consolidated financial statements of the ultimate controllingparty on the merger date will be recognized as the initial cost of the long-term equity investment. The difference between this initialinvestment cost and the actual cash paid, non-cash assets transferred, and the book value of debts assumed shall be adjusted against thecapital reserve. If the capital reserve is insufficient to cover the difference, the remaining amount shall be adjusted against retained earnings.
B. For a business combination under common control, the merging party issues equity securities as consideration, the share of thebook value of the merged entity’s owners’ equity in the consolidated financial statements of the ultimate controlling party—calculated as ofthe merger date—shall be recognized as the initial cost of the long-term equity investment. The total face value of the issued shares will berecorded as capital stock. Any difference between the initial investment cost and the total face value of the shares issued should be adjustedto the capital reserve. If the capital reserve is insufficient to cover this difference, the remaining amount shall be adjusted against retainedearnings.
C. For a business combination not under common control, the fair value of the assets transferred, liabilities incurred or assumed, andequity securities issued on the acquisition date to gain control over the acquiree is recognized as the acquisition cost. This amount isconsidered the initial investment cost of the long-term equity investment. Any intermediary expenses incurred by the acquiring party—suchas audit, legal, valuation, consulting fees, and other related administrative costs—should be recognized as expenses for the current period.
② Except for long-term equity investments acquired through mergers, the investment cost for other long-term equity investmentsshall be determined in accordance with the following provisions:
A. For long-term equity investments acquired through cash payment, the actual purchase price paid shall be considered the investmentcost. The initial investment cost includes expenses, taxes, and other necessary costs directly related to the acquisition of the investment.
B. For long-term equity investments acquired through the issuance of equity securities, the fair value of the issued securities shall berecognized as the initial investment cost.
C. For long-term equity investments acquired through the exchange of non-monetary assets, if the exchange has commercial substanceand the fair value of the assets received or surrendered can be reliably measured, then the initial investment cost shall be based on the fairvalue of the assets surrendered, including relevant taxes. Any difference between the fair value and the book value of the surrendered assetsshall be recognized in current profits or losses. If the exchange does not meet both of these conditions simultaneously, the initial investmentcost shall be based on the book value of the surrendered assets, along with applicable taxes and fees.
D. For long-term equity investments acquired through debt restructuring, the initial recognition is based on the fair value of therelinquished creditor’s rights and other directly attributable costs. Any difference between the fair value of these rights and their book valueis recognized as a gain or loss in current profits and losses.
(3) Method for subsequent measurement and recognition of profit and loss
The Company uses the cost method to account for long-term equity investments in entities it can control, while it applies the equitymethod for investments in associates and joint ventures.
① Cost method
For long-term equity investments accounted for using the cost method, the carrying amount should be adjusted when additionalinvestments are made or when investments are withdrawn. Cash dividends or profits declared and distributed by the investee should berecognized as current investment income.
② Equity method
For long-term equity investments accounted for using the equity method, the standard accounting treatment is:
If the Company’s initial investment cost for a long-term equity investment exceeds the fair value of the investee’s identifiable netassets at the time of investment, no adjustment will be made to the initial investment cost. Conversely, if the initial investment cost is lessthan the fair value of the investee’s identifiable net assets, the difference will be recognized in current profits and losses, and the carryingamount of the long-term equity investment will be adjusted accordingly.
The Company recognizes investment income and other comprehensive income based on its share of the net profit or loss and othercomprehensive income realized by the invested entity that should be enjoyed or shared. Simultaneously, it adjusts the carrying amount of thelong-term equity investment accordingly. The portion to be recognized is calculated based on the profit or cash dividends declared anddistributed by the invested entity, and the carrying amount of the long-term equity investment is reduced accordingly. Adjustments are alsomade to the carrying amount of the long-term equity investment for other changes in the investee's equity, excluding net profit or loss, other
comprehensive income, and profit distributions, and these adjustments are reflected in the owners’ equity. When recognizing the share ofnet profit or loss from the invested entity, the net profit is adjusted and confirmed based on the fair value of the identifiable net assets of theinvestee at the time of acquiring the investment. If the invested entity’s accounting policies and periods differ from those of the Company,its financial statements are adjusted to align with the Company’s policies and periods, and investment income and other comprehensiveincome are recognized accordingly. Unrealized gains and losses from internal transactions between the Company and its associates or jointventures are offset proportionally to the Company’s share, and investment gains or losses are recognized on this basis. If the unrealizedinternal transaction loss is an asset impairment loss, it shall be recognized in full.If an entity can exert significant influence over an investee or exercise joint control but does not have control due to additionalinvestments or other reasons, the initial investment cost under the equity method should be calculated as the combined fair value of theoriginal equity investment and the cost of the new investment. When the originally held equity investment is classified as other equityinstruments, any difference between its fair value and book value, along with accumulated gains or losses previously recognized in othercomprehensive income, should be reclassified out of other comprehensive income and included in retained earnings in the current periodwhen the equity method is changed.If joint control or significant influence over the investee is lost due to partial disposal of equity or other reasons, the remaining equityshall be measured at its fair value. Any difference between this fair value and the book value at the date of loss of joint control or influenceshall be recognized in current profits and losses. Additionally, any other comprehensive income previously recognized through the equitymethod, as a result of the original investment, should be accounted for in the same manner as a direct disposal of related assets or liabilitiesby the investee when the equity method is terminated.
(4) Equity investments held for sale
If all or part of the equity investment in an associated enterprise or joint venture is classified as assets held for sale, please refer toNote V-15 of this Section for the appropriate accounting treatment.
For any remaining equity investments not classified as assets held for sale, the equity method is applied for accounting purposes.
Equity investments in associates or joint ventures that were previously classified as held for sale but no longer meet the criteria forsuch classification should be adjusted retrospectively using the equity method, starting from the date they were reclassified. The financialstatements for the period during which these investments were classified as held for sale should be restated accordingly.
(5) Method for impairment tests and provision for impairment
For investments in subsidiaries, associates, and joint ventures, please refer to Note V-21 of this Section for the procedures on assetimpairment provisions.
16. Investment properties
(1) Types of investment properties
Investment property refers to real estate held primarily to generate rental income, appreciate in value, or both. It typically includes:
① Leased land use rights.
② Land use rights held and to be transferred after appreciation.
③ Leased buildings.
(2) Measurement method for investment properties
The Company uses the cost model for subsequent measurement of its investment properties. Please refer to Note V-21 of this Sectionfor details on asset impairment provisions.
The Company calculates depreciation or amortization of investment properties using the straight-line method, after deductingaccumulated impairments and the net residual value from the asset’s cost. The depreciation period and annual depreciation rate are determinedbased on the category, estimated service life, and expected residual value of the investment real estate.
| Category | Depreciation period (Years) | Residual value rate (%) | Annual depreciation rate (%) |
| Buildings and structures | 20 | 5-10 | 4.50-4.75 |
| Land use rights | Service life of land use rights | 1/Service life * 100 |
17. Fixed assets
Fixed assets are tangible assets of significant value that are used for producing goods, rendering of services, leases or operationmanagement and have a service life of more than one year.
(1) Recognition criteria
Fixed assets shall be recognized at their actual acquisition cost when all of the following conditions are met simultaneously:
① The economic benefits associated with fixed assets are likely to flow into the enterprise.
② The cost of the fixed asset can be measured in a reliable way.
Subsequent expenditures on fixed assets should be capitalized into the asset’s cost if they meet the criteria for recognition as fixedassets. If they do not meet these criteria, they should be recorded in the current profits and losses.
(2) Depreciation method
The Company calculates depreciation using the straight-line method starting from the month after the fixed assets reach their expectedusable condition. The depreciation period and annual rate are determined based on the asset’s category, estimated service life, and expectedresidual value, as outlined below:
| Category | Depreciation method | Depreciation period | Residual value rate (%) | Annual depreciation rate (%) |
| Buildings and structures | Straight-line method | 20 | 5-10 | 4.50-4.75 |
| Machinery and equipment | Straight-line method | 6-13 | 5-10 | 6.92-15.83 |
| Transportation equipment | Straight-line method | 5 | 5-10 | 18.00-19.00 |
| Electronic equipment | Straight-line method | 5 | 5-10 | 18.00-19.00 |
| Office equipment | Straight-line method | 5 | 5-10 | 18.00-19.00 |
| Other equipment | Straight-line method | 5 | 5-10 | 18.00-19.00 |
For fixed assets with an impairment provision already recognized, the impairment amount should be deducted when calculatingdepreciation.At the end of each year, the Company will review the service life, estimated net residual value, and depreciation method of its fixedassets. If the estimated service life has changed from the original estimate, the service life of the asset will be adjusted accordingly.
18. Construction in progress
The Company shall comply with the disclosure requirements in the chemical industry set forth in the Self-Regulatory Guidelines No. 3 forCompanies Listed on the Shenzhen Stock Exchange – Industry Information Disclosure.
(1) Construction in progress is accounted for by project categories based on their approved proposals.
(2) Standard procedures and timeline for capitalizing construction in progress to fixed assetsFor the construction in progress project, all expenses incurred prior to the asset reaching its expected usable condition are consideredthe initial recognition of the fixed asset. This includes construction costs, the original purchase price of machinery and equipment, othernecessary expenditures to bring the project to its intended operational state, as well as borrowing costs associated with special financing forthe project incurred before the asset becomes usable, and borrowing costs from general loans used during this period. Once the projectinstallation or construction is completed and the asset reaches its expected usable condition, the project under construction is transferred tofixed assets. For fixed assets that have reached the expected usable state but have not yet undergone final accounting, they are recorded at anestimated value based on the project budget, cost, or actual expenses incurred from the date the asset became usable. Depreciation iscalculated and recognized in accordance with the Company’s fixed asset depreciation policies. The original estimated value is adjusted toreflect actual costs; however, previously accrued depreciation remains unchanged.
19. Borrowing costs
(1) Recognition principles and capitalization period for borrowing costs
The Company shall capitalize borrowing costs directly attributable to the acquisition, construction, or production of eligible assets, andinclude them in the asset’s cost, provided that all of the following conditions are met simultaneously:
① The asset expenditure has been incurred.
② The borrowing costs have been incurred.
③ The activities required for the purchase, construction, or production of the assets to achieve their expected usable condition havebegun.
Any other borrowing costs, discounts, premiums, or exchange differences should be included in the current profit and loss.
Borrowing costs shall be capitalized only when the acquisition, construction, or production of eligible assets proceeds without abnormalinterruption. If such interruption exceeds three months, capitalization shall be suspended.
Capitalization of borrowing costs shall cease once the assets under construction or production, which meet the capitalization criteria,are ready for their intended use or sale. Any borrowing costs incurred thereafter shall be recognized as expenses in the current period.
(2) Capitalization rate for borrowing costs and method of calculating the capitalized amount
When a special loan is used to acquire, construct, or produce assets eligible for capitalization, the interest expense for the current periodis calculated as the actual interest incurred on the loan minus any interest income earned from depositing unused funds in the bank or fromtemporary investments. This net amount represents the capitalized interest expense of the special loan.
When a general borrowing is used to acquire, construct, or produce assets eligible for capitalization, the interest to be capitalized shouldbe calculated by multiplying the weighted average asset expenditure—specifically, the portion of accumulated asset costs exceeding theamount financed by special borrowings—by the capitalization rate of the general borrowing. This capitalization rate is determined based onthe weighted average interest rate of the general borrowings.
20. Intangible assets
(1) Valuation methods for intangible assets
Intangible assets are recorded at their acquisition cost.
(2) The service life and its determination basis, estimated situation, amortization method or reviewprocedures
① Estimating the service life of intangible assets with limited service life
| Item | Expected service life | Basis |
| Software | 10 years | Determine the service life based on the period during which it provides economic benefits to the Company. |
| Land use rights | 50 years | Legal use rights |
| Patent rights | 10 years | Determine the service life based on the period during which it provides economic benefits to the Company. |
| Non-proprietary technology | 10 years | Determine the service life based on the period during which it provides economic benefits to the Company. |
At the end of each year, the Company will review the service life and amortization method of intangible assets with limited service lives.If, after review, there are no changes from previous estimates, the current service life and amortization method will remain unchanged.
② If it is not possible to determine the time frame within which intangible assets will generate economic benefits for the company,they should be classified as intangible assets with an indefinite service life. For such assets, the Company shall review their service life atthe end of each year. If, after this review, the service life remains uncertain, an impairment test shall be performed as of the balance sheetdate.
③ Amortization of intangible assets
For intangible assets with a limited service life, the Company determines their service life at the time of acquisition. These assets arethen amortized systematically and reasonably using the straight-line method over their designated service life. The amortization expense isrecorded in either the current profit and loss or the cost of related assets, depending on the beneficiary items. The amortizable amount iscalculated as the asset’s cost minus its estimated residual value. For intangible assets that have been impaired, the accumulated impairmentlosses are also deducted when determining the net book value. The residual value of an intangible asset with a limited service life is generallyconsidered zero, unless there is a third-party commitment to purchase the asset at the end of its service life or if reliable information aboutan estimated residual value can be obtained from an active market—indicating that a market is likely to exist at the end of the asset’s servicelife.
Intangible assets with uncertain service life should not be amortized. Their service life must be reviewed annually. If evidence indicatesthat the asset’s service life is limited, its service life should be estimated accordingly, and amortization should be carried out systematicallyand prudently within that estimated period.
(3) Sweep scope for R&D expenses and relevant accounting treatments
The Company classifies all expenses directly associated with research and development activities as R&D expenditures. These includestaff salaries, direct input costs, depreciation, long-term deferred expenses, design costs, equipment commissioning expenses, amortizationof intangible assets, outsourced R&D services, and other related expenses.
① The Company considers materials used for further development and related preparatory activities as part of the research phase.Expenses incurred during this research stage for intangible assets are recognized in the current profit and loss when they occur.
② Activities conducted after the Company has completed the research phase will be considered part of the development stage.
Expenditures during the development stage can be recognized as intangible assets only if they simultaneously meet the followingconditions:
A. It is technically feasible to develop the intangible asset to the point where it can be used or sold.
B. It aims to complete the intangible asset for use or sale.
C. The manner in which the intangible asset generates economic benefits, including demonstrating the existence of a market for theproducts created using the asset or for the asset itself. It also involves confirming that the intangible asset will be used internally and providingevidence of its usefulness.
D. It possesses adequate technical, financial, and other resources to complete the development of the intangible assets and has thecapacity to effectively utilize or sell them.
E. The costs associated with the development stage of the intangible asset can be reliably determined.
21. Impairment of long-term assets
The impairment of long-term equity investments in subsidiaries, associates, and joint ventures, as well as investment properties, fixedassets, construction in progress, right-of-use assets, intangible assets, and goodwill (excluding inventories, deferred tax assets, and financialassets) measured subsequently at cost, shall be assessed using the following methods:
On the balance sheet date, the Company will assess whether there are any indications of potential asset impairment. If such signs areidentified, the Company will estimate the recoverable amount and perform an impairment test. Additionally, goodwill arising from business
combinations, intangible assets with uncertain service life, and intangible assets not yet ready for use must undergo annual impairment testing,regardless of whether there are any signs of impairment.The recoverable amount is determined as the higher of the fair value of the asset less disposal expenses and the present value of estimatedfuture cash flows generated by the asset. The Company assesses the recoverable amount on a per-asset basis. If it is challenging to estimatethe recoverable amount of a single asset, the Company evaluates the recoverable amount of the asset group to which the asset belongs. Anasset group is recognized based on whether the primary cash inflow it generates is independent of other assets or other asset groups.When the recoverable amount of an asset or asset group falls below its book value, the Company shall reduce its carrying amount to therecoverable amount. The impairment loss will be recognized in the current profit and loss, and an appropriate provision for asset impairmentwill be established simultaneously.Regarding the impairment test for goodwill, the book value of goodwill arising from a business combination should be allocated to therelevant asset groups using a reasonable method from the acquisition date. If it is difficult to allocate to specific asset groups, it should beallocated to the relevant combination of asset groups. These asset groups or combinations are those that are expected to benefit from thesynergies of the business combination and are not larger than the reporting segments defined by the Company.During the impairment test, if there are any indications of impairment in the asset group or combination of asset groups related togoodwill, the asset group or groups excluding goodwill should be tested first. The recoverable amount will be calculated, and any resultingimpairment loss recognized. Subsequently, the asset group or groups containing goodwill will undergo impairment testing, with their carryingamounts compared to their recoverable amounts. If the recoverable amount is lower than the carrying amount, an impairment loss for goodwillshould be recognized.Once an asset impairment loss is recognized, it cannot be reversed in subsequent accounting periods.
22. Long-term deferred expenses
Long-term deferred expenses are costs that the Company has already incurred but will be allocated over the current and subsequentperiods, with an amortization period exceeding one year.The Company’s long-term deferred expenses are generally amortized over their respective benefit periods. The amortization periods forvarious expenses are as follows:
| Item | Amortization period |
| Technical services fee | Agreed in the contract |
| Renovation fee | 3 to 5 years |
| Power grid access fee | 10 years |
| Software system implementation fee | 5 years |
23. Employee compensation
Employee compensation refers to all forms of remuneration the Company provides in exchange for employees’ services or upon thetermination of employment. This includes short-term incentives, post-employment benefits, severance packages, and other long-termemployee benefits. Additionally, benefits extended to employees’ spouses, children, dependents, survivors of deceased employees, and otherbeneficiaries are also considered part of employee compensation.
Based on liquidity, employee compensation is recorded under “Employee compensation payable” and “Long-term employeecompensation payable” on the balance sheet.
(1) Accounting treatment of short-term employee compensation
① Basic employee compensation, including salary, bonuses, allowances, and subsidies
During the accounting period in which employees provide services, the Company recognizes the actual short-term compensation as aliability and records it as an expense in the current period, except for amounts that are required or permitted by other accounting standardsto be capitalized as part of asset costs.
② Employee benefits expenses
Employee benefits expenses incurred by the Company shall be recognized in the current profit and loss or as part of the cost of relevantassets based on the actual amount incurred. For non-monetary benefits, their value shall be measured at fair value.
③ Medical insurance premiums, industrial injury insurance, maternity insurance, and other social insurance contributions, along withhousing provident fund, trade union funds, and staff education funds.
During the accounting period in which employees provide services, the Company shall calculate and determine the correspondingemployee compensation for social insurance premiums (including medical insurance, work-related injury insurance, maternity insurance,and other social insurance contributions), housing provident fund payments, labor union funds, and employee education funds in accordancewith applicable regulations. These amounts shall be based on the prescribed accrual basis and proportions. The corresponding liabilities shallbe recognized and included either in the current profit and loss or as part of the cost of related assets.
④ Short-term paid leave
The Company recognizes employee compensation for accumulated paid leave when employees provide services that increase theirfuture paid leave entitlement. This is measured by the expected payment amount, adjusted for any accumulated unused leave rights. For non-cumulative paid absences, the Company recognizes related compensation during the accounting period in which the employee is actuallyabsent from work.
⑤ Short-term profit-sharing plan
If the profit-sharing plan simultaneously meets the following conditions, the Company will confirm the corresponding employeecompensation payable:
A. The company has A legal or constructive obligation to pay the employee’s salary arising from past events.
B. The company’s liability for employee compensation related to the profit-sharing plan can be accurately determined.
(2) Accounting treatment for post-employment benefits
① Defined contribution plan
During the accounting period in which employees provide services, the Company will recognize the payable amount calculated underthe defined contribution plan as a liability. This amount will be included in current profit and loss or allocated to the cost of related assets.
Under the defined contribution plan, if it is anticipated that the deposit will not be fully paid within 12 months after the end of the annualReporting Period during which employees provide the related services, the Company should use an appropriate discount rate. This rate isdetermined based on the market yield of treasury bonds or high-quality corporate bonds with similar maturity and currency in an activemarket, as of the balance sheet date. The total deposit amount is then measured as the present value of the employee compensation payable,discounted at this rate.
② Defined benefit plan
A. Determine the present value of the defined benefit plan obligation and the current service cost
Using the expected cumulative unit benefit method, relevant demographic and financial variables are estimated based on unbiased andmutually consistent actuarial assumptions. The obligations stemming from the defined benefit plan are then measured, and the vesting periodfor these obligations is determined. The Company discounts the obligations using an appropriate discount rate—derived from the marketyields of treasury bonds or high-quality corporate bonds that match the duration and currency of the plan’s obligations on the balance sheetdate. This process calculates the present value of the defined benefit obligations and the current service cost.
B. Recognize net liabilities or net assets in defined benefit plans
If the defined benefit plan has assets, the Company will recognize a net liability or net asset based on the difference between the presentvalue of the plan’s obligations and the fair value of its assets. This reflects either a deficit or a surplus in the plan.
If there is a surplus in the defined benefit plan, the Company shall measure the plan’s net assets at the lesser of the surplus amount andthe maximum allowable asset ceiling.
C. Determine the amount to be included in the asset’s cost or current profit and loss
Service costs, including current service costs, past service costs, and settlement gains or losses. Except for current service costs that arerequired or permitted by other accounting standards to be capitalized as part of asset costs, all other service costs are recognized in currentprofits and losses.
The net interest on the net liabilities or net assets of the defined benefit plan—including interest income from plan assets, interestexpenses on the plan obligations, and interest related to the asset ceiling—shall be recognized in current profits and losses.
D. Determine the amount to be included in other comprehensive income
The adjustments resulting from the re-measurement of the net liabilities or net assets of the defined benefit plan include:
(a) Actuarial gains or losses, which are increases or decreases in the present value of previously recognized defined benefit planobligations resulting from changes in actuarial assumptions and experience adjustments;
(b) The return on plan assets minus the amount included in the net interest on the plan’s net liability or net assets;
(c) Changes in the impact of the asset ceiling, net of the amount included in the net interest on the net liabilities or net assets of a definedbenefit plan.
Any changes resulting from the re-measurement of the net liabilities or net assets of the defined benefit plan are recognized directly inother comprehensive income. These amounts cannot be reclassified to profit or loss in future periods. Upon the termination of the originaldefined benefit plan, the Company will transfer all amounts previously recognized in other comprehensive income to undistributed profitswithin equity.
(3) Accounting treatment for termination benefits
When the Company offers termination benefits to employees, the corresponding employee compensation liabilities shall be recognizedand included in current profits and losses on the earlier of these two dates:
① When the enterprise cannot unilaterally revoke the termination benefits offered, due to plans to terminate the employmentrelationship or layoff proposals;
② When the Company confirms the costs or expenses associated with the reorganization, including the payment of termination benefits.
If the termination benefits are not expected to be fully paid within 12 months after the end of the annual Reporting Period, the amountshould be discounted using an appropriate discount rate. This rate should be based on the market yield of treasury bonds or high-qualitycorporate bonds that match the period and currency of the defined benefit plan obligations as of the balance sheet date. The employeecompensation payable shall then be measured at this discounted amount.
(4) Accounting treatment for other long-term employee benefits
① Complying with the requirements of the defined contribution plan
For other long-term employee benefits offered by the Company, if they qualify as a defined contribution plan, all payable amounts shallbe discounted to determine the employee compensation expense.
② Complying with the requirements of the defined benefit plan
At the end of the Reporting Period, the Company recorded employee compensation costs related to other long-term employee benefits,including the following components:
A. Service fees;
B. Net interest on the net liabilities or assets of other long-term employee benefits;
C. Adjustments resulting from the re-measurement of net liabilities or net assets related to other long-term employee benefits.
To simplify the accounting process, the total net amount of the above items is incorporated into the current profit and loss or the cost ofrelated assets.
24. Estimated Liabilities
(1) Recognition criteria of estimated liabilities
If the obligations related to contingencies meet all of the following conditions simultaneously, the Company will recognize them asestimated liabilities:
① The obligation refers to the Company’s current commitments.
② The performance of the obligation is likely to lead to the outflow of economic benefits from the Company.
③ The obligation can be measured reliably.
(2) Measurement of estimated liabilities
The estimated liabilities are initially recognized based on the best estimate of the expenditure needed to settle the current obligations,considering risks, uncertainties, the time value of money, and other relevant contingencies. The carrying amount of these estimated liabilitiesshould be reviewed at each balance sheet date. If there is clear evidence indicating that the carrying amount no longer reflects the currentbest estimate, it should be adjusted accordingly.
25. Share-based payments
(1) Categories of share-based payments
The Company’s share-based payments include both cash-settled and equity-settled arrangements.
(2) Determination method of fair value of equity instruments
① The fair value of shares granted to employees shall be determined based on the current market price of the Company’s shares,adjusted to reflect the specific terms and conditions of the grant, excluding any vesting conditions other than market-based ones. ② In manycases, obtaining an exact market price for employee stock options can be challenging. When there are no traded options with similar termsand conditions, the Company will use an appropriate option pricing model to estimate the fair value of the granted options.
(3) Basis for determining the best estimate of exercisable equity instruments
On each balance sheet date during the vesting period, the Company will make the most accurate estimate possible, based on the latestavailable information—such as changes in the number of employees eligible to exercise their options—and will revise the expected numberof exercisable equity instruments accordingly to ensure the best estimate for exercisable equity instruments.
(4) Accounting treatment for implementing share-based payment plans
Cash-settled share-based payments
① For cash-settled share-based payments that can be exercised immediately after the grant, the fair value of the liabilities assumed bythe Company should be recognized as part of the relevant costs or expenses on the grant date, with an increase in liabilities accordingly. Thefair value of these liabilities must be re-measured at each balance sheet date and again on the settlement date, with any changes recognizedin profit or loss.
② For cash-settled share-based payments that can only be exercised after the completion of service within the vesting period or oncespecific performance conditions are met, the costs or expenses incurred during the current period should be recognized. The correspondingliabilities should be recorded at their fair value, reflecting the Company’s assumed liabilities on each balance sheet date within the vestingperiod. This fair value should be estimated based on the best assessment of the exercisable conditions.
Equity-settled share-based payments
For equity-settled share-based payments granted to employees that can be exercised immediately after issuance, the fair value of theequity instrument should be recognized as an expense or cost on the grant date. The capital reserve should be increased accordingly.
② For equity-settled share-based payments granted in exchange for employee services, once the services within the vesting period arecompleted or the specified performance conditions are satisfied, the corresponding expense is recognized. On each balance sheet date duringthe vesting period, the estimated number of vested equity instruments is used to determine the amount. The cost or expense, along with thecorresponding capital reserve, is based on the fair value of the equity instruments at the grant date and reflects the services rendered in thecurrent period.
(5) Accounting treatment for modifications to share-based payment plans
When the Company amends the share-based payment plan, any increase in the fair value of the granted equity instruments resultingfrom the modification shall be recognized as an increase in the services acquired. Similarly, if the modification increases the number ofequity instruments granted, the additional fair value shall also be recognized as an increase in the services acquired. The increase in fair valueis calculated as the difference between the fair value of the equity instruments before and after the modification date. If the modificationreduces the total fair value of the share-based payment or alters the plan’s terms and conditions in a way that is unfavorable to employees,the accounting treatment for the services already obtained shall remain unchanged as if the modification had not occurred, unless theCompany cancels part or all of the granted equity instruments.
(6) Accounting treatment for terminating a share-based payment plan
If the equity instruments granted are canceled or settled during the vesting period (excluding cancellations due to failure to meet vestingconditions), the Company:
① considers cancellation or settlement as an acceleration of the exercisable right, and the amount that would have been recognizedduring the remaining vesting period shall be recognized immediately.
② considers all payments made to employees upon cancellation or settlement as equity repurchase. Any amount exceeding the fairvalue of the equity instrument on the repurchase date will be recognized as a current expense.
If the Company repurchases equity instruments that employees have exercised, it will reduce the owners’ equity. If the purchase priceexceeds the fair value of the equity instruments on the repurchase date, the excess will be recognized in current profits and losses.
26. Principles of revenue recognition and measurement method
(1) General principles
Revenue is the total economic benefits earned from the Company’s regular business activities, leading to an increase in shareholders’equity. It is not related to the capital invested by shareholders.
Revenue is recognized when the Company fulfills its contractual obligations, which occurs when the customer gains control of theproduct. Gaining control of the product means having the ability to direct its use and to receive the majority of the economic benefits itgenerates.
When a contract includes two or more performance obligations, the Company shall, as of the contract’s commencement date, allocatethe transaction price to each obligation based on the relative standalone selling prices of the goods or services promised. Revenue for eachperformance obligation shall then be recognized in accordance with the allocated amount.
The transaction price is the amount of consideration the Company expects to receive for transferring goods or services to customers,excluding payments made on behalf of third parties. When determining the contract's transaction price, if there is variable consideration, theCompany estimates it using either the expected value or the most likely amount. This estimate is included in the transaction price at anamount that is not highly likely to result in a significant reversal of previously recognized revenue once the related uncertainties are resolved.If the contract includes a significant financing component, the Company calculates the transaction price based on the cash amount payableby the customer at the time control of the goods or services is transferred. The difference between the transaction price and the contractconsideration is amortized over the contract period using the effective interest rate method. If the interval between the transfer of control andthe customer’s payment does not exceed one year, the Company does not account for a financing component.
If any of the following conditions are met, the performance obligation shall be satisfied over a specific period; otherwise, it shall befulfilled at a designated point in time.
① The customer receives and enjoys the economic benefits generated by the Company’s performance under the contract.
② The customer has the right to oversee the goods under construction while the Company is performing its services.
③ The products manufactured by the Company in the course of fulfilling the contract serve unique and indispensable purposes. TheCompany is entitled to receive payment for the completed portion of the contract throughout its duration.
For performance obligations fulfilled within a specified period, the Company shall recognize revenue based on the progress ofperformance during that period, unless the progress cannot be reasonably measured. The Company will assess the progress of services usingeither an input method (such as costs incurred) or an output method. If the progress cannot be reasonably determined but the Companyexpects to be compensated for the costs incurred, revenue will be recognized equal to the costs incurred until the progress can be reliablymeasured.
For performance obligations fulfilled at a specific point in time, the Company recognizes revenue when the customer gains control ofthe relevant goods or services. To assess whether control has been transferred, the Company will consider the following indicators:
① The Company currently holds the right to receive payment for the goods or services, meaning the customer has an existingobligation to pay.
② The Company has transferred full legal ownership of the commodity to the customer, meaning the customer now holds completelegal rights to the item.
③ The Company has delivered the goods in kind to the customer, meaning the customer has taken possession of the physical items.
④ The Company has transferred the primary risks and rewards of ownership of the commodity to the customer, meaning the customernow assumes the main risks and benefits associated with ownership.
⑤ The customer has accepted the product.
Sales return clauses
For sales with return clauses, when the customer gains control of the goods, the Company recognizes revenue based on the amount ofconsideration it has the right to receive upon transfer. Any estimated returns are recorded as a liability. Simultaneously, the companyrecognizes an asset representing the expected recoverable amount of returned goods, calculated as the estimated book value of the goods atthe time of transfer minus the expected recovery costs (including potential impairment of the value of returned goods). This asset, referredto as the receivable for return costs, is carried forward at its initial book value, adjusted by deducting the net amount of the estimated recoverycosts. At each balance sheet date, the Company reviews and updates its estimates of future sales returns and re-measures the related assetsand liabilities accordingly.
Quality assurance obligations
Based on the contractual agreement and applicable legal provisions, the Company provides quality assurance for both the goods soldand the projects constructed. For quality guarantees that ensure the goods meet established standards, the company accounts for these inaccordance with Accounting Standards for Business Enterprises No. 13 - Contingencies. Regarding service-based quality assurance, whichinvolves offering an additional service to ensure the goods meet the specified standards, the company treats it as a single performanceobligation. It allocates a portion of the transaction price to this service based on its relative standalone selling price compared to the goods,and recognizes revenue when the customer gains control of the service. When determining whether the quality assurance constitutes a separateservice beyond simply ensuring the goods meet standards, the company considers factors such as whether the warranty is a legal requirement,its duration, and the nature of the tasks involved in delivering the service.
Principal and agent
We determine whether we are acting as a principal or an agent in a transaction by assessing whether we have control over the goodsor services before they are transferred to the customer. If the Company has control over the goods or services prior to the transfer, it isconsidered the principal, and revenue is recognized based on the total consideration received or receivable. If the Company does not havecontrol and is acting as an agent, revenue is recognized in the amount of the commission or handling fee it expects to earn. This amount iscalculated based on the net consideration after deducting payments to other relevant parties, or according to the established commission rateor proportion.
Consideration payable to customers
If the contract includes any consideration payable to the customer, and the consideration is not for obtaining other distinct goods orservices, the Company will offset this consideration against the transaction price. The offset will occur either when the relevant revenue isrecognized or when the customer consideration is paid (or promised to be paid), whichever happens later.Customer’s unused contractual rightsWhen the Company receives advance payments from customers for the sale of goods or services, it initially records the amount as aliability. Revenue is recognized only when the relevant performance obligations are fulfilled. If the Company determines that it will not needto refund the received amount and the customer has the right to waive all or part of their contractual rights, the Company expects to beentitled to the value of waived rights. In such cases, the corresponding amount is recognized as revenue on a pro-rata basis, reflecting howthe customer exercises their contractual rights. If the likelihood of the customer requiring the Company to perform the remaining obligationsis extremely low, the liability is transferred to revenue only when this probability becomes negligible.Contract modificationWhen the construction contract between the Company and the customer is amended:
① If the contract change results in additional construction services and a clearly distinguishable increase in the contract price, andthe new price reflects the standalone selling price of the additional services, the Company will account for the change as a separate contract.
② If the contract change does not fall under item ①, and the transferred and untransferred construction services can be clearlydistinguished on the date of the change, the Company will consider this as the termination of the original contract. Also, the unperformedportion of the original contract and the modified part will be combined into a new contract for accounting purposes.
③ If the contract change does not fall under the scenarios described in item ①, and the construction services transferred on thecontract change date cannot be clearly separated from those not transferred, the Company will treat the revised portion of the contract as anintegral part of the original agreement for accounting purposes. The impact on recognized revenue resulting from this change will be adjustedto reflect the current revenue as of the contract change date.
(2) Specific methods
Domestic sales: The Company’s revenue recognition policies are as follows: 1. BOPP cigarette film, cigarette labels, and asepticpackaging products: Revenue is recognized when the goods are delivered to the customer’s designated location, the delivery is completed,and evidence of the customer’s transfer of control over the goods is obtained. 2. BOPP flat film and lithium battery separator products: Inaddition to the consignment arrangement, revenue is recognized upon delivery according to the terms agreed with the customer. This occurswhen the goods are delivered, and evidence of the transfer of control—either to the customer or their designated carrier—is obtained. Underthe consignment model, revenue is recognized when the company delivers the goods to the customer’s designated warehouse, and the transferof control is deemed complete upon receipt of the customer’s settlement documents. 3. Specialty paper products: Revenue is recognizedwhen the goods are delivered to the customer’s designated location, the delivery is completed, and the customer provides confirmation thatthe goods meet the required standards for use.
Overseas sales: Once the Company has completed the export customs declaration and shipped the products abroad, revenue will berecognized based on the date of obtaining the customs clearance and other export-related documents, which marks the transfer of controlrights.
27. Contract costs
Contract costs are divided into performance costs and acquisition costs.
The Company’s contract performance costs are recognized as an asset when all of the following conditions are met:
① The cost is directly linked to an existing or anticipated contract and includes direct labor, direct materials, manufacturing expenses(or similar costs), expenses explicitly paid by the customer, and any other costs incurred solely as a result of the contract.
② The cost reflects the additional resources the Company will need to fulfill its future performance obligations.
③ The cost is expected to be recovered.
If the Company expects to recover the additional costs incurred to obtain the contract, these costs shall be recognized as an asset.
Assets related to contract costs are amortized in the same manner as the revenue recognition for the corresponding goods or services.However, if the amortization period for contract acquisition costs is one year or less, the Company will recognize these costs as expenses forthe current period.
If the book value of the assets associated with the contract costs exceeds the difference between the following two items, the Companywill recognize an impairment loss for the excess amount. It will further consider whether to accrue estimated liabilities related to the losscontract.
① Remaining consideration expected to be obtained from the transfer of goods or services related to the asset.
② Estimated costs to be incurred to transfer the related goods or services.
If the impairment of assets is later reversed, the asset’s book value after reversal shall not exceed its original book value on the reversaldate, assuming no impairment had been recognized.
The contract performance costs recognized as assets should be classified under “Inventory” if the amortization period does not exceedone year or a normal business cycle at the time of initial recognition. If the amortization period exceeds one year or a normal business cycle,they should be classified under “Other non-current assets.”
The contract acquisition cost recognized as an asset should be classified as “Other current assets” if the amortization period at initialrecognition does not exceed one year or a normal business cycle. If the amortization period exceeds one year or a normal business cycle, itshould be classified as “Other non-current assets.”
28. Government subsidies
(1) Recognition of government subsidies
Government subsidies are only acknowledged when all of the following conditions are met:
① The Company is capable of fulfilling all the requirements associated with the government subsidy.
② The Company is eligible to receive government subsidies.
(2) Measurement of government subsidies
If a government subsidy is a monetary asset, it should be measured at the amount received or receivable. If it is a non-monetary asset,it should be valued at its fair value. If the fair value cannot be reliably determined, the subsidy should be measured at a nominal amount ofRMB1.
(3) Accounting treatment for government subsidies
① Asset-related government subsidies
Government subsidies received by the Company for the purchase, construction, or formation of long-term assets are classified as asset-related government subsidies. These subsidies are recognized as deferred income and systematically included in profit or loss over the servicelife of the corresponding assets. Subsidies measured at their nominal amount are recognized directly in current profits and losses. If therelated assets are sold, transferred, scrapped, or damaged before the end of their service life, any remaining deferred income balance will betransferred to current profits or losses as part of the asset disposal.
② Income-based government subsidies
Government subsidies, excluding those tied to assets, are classified as income-related government subsidies. Such income-relatedgovernment subsidies shall be recognized and accounted for in accordance with the following provisions:
If it is intended to offset the Company’s related costs or losses in a future period, it should be recognized as deferred income. Thisamount will then be included in the current profits and losses when the corresponding costs or losses are recognized.
If used to offset the Company’s relevant costs or losses, it shall be directly recorded as part of the current profits and losses.
For government subsidies that include both asset-based and income-based components, these parts should be accounted for separately.If it is difficult to differentiate between them, the entire subsidy should be classified as an income-based government subsidy.
Government subsidies associated with the Company’s daily operations are classified under other income based on their economicnature. Subsidies unrelated to the Company’s routine activities are recorded as non-operating income or expenses.
③ Discount on preferential policy loans
The finance department will directly allocate the discount funds to the Company, which will then offset the associated borrowing costsaccordingly.
④ Repayment of government subsidies
When a government subsidy that has been recognized needs to be repaid, the following steps should be taken: If the initial recognitioninvolved offsetting the book value of the related assets, the asset’s book value should be adjusted accordingly. If there is a balance in therelevant deferred income, it should be offset against that balance, with any excess recognized as current profits or losses. In other cases, therepayment should be directly recorded as current profits and losses.
29. Deferred income tax assets/Deferred income tax liabilities
The Company generally uses the balance sheet liability method to recognize and measure the effects of taxable and deductibletemporary differences on income tax. These are recorded as deferred income tax liabilities or deferred income tax assets based on thedifferences between the carrying amounts of assets and liabilities on the balance sheet date and their respective tax bases. The Company doesnot discount deferred income tax assets or liabilities.
(1) Recognition of deferred income tax assets
For deductible temporary differences, as well as losses and tax credits that can be carried forward to future years, their impact onincome tax is calculated using the tax rate expected at the time of reversal. These amounts are recognized as deferred income tax assets, butonly to the extent that the Company is likely to generate future taxable income to offset these deductible temporary differences, losses, andcredits.
The impact of deductible temporary differences on income tax arising from the initial recognition of assets or liabilities in transactionsor events with the following characteristics is not recognized as a deferred income tax asset:
A. This transaction does not qualify as a business combination;
B. At the time of the transaction, there will be no impact on accounting profits and taxable amounts (or deductible losses).
However, the exemption from initially recognizing deferred income tax liabilities and assets does not apply to transactions thatsimultaneously meet both of the above conditions and result in equivalent taxable and deductible temporary differences. For such transactions,where the initial recognition of assets and liabilities gives rise to taxable temporary differences and deductible temporary differences, theCompany will recognize the corresponding deferred income tax liabilities and assets at the time the transaction occurs.
For deductible temporary differences related to investments in subsidiaries, associates, and joint ventures, deferred income tax assetscan be recognized when both of the following conditions are satisfied:
A. Temporary differences are expected to reverse in the near future;
B. Taxable income expected to be realized in the future, used to offset deductible temporary differences.
On the balance sheet date, if there is clear evidence indicating that enough taxable income is likely to be generated in the future tooffset the deductible temporary differences, then the previously unrecognized deferred income tax assets should be recognized.
On the balance sheet date, the Company reviews the carrying amount of its deferred tax assets. If it is unlikely that the Company willgenerate enough taxable income in the future to realize these assets, their carrying amount should be written down. If it becomes probablethat sufficient taxable income will be available, any previously recognized write-downs should be reversed.
(2) Recognition of deferred income tax liabilities
All taxable temporary differences of the Company shall be measured based on the income tax rate applicable during the expectedreversal period. The resulting impact shall be recognized as deferred income tax liabilities, except in the following cases:
① The impact of taxable temporary differences resulting from the following transactions or events on income tax is not recognizedas deferred income tax liabilities.
A. Initial acknowledgment of goodwill;
B. The initial recognition of an asset or liability resulting from a transaction that is not a business combination and does not impacteither accounting profit or taxable income or deductible loss at the time of the transaction.
② For taxable temporary differences arising from investments in subsidiaries, joint ventures, and associates, the impact on incometax is generally recognized as a deferred tax liability, unless the following two conditions are both met:
A. The Company has the ability to control when temporary differences are reversed;
B. It is unlikely that the temporary difference will reverse in the foreseeable future.
(3) Recognition of deferred income tax liabilities or assets arising from specific transactions or events
① Deferred income tax liabilities or assets arising from business combinations
When recognizing deferred income tax liabilities or assets arising from taxable or deductible temporary differences due to mergers ofunrelated enterprises, the goodwill recorded during the merger is typically adjusted by the corresponding deferred tax expenses or gains.
② Items directly included in the owners’ equity
Income tax and deferred income tax related to transactions or events directly affecting the owners’ equity should be included in theowners’ equity. This includes the impact of temporary differences on income tax. Transactions or events incorporated into owners’ equityencompass: other comprehensive income resulting from changes in the fair value of debt investments; changes in accounting policies;adjustments to retained earnings at the beginning of the period through retrospective correction; or the correction of significant accountingerrors from previous periods via retrospective restatement. Additionally, hybrid financial instruments that contain both liability and equitycomponents are included in owners’ equity at the time of initial recognition.
③ Recoverable losses and tax deductions
A. Recoverable losses and tax deductions generated from the Company’s own operations
Deductible losses are losses calculated and recognized in accordance with the provisions of the Tax Law that can be offset againstfuture taxable income. Unused losses (deductible losses) and tax deductions that can be carried forward to subsequent years are classified asdeductible temporary differences. When it is probable that sufficient taxable income will be generated in future periods to utilize these lossesor deductions, a deferred income tax asset should be recognized to the extent of the expected taxable income. This recognition reduces thecurrent income tax expense accordingly.
B. Unrecoverable losses of the merged company that can be offset through the business combination
In a business combination, the deductible temporary difference recognized by the Company from the acquiree shall not beacknowledged if it does not meet the criteria for recognizing deferred income tax assets on the acquisition date. However, within 12 monthsafter the acquisition, if new or additional information indicates that the circumstances existing at the acquisition date are valid and that theeconomic benefits associated with the acquiree’s deductible temporary differences are likely to be realized, the relevant deferred income taxassets should be recognized. Simultaneously, any resulting increase in goodwill should be adjusted accordingly. If the goodwill is insufficientto offset the deferred tax asset, the excess is recognized as current profit or loss. Outside of these conditions, any deferred income tax assetsrelated to the business combination should be recognized and included in current profits and losses.
④ Temporary differences resulting from consolidation elimination
When preparing the consolidated financial statements, if temporary differences arise between the book values of assets and liabilitieson the consolidated balance sheet and their tax bases—such as from offsetting unrealized internal sales gains and losses—deferred incometax assets or liabilities should be recognized accordingly. Income tax expenses in the consolidated income statement should be adjusted toreflect these differences. However, deferred tax related to transactions or events directly affecting owners’ equity, as well as those resultingfrom business mergers, should be excluded.
⑤ Equity-settled share-based payments
If the tax law permits the deduction of expenses related to share-based payments before tax, and these costs are recognized inaccordance with accounting standards during the Reporting Period, the Company will calculate the tax basis and temporary differences basedon the estimated deductible amount available at the end of the accounting period. If the recognition criteria are met, the Company will recordthe corresponding deferred income tax. Furthermore, if the expected future deductible amount exceeds the share-based payment expensesrecognized under accounting standards, the tax effect of this excess shall be directly recognized in the owners’ equity.
⑥ Dividends on financial instruments classified as equity instrument
For financial instruments classified as equity instrument by the Company as the issuer, if the relevant dividend expenses are deductedbefore calculating enterprise income tax in accordance with applicable tax regulations, the Company shall recognize the related income taximpact at the time dividends are recognized payable. The tax effect of the dividends is included in current profit and loss if the distributedprofits originate from transactions or events that previously generated profit or loss. If the distributed profits stem from transactions or eventspreviously recognized in owners’ equity, the associated tax effect is included in owners’ equity.
(4) Rationale for presenting deferred income tax assets and deferred income tax liabilities on a net basis
When the following conditions are met, deferred income tax assets and deferred income tax liabilities are offset and presented as a netamount:
① The Company has the legal right to offset current income tax assets and current income tax liabilities on a net basis.
② Deferred income tax assets and deferred income tax liabilities are connected to the income taxes imposed by the same tax authority,either on the same taxpayer or different taxpayers. These assets and liabilities pertain to future periods when they are expected to be reversed.The taxpayer involved plans to settle current income tax assets and liabilities on a net basis or to acquire assets and settle liabilitiessimultaneously.
30. Leases
(1) Lease identification
At the commencement date of the contract, the Company evaluates whether the agreement is a lease or contains a lease. A contractqualifies as a lease or includes a lease if one party transfers the right to control the use of one or more specified assets for a certain period inexchange for consideration. To determine whether a contract grants the right to control the use of an identified asset, the Company assesses
whether the customer is entitled to receive substantially all of the economic benefits arising from the use of the asset during the period andhas the right to direct how the asset is used throughout that period.
(2) Identification of individual leases
If a contract includes multiple individual leases entered into simultaneously, the Company will separate the contract and applyaccounting treatment to each lease individually. A right to use an identified asset is considered an individual lease within the contract if allof the following conditions are met: ① the lessee can benefit from using the asset on its own or together with readily available resources;
② the asset is not highly dependent on or closely linked to other assets within the contract.
(3) Accounting treatment of the leases as the lessee
On the lease commencement date, the Company classifies leases with a term of 12 months or less and no purchase options as short-term leases. Additionally, leases involving a single, newly acquired asset with a low value are recognized as low-value asset leases. However,if the Company subleases or expects to sublease the leased assets, the original lease is not classified as a low-value asset lease.
For all short-term leases and leases of low-value assets, the Company recognizes lease payments as part of the asset costs or currentprofits and losses, spreading them evenly over the lease term.
Except for short-term leases and leases of low-value assets accounted for using simplified methods, the Company recognizes the right-of-use asset and lease liability on the lease commencement date.
① Right-of-use asset
Right-of-use asset refers to the lessee’s right to utilize the leased asset throughout the duration of the lease.
On the lease commencement date, the right-of-use asset is initially recorded at its cost, which includes:
The initial amount of the lease liability;
For any lease payments made on or before the lease commencement date, if a lease incentive applies, the corresponding amount of theincentive already received shall be deducted.
Initial direct costs incurred by the lessee;
The costs anticipated by the lessee for dismantling and removing the leased assets, restoring the site where the assets are located, orreturning the assets to the condition specified in the lease agreement. The Company recognizes and measures these costs in accordance withthe relevant standards and methods for estimating liabilities. For details, please refer to Note V-24 of this Section. Costs incurred for inventoryproduction related to these activities will be included in the cost of inventories.
The depreciation of right-of-use assets is recognized by category using the straight-line method. If it is reasonably certain thatownership of the leased asset will transfer to the lessee at the end of the lease term, depreciation is calculated based on the asset's categoryand its estimated residual value over the remaining service life. If it is not reasonably certain that ownership will transfer, depreciation iscalculated over the shorter of the lease term and the remaining service life of the asset, according to its category.
② Lease liabilities
The lease liability shall be initially recognized at the present value of the remaining lease payments as of the lease commencementdate. These lease payments include the following five components:
Fixed payment amount and substantial fixed payment amount, with any applicable lease incentives deducted accordingly.
Variable lease payments tied to an index or rate; the exercise price of a purchase option when the lessee reasonably expects to exerciseit.
The amount payable to exercise the option to terminate the lease, assuming the lease term indicates that the lessee intends to exercisethis option.
The amount expected to be paid based on the guaranteed residual value provided by the lessee.
The interest rate implicit in the lease shall be used as the discount rate when calculating the present value of lease payments. If theimplicit interest rate cannot be determined, the company's incremental borrowing rate shall be applied as the discount rate. The differencebetween the lease payments and their present value is recognized as unrecognized financing expense. Interest expense is then recognizedbased on the discount rate applied to the present value of the recognized lease payments throughout each period of the lease term and isincluded in current profit or loss. Variable lease payments not included in the measurement of lease liabilities are recognized in current profitsand losses.
After the lease term begins, if there are any changes to the actual fixed payments, the estimated amount payable for the guaranteedresidual value, the index or ratio used to calculate lease payments, or the results of assessments or actual exercises of purchase, renewal, ortermination options, the Company shall re-measure the lease liability by discounting the revised lease payments to their present value. Thecarrying amount of the right-of-use asset shall be adjusted accordingly.
(4) Accounting treatment of the leases as the lessor
On the lease commencement date, the Company classifies leases that transfer substantially all the risks and rewards of ownership ofthe leased asset as finance leases. All other leases are classified as operating leases.
① Operating leases
During each period of the lease term, the Company recognizes rental income on a straight-line basis. Initial direct costs incurred arecapitalized and amortized in the same manner as the rental income, and are recognized in current profits and losses over time. Variable leasepayments related to operating leases, which are not included in the lease receipts, are recognized in current profits and losses when they areactually incurred.
② Finance leases
On the lease commencement date, the Company recognizes finance lease receivables at the net investment in the lease (sum of theunguaranteed residual value and the present value of lease payments not yet received at the commencement date, discounted using the implicitinterest rate) and derecognizes the finance leased assets. Throughout each period of the lease term, the Company calculates and recognizesinterest income based on the interest rate specified in the lease agreement.
Variable lease payments received by the Company that are not part of the net lease investment are recognized as current profits andlosses.
(5) Accounting treatment for lease modifications
① Lease modification accounted for as an individual lease
If the lease is modified and the following conditions are met, the Company will account for the change as an individual lease: A. Themodification expands the scope of the lease by granting the right to use additional leased assets; B. The additional consideration is equivalentto the standalone price for the expanded portion of the lease, adjusted for the specific circumstances of the contract.
② Lease modification not accounted for as an individual lease
A. The Company as the lessee
On the effective date of the lease modification, the Company re-evaluates the lease term and adopts a revised discount rate to discountthe adjusted lease payments for re-measuring the lease liabilities. When calculating the present value of the revised lease payments, theinterest rate implicit in the lease for the remaining term should be used as the discount rate. If the implicit rate cannot be determined, theincremental borrowing rate at the date of the lease modification should be used instead.
To account for the impact of the above lease liability adjustments, the following situations should be distinguished:
If the scope of the lease is reduced or the lease term is shortened due to changes in the lease agreement, the book value of the right-of-use asset should be adjusted accordingly, reflecting a reduction. Any gains or losses resulting from the partial or complete termination of thelease must be recognized in the current profits and losses.
For any other lease modifications, the book value of the right-of-use asset shall be adjusted accordingly.
B. The Company as the lessor
If the operating lease is modified, the Company shall recognize it as a new lease starting from the date of the change. Any lease paymentsreceived or receivable prior to the modification will be considered as part of the new lease.
If a change to a finance lease is not treated as an individual lease, the Company will account for the modification based on the followingcircumstances: If the change becomes effective on the lease's commencement date, the lease will be classified as an operating lease, and theCompany will recognize it as a new lease from the effective date of the change. The net investment in the lease prior to the change will berecorded as the carrying amount of the leased asset. However, if the change takes effect on the lease's commencement date, the lease will beclassified as a finance lease, and the Company will treat the accounting in accordance with the relevant provisions on contract modificationsor renegotiations.
(6) Sale and leaseback
The Company evaluates whether the asset transfer in the sale and leaseback transaction qualifies as a sale, in accordance with thecriteria outlined in Note III.27.
① The Company as the seller (lessee)
If the transfer of assets in a sale and leaseback transaction does not qualify as a sale, the Company will continue to recognize thetransferred assets on its balance sheet. Simultaneously, it will record a financial liability equal to the transfer income and account for thisliability in accordance with Note III.11. However, if the transfer qualifies as a sale, the Company will measure the right-of-use assetresulting from the sale and leaseback based on the portion of the original asset’s book value attributable to the right of use gained throughthe leaseback. Any gains or losses will be recognized only for the rights transferred to the lessor.
② The Company as the buyer (lessor)
If the asset transfer in a sale and leaseback transaction does not qualify as a sale, the Company will not recognize the transferred asset.Instead, it will recognize a financial asset equal to the transfer income and account for it in accordance with Note III.11. However, if thetransfer qualifies as a sale, the Company will apply the relevant Accounting Standards for Business Enterprises to record the purchase ofthe asset. Additionally, it will account for the lease of the asset in accordance with applicable standards.
31. Repurchase of shares of the Company
(1) When the Company reduces its capital by repurchasing its own shares in accordance with legal procedures and upon approval, thecapital stock shall be decreased by the total par value of the canceled shares. The owners’ equity shall be adjusted to reflect the differencebetween the purchase price (including transaction costs) and the par value of the repurchased shares. Any excess over the total par valueshall be offset against the capital reserve (capital stock premium), surplus reserve, and undistributed profits in that order. Conversely, if therepurchase price is lower than the total par value, the shortfall shall be credited to the capital reserve (capital stock premium).
(2) Before the Company’s repurchased shares are canceled or transferred, they are held as treasury shares, with all associatedrepurchase expenses recorded as part of the cost of the treasury shares.
(3) When treasury shares are transferred, any transfer income exceeding the cost of the treasury shares shall be added to the capitalreserve (capital stock premium). If the transfer income is less than the cost, the shortfall shall be offset against the capital reserve (capitalstock premium), surplus reserve, and undistributed profits in that order.
32. Debt restructuring
(1) The Company as a creditor
In the event of debt restructuring through debt liquidation by assets, assets other than the transferred financial assets shall be initiallymeasured at cost. The cost of inventories includes the fair value of the abandoned creditor’s rights and other directly attributable costs, suchas taxes, transportation fees, loading and unloading charges, and insurance premiums incurred to bring the assets to their current conditionand location. For investments in associates or joint ventures, the cost comprises the fair value of the abandoned claims and other directlyattributable costs, such as taxes. The cost of investment real estate includes the fair value of the abandoned creditor’s rights and related costslike taxes. The cost of a fixed asset includes the fair value of the waived creditor’s rights, as well as taxes, transportation fees, loading andunloading charges, installation costs, professional service fees, and other directly attributable expenses incurred before the asset is ready foruse. Biological assets’ costs encompass the fair value of the abandoned creditor’s rights, along with taxes, freight, insurance premiums, andother directly attributable costs. Intangible assets’ costs include the fair value of abandoned creditor’s rights and other directly attributableexpenses, such as taxes incurred to bring the assets to their intended use. Any difference between the fair value of the abandoned creditor’srights and their book value shall be recognized in current profits and losses.
If debt restructuring involves converting debt into equity instruments, resulting in the company's transfer of creditor’s rights into anequity investment in associates or joint ventures, the company should measure the initial investment at the fair value of the relinquishedcreditor’s rights, along with any directly attributable costs such as taxes. The difference between the fair value of the relinquished creditor’srights and their book value should be recognized in current profits and losses.
When debt restructuring involves modifying other terms, the Company shall recognize and measure the restructured creditor's rightsin accordance with the accounting policies outlined in Note V-11 of this Section.
In the event of debt restructuring through the repayment of debts with multiple assets or a combination of assets, the Company shallfirst recognize and measure the transferred financial assets and restructured creditor's rights in accordance with the provisions of Note V-11of this Section. Subsequently, the net amount—calculated by deducting the recognized value of the transferred financial assets andrestructured creditor's rights—from the fair value of the abandoned creditor's rights shall be allocated based on the fair value proportions ofeach remaining asset, excluding the transferred financial assets. Using this basis, the cost of each asset is determined separately according tothe aforementioned method. Any difference between the fair value of the abandoned creditor's rights and their book value shall be recognizedas current profit or loss.
(2) The Company as the debtor
In the event of debt restructuring through asset liquidation, the Company shall cease recognition when the assets transferred and theliquidated debts meet the criteria for derecognition. Any difference between the carrying amount of the liquidated debts and the book valueof the transferred assets shall be recognized as a gain or loss in the current period.
In the event of debt restructuring through the conversion of debts into equity instruments, the Company shall cease recognition oncethe debts are fully paid and meet the derecognition criteria. Upon initial recognition of the equity instrument, it shall be measured at its fairvalue. If the fair value cannot be reliably determined, it shall be measured at the fair value used at the time of debt liquidation. Any differencebetween the carrying amount of the repaid debt and the recognized value of the equity instrument shall be recorded in current profits andlosses.
When debt restructuring involves modifying other terms, the Company shall recognize and measure the restructured debt in accordancewith the accounting policies outlined in Note V-11 of this Section.
In the event of debt restructuring through the settlement of debts with multiple assets or a combination of methods, the Company shallrecognize and measure the equity instruments and restructured debts in accordance with the specified procedures. Any difference betweenthe book value of the settled debts and the combined book value of the transferred assets plus the recognized amounts of the equity instrumentsand restructured debts shall be recorded as current profits or losses.
33. Restricted stock
Under the Share Incentive Plan, the Company shall grant restricted shares to eligible participants, who will first subscribe to theseshares. If the specified unlocking conditions are not subsequently met, the Company has the right to repurchase the shares at a predeterminedprice. When restricted shares issued to employees undergo registration and other procedures for capital increase in accordance with relevantregulations, the Company will recognize the corresponding increase in share capital and capital reserves (capital stock premium) based onthe subscription payments received from employees. Simultaneously, the Company will record the treasury shares and any other payablesrelated to the repurchase obligations.
34. Changes in critical accounting policies and accounting estimates
(1) Changes in critical accounting policies
? Applicable □ Not applicable
Implementation of the Interpretation No. 17 of Accounting Standards for Business Enterprises
On October 25, 2023, the Ministry of Finance issued the Interpretation No. 17 of the Accounting Standards for Business Enterprises(Cai Kuai [2023] No. 21, hereinafter referred to as "Interpretation No. 17"), which has been effective since January 1, 2024. The Companystarted to implement Interpretation No. 17 on January 1, 2024, and such implementation has no significant impact on the financial statementsof the Company during the Reporting Period.
Reclassification of warranty expenses in the guarantee category
The Ministry of Finance issued the Compilation of Application Guidelines for the Accounting Standards for Business Enterprises 2024in March 2024 and the Interpretation No. 18 of the Accounting Standards for Business Enterprises on December 6, 2024, which stipulatethat warranty expenses should be included in operating costs. Their implementation has no significant impact on the financial statements ofthe Company during the Reporting Period.
(2) Changes in critical accounting estimates
□ Applicable ? Not applicable
(3) Adjustments to relevant items of financial statements at the beginning of the first implementation year due to the implementationof the new accounting standards in 2024
□ Applicable ? Not applicable
35. Others
VI. Taxation
1. Main Tax Types and Tax Rates
| Tax type | Taxation basis | Tax rate |
| Value added tax (“VAT”) | Sales of goods, taxable sales service income, intangible assets or real estate | 13%, 9%, 6% |
| City maintenance and construction tax | Amount of VAT paid | 7%, 5%, 1% |
| Corporate income tax | 25%, 15%, 16.5%, 9%, 20% | |
| Property tax | Based on 70% of the original value of the property (or rental income) as the tax benchmark | 1.2%, 12% |
Explanation of disclosure for taxpayers with different corporate income tax rates
| Taxpayer | Income tax rate |
| The Company | 25% |
| Yunnan Dexin Paper Co., Ltd. | 25% |
| Yunnan Jiechen Packaging Materials Co., Ltd. | 15% |
| Yunnan Hongchuang Packaging Co., Ltd. | 15% |
| Yunnan Hongta Plastic Co., Ltd. | 15% |
| Hongta Plastic (Chengdu) Co., Ltd. | 15% |
| Yuxi Feiermu Trading Co., Ltd. | 25% |
| Shanghai Energy New Material Technology Co., Ltd. | 15% |
| Zhuhai Energy New Material Technology Co., Ltd. | 15% |
| Wuxi Energy New Material Technology Co., Ltd. | 15% |
| Jiangxi Tonry New Energy Technology Development Co., Ltd. | 15% |
| Jiangsu Ruijie New Material Technology Co., Ltd. | 25% |
| Jiangxi Ruijie New Material Technology Co., Ltd. | 15% |
| Suzhou GreenPower New Energy Materials Co., Ltd | 15% |
| Chongqing Energy Newmi Technological Co., Ltd. | 15% |
| Jiangxi Enpo New Material Technology Co., Ltd. | 15% |
| Jiangxi Energy New Material Technology Co., Ltd. | 25% |
| Jiangsu Energy New Material Technology Co., Ltd. | 15% |
| Hunan Energy Frontier New Material Technology Co., Ltd. | 25% |
| Ningbo Energy New Material Co., Ltd. | 25% |
| Xiamen Energy New Material Co., Ltd. | 25% |
| Chongqing Energy New Material Technology Co., Ltd. | 15% |
| Hubei Energy New Material Technology Co., Ltd. | 15% |
| Jiangsu Sanhe Battery Material Technology Co., Ltd. | 25% |
| Hongchuang Packaging (Anhui) Co., Ltd. | 25% |
| Shanghai Energy New Materials Research Co., Ltd. | 25% |
| Zhuhai Economic and Technological Development Zone Energy Technology Co., Ltd. | 25% |
| Yuxi Energy New Material Co., Ltd. | 25% |
| Shanghai Energy Trading Co., Ltd. | 25% |
| Jiangsu Energy New Materials Research Co., Ltd. | 25% |
| Shanghai Jiezhiyuan New Material Technology Co., Ltd. | 25% |
| Shanghai Hengjieyuan New Material Technology Co., Ltd. | 25% |
| Hainan Energy Investment Co., Ltd. | 25% |
| Chuangxin New Material (Hong Kong) Co., Ltd. | 16.5% |
| SEMCORP Global Holdings Kft. | 9% |
| SEMCORP Hungary Kft. | 9% |
| SEMCORP Properties Kft. | 9% |
| SEMCORP America Inc. | 20% |
| SEMCORP Manufacturing USA LLC | 20% |
2. Preferential tax treatment
In accordance with the Announcement on Enterprise Income Tax Issues Related to the In-depth Implementation of the WesternDevelopment Strategy (Announcement No. 12, 2012 of the State Taxation Administration), the subsidiary Yunnan Hongchuang PackagingCo., Ltd., the subsidiary Yunnan Hongta Plastic Co., Ltd., the sub-subsidiary Hongta Plastic (Chengdu) Co., Ltd., and the sub-subsidiaryChongqing Energy New Material Technology Co., Ltd. continue to enjoy the preferential tax policies for the western development duringthis period. The enterprise income tax shall be paid at the reduced tax rate of 15%.According to the Enterprise Income Tax Law of the People's Republic of China (2018 Amendment) and the Notice of the Ministry ofScience and Technology, the Ministry of Finance, the State Taxation Administration on the Revision and Printing of the AdministrativeMeasures for the Recognition of High and New Technology Enterprises (Guo Ke Fa Huo [2016] No. 32), the subsidiary Yunnan JiechenPackaging Materials Co., Ltd., the subsidiary Shanghai Energy New Material Technology Co., Ltd., the sub-subsidiary Zhuhai Energy NewMaterial Technology Co., Ltd., the sub-subsidiary Jiangxi Tonry New Energy Technology Development Co., Ltd., the subsidiary JiangxiEnpo New Materials Co., Ltd., the sub-subsidiary Jiangsu Energy New Material Technology Co., Ltd., the sub-subsidiary Wuxi Energy NewMaterial Technology Co., Ltd., the sub-subsidiary Suzhou GreenPower New Energy Materials Co., Ltd., the sub-subsidiary ChongqingEnergy Newmi Technological Co., Ltd., the sub-subsidiary Hubei Energy New Material Technology Co., Ltd., and the four tier subsidiaryJiangxi Ruijie New Material Technology Co., Ltd. are recognized as high-tech enterprises upon application, and the preferential tax rate forhigh-tech enterprises shall be 15%.
According to the Notice of the Ministry of Finance and the State Taxation Administration on the Policies of Value added Tax andConsumption Tax on Exported Goods and Services, the Company benefits from tax exemption, offset, and refund for its self-operated exportgoods, and the tax refund rate is mainly 13% depending on specific products. The subsidiary Yunnan Hongchuang Packaging Co., Ltd., thesubsidiary Yunnan Hongta Plastic Co., Ltd., the subsidiary Shanghai Energy New Material Technology Co., Ltd., the sub-subsidiary ZhuhaiEnergy New Material Technology Co., Ltd., and the sub-subsidiary Suzhou GreenPower New Energy Materials Co., Ltd. benefit from taxexemption, offset, and refund for their self-operated export goods, and their tax refund rate is 13%.
According to the Announcement on the Ministry of Finance and the State Taxation Administration on the Policy of Value added TaxDeduction for Advanced Manufacturing Enterprises (Announcement No. 43, 2023 of the Ministry of Finance and the State TaxationAdministration), the subsidiary Yunnan Hongchuang Packaging Co., Ltd., the subsidiary Yunnan Hongta Plastic Co., Ltd., the subsidiaryYunnan Dexin Paper Co., Ltd., the sub-subsidiary Hongta Plastic (Chengdu) Co., Ltd., the subsidiary Shanghai Energy New MaterialTechnology Co., Ltd., the sub-subsidiary Zhuhai Energy New Material Technology Co., Ltd., the sub-subsidiary Jiangxi Tonry New EnergyTechnology Development Co., Ltd., the sub-subsidiary Jiangsu Energy New Material Technology Co., Ltd., the sub-subsidiary Jiangxi EnpoNew Materials Co., Ltd., the fourth tier subsidiary Jiangxi Ruijie New Material Technology Co., Ltd., the sub-subsidiary Wuxi Energy NewMaterial Technology Co., Ltd., the sub-subsidiary Suzhou GreenPower New Energy Materials Co., Ltd., the sub-subsidiary ChongqingEnergy Newmi Technological Co., Ltd. and the sub-subsidiary Chongqing Energy New Material Technology Co., Ltd. enjoy the policy ofadditional tax deduction, and their current additional tax deduction amount is calculated at 5% of the deductible input tax for the currentperiod.
According to the Announcement of the Ministry of Finance, the State Taxation Administration, and the Department of Veterans Affairson Further Supporting the Entrepreneurship and Employment of Find-Jobs-on-Their-Own Retired Soldiers (Announcement No. 14, 2023 ofthe Ministry of Finance, the State Taxation Administration, and the Department of Veterans Affairs), in the event that an enterprise recruitsfind-jobs-on-their-own retired soldiers, signs a labor contract with them for more than one year and pays social insurance premiums inaccordance with the applicable laws, its value-added tax, urban maintenance and construction tax, education surcharge, local educationsurcharge, and corporate income tax will be deducted in three years from the month of signing the labor contract and paying for socialinsurance, in a fixed amount based on the actual number of recruits and calculated with RMB6,000 per person per year, which may beincreased by up to 50%.
According to the Announcement of the Ministry of Finance, the State Taxation Administration, the Ministry of Human Resources andSocial Security, the Ministry of Agriculture and Rural Affairs on Taxation Policies concerning Further Supporting Key Groups'Entrepreneurship and Employment (Announcement No. 15, 2023 of the Ministry of Finance, the State Taxation Administration, the Ministryof Human Resources and Social Security, the Ministry of Agriculture and Rural Affairs), in the event that an enterprise recruits impoverishedindividuals who have been registered as unemployed for more than six months at a public employment service agency under the Ministry ofHuman Resources and Social Security and hold an Employment and Entrepreneurship Certificate or an Employment and UnemploymentRegistration Certificate (indicating "tax incentives for employment"), and signs a labor contract with them for a period of more than one yearand pays social insurance premiums in accordance with the applicable laws, its value-added tax, urban maintenance and construction tax,education surcharge, local education surcharge, and corporate income tax will be deducted in three years from the month of signing the laborcontract and paying for social insurance, in a fixed amount based on the actual number of recruits and calculated with RMB6,000 per personper year, which may be increased by up to 30% as determined by the people’s governments of provinces, autonomous regions and
municipalities directly under the central government based on their actual situations. The tax basis for urban maintenance and constructiontax, education surcharge, and local education surcharge is the value-added tax payable prior to this tax incentive.VII. Notes to Items in Consolidated Financial Statements
1. Monetary funds
Unit: RMB
| Item | Closing balance | Opening balance |
| Cash on hand | 92,218.87 | 53,243.07 |
| Bank deposit | 1,733,368,264.27 | 2,788,980,758.78 |
| Other monetary funds | 838,743,097.78 | 1,045,522,070.90 |
| Interest receivable that has not yet matured | 1,937,438.61 | 974,465.95 |
| Total | 2,574,141,019.53 | 3,835,530,538.70 |
| Including: total amount of funds deposited abroad | 348,118,411.02 | 144,903,602.10 |
Other explanations:
| Item | December 31, 2024 | December 31, 2023 |
| Bank acceptance bill deposits | 750,566,249.46 | 948,496,165.94 |
| Letter of credit deposits | 71,506,746.02 | 83,177,241.54 |
| Letter of guarantee deposits | 15,995,560.96 | 10,321,400.00 |
| Performance bonds | 3,478,063.38 | |
| Deposits in bank regulated accounts | 674,541.34 | 49,200.04 |
| Total | 838,743,097.78 | 1,045,522,070.90 |
The details of restricted monetary funds are as follows:
2. Notes receivable
(1) Notes receivable by types
Unit: RMB
| Item | Closing balance | Opening balance |
| Bank acceptance | 221,135,947.50 | 521,271,854.08 |
| Commercial acceptance | 152,446,000.00 | 248,750,000.00 |
| Provision for bad debts | -2,928,836.63 | -9,053,466.83 |
| Total | 370,653,110.87 | 760,968,387.25 |
(2) Disclosure by bad debt provision methods
Unit: RMB
| Type | Closing balance | Opening balance | ||||||||
| Book balance | Provision for bad debts | Book value | Book balance | Provision for bad debts | Book value | |||||
| Amount | Proportion | Amount | Provision proportion | Amount | Proportion | Amount | Provision proportion | |||
| Including: | ||||||||||
| Notes receivable with bad debt reserve withdrawn as per the portfolio of credit risk characteristics | 373,581,947.50 | 100.00% | 2,928,836.63 | 0.78% | 370,653,110.87 | 770,021,854.08 | 100.00% | 9,053,466.83 | 1.18% | 760,968,387.25 |
| Including: | ||||||||||
| 1. Bank acceptance bill portfolio | 221,135,947.50 | 59.19% | 0.00 | 0.00% | 221,135,947.50 | 521,271,854.08 | 67.70% | 0.00 | 0.00% | 521,271,854.08 |
| 2. Commercial acceptance bill portfolio | 152,446,000.00 | 40.81% | 2,928,836.63 | 1.92% | 149,517,163.37 | 248,750,000.00 | 32.30% | 9,053,466.83 | 3.64% | 239,696,533.17 |
| Total | 373,581,947.50 | 100.00% | 2,928,836.63 | 0.78% | 370,653,110.87 | 770,021,854.08 | 100.00% | 9,053,466.83 | 1.18% | 760,968,387.25 |
Provision for bad debts by portfolio: 2,928,836.63
Unit: RMB
| Description | Closing balance | ||
| Book balance | Provision for bad debts | Provision proportion | |
| Commercial acceptance bill portfolio | 152,446,000.00 | 2,928,836.63 | 1.92% |
| Total | 152,446,000.00 | 2,928,836.63 | |
Explanation for determining the basis of this portfolio:
If provision was made for bad debts of notes receivable in accordance with the general expected credit loss model:
□ Applicable ? Not applicable
(3) Provision for bad debts accrued, recovered or reversed during the Reporting PeriodProvision for bad debts during the Reporting Period:
Unit: RMB
| Type | Opening balance | Changes in amount for the period | Closing balance | |||
| Provision | Recovery or reversal | Write-offs | Others | |||
| Commercial acceptance bill portfolio | 9,053,466.83 | -6,124,630.20 | 2,928,836.63 | |||
| Total | 9,053,466.83 | -6,124,630.20 | 2,928,836.63 | |||
Among them, the important amount of recovery or reverse of bad debt provision for the period:
□ Applicable ? Not applicable
(4) Notes receivable endorsed or discounted by the Company, which were not yet due on the balance sheetdate as at the end of the Reporting Period
Unit: RMB
| Item | Derecognized amount at the end of the Reporting Period | Recognized amount at the end of the Reporting Period |
| Bank acceptance notes | 208,570,048.67 | |
| Total | 208,570,048.67 |
3. Accounts receivable
(1) Disclosure by aging
Unit: RMB
| Aging | Book balance at the end of the Reporting Period | Book balance at the beginning of the Reporting Period |
| Less than 1 year (inclusive) | 5,116,313,235.17 | 6,126,420,159.69 |
| 1-2 years | 898,186,547.87 | 590,091,823.97 |
| 2-3 years | 101,598,939.51 | 23,644,434.60 |
| Over 3 years | 112,499,022.11 | 125,125,171.09 |
| 3-4 years | 10,249,434.69 | 6,235,113.36 |
| 4-5 years | 5,706,159.68 | 14,217,259.73 |
| Over 5 years | 96,543,427.74 | 104,672,798.00 |
| Total | 6,228,597,744.66 | 6,865,281,589.35 |
(2) Disclosure by bad debt provision methods
Unit: RMB
| Type | Closing balance | Opening balance | ||||||||
| Book balance | Provision for bad debts | Book value | Book balance | Provision for bad debts | Book value | |||||
| Amount | Proportion | Amount | Provision proportion | Amount | Proportion | Amount | Provision proportion | |||
| Provision for bad debts by individuals | 97,797,292.18 | 1.57% | 97,797,292.18 | 100.00% | 0.00 | 102,694,913.11 | 1.50% | 102,694,913.11 | 100.00% | 0.00 |
| Including: | ||||||||||
| Provision for bad debts by portfolio | 6,130,800,452.48 | 98.43% | 28,752,219.97 | 0.47% | 6,102,048,232.51 | 6,762,586,676.24 | 98.50% | 42,886,914.06 | 0.63% | 6,719,699,762.18 |
| Including: | ||||||||||
| 1. Companies outside consolidation | 6,130,800,452.48 | 100.00% | 28,752,219.97 | 0.47% | 6,102,048,232.51 | 6,762,586,676.24 | 100.00% | 42,886,914.06 | 0.63% | 6,719,699,762.18 |
| Total | 6,228,597,744.66 | 100.00% | 126,549,512.15 | 2.03% | 6,102,048,232.51 | 6,865,281,589.35 | 100.00% | 145,581,827.17 | 2.12% | 6,719,699,762.18 |
Provision for bad debts by individuals:
Unit: RMB
| Name | Opening balance | Closing balance | ||||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | Provision proportion | Provision reason | |
| OptimumNano Energy Co., Ltd. | 32,249,003.26 | 32,249,003.26 | 32,249,003.26 | 32,249,003.26 | 100.00% | Estimated to be uncollectible |
| eTrust Power Group Ltd. | 17,481,429.49 | 17,481,429.49 | 17,481,429.49 | 17,481,429.49 | 100.00% | Estimated to be uncollectible |
| Shaanxi OptimumNano New Energy Co., Ltd. | 14,847,098.36 | 14,847,098.36 | 14,847,098.36 | 14,847,098.36 | 100.00% | Estimated to be uncollectible |
| Jiangsu Jeve Power Industry Co., Ltd. | 5,100,387.08 | 5,100,387.08 | 100.00% | Estimated to be uncollectible | ||
| E-power Tech Co., Ltd. | 3,058,731.42 | 3,058,731.42 | 100.00% | Estimated to be uncollectible | ||
| Xinyu Eternal ENERGY Co., Ltd. | 3,025,906.40 | 3,025,906.40 | 2,802,263.94 | 2,802,263.94 | 100.00% | Estimated to be uncollectible |
| Huaibei Jiaheyuan Technology Co., Ltd. | 2,530,770.94 | 2,530,770.94 | 100.00% | Estimated to be uncollectible | ||
| Hubei Yu Long New Energy Co., Ltd. | 2,177,165.60 | 2,177,165.60 | 2,177,165.60 | 2,177,165.60 | 100.00% | Estimated to be uncollectible |
| Northvolt | 1,540,340.80 | 1,540,340.80 | 100.00% | Estimated to be uncollectible | ||
| Jiangxi Far East Battery Co., Ltd. | 3,676,530.89 | 3,676,530.89 | 1,515,182.03 | 1,515,182.03 | 100.00% | Estimated to be uncollectible |
| AnHui Teamsky New Energy Technology Co., Ltd. | 1,477,646.78 | 1,477,646.78 | 1,477,646.78 | 1,477,646.78 | 100.00% | Estimated to be uncollectible |
| Shenzhen Teamgiant New Energy Technology Co., Ltd. | 1,470,081.04 | 1,470,081.04 | 1,470,081.04 | 1,470,081.04 | 100.00% | Estimated to be uncollectible |
| Jingzhou OptimumNano Co., Ltd. | 1,175,130.00 | 1,175,130.00 | 1,175,130.00 | 1,175,130.00 | 100.00% | Estimated to be uncollectible |
| Shenzhen Vision Lithium Battery Co., Ltd. | 1,062,626.69 | 1,062,626.69 | 100.00% | Estimated to be uncollectible | ||
| Shenzhen GRAND Powersource Group Co., Ltd. | 1,004,401.76 | 1,004,401.76 | 1,004,401.76 | 1,004,401.76 | 100.00% | Estimated to be uncollectible |
| Shenzhen Lukewan Technology Co., Ltd. | 1,000,000.00 | 1,000,000.00 | 1,000,000.00 | 1,000,000.00 | 100.00% | Estimated to be uncollectible |
| Yunnan Zhongyun Li’ao Package Printing Co., Ltd. | 6,062,972.00 | 6,062,972.00 | 100.00% | Estimated to be uncollectible | ||
| Heilongjiang Longdan Dairy Technology Co., Ltd. | 5,075,381.00 | 5,075,381.00 | 100.00% | Estimated to be uncollectible | ||
| Chengdu Henglide Food Co., Ltd. | 2,780,677.50 | 2,780,677.50 | 100.00% | Estimated to be uncollectible | ||
| Zhongshan Yuankangyuan Food Co., Ltd. | 2,591,501.42 | 2,591,501.42 | 100.00% | Estimated to be uncollectible | ||
| Sub-total of less than RMB1 million | 6,599,987.61 | 6,599,987.61 | 7,305,032.99 | 7,305,032.99 | 100.00% | Estimated to be uncollectible |
| Total | 102,694,913.11 | 102,694,913.11 | 97,797,292.18 | 97,797,292.18 |
Provision for bad debts by portfolio: companies outside consolidation
Unit: RMB
| Name | Closing balance | ||
| Book balance | Provision for bad debts | Provision proportion | |
| Less than 1 year | 5,114,732,709.92 | 1,947,044.10 | 0.04% |
| 1-2 years | 891,268,886.87 | 1,463,328.34 | 0.16% |
| 2-3 years | 98,957,774.59 | 725,315.02 | 0.73% |
| 3-4 years | 1,533,859.50 | 564,053.48 | 36.77% |
| 4-5 years | 284,895.78 | 30,153.21 | 10.58% |
| Over 5 years | 24,022,325.82 | 24,022,325.82 | 100.00% |
| Total | 6,130,800,452.48 | 28,752,219.97 |
The recognition criteria and instructions for bad debt provisions based on combinations can be found in Note V-11 of this Section.If provision was made for bad debts of accounts receivable in accordance with the general expected credit loss model:
□ Applicable ? Not applicable
(3) Provision for bad debts accrued, recovered or reversed during the Reporting PeriodProvision for bad debts during the Reporting Period:
Unit: RMB
| Type | Opening balance | Changes in amount for the period | Closing balance | |||
| Provision | Recovery or reversal | Write-offs | Others | |||
| Bad debt provision made on individual basis | 102,694,913.11 | 13,253,434.28 | 2,384,991.32 | 17,775,336.42 | 2,009,272.53 | 97,797,292.18 |
| Bad debt provision made on a collective basis | 42,886,914.06 | -12,124,884.19 | 537.37 | -2,009,272.53 | 28,752,219.97 | |
| Total | 145,581,827.17 | 1,128,550.09 | 2,384,991.32 | 17,775,873.79 | 0.00 | 126,549,512.15 |
(4) Actual write-off of accounts receivable for the period
Unit: RMB
| Item | Amount of write-off |
| Actual write-off of accounts receivable | 17,775,873.79 |
Significant write-off of accounts receivable:
Unit: RMB
| Company name | Nature of account receivable | Write-off amount | Reason of write-off | Write-off procedure performed | Generated from associated transaction or not |
| Yunnan Zhongyun Li’ao Package Printing Co., Ltd. | Payment for goods | 6,062,972.00 | Uncollectible | Approval by management | No |
| Heilongjiang Longdan Dairy Technology Co., Ltd. | Payment for goods | 5,075,381.00 | Uncollectible | Approval by management | No |
| Chengdu Henglide Food Co., Ltd. | Payment for goods | 2,780,677.50 | Uncollectible | Approval by management | No |
| Zhongshan Yuankangyuan Food Co., Ltd. | Payment for goods | 2,591,501.42 | Uncollectible | Approval by management | No |
| Total | 16,510,531.92 |
Explanations about the write-off of accounts receivable:
(5) Accounts receivable and contract assets of top five closing balances by debtors
Unit: RMB
| Company name | Closing balance of accounts receivable | Closing balance of contract assets | Closing balance of accounts receivable and contract assets | Percentage of total of closing balance of accounts receivable and contract assets | Closing balance of bad debt provision for accounts receivable and impairment provision for contract assets |
| Company 1 | 918,462,633.01 | 918,462,633.01 | 14.75% | 927,499.72 | |
| Company 2 | 865,147,730.19 | 865,147,730.19 | 13.89% | 173,059.91 | |
| Company 3 | 380,914,453.92 | 380,914,453.92 | 6.12% | 283,095.62 | |
| Company 4 | 304,176,080.82 | 304,176,080.82 | 4.88% | 121,670.43 | |
| Company 5 | 204,752,470.34 | 204,752,470.34 | 3.29% | 40,950.49 | |
| Total | 2,673,453,368.28 | 2,673,453,368.28 | 42.93% | 1,546,276.17 |
4. Accounts receivable financing
(1) Accounts receivable financing by type
Unit: RMB
| Item | Closing balance | Opening balance |
| Bank acceptance bills | 408,092,531.80 | 408,354,641.63 |
| Total | 408,092,531.80 | 408,354,641.63 |
(2) Accounts receivable financing endorsed or discounted by the Company, which were not yet due on thebalance sheet date as at the end of the Reporting Period
Unit: RMB
| Item | Derecognized amount at the end of the Reporting Period | Recognized amount at the end of the Reporting Period |
| Bank acceptance bills | 2,352,434,741.58 | |
| Total | 2,352,434,741.58 |
5. Other receivables
Unit: RMB
| Item | Closing balance | Opening balance |
| Dividends receivable | 1,347,859.55 | |
| Other receivables | 26,873,634.05 | 26,568,094.26 |
| Total | 28,221,493.60 | 26,568,094.26 |
(1) Dividends receivable
1) Classification of dividends receivable
Unit: RMB
| Item (or investee) | Closing balance | Opening balance |
| Yuxi Kunshasi Plastic Masterbatch Co., Ltd. | 1,347,859.55 |
| Total | 1,347,859.55 |
(2) Other receivables
1) Other receivables by nature
Unit: RMB
| Nature of amount | Book balance at the end of the Reporting Period | Book balance at the beginning of the Reporting Period |
| Equity acquisition funds | 1,799,150.09 | |
| Guarantees and deposits | 12,608,454.57 | 14,092,694.79 |
| Reserve fund | 1,913,150.52 | 2,523,618.93 |
| Substitute advance | 5,628,114.10 | 5,158,505.75 |
| Others | 6,532,918.46 | 6,544,924.41 |
| Total | 28,481,787.74 | 28,319,743.88 |
2) Disclosure by aging
Unit: RMB
| Aging | Book balance at the end of the Reporting Period | Book balance at the beginning of the Reporting Period |
| Less than 1 year (inclusive) | 13,413,350.75 | 17,914,957.69 |
| 1-2 years | 5,551,295.87 | 8,862,725.63 |
| 2-3 years | 8,319,139.32 | 217,095.12 |
| Over 3 years | 1,198,001.80 | 1,324,965.44 |
| 3-4 years | 186,620.90 | 464,050.00 |
| 4-5 years | 308,000.00 | 15,780.00 |
| Over 5 years | 703,380.90 | 845,135.44 |
| Total | 28,481,787.74 | 28,319,743.88 |
3) Disclosure by bad debt provision methods
? Applicable □ Not applicable
Unit: RMB
| Type | Closing balance | Opening balance | ||||||||
| Book balance | Provision for bad debts | Book value | Book balance | Provision for bad debts | Book value | |||||
| Amount | Proportion | Amount | Provision proportion | Amount | Proportion | Amount | Provision proportion | |||
| Bad debt provision made on individual basis | 110,940.90 | 0.39% | 110,940.90 | 100.00% | 0.00 | 268,475.44 | 0.95% | 268,475.44 | 100.00% | 0.00 |
| Including: | ||||||||||
| Bad debt provision made on a collective basis | 28,370,846.84 | 99.61% | 1,497,212.79 | 5.28% | 26,873,634.05 | 28,051,268.44 | 99.05% | 1,483,174.18 | 5.29% | 26,568,094.26 |
| Including: | ||||||||||
| 1. Companies outside consolidation | 28,370,846.84 | 100.00% | 1,497,212.79 | 5.28% | 26,873,634.05 | 28,051,268.44 | 100.00% | 1,483,174.18 | 5.29% | 26,568,094.26 |
| Total | 28,481,787.74 | 100.00% | 1,608,153.69 | 5.65% | 26,873,634.05 | 28,319,743.88 | 100.00% | 1,751,649.62 | 6.19% | 26,568,094.26 |
Provision for bad debts by individual:
Unit: RMB
| Description | Opening balance | Closing balance | ||||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | Provision proportion | Provision reason | |
| Stage III | 268,475.44 | 268,475.44 | 110,940.90 | 110,940.90 | 100.00% | Uncollectible |
| Total | 268,475.44 | 268,475.44 | 110,940.90 | 110,940.90 | ||
Bad debt provision based on a collective basis: companies outside consolidation
Unit: RMB
| Description | Closing balance | ||
| Book balance | Provision for bad debts | Provision proportion | |
| Stage I | 27,794,546.84 | 1,209,062.79 | 4.35% |
| Stage II | 576,300.00 | 288,150.00 | 50.00% |
| Total | 28,370,846.84 | 1,497,212.79 | |
Explanation for determining the basis for this combination: The recognition criteria and instructions for bad debt provisions based oncombinations can be found in Note V-11 of this Section.Bad debt provision assessed based on ECL model:
Unit: RMB
| Provision for bad debts | Stage I | Stage II | Stage III | Total |
| 12-month ECL | Lifetime ECL (not credit-impaired) | Lifetime ECL (credit-impaired) | ||
| Balance of January 1, 2024 | 1,195,174.18 | 288,000.00 | 268,475.44 | 1,751,649.62 |
| Balance of January 1, 2024 for the period | ||||
| - Shift to Stage II | -13.05 | 13.05 | ||
| Provision for the period | 14,151.66 | 136.95 | 14,288.61 | |
| Write-offs for the period | 250.00 | 157,534.54 | 157,784.54 | |
| Balance of December 31, 2024 | 1,209,062.79 | 288,150.00 | 110,940.90 | 1,608,153.69 |
Classification basis and bad debt provision ratio for each stage: see Note V-11 of this Section for the basis for classification of each state;and the bad debt provision ratio is 4.35% for Stage I, 50.00% for Stage II, and 100.00% for Stage III.Changes in book balance with significant changes in loss reserves for the period
□ Applicable ? Not applicable
4) Provision for bad debts accrued, recovered or reversed during the Reporting Period
Provision for bad debts during the Reporting Period:
Unit: RMB
| Type | Opening balance | Changes in amount for the period | Closing balance | |||
| Provision | Recovery or reversal | Write-offs | Others | |||
| Bad debt provision made on individual basis | 268,475.44 | 157,534.54 | 110,940.90 | |||
| Bad debt provision made | 1,483,174.18 | 14,288.61 | 250.00 | 1,497,212.79 | ||
| on a collective basis | ||||||
| Total | 1,751,649.62 | 14,288.61 | 157,784.54 | 1,608,153.69 |
5) Actual write-off of other receivables for the period:
Unit: RMB
| Item | Amount of write-offs |
| Actual write-off of other receivables | 157,784.54 |
6) Top five customers with closing balance of other receivables collected by arrear party
Unit: RMB
| Company name | Nature of other receivable | Closing balance | Aging | Percentage of total of closing balance of other receivables | Closing balance of bad debt provision |
| Special Account of Government Non-Tax Revenue, Jintan District Finance Bureau, Changzhou | Deposit and security deposit | 8,114,200.00 | 2-3 years | 28.49% | 352,967.70 |
| Housing Provident Fund | Advance payment on behalf of others | 1,846,123.28 | Less than 1 year | 6.48% | 80,306.36 |
| Taige Transportation Service Co., Ltd., Yuxi, Yunnan | Equity acquisition fund | 1,799,150.09 | Less than 1 year | 6.32% | 78,263.03 |
| Pension Insurance | Advance payment on behalf of others | 1,716,025.98 | Less than 1 year | 6.02% | 74,647.13 |
| Yuxi Power Supply Bureau, Yunnan Power Grid Co., Ltd. | Deposit and security deposit | 1,100,000.00 | 1-2 years | 3.86% | 47,850.00 |
| Total | 14,575,499.35 | 51.17% | 634,034.22 |
6. Prepayment
(1) Prepayments by aging
Unit: RMB
| Aging | Closing balance | Opening balance | ||
| Amount | Proportion | Amount | Proportion | |
| Less than 1 year (inclusive) | 151,744,967.81 | 94.59% | 175,163,739.05 | 99.75% |
| 1-2 years | 8,594,878.20 | 5.36% | 188,822.79 | 0.11% |
| 2-3 years | 126,752.48 | 0.07% | ||
| Over 3 years | 83,914.32 | 0.05% | 126,388.64 | 0.07% |
| Total | 160,423,760.33 | 175,605,702.96 | ||
(2) Top five suppliers with closing balance of prepayment collected by prepaid entity
| Company name | Balance of December 31, 2024 | Proportion (%) of the total closing balance of prepayments |
| Company 1 | 25,951,196.87 | 16.18 |
| Company 2 | 15,661,649.49 | 9.76 |
| Company 3 | 13,057,992.70 | 8.14 |
| Company 4 | 7,512,883.92 | 4.68 |
| Company 5 | 7,447,324.27 | 4.64 |
| Total | 69,631,047.25 | 43.40 |
7. Inventories
Did the Company need to comply with the disclosure requirements of the real estate industryNo
(1) Classification of inventories
Unit: RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Inventory provision reserve or contract performance cost depreciation reserve | Book value | Book balance | Inventory provision reserve or contract performance cost depreciation reserve | Book value | |
| Raw materials | 546,202,730.19 | 27,199,840.67 | 519,002,889.52 | 540,759,974.02 | 3,482,756.26 | 537,277,217.76 |
| Goods in process | 5,199,678.09 | 0.00 | 5,199,678.09 | 5,554,243.47 | 0.00 | 5,554,243.47 |
| Finished goods | 2,513,508,258.64 | 598,721,761.77 | 1,914,786,496.87 | 2,366,399,195.15 | 223,726,592.32 | 2,142,672,602.83 |
| Turnover materials | 179,451,015.62 | 0.00 | 179,451,015.62 | 141,408,010.67 | 0.00 | 141,408,010.67 |
| Goods in transit | 257,753,391.64 | 2,496,390.10 | 255,257,001.54 | 125,095,000.14 | 101,045.05 | 124,993,955.09 |
| Consigned processing material | 1,758,679.73 | 0.00 | 1,758,679.73 | 1,756,624.05 | 0.00 | 1,756,624.05 |
| Semi-finished goods | 52,932,171.59 | 9,589,965.09 | 43,342,206.50 | 51,065,707.25 | 4,169,507.48 | 46,896,199.77 |
| Materials in transit | 44,228,826.95 | 0.00 | 44,228,826.95 | 0.00 | 0.00 | 0.00 |
| Total | 3,601,034,752.45 | 638,007,957.63 | 2,963,026,794.82 | 3,232,038,754.75 | 231,479,901.11 | 3,000,558,853.64 |
(2) Inventory provision reserve and contract performance cost depreciation reserve
Unit: RMB
| Item | Opening balance | Increase for the period | Decrease for the period | Closing balance | ||
| Provision | Others | Recovery or | Others | |||
| reversal | ||||||
| Raw materials | 3,482,756.26 | 26,532,191.18 | 2,815,106.77 | 27,199,840.67 | ||
| Goods in process | 0.00 | 0.00 | ||||
| Finished goods | 223,726,592.32 | 422,319,546.12 | 47,324,376.67 | 598,721,761.77 | ||
| Turnover materials | 0.00 | 0.00 | ||||
| Goods in transit | 101,045.05 | 2,479,146.35 | 83,801.30 | 2,496,390.10 | ||
| Semi-finished goods | 4,169,507.48 | 5,536,079.34 | 115,621.73 | 9,589,965.09 | ||
| Total | 231,479,901.11 | 456,866,962.99 | 50,338,906.47 | 638,007,957.63 |
Explanations: Resales for the year are due to the sale of the inventory of the inventory provision reserve already accrued.Provision for inventory depreciation by group
Unit: RMB
| Portfolio name | At the end of period | At the beginning of period | ||||
| Closing balance | Allowance for impairment | Provision ratio of allowance for impairment | Opening balance | Allowance for impairment | Provision ratio of allowance for impairment | |
| Raw materials | 546,202,730.19 | 27,199,840.67 | 4.98% | 540,759,974.02 | 3,482,756.26 | 0.64% |
| Goods in process | 5,199,678.09 | 5,554,243.47 | ||||
| Finished goods | 2,513,508,258.64 | 598,721,761.77 | 23.82% | 2,366,399,195.15 | 223,726,592.32 | 9.45% |
| Goods in transit | 257,753,391.64 | 2,496,390.10 | 0.97% | 125,095,000.14 | 101,045.05 | 0.08% |
| Consigned processing materials | 1,758,679.73 | 1,756,624.05 | ||||
| Turnover materials | 179,451,015.62 | 141,408,010.67 | ||||
| Semi-finished goods | 52,932,171.59 | 9,589,965.09 | 18.12% | 51,065,707.25 | 4,169,507.48 | 8.16% |
| Materials in transit | 44,228,826.95 | |||||
| Total | 3,601,034,752.45 | 638,007,957.63 | 17.72% | 3,232,038,754.75 | 231,479,901.11 | 7.16% |
The provision standards for inventory depreciation reserves by group
8. Non-current assets due within one year
Unit: RMB
| Item | Closing balance | Opening balance |
| Large deposit certificate | 200,000,000.00 | 571,927,500.00 |
| Undue interest receivable | 15,940,873.29 | 46,368,076.83 |
| Total | 215,940,873.29 | 618,295,576.83 |
(1) Debt investment due within one year
□ Applicable ? Not applicable
(2) Other debt investment due within one year
□ Applicable ? Not applicable
9. Other current assets
Unit: RMB
| Item | Closing balance | Opening balance |
| Prepayment of tax | 6,594,972.18 | 6,819,992.30 |
| Input tax to be deducted | 692,330,332.81 | 487,696,936.11 |
| Time deposit | 302,953,767.12 | 251,828,755.71 |
| Total | 1,001,879,072.11 | 746,345,684.12 |
10. Other equity instrument investment
Unit: RMB
| Item | Closing balance | Opening balance | Additional investment | Profit recognized in other comprehensive income for the period | Loss charged to other comprehensive income for the period | Accumulated profit in other comprehensive income at the end of the period | Accumulated losses in other comprehensive income at the end of the period | Dividend income recognized during the period | Reason for designating as a financial asset measured at fair value and its changes are included in other comprehensive income |
| Suzhou Jiesheng Technology Co., Ltd. | 72,000,000.00 | 89,000,000.00 | -17,000,000.00 | -38,000,000.00 | |||||
| Zhuhai Chenyu New Material Technology Co., Ltd. | 6,000,000.00 | 6,000,000.00 | |||||||
| Total | 78,000,000.00 | 89,000,000.00 | -17,000,000.00 | -38,000,000.00 |
Other explanations:
Note 1: According to the evaluation by Shanghai Zhonghua Asset Appraisal Co., Ltd., as of December 31, 2024, the overall equity value ofSuzhou Jiesheng Technology Co., Ltd. is RMB720,000,000.00, and the Company holds 10% equity of Suzhou Jiesheng Technology Co.,Ltd., corresponding to a fair value of RMB72,000,000.00.Note 2: This period saw the additional investment in Zhuhai Chenyu New Material Technology Co., Ltd., with the Company’s subsidiaryShanghai Energy New Material Technology Co., Ltd. holding 8% of its equity. The fair value at the end of the period was close to the bookvalue.
11. Long-term equity investment
Unit: RMB
| Investees | Opening balance (book value) | Opening balance of provision for impairment | Increase / decrease for the period | Closing balance (book value) | Closing balance of provision for impairment | |||||||
| Increase in investment | Decrease in investment | Investment profit or loss recognized under equity method | Adjustments to other comprehensive income | Other changes in equity | Cash dividends or profit declared | Provision for impairment | Others | |||||
| I. Joint ventures | ||||||||||||
| II. Associates | ||||||||||||
| Yuxi Kunshasi Plastic Masterbatch Co., Ltd. | 3,209,980.10 | 1,858,893.98 | 1,347,859.55 | -2,698,945.67 | 0.00 | |||||||
| Subtotal | 3,209,980.10 | 1,858,893.98 | 1,347,859.55 | -2,698,945.67 | 0.00 | |||||||
| Total | 3,209,980.10 | 1,858,893.98 | 1,347,859.55 | -2,698,945.67 | 0.00 | |||||||
The recoverable amount is determined based on the net amount after deducting disposal expenses from fair value
□ Applicable ? Not applicable
The recoverable amount is determined based on the present value of expected future cash flows
□ Applicable ? Not applicable
12. Investment properties
(1) Adoption of the cost measurement mode for investment properties
? Applicable □ Not applicable
Unit: RMB
| Item | Buildings and structures | Land use rights | Construction in progress | Total |
| I. Original book value | ||||
| 1. Opening balance | 11,871,802.82 | 11,871,802.82 | ||
| 2. Increase for the period | 1,727,218.59 | 1,727,218.59 | ||
| (1) External purchase | 1,727,218.59 | 1,727,218.59 | ||
| (2) Transfer of inventory/fixed assets/construction in progress | ||||
| (3) Increase in business combination | ||||
| 3. Decrease for the period | ||||
| (1) Disposal | ||||
| (2) Other transferred out | ||||
| 4. Closing balance | 13,599,021.41 | 13,599,021.41 | ||
| II. Accumulative depreciation and amortization | ||||
| 1. Opening balance | 4,006,733.40 | 4,006,733.40 | ||
| 2. Increase for the period | 540,708.19 | 540,708.19 | ||
| (1) Provision or amortization | 540,708.19 | 540,708.19 | ||
| 3. Decrease for the period | ||||
| (1) Disposal | ||||
| (2) Other transferred out | ||||
| 4. Closing balance | 4,547,441.59 | 4,547,441.59 | ||
| III. Provision for impairment | ||||
| 1. Opening balance | ||||
| 2. Increase for the period | ||||
| (1) Provision |
| 3. Decrease for the period | ||||
| (1) Disposal | ||||
| (2) Other transferred out | ||||
| 4. Closing balance | ||||
| IV. Book value | ||||
| 1. Closing book value | 9,051,579.82 | 9,051,579.82 | ||
| 2. Opening book value | 7,865,069.42 | 7,865,069.42 |
The recoverable amount is determined based on the net amount after deducting disposal expenses from fair value
□ Applicable ? Not applicable
The recoverable amount is determined based on the present value of expected future cash flows
□ Applicable ? Not applicable
Reasons for significant discrepancies between the aforementioned and the information or external information used in previous years’impairment testingReasons for significant discrepancies between the information used in the Company’s previous annual impairment tests and the actualsituation of the current yearOther explanations:
(2) Investment properties measured using fair value measurement model
□ Applicable ? Not applicable
13. Fixed assets
Unit: RMB
| Item | Closing balance | Opening balance |
| Fixed assets | 22,928,507,627.21 | 19,380,327,177.42 |
| Fixed assets pending for disposal | ||
| Total | 22,928,507,627.21 | 19,380,327,177.42 |
(1) Fixed assets
Unit: RMB
| Item | Buildings and structures | Machinery and equipment | Transportation equipment | Electronic devices and others | Total |
| I. Original book value | |||||
| 1. Opening balance | 4,731,343,128.11 | 19,884,170,036.34 | 48,833,379.97 | 814,755,311.99 | 25,479,101,856.41 |
| 2. Increase for the period | 1,067,824,006.86 | 4,221,959,232.09 | 8,683,957.06 | 39,490,683.43 | 5,337,957,879.44 |
| (1) Purchase | 30,066,284.47 | 34,548,316.12 | 3,211,767.88 | 9,622,825.50 | 77,449,193.97 |
| (2) Transfer of construction in progress | 1,034,284,819.59 | 4,187,410,628.34 | 5,472,189.18 | 29,866,914.50 | 5,257,034,551.61 |
| (3) Increase in business combination | |||||
| (4) Converted difference in foreign currency statements | 3,472,902.80 | 287.63 | 943.43 | 3,474,133.86 | |
| 3. Decrease for the period | 775,207.20 | 60,878,446.90 | 1,626,262.68 | 4,206,404.45 | 67,486,321.23 |
| (1) Disposal or scrapping | 775,207.20 | 60,878,446.90 | 1,613,936.85 | 3,686,593.34 | 66,954,184.29 |
| (2) Converted difference in foreign currency statements | 12,325.83 | 519,811.11 | 532,136.94 | ||
| 4. Closing balance | 5,798,391,927.77 | 24,045,250,821.53 | 55,891,074.35 | 850,039,590.97 | 30,749,573,414.62 |
| II. Accumulative depreciation | |||||
| 1. Opening balance | 662,560,305.90 | 4,942,188,278.62 | 24,072,434.29 | 178,333,212.15 | 5,807,154,230.96 |
| 2. Increase for the period | 227,585,944.34 | 1,464,523,862.02 | 8,002,463.72 | 60,782,125.35 | 1,760,894,395.43 |
| (1) Provision | 227,579,240.42 | 1,464,523,862.02 | 7,999,695.58 | 60,773,100.42 | 1,760,875,898.44 |
| (2) Converted difference in foreign currency statements | 6,703.92 | 2,768.14 | 9,024.93 | 18,496.99 | |
| 3. Decrease for the period | 34,370,534.81 | 1,258,877.82 | 2,718,944.39 | 38,348,357.02 | |
| (1) Disposal or scrapping | 34,370,534.81 | 1,258,877.82 | 2,718,944.39 | 38,348,357.02 | |
| (2) Converted difference in foreign currency statements | |||||
| 4. Closing balance | 890,146,250.24 | 6,372,341,605.83 | 30,816,020.19 | 236,396,393.11 | 7,529,700,269.37 |
| III. Provision for impairment | |||||
| 1. Opening balance | 291,595,666.77 | 15,759.89 | 9,021.37 | 291,620,448.03 | |
| 2. Increase for the period | |||||
| (1) Provision | |||||
| 3. Decrease for the period | 254,929.99 | 254,929.99 | |||
| (1) Disposal or scrapping | 254,929.99 | 254,929.99 | |||
| 4. Closing balance | 291,340,736.78 | 15,759.89 | 9,021.37 | 291,365,518.04 | |
| IV. Book value | |||||
| 1. Closing book value | 4,908,245,677.53 | 17,381,568,478.92 | 25,059,294.27 | 613,634,176.49 | 22,928,507,627.21 |
| 2. Opening book value | 4,068,782,822.21 | 14,650,386,090.95 | 24,745,185.79 | 636,413,078.47 | 19,380,327,177.42 |
(2) Fixed assets in temporary idle
Unit: RMB
| Item | Original book value | Accumulative depreciation | Provision for impairment | Book value | Remarks |
| Buildings and structures | 2,105,695.50 | 1,156,559.26 | 949,136.24 | ||
| Machinery and equipment | 9,135,247.28 | 7,589,280.96 | 1,545,966.32 | ||
| Total | 11,240,942.78 | 8,745,840.22 | 2,495,102.56 |
(3) Fixed assets not obtaining the title certificate
Unit: RMB
| Item | Book value | Reason |
| Buildings and structures | 1,768,270,016.01 | Being processed |
Other explanations:
(4) Impairment testing of fixed assets
? Applicable □ Not applicableThe recoverable amount is determined based on the net amount after deducting disposal expenses from fair value? Applicable □ Not applicable
Unit: RMB
| Item | Book value | Recoverable amount | Impairment | Determination of fair value and disposal expenses | Key parameters | Basis for determining key parameters |
| Jiangxi Ruijie New Material Technology Co., Ltd. | 529,983,720.62 | 554,000,000.00 | 0.00 | The fair value is evaluated using the income method | Forecast period: 12 years, profit margin for forecast period: 12.3% -16.1%, stable period: 16.1% -17.1%, discount rate: 12.61% | Determine based on the specific situation of the company and market environment |
| Jiangsu Energy New Material Technology Co., Ltd. | 3,448,618,215.43 | 3,510,000,000.00 | 0.00 | The fair value is evaluated using the income method | Forecast period: 13 years, profit margin for forecast period: 3.70% -21.81%, stable period: 21.81% -32.32%, discount rate: 11.51% | Determine based on the specific situation of the company and market environment |
| Total | 3,978,601,936.05 | 4,064,000,000.00 |
The recoverable amount is determined based on the present value of expected future cash flows? Applicable □ Not applicable
Unit: RMB
| Item | Book value | Recoverable amount | Impairment | Duration of the forecast period | Key parameters of the forecast period | Key parameters of the stable period | Basis for determining the key parameters of the stable period |
| Wuxi Energy New Material Technology Co., Ltd. | 3,532,510,451.88 | 3,630,000,000.00 | 0.00 | 11 | Profit margin:16.8%-17.2% | Profit margin: 16.1%-16.6% | Determine based on the specific situation of the company and market environment |
| Total | 3,532,510,451.88 | 3,630,000,000.00 | 0.00 |
Reasons for significant discrepancies between the aforementioned and the information or external information used in previous years’impairment testing: not applicableReasons for significant discrepancies between the information used in the Company’s previous annual impairment tests and the actualsituation of the current year: not applicableThe process, parameters, and methods for confirming impairment losses of major fixed assets are as follows:
(1) Jiangsu Energy New Material Technology Co., Ltd.
The recoverable amount of fixed assets is calculated based on the fair value less disposal costs, which is derived from the Company’sapproved 13-year cash flow forecasts. The cash flow forecasts apply a discount rate of 11.51%, and cash flows beyond the forecast periodare assumed to remain stable at the level for the final year. This growth rate is broadly consistent with the long-term average growth rate ofthe lithium battery industry.
| Company name | Key parameters | ||||
| Forecast period | Growth rate for the forecast period | Growth rate for the stable period | Profit margin | Discount rate (pre-tax weighted average cost of capital, WACC) | |
| Jiangsu Energy | Limited period: 2025-2037 (with growth in 2025-2029, followed by a stable period) | Note 1 | Flat | Based on estimated revenues, costs, expenses, etc. | 11.51% |
Note 1: Based on executed contracts and agreements, the Company’s development plans, historical operational trends, andcomprehensive analysis of market competition factors, combined with the asset group’s condition as of the valuation date, cash flows for theasset group over the next five years were forecasted.
According to the valuation results in the Asset Appraisal Report on the Recoverable Amount of the Long-Term Asset Group Held byJiangsu Energy New Material Technology Co., Ltd. for Impairment Testing Purposes of Yunnan Energy New Materials Co., Ltd. (forFinancial Reporting) (Report No.: Hu Zhong Ping Bao Zi [2025] No. 0238) issued by Shanghai Zhonghua Asset Appraisal Co., Ltd. engagedby the Company, the recoverable amount of the fixed assets was determined to be RMB3.51 billion, indicating no need for provision forfixed asset impairment.
(2) Wuxi Energy New Material Technology Co., Ltd.
The recoverable amount of fixed assets is calculated based on the fair value less disposal costs, which is derived from the Company’sapproved 11-year cash flow forecasts. The cash flow forecasts apply a discount rate of 12.04%, and cash flows beyond the forecast periodare assumed to remain stable at the level for the final year. This growth rate is broadly consistent with the long-term average growth rate ofthe lithium battery industry.
| Company name | Key parameters | ||||
| Forecast period | Growth rate for the forecast period | Growth rate for the stable period | Profit margin | Discount rate (pre-tax weighted average cost of capital, WACC) | |
| Wuxi Energy | Limited period: 2025-2035 (with growth in 2025-2029, followed by a stable period) | Note 1 | Flat | Based on estimated revenues, costs, expenses, etc. | 12.04% |
Note 1: Based on executed contracts and agreements, the Company’s development plans, historical operational trends, andcomprehensive analysis of market competition factors, combined with the asset group’s condition as of the valuation date, cash flows for theasset group over the next five years were forecasted.
According to the valuation results in the Asset Appraisal Report on the Recoverable Amount of the Long-Term Asset Group Held byWuxi Energy New Material Technology Co., Ltd. for Impairment Testing Purposes of Yunnan Energy New Materials Co., Ltd. (for FinancialReporting) (Report No.: Hu Zhong Ping Bao Zi [2025] No. 0204) issued by Shanghai Zhonghua Asset Appraisal Co., Ltd. engaged by theCompany, the recoverable amount of the fixed assets was determined to be RMB3.63 billion, indicating no need for provision for fixed assetimpairment.
(3) Wuxi Energy New Material Technology Co., Ltd.
The recoverable amount of fixed assets is calculated based on the fair value less disposal costs, which is derived from the Company’sapproved 12-year cash flow forecasts. The cash flow forecasts apply a discount rate of 12.61%, and cash flows beyond the forecast periodare assumed to remain stable at the level for the final year. This growth rate is broadly consistent with the long-term average growth rate ofthe lithium battery industry.
| Company name | Key parameters | ||||
| Forecast period | Growth rate for the forecast period | Growth rate for the stable period | Profit margin | Discount rate (pre-tax weighted average cost of capital, WACC) | |
| Jiangxi Ruijie | Limited period: 2025-2036 (with growth in 2025-2029, followed by a stable period) | Note 1 | Flat | Based on estimated revenues, costs, expenses, etc. | 12.61% |
Note 1: Based on executed contracts and agreements, the Company’s development plans, historical operational trends, andcomprehensive analysis of market competition factors, combined with the asset group’s condition as of the valuation date, cash flows for theasset group over the next five years were forecasted.According to the valuation results in the Asset Appraisal Report on the Recoverable Amount of the Long-Term Asset Group Held byJiangxi Ruijie New Material Technology Co., Ltd. for Impairment Testing Purposes of Yunnan Energy New Materials Co., Ltd. (for FinancialReporting) (Report No.: Hu Zhong Ping Bao Zi [2025] No. 0203) issued by Shanghai Zhonghua Asset Appraisal Co., Ltd. engaged by theCompany, the recoverable amount of the fixed assets was determined to be RMB554 million, indicating no need for provision for fixed assetimpairment.
14. Construction in progress
Unit: RMB
| Item | Closing balance | Opening balance |
| Construction in progress | 5,852,662,936.95 | 6,194,674,917.74 |
| Engineering materials | 10,582,086.18 | 12,733,550.25 |
| Total | 5,863,245,023.13 | 6,207,408,467.99 |
(1) Construction in progress
Unit: RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
| Hungarian factory | 3,173,726,601.84 | 3,173,726,601.84 | 2,716,335,255.30 | 2,716,335,255.30 | ||
| Yuxi Energy 1.6 Billion m2/a Lithium Battery Project | 1,005,383,793.90 | 1,005,383,793.90 | 8,236,530.91 | 8,236,530.91 | ||
| Jiangxi Enpo New Material | 587,916,982.98 | 587,916,982.98 | 610,590,508.50 | 610,590,508.50 | ||
| Co., Ltd. Lithium-ion Battery Dry Process Separator Film Construction Project | ||||||
| Anhui Hongchuang Project for Annual Production of 12 billion Liquid Beverage Cartons | 334,535,052.66 | 334,535,052.66 | 15,815,398.08 | 15,815,398.08 | ||
| Microporous Membrane Project of High- performance Lithium-ion Battery of Chongqing Energy (Phase II) | 297,650,631.72 | 297,650,631.72 | 283,616,453.18 | 283,616,453.18 | ||
| Jiangsu Energy EV Lithium Battery Separator Industrialization Project | 44,626,237.64 | 44,626,237.64 | 880,545,589.70 | 880,545,589.70 | ||
| Jiangsu Ruijie EV Lithium Battery Aluminum Laminated Film Industrialization Project | 42,381,128.27 | 42,381,128.27 | 237,272,443.83 | 237,272,443.83 | ||
| Hubei Energy EV Lithium Battery Separator Industrialization Project | 41,618,487.85 | 41,618,487.85 | 221,353,261.99 | 221,353,261.99 | ||
| American factory | 33,021,712.10 | 33,021,712.10 | 279,543,528.16 | 279,543,528.16 | ||
| Jiangxi Energy SRS Project | 23,069,781.38 | 23,069,781.38 | 26,483,484.16 | 26,483,484.16 | ||
| Others | 272,962,057.28 | 4,229,530.67 | 268,732,526.61 | 914,882,463.93 | 914,882,463.93 | |
| Total | 5,856,892,467.62 | 4,229,530.67 | 5,852,662,936.95 | 6,194,674,917.74 | 6,194,674,917.74 |
(2) Changes in important projects in progress for the period
Unit: RMB
| Item | Budget (in RMB10,000) | Opening balance | Increase for the period | Transfer to fixed assets for the period | Decrease in other amounts for the period | Closing balance | Proportion of total project investment in budget | Progress of the project (%) | Capitalized accumulated amount of interest | Including: Capitalized amount of interest for the period | Capitalization rate of interest for the period | Source of capital |
| Hungarian factory | 317,372.66 | 2,716,335,255.30 | 412,077,908.17 | -45,313,438.37 | 3,173,726,601.84 | 100.00% | 99.00 | Self-owned funds | ||||
| Yuxi Energy 1.6 Billion m2/a Lithium Battery Project | 450,000.00 | 8,236,530.91 | 997,147,262.99 | 1,005,383,793.90 | 33.00% | 51.00 | 3,049,654.20 | 3,049,654.20 | 2.54% | Self-owned funds and loans | ||
| Jiangxi Enpo New Material Co., Ltd. Lithium-ion Battery Dry Process Separator Film Construction Project | 200,000.00 | 610,590,508.50 | 178,717,980.62 | 201,391,506.14 | 587,916,982.98 | 56.82% | 60.00 | 26,721,775.08 | 16,713,764.58 | 3.30% | Self-owned funds and loans | |
| Anhui Hongchuang Project for Annual Production of 12 Billion Liquid Beverage Cartons | 70,000.00 | 15,815,398.08 | 328,187,229.68 | 9,467,575.10 | 334,535,052.66 | 64.88% | 55.85 | 793,278.40 | 793,278.40 | 2.40% | Self-owned funds and loans | |
| Microporous Membrane Project of High- performance Lithium-ion Battery of Chongqing Energy (Phase II) | 300,000.00 | 283,616,453.18 | 188,012,707.33 | 173,978,528.79 | 297,650,631.72 | 90.00% | 90.00 | 22,675,195.97 | 2,639,943.57 | 2.97% | Raised funds and loans | |
| Jiangsu Energy EV Lithium Battery Separator Industrialization Project | 520,000.00 | 880,545,589.70 | 890,414,936.78 | 1,726,334,288.84 | 44,626,237.64 | 77.00% | 95.00 | 23,598,457.77 | 3,378,591.37 | 3.27% | Raised funds and loans |
| Jiangsu Ruijie EV Lithium Battery Aluminum Laminated Film Industrialization Project | 160,000.00 | 237,272,443.83 | 46,761,426.66 | 241,652,742.22 | 42,381,128.27 | 45.00% | 50.00 | 8,040,159.55 | 337,375.95 | 3.33% | Raised funds and loans | |
| Hubei Energy EV Lithium Battery Separator Industrialization Project | 190,000.00 | 221,353,261.99 | 316,205,086.14 | 495,939,860.28 | 41,618,487.85 | 87.12% | 90.00 | 5,075,059.24 | 4,166,093.20 | 3.06% | Self-owned funds and loans | |
| American factory | 196,899.06 | 279,543,528.16 | 47,782,054.17 | 295,801,160.16 | -1,497,289.93 | 33,021,712.10 | 35.00% | 35.00 | Self-owned funds | |||
| Jiangxi Energy SRS Project | 95,000.00 | 26,483,484.16 | 31,398,192.23 | 34,811,895.01 | 23,069,781.38 | 75.00% | 95.00 | Self-owned funds | ||||
| Others | 914,882,463.93 | 1,435,736,588.42 | 2,077,656,995.07 | 272,962,057.28 | 63,494,772.24 | 3,652,443.44 | Self-owned funds, raised funds and loans | |||||
| Total | 2,499,271.72 | 6,194,674,917.74 | 4,872,441,373.19 | 5,257,034,551.61 | -46,810,728.30 | 5,856,892,467.62 | 153,448,352.45 | 34,731,144.70 |
Note: The other decreases of Hungarian and American factories in this period were due to the difference in foreign currencytranslation.
(3) Provision for impairment of construction in progress in this period
Unit: RMB
| Item | Opening balance | Increase for the period | Decrease for the period | Closing balance | Reason for provision |
| Jiangxi Tonry Lithium Battery Membrane Project (Phase I Expansion) | 4,229,530.67 | 4,229,530.67 | Idle equipment, expected to be unusable | ||
| Total | 4,229,530.67 | 4,229,530.67 | -- |
(4) Impairment testing of construction in progress
□ Applicable ? Not applicable
(5) Engineering materials
Unit: RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
| Equipment not installed | 10,582,086.18 | 10,582,086.18 | 12,733,550.25 | 12,733,550.25 | ||
| Total | 10,582,086.18 | 10,582,086.18 | 12,733,550.25 | 12,733,550.25 | ||
Other explanations:
15. Right-of-use assets
(1) Right-of-use assets
Unit: RMB
| Item | Buildings and structures | Others | Total |
| I. Original book value | |||
| 1. Opening balance | 3,828,415.83 | 1,376,146.80 | 5,204,562.63 |
| 2. Increase for the period | 1,990,728.20 | 1,990,728.20 | |
| 3. Decrease for the period | 3,828,415.83 | 3,828,415.83 | |
| 4. Closing balance | 1,990,728.20 | 1,376,146.80 | 3,366,875.00 |
| II. Accumulative depreciation | |||
| 1. Opening balance | 2,472,815.01 | 344,036.55 | 2,816,851.56 |
| 2. Increase for the period | 1,343,487.09 | 275,229.24 | 1,618,716.33 |
| (1) Provision | |||
| 3. Decrease for the period | 2,820,937.98 | 2,820,937.98 | |
| (1) Disposal | 2,820,937.98 | 2,820,937.98 | |
| 4. Closing balance | 995,364.12 | 619,265.79 | 1,614,629.91 |
| III. Provision for impairment | |||
| 1. Opening balance | |||
| 2. Increase for the period | |||
| (1) Provision | |||
| 3. Decrease for the period | |||
| (1) Disposal | |||
| 4. Closing balance | |||
| IV. Book value | |||
| 1. Closing book value | 995,364.08 | 756,881.01 | 1,752,245.09 |
| 2. Opening book value | 1,355,600.82 | 1,032,110.25 | 2,387,711.07 |
(2) Impairment testing of right-of-use assets
□Applicable ?Not applicable
Other explanations: Depreciation of right-of-use assets for 2024 amounted to RMB1,618,716.33, of which RMB1,343,487.09 was recordedas depreciation expense in administrative expenses and RMB275,229.24 was recorded as depreciation expense in manufacturing expenses.
16.
Intangible assets
(1) Intangible assets
Unit: RMB
Unit: RMB
| Item | Land use rights | Patent rights | Non-patent technology | Software | Total |
| I. Original book value | |||||
| 1. Opening balance | 1,159,048,231.25 | 35,641,267.04 | 23,338,200.00 | 49,886,075.07 | 1,267,913,773.36 |
| 2. Increase for the period | 436,113.21 | 32,110,593.23 | 17,603,819.00 | 50,150,525.44 | |
| (1) Purchase | 436,113.21 | 18,331,629.12 | 17,581,951.79 | 36,349,694.12 | |
| (2) Internal R&D | |||||
| (3) Increase in business combination | |||||
| (4) Shareholder investment | 13,700,000.00 | 13,700,000.00 | |||
| (5) Converted difference in foreign currency statements | 78,964.11 | 21,867.21 | 100,831.32 |
| 3. Decrease for the period | 1,197,667.94 | 1,197,667.94 | |||
| (1) Disposal | 1,197,667.94 | 1,197,667.94 | |||
| 4. Closing balance | 1,159,484,344.46 | 67,751,860.27 | 23,338,200.00 | 66,292,226.13 | 1,316,866,630.86 |
| II. Accumulative amortization | |||||
| 1. Opening balance | 101,067,947.46 | 11,095,063.28 | 21,184,472.90 | 14,021,577.18 | 147,369,060.82 |
| 2. Increase for the period | 23,311,848.36 | 7,773,909.29 | 419,280.21 | 6,012,384.08 | 37,517,421.94 |
| (1) Provision | 23,311,848.36 | 7,765,344.08 | 419,280.21 | 6,001,714.60 | 37,498,187.25 |
| (2) Converted difference in foreign currency statements | 8,565.21 | 10,669.48 | 19,234.69 | ||
| 3. Decrease for the period | |||||
| (1) Disposal | |||||
| 4. Closing balance | 124,379,795.82 | 18,868,972.57 | 21,603,753.11 | 20,033,961.26 | 184,886,482.76 |
| III. Provision for impairment | |||||
| 1. Opening balance | 1,203,498.45 | 1,203,498.45 | |||
| 2. Increase for the period | |||||
| (1) Provision | |||||
| 3. Decrease for the period | |||||
| (1) Disposal | |||||
| 4. Closing balance | 1,203,498.45 | 1,203,498.45 | |||
| IV. Book value | |||||
| 1. Closing book value | 1,035,104,548.64 | 48,882,887.70 | 530,948.44 | 46,258,264.87 | 1,130,776,649.65 |
| 2. Opening book value | 1,057,980,283.79 | 24,546,203.76 | 950,228.65 | 35,864,497.89 | 1,119,341,214.09 |
The intangible assets produced through internal R&D of the Company accounted for 0.00% of the balance of intangible assets at theend of the current period.
(2) Data resources recognized as intangible assets
□Applicable ?Not applicable
(3) Impairment testing of intangible assets
□Applicable ?Not applicable
17.
Goodwill
(1) Original book value of goodwill
Unit: RMB
| Events that may generate goodwill through investee names | Opening balance | Increase for the period | Decrease for the period | Closing balance | ||
| Generated by business combination | Disposal | |||||
| Jiangxi Tonry New Energy Technology Development Co., Ltd. | 34,483,188.64 | 34,483,188.64 | ||||
| Chongqing Energy Newmi Technological Co., Ltd. | 15,589,757.32 | 15,589,757.32 | ||||
| Suzhou GreenPower New Energy Materials Co., Ltd. | 470,157,733.69 | 470,157,733.69 | ||||
| Total | 520,230,679.65 | 520,230,679.65 | ||||
(2) Provision for impairment of goodwill
Unit: RMB
| Events that may generate goodwill through investee names | Opening balance | Increase for the period | Decrease for the period | Closing balance | ||
| Provision | Disposal | |||||
| Jiangxi Tonry New Energy Technology Development Co., Ltd. | ||||||
| Chongqing Energy Newmi Technological Co., Ltd. | 1,125,126.29 | 1,125,126.29 | ||||
| Suzhou GreenPower New Energy Materials Co., Ltd. | ||||||
| Total | 1,125,126.29 | 1,125,126.29 | ||||
(3) The process and key parameters of goodwill impairment testing, as well as the recognition methodof goodwill impairment losses
① Jiangxi Tonry New Energy Technology Development Co., Ltd.
The recoverable amount of goodwill is calculated based on the present value of expected future cash flows, which is derived from theCompany’s approved 5-year cash flow forecasts. The cash flow forecasts apply a discount rate of 12.05%, and cash flows beyond the forecast periodare assumed to remain stable at the level for the final year. This growth rate is broadly consistent with the long-term average growth rate of thelithium battery industry.
| Company name | Key parameters | ||||
| Forecast period | Growth rate for the forecast period | Growth rate for the stable period | Profit margin | Discount rate (pre-tax weighted average cost of capital, WACC) | |
| Jiangxi Tonry | Indefinite: 2025-2029 (followed by a stable period) | Note 1 | Flat | Based on estimated revenues, costs, expenses, etc. | 12.05% |
Note 1: Based on executed contracts and agreements, the Company’s development plans, historical operational trends, and comprehensiveanalysis of market competition factors, combined with the asset group’s condition as of the valuation date, cash flows for the asset group over thenext five years were forecasted.
According to the valuation results in the Asset Appraisal Report on the Recoverable Amount of the Asset Group Related to Jiangxi Tonry NewEnergy Technology Development Co., Ltd. for Goodwill Impairment Testing Purposes of Yunnan Energy New Material Co., Ltd. (for FinancialReporting) (Report No.: Hu Zhong Ping Bao Zi [2025] No. 0205) issued by Shanghai Zhonghua Asset Appraisal Co., Ltd. engaged by the Company,the recoverable amount of the asset group (including goodwill) was determined to be RMB976 million, indicating no need for goodwill impairmentprovision.
② Chongqing Energy Newmi Technological Co., Ltd.
The recoverable amount of goodwill is calculated based on the present value of expected future cash flows, which is derived from theCompany’s approved 5-year cash flow forecasts. The cash flow forecasts apply a discount rate of 12.06%, and cash flows beyond the forecast periodare assumed to remain stable at the level for the final year. This growth rate is broadly consistent with the long-term average growth rate of thelithium battery industry.
| Company name | Key parameters | ||||
| Forecast period | Growth rate for the forecast period | Growth rate for the stable period | Profit margin | Discount rate (pre-tax weighted average cost of capital, WACC) | |
| Newmi Tech | Indefinite: 2025-2029 (followed by a stable period) | Note 1 | Flat | Based on estimated revenues, costs, expenses, etc. | 12.06% |
Note 1: Based on executed contracts and agreements, the Company’s development plans, historical operational trends, and comprehensiveanalysis of market competition factors, combined with the asset group’s condition as of the valuation date, cash flows for the asset group over thenext five years were forecasted.
According to the valuation results in the Asset Appraisal Report on the Recoverable Amount of the Asset Group Related to Chongqing EnergyNewmi Technological Co., Ltd. for Goodwill Impairment Testing Purposes of Yunnan Energy New Material Co., Ltd. (for Financial Reporting)(Report No.: Hu Zhong Ping Bao Zi [2025] No. 0243) issued by Shanghai Zhonghua Asset Appraisal Co., Ltd. engaged by the Company, therecoverable amount of the asset group (including goodwill) was determined to be RMB621 million, which is lower than the carrying amount of theasset group (including goodwill). Based on the Company’s ownership percentage, a goodwill impairment loss of RMB1,125,126.29 was recognizedin the current period.
③ Suzhou GreenPower New Energy Material Co., Ltd.
The recoverable amount of goodwill is calculated based on the present value of expected future cash flows, which is derived from theCompany’s approved 5-year cash flow forecasts. The cash flow forecasts apply a discount rate of 12.39%, and cash flows beyond the forecast periodare assumed to remain stable at the level for the final year. This growth rate is broadly consistent with the long-term average growth rate of thelithium battery industry.
| Company name | Key parameters | ||||
| Forecast period | Growth rate for the forecast period | Growth rate for the stable period | Profit margin | Discount rate (pre-tax weighted average cost of capital, WACC) | |
| Suzhou GreenPower | Indefinite: 2025-2029 (followed by a stable period) | Note 1 | Flat | Based on estimated revenues, costs, expenses, etc. | 12.39% |
Note 1: Based on executed contracts and agreements, the Company’s development plans, historical operational trends, and comprehensiveanalysis of market competition factors, combined with the asset group’s condition as of the valuation date, cash flows for the asset group over thenext five years were forecasted.
According to the appraisal results of the Asset Appraisal Report on the Recoverable Amount of the Asset Group Related to Suzhou GreenPowerNew Energy Material Co., Ltd. for Goodwill Impairment Testing Purposes of Yunnan Energy New Material Co., Ltd. (for Financial Reporting)(Report No.: Hu Zhong Ping Bao Zi [2025] No. 0201) issued by Shanghai Zhonghua Asset Appraisal Co., Ltd. engaged by the Company, therecoverable amount of the asset group (including goodwill) was RMB1,176 million, and no goodwill impairment provision was required.
18.
Long-term unamortized expenses
Unit: RMB
| Item | Opening balance | Increase for the period | Amortized amount for the period | Decrease in other amounts | Closing balance |
| Renovation cost | 327,988.80 | 1,846,517.46 | 691,494.66 | 252,000.00 | 1,231,011.60 |
| Software system implementation fee | 120,220.20 | 85,251.69 | 34,968.51 | ||
| Power grid access fee | 26,272.50 | 11,259.84 | 15,012.66 | ||
| Technical service fee | 50,000.00 | 50,000.00 | |||
| Total | 524,481.50 | 1,846,517.46 | 838,006.19 | 252,000.00 | 1,280,992.77 |
Other explanations:
19.
Deferred income tax assets/Deferred income tax liabilities
(1) Deferred income tax assets before offset
Unit: RMB
| Item | Closing balance | Opening balance | ||
| Deductible temporary difference | Deferred income tax assets | Deductible temporary difference | Deferred income tax assets | |
| Asset impairment provision | 1,063,839,230.22 | 162,284,314.81 | 678,621,646.31 | 102,285,613.92 |
| Unrealized profit of internal transaction | 422,444,452.67 | 72,300,918.97 | 322,965,743.09 | 64,272,680.66 |
| Deductible losses | 3,296,761,130.39 | 515,190,751.08 | 569,317,545.40 | 100,878,883.39 |
| Government subsidy | 1,410,310,952.03 | 221,155,547.01 | 980,671,337.01 | 152,902,430.39 |
| Stock incentive | 16,104,459.29 | 2,415,964.22 | 35,142,855.13 | 5,271,428.28 |
| Changes in fair value of other equity instrument investments | 38,000,000.00 | 9,500,000.00 | 21,000,000.00 | 5,250,000.00 |
| Provision for sales rebates | 15,464,691.47 | 2,319,703.72 | 5,256,207.35 | 788,431.10 |
| Others | 37,895,959.39 | 7,091,331.93 | 9,484,913.87 | 1,558,297.17 |
| Total | 6,300,820,875.46 | 992,258,531.74 | 2,622,460,248.16 | 433,207,764.91 |
(2) Deferred income tax liabilities before offset
Unit: RMB
| Item | Closing balance | Opening balance | ||
| Taxable temporary difference | Deferred income tax liabilities | Taxable temporary difference | Deferred income tax liabilities | |
| Appraisal and appreciation of assets in mergers of companies not under common control | 54,932,224.18 | 8,239,833.62 | 64,061,162.33 | 9,609,174.35 |
| Pre-tax deduction of equipment and instruments at one time (Note 1 and 2) | 2,381,107,385.93 | 371,117,097.18 | 1,918,835,132.08 | 297,600,075.77 |
| Others | 17,801,127.89 | 2,670,169.19 | 8,840,787.78 | 1,461,678.25 |
| Total | 2,453,840,738.00 | 382,027,099.99 | 1,991,737,082.19 | 308,670,928.37 |
Note 1: In accordance with the Notice on Corporate Income Tax Policies Regarding Equipment and Appliance Deductions (Cai Shui[2018] No. 54), the Announcement on Extending the Implementation Period of Certain Preferential Tax Policies (Ministry of Finance andState Taxation Administration Announcement [2021] No. 6), and the Announcement on Corporate Income Tax Policies Regarding Equipmentand Appliance Deductions (Ministry of Finance and State Taxation Administration Announcement [2023] No. 37), the Company and itssubsidiaries have elected to fully deduct the cost of newly purchased equipment and instruments at one time with unit value not exceedingRMB5 million during the period from January 1, 2018 to December 31, 2027 when calculating taxable income. This has resulted in taxabletemporary differences and consequently deferred income tax liabilities.Note 2: In accordance with the Announcement on Enhancing Pre-Tax Deductions for Scientific and Technological Innovation (Ministryof Finance, State Taxation Administration, and Ministry of Science and Technology Announcement [2022] No. 28), the Company’ssubsidiaries have fully deducted the cost of newly purchased equipment and instruments at one time during the fourth quarter of 2022 whencalculating taxable income, resulting in taxable temporary differences and consequently deferred income tax liabilities.
(3) Net amount of offset deferred income tax assets or liabilities
Unit: RMB
| Item | Offsetting amount of deferred income tax assets and deferred income tax liabilities at the end of the Reporting Period | Closing balance of deferred income tax assets or liabilities after offset | Offsetting amount of deferred income tax assets and deferred income tax liabilities at the beginning of the Reporting Period | Opening balance of deferred income tax assets or liabilities after offset |
| Deferred income tax assets | 359,762,846.47 | 632,495,685.27 | 338,900.21 | 432,868,864.70 |
| Deferred income tax liabilities | 359,762,846.47 | 22,264,253.52 | 338,900.21 | 308,332,028.16 |
(4) Details of unrecognized deferred income tax assets
Unit: RMB
| Item | Closing balance | Opening balance |
| Deductible temporary differences | 2,053,777.04 | 2,069,144.90 |
| Deductible loss | 108,096,935.27 | 38,261,232.97 |
| Total | 110,150,712.31 | 40,330,377.87 |
(5) Deductible losses for which deferred income tax assets were unrecognized will expire in the following years
Unit: RMB
| Year | Closing amount | Opening amount | Remarks |
| 2026 | 571,908.69 | 155,294.79 | |
| 2027 | 13,040,659.48 | 12,225,377.12 | |
| 2028 | 11,255,602.35 | 25,880,561.06 | |
| 2029 | 14,165,911.37 | ||
| No legal term | 69,062,853.38 | ||
| Total | 108,096,935.27 | 38,261,232.97 |
20.
Other non-current assets
Unit: RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
| Advance payment for project and equipment | 720,594,841.55 | 720,594,841.55 | 1,829,576,771.04 | 1,829,576,771.04 | ||
| Quality guarantee (Note 1) | 1,350,000.00 | 1,350,000.00 | 1,350,000.00 | 1,350,000.00 | ||
| Installment for sale of equipment (Note 2) | 44,219,610.90 | 44,219,610.90 | 32,425,949.76 | 32,425,949.76 | ||
| Advance payment for house and land | 1,139,646,320.70 | 1,139,646,320.70 | 1,121,966,430.21 | 1,121,966,430.21 | ||
| Time deposits | 521,125,355.20 | 521,125,355.20 | 778,802,174.00 | 778,802,174.00 | ||
| Other non-current assets due within one year | -215,940,873.29 | -215,940,873.29 | -618,295,576.83 | -618,295,576.83 | ||
| Total | 2,210,995,255.06 | 2,210,995,255.06 | 3,145,825,748.18 | 3,145,825,748.18 |
Other explanations:
Note 1: Guizhou Haoyiduo Dairy Co., Ltd. signed an agreement with the Company, and the two parties entered into a long-term strategicpartnership. The Company provided Guizhou Haoyiduo Dairy Co., Ltd. with the above money as its quality guarantee. Guizhou HaoyiduoDairy Co., Ltd. promised to purchase no less than 13 million packaging boxes of products from the Company every year, and return the abovemoney after the termination of the partnership. As long as the cooperation relationship is not terminated, the agreement will automaticallycontinue after expiration. During the Reporting Period, Guizhou Haoyiduo Dairy Co., Ltd. has a good cooperation relationship with theCompany, and the annual order quantity to the Company exceeds the agreed quantity in the above agreement. The Company expects that theabove agreement will continue.Note 2: The Company purchases filling machines and auxiliary equipment and sells them to customers by installment sales. The price ofthe equipment shall be paid together with the payment for the Company’s products purchased by customers. Until the appointed time, all thepayments for equipment shall be recovered, invoices shall be issued and the property rights of the equipment shall be transferred to customers.
21.
Assets with restricted ownership or use
Unit: RMB
| Item | Beginning of the period | End of the period | ||||||
| Book balance | Book value | Restriction type | Restriction | Book balance | Book value | Restriction type | Restriction | |
| Monetary funds | 838,743,097.78 | 838,743,097.78 | Pledged | Margin, and account deposits under bank regulation | 1,045,522,070.90 | 1,045,522,070.90 | Pledged, frozen | Bank draft margin, letter of credit margin, letter of guarantee margin, performance bond, foreign exchange margin, bank-controlled account deposits |
| Receivables | 248,473,890.50 | 248,473,890.50 | Pledged | Pledged bank loan | ||||
| Fixed assets | 1,305,145,941.74 | 1,155,206,200.49 | Mortgaged | Mortgaged loan | 581,698,498.88 | 518,129,104.90 | Mortgaged | Mortgaged bank loan |
| Intangible assets | 140,710,834.33 | 130,345,642.47 | Mortgaged | Mortgaged loan | 309,173,107.74 | 288,826,669.43 | Mortgaged | Mortgaged bank loan |
| Construction in progress | 244,204,248.10 | 244,204,248.10 | Mortgaged | Mortgage-backed government subsidy | 92,118,326.54 | 92,118,326.54 | Mortgaged | Mortgaged bank loan |
| Other current assets | 50,178,767.12 | 50,178,767.12 | Pledged | Margin | 251,828,755.71 | 251,828,755.71 | Pledged | Pledged bank loan, bank acceptance bills |
| Other non-current assets | 53,500,694.44 | 53,500,694.44 | Pledged | Pledged bank loan | ||||
| Non-current assets due within one year | 268,759,015.31 | 268,759,015.31 | Pledged | Pledged bank loan, bank acceptance bills | ||||
| Total | 2,578,982,889.07 | 2,418,677,955.96 | 2,851,074,360.02 | 2,767,158,527.73 | ||||
Other explanations: In addition to the items presented in the above table, the Company’s subsidiary Shanghai Energy New MaterialTechnology Co., Ltd. has pledged its 100% equity interest in Suzhou GreenPower New Energy Material Co., Ltd. as collateral for bank borrowings.As a result, the aforementioned equity interest is classified as a restricted asset.22.
Short-term loans
(1) Classification of short-term borrowings
Unit: RMB
| Item | Closing balance | Opening balance |
| Pledged loan | 49,875,000.00 | 644,093,855.11 |
| Guaranteed loan | 7,873,958,503.74 | 6,604,597,126.61 |
| Credit loan | 192,500,000.00 | 37,852,112.49 |
| Undue interest payables | 20,564,458.76 | 4,151,812.06 |
| Total | 8,136,897,962.50 | 7,290,694,906.27 |
Explanations for classification of short-term borrowings:
Pledged loan: the subsidiary Shanghai Energy New Material Technology Co., Ltd. obtained a loan of RMB49,875,000.00 bypledging its own certificate of deposit amounting to RMB50,178,767.12 as collateral. See Note VII-21 “Assets with restrictedownership or use” in this Section for details of pledge.
Guaranteed loan: Loans obtained through guarantees provided by the Company’s ultimate controlling shareholder, the Companyand its subsidiaries. For details, please refer to: Note XIV of this Section “Related parties and related party transactions” - 5. Relatedparty transactions - (3) Related party guarantees.
(2) Status of short-term loans that are past due: None
23.
Notes payable
Unit: RMB
| Type | Closing balance | Opening balance |
| Commercial acceptance bills | 5,969,550.46 | 4,709,188.70 |
| Bank acceptance bills | 508,719,854.16 | 798,224,515.32 |
| Total | 514,689,404.62 | 802,933,704.02 |
24.
Accounts payable
(1) Accounts payable
Unit: RMB
| Item | Closing balance | Opening balance |
| Materials payable | 717,111,406.43 | 680,801,257.32 |
| Engineering equipment payable | 959,748,795.64 | 752,175,443.55 |
| Accessories and spare parts payable | 68,189,620.27 | 54,096,569.19 |
| Transportation fee payable | 61,583,428.05 | 43,961,121.64 |
| Other payable | 203,225,271.16 | 77,275,224.76 |
| Total | 2,009,858,521.55 | 1,608,309,616.46 |
(2) Major accounts payable aged over one year
Unit: RMB
| Item | Closing balance | Reasons for outstanding or carry-over |
| Hubei Qianye Construction Engineering Co., Ltd. | 39,852,710.59 | Not mature |
| Yunnan Yuxi Hengda Interspace Steel Structure Co., Ltd. | 9,798,417.80 | Not mature |
| Yunnan Futong Air Conditioning & Purification Engineering Co., Ltd. | 9,324,518.05 | Not mature |
| Total | 58,975,646.44 |
25.
Other payables
Unit: RMB
| Item | Closing balance | Opening balance |
| Dividends payable | 9,778,239.09 | 95,117,453.54 |
| Other payables | 202,844,830.33 | 149,580,848.79 |
| Total | 212,623,069.42 | 244,698,302.33 |
(1) Dividends payable
Unit: RMBUnit: RMB
(2) Other payables
1) Other payables listed by nature of payment
Unit: RMB
Unit: RMB
| Item | Closing balance | Opening balance |
| Restricted stock repurchase obligations | 135,645,573.37 | 57,284,985.20 |
| Equity acquisition | 42,736,010.00 | 42,736,010.00 |
| Deposits and guarantees | 15,651,753.56 | 26,896,046.27 |
| Withholding employees’ social insurance | 2,431,817.90 | 1,916,544.15 |
| Collection and payment on behalf | 14,000,000.00 | |
| Reimbursement | 2,046,262.01 | 1,105,898.00 |
| Others | 4,333,413.49 | 5,641,365.17 |
| Total | 202,844,830.33 | 149,580,848.79 |
2) Major other payables aged over one year or due
Unit: RMB
Unit: RMB
| Item | Closing balance | Reasons for outstanding or carry-over |
| Gao’an Kewei investment partnership (limited partnership) | 22,380,000.00 | Payment terms not been met |
| DENCOLIMITED | 20,356,010.00 | Payment terms not been met |
| Total | 42,736,010.00 |
26.
Contractual liabilities
Unit: RMB
| Item | Closing balance | Opening balance |
| Advance receivable for goods | 30,176,163.00 | 21,662,658.20 |
| Rebate | 15,464,691.47 | 8,129,313.05 |
| Total | 45,640,854.47 | 29,791,971.25 |
27.
Employee benefits payable
(1) Employee benefits payable
Unit: RMB
| Item | Opening balance | Increase for the period | Decrease for the period | Closing balance |
| I. Short-term remuneration | 84,732,556.37 | 1,380,886,386.07 | 1,379,909,301.37 | 85,709,641.07 |
| II. Retirement pension program-defined contribution plan | 2,956,157.92 | 108,044,617.71 | 107,744,084.49 | 3,256,691.14 |
| III. Termination benefits | 1,553,521.87 | 1,553,521.87 | ||
| Total | 87,688,714.29 | 1,490,484,525.65 | 1,489,206,907.73 | 88,966,332.21 |
(2) Short-term benefits
Unit: RMB
| Item | Opening balance | Increase for the period | Decrease for the period | Closing balance |
| 1. Wage, bonus, allowance and subsidies | 81,050,747.18 | 1,190,757,601.13 | 1,190,686,072.98 | 81,122,275.33 |
| 2. Employee welfare | 77,078,897.06 | 77,078,897.06 |
Item
| Item | Closing balance | Opening balance |
| Common share dividends | 9,778,239.09 | 95,117,453.54 |
| Total | 9,778,239.09 | 95,117,453.54 |
| 3. Social insurance | 1,421,164.23 | 58,542,813.86 | 58,209,722.55 | 1,754,255.54 |
| Including: Medical insurance | 1,333,873.36 | 50,219,714.95 | 49,901,114.68 | 1,652,473.63 |
| Labor injury insurance | 46,730.37 | 4,361,114.58 | 4,359,668.90 | 48,176.05 |
| Maternity insurance premium | 40,560.50 | 2,716,976.95 | 2,703,931.59 | 53,605.86 |
| Supplementary medical insurance | 1,245,007.38 | 1,245,007.38 | ||
| 4. Housing fund | 1,331,958.00 | 47,644,703.64 | 47,235,338.64 | 1,741,323.00 |
| 5. Labor union budget and staff education fund | 928,686.96 | 6,362,269.02 | 6,199,168.78 | 1,091,787.20 |
| 8. Other short-term benefits | 500,101.36 | 500,101.36 | ||
| Total | 84,732,556.37 | 1,380,886,386.07 | 1,379,909,301.37 | 85,709,641.07 |
(3) Defined contribution plans
Unit: RMB
| Item | Opening balance | Increase for the period | Decrease for the period | Closing balance |
| 1. Basic pension | 2,866,575.42 | 104,611,060.42 | 104,319,725.88 | 3,157,909.96 |
| 2. Unemployment insurance | 89,582.50 | 3,433,557.29 | 3,424,358.61 | 98,781.18 |
| Total | 2,956,157.92 | 108,044,617.71 | 107,744,084.49 | 3,256,691.14 |
Other explanations:
28.
Taxes payable
Unit: RMB
| Item | Closing balance | Opening balance |
| VAT | 19,826,033.72 | 27,197,483.43 |
| Corporate income tax | 70,548,724.88 | 125,352,993.96 |
| Personal income tax | 6,300,491.33 | 7,468,828.49 |
| City maintenance and construction tax | 963,296.29 | 1,221,378.93 |
| Property tax | 9,776,242.18 | 13,107,647.84 |
| Land using tax | 3,050,650.02 | 2,402,253.38 |
| Education surtax | 926,425.35 | 997,712.64 |
| Stamp duty | 5,346,531.90 | 2,332,118.04 |
| Others | 163,472.85 | 213,439.40 |
| Total | 116,901,868.52 | 180,293,856.11 |
Other explanations:
29.
Non-current liabilities due within one year
Unit: RMB
| Item | Closing balance | Opening balance |
| Long-term loans due within 1 year | 1,663,741,019.86 | 1,088,108,156.55 |
| Bonds payable due within 1 year | 7,403,847.66 | 6,070,366.96 |
| Lease liabilities due within 1 year | 1,009,605.19 | 1,375,995.60 |
| R&D project subsidy for lithium battery separator | 700,000.00 | |
| Project subsidy for high-safety & high-reliability lithium batteries and high-strength separators for energy electronics applications | 22,000,000.00 | |
| Lithium battery separator project investment funds | 87,000,000.00 | |
| Total | 1,781,854,472.71 | 1,095,554,519.11 |
30.
Other current liabilities
Unit: RMB
| Item | Closing balance | Opening balance |
| Output value-added tax payable | 1,775,714.63 | 2,219,902.48 |
| Endorsement of bank acceptance bill not derecognized | 208,570,048.67 | 181,173,715.43 |
| Endorsement for transfer of supply chain voucher not derecognized | 525,952,344.55 | 6,398,603.21 |
| Total | 736,298,107.85 | 189,792,221.12 |
31.
Long-term borrowings
(1) Long-term borrowings by type
Unit: RMB
| Item | Closing balance | Opening balance |
| Pledged loan | 516,000,000.00 | 636,000,000.00 |
| Mortgaged loan | 1,241,029,140.62 | 1,191,337,067.22 |
| Guaranteed loan | 4,622,089,982.32 | 3,571,102,307.79 |
| Credit loan | 349,000,000.00 | 370,000,000.00 |
| Undue interest payables | 5,651,008.22 | 4,984,599.24 |
| Less: Long-term loans due within 1 year | 1,663,741,019.86 | 1,088,108,156.55 |
| Total | 5,070,029,111.30 | 4,685,315,817.70 |
Description for long-term borrowings by type:
Pledged loans: the subsidiary Shanghai Energy New Material Technology Co., Ltd. will pledge its 100% equity in SuzhouGreenPower New Energy Materials Co., Ltd. to obtain a loan of RMB516,000,000.00.Mortgaged loan: the subsidiary Yunnan Hongta Plastic Co., Ltd., the sub-subsidiaries Zhuhai Energy New Material TechnologyCo., Ltd., Wuxi Energy New Material Technology Co., Ltd., Hubei Energy New Material Technology Co., Ltd., Jiangsu EnergyNew Material Technology Co., Ltd., Chongqing Energy New Material Technology Co., Ltd. obtained a loan ofRMB1,241,029,140.62 by pledging their own fixed assets and intangible assets. See Note VII-21 “Assets with restricted ownershipor use” in this Section for details of pledge.Guaranteed loan: For details of loans obtained through the guarantee provided by actual controllers of the Company, theCompany and its subsidiaries, please refer to “Note XIV Related parties and related party transactions - 5. Related parties and relatedparty transactions – 4-(3). Related party guarantees” in this Section.
32.
Bonds payable
(1) Bonds payable
Unit: RMB
| Item | Closing balance | Opening balance |
| Convertible corporate bonds | 447,655,547.48 | 441,970,853.72 |
| Less: Bonds payable due within one year | -7,403,847.66 | -6,070,366.96 |
| Total | 440,251,699.82 | 435,900,486.76 |
(2) Changes in bonds payable: (excluding preferred shares classified as financial liabilities, perpetual bonds and other financialinstruments)
Unit: RMB
| Name of bond | Par value | Coupon rate | Issue date | Term | Issue size | Opening balance | Issued in current period | Interest provisioned by par value | Amortization of discounts and premiums | Paid in the current period | Shares converted in the current period | Sale-back in the current period | Closing balance | Default or not |
| Convertible corporate bonds of Yunnan Energy | 1,600,000,000.00 | 0.40%-2.00% | February 11, 2020 | 6 years | 1,600,000,000.00 | 435,900,486.76 | 4,538,413.06 | -184,200.00 | -3,000.00 | 440,251,699.82 | No | |||
| Total | — | 1,600,000,000.00 | 435,900,486.76 | 4,538,413.06 | -184,200.00 | -3,000.00 | 440,251,699.82 | —— | ||||||
(3) Explanation on convertible corporate bonds
According to the Rules Governing the Listing of Stocks on the Shenzhen Stock Exchange and the Prospectus of Yunnan EnergyNew Material Co., Ltd. on the Public Issuance of Convertible Corporate Bonds, the debt and share conversion period of YunnanEnergy commences from the first trading day in the six months after the end of the issuance to the maturity date of the convertiblecorporate bonds, that is, from August 17, 2020 to February 11, 2026, and the initial conversion price is RMB64.61 per share.
On May 21, 2020, according to the Announcement on the Adjustment of the Conversion Price of Convertible Corporate Bonds,as the Company implements the 2019 annual equity distribution plan, the conversion price of debts and shares of Yunnan Energy isadjusted from RMB64.61 per share to RMB64.49 per share.
On September 3, 2020, according to the Announcement on the Adjustment of the Conversion Price of Convertible CorporateBonds, as the Company adopts the non-public issuance of new shares, the conversion price of debts and shares of Yunnan Energy isadjusted to RMB65.09 per share.
As at September 28, 2020, in accordance with the Announcement on the Non-adjustment of Convertible Corporate BondConversion Price for the Repurchase and Cancellation of Some Restricted Shares, the Company repurchased and cancelled theCompany’s restricted shares held by the four incentive recipients because the personal assessment grade of the four incentiverecipients was “good” when the Company’s 2017 Restricted Stock Incentive Plan was unlocked for the third time. Due to the smallproportion of the repurchased and cancelled shares in the Company’s total share capital, after the repurchase and cancellation, theconversion price of debts and shares of Yunnan Energy remained unchanged at RMB65.09 per share.On April 30, 2021, according to the Announcement on the Adjustment of the Conversion Price of Convertible Corporate Bonds,as the Company implements the 2020 annual equity distribution plan, the conversion price of debts and shares of Yunnan Energy isadjusted to RMB64.92 per share.On May 16, 2022, according to the Announcement on the Adjustment of the Conversion Price of Convertible Corporate Bonds,as the Company Implemented the 2021 annual equity allocation plan, the conversion price of debts and shares of Yunnan Energy isadjusted to RMB64.62 per share.On June 20, 2023, according to the Announcement on the Adjustment of the Conversion Price of Convertible Corporate Bonds,as the Company implemented non-public issuance of Renminbi ordinary shares, the conversion price of debts and shares of YunnanEnergy is adjusted to RMB66.64 per share.
On July 20, 2023, according to the Announcement on the Non-adjustment of Convertible Corporate Bond Conversion Price forthe Repurchase and Cancellation of Some Restricted Shares, the Company repurchased and cancelled the Company’s certainrestricted shares held by 2022 Stock Options and Restricted Stock Incentive Plan, the conversion price of debts and shares of YunnanEnergy is adjusted to RMB64.64 per share.
On August 21, 2023, according to the Announcement on the Adjustment of the Conversion Price of Convertible Corporate Bonds,as the Company implements the 2022 annual equity distribution plan, the conversion price of debts and shares of Yunnan Energy isadjusted to RMB64.46 per share.
On September 21, 2023, according to the Announcement on the Adjustment of the Conversion Price of Convertible CorporateBonds, as the Company implements the 2023 semi-annual equity distribution plan, the conversion price of debts and shares ofYunnan Energy is adjusted to RMB66.26 per share.
On June 3, 2024, according to the Announcement on the Adjustment of the Conversion Price of Convertible Corporate Bonds,as the Company implements the 2023 annual equity distribution plan, the conversion price of debts and shares of Yunnan Energy isadjusted to RMB64.73 per share.
On June 6, 2024, according to the Announcement on the Non-adjustment of Convertible Corporate Bond Conversion Price forthe Repurchase and Cancellation of Some Restricted Shares, the conversion price of debts and shares of Yunnan Energy remainedunchanged at RMB64.73 per share, due to the Company’s repurchase and cancellation of restricted shares.
On November 6, 2024, according to the Announcement on the Adjustment of the Conversion Price of Convertible CorporateBonds, as the Company implements the repurchase and cancellation of shares, the conversion price of debts and shares of YunnanEnergy was adjusted to RMB64.92 per share.
33.
Lease liabilities
Unit: RMB
| Item | Closing balance | Opening balance |
| Lease payments | 1,028,571.48 | 1,605,328.20 |
| Less: Unrecognized financing expenses | 18,966.29 | 46,668.72 |
| Less: Lease liabilities due within one year | 1,009,605.19 | 1,375,995.60 |
| Total | 182,663.88 |
34.
Long-term payables
Unit: RMB
| Item | Closing balance | Opening balance |
| Long-term payables | 172,792,328.77 | |
| Total | 172,792,328.77 |
(1) Long-term payables by nature of the amount
Unit: RMB
| Item | Closing balance | Opening balance |
| Equity repurchase obligation | 172,792,328.77 |
35.
Deferred income
Unit: RMB
| Item | Opening balance | Increase for the period | Decrease for the period | Closing balance | Reason |
| Government subsidies related to assets | 962,614,159.29 | 542,975,123.23 | 138,422,960.79 | 1,367,166,321.73 | See Note XI of this Section |
| Government subsidies related to income | 659,380.50 | 344,024.63 | 315,355.87 | See Note XI of this Section | |
| VAT deduction | 31,701,456.17 | 66,457,515.82 | 82,873,868.52 | 15,285,103.47 | |
| Total | 994,974,995.96 | 609,432,639.05 | 221,640,853.94 | 1,382,766,781.07 | -- |
36.
Other non-current liabilities
Unit: RMB
| Item | Closing balance | Opening balance |
| Government support for lithium battery separator project (Note 1) | 455,517,694.55 | |
| Investment in lithium battery separator project (Note 2) | 86,000,000.00 | |
| R&D project subsidy for lithium battery separator | 700,000.00 | |
| Project subsidy for high-safety & high-reliability lithium batteries and high-strength separators for energy electronics applications (Note 3) | 22,000,000.00 | |
| Investment subsidy for aseptic packaging production project (Note 4) | 18,600,000.00 | |
| Investment subsidy for the Hungarian factory (Note 5) | 244,204,248.10 | |
| Total | 262,804,248.10 | 564,217,694.55 |
Other explanations:
Note 1: Jiangxi Tonry New Energy Technology Development Co., Ltd., a third-level subsidiary of the Company, has built aproduction base of lithium-ion separator in Gao’an City, Yichun City, Jiangxi Province, with policy support from the localgovernment. According to the relevant provisions of the investment agreement, the government borrows money in advance to payfor the purchase of equipment. When each lithium-ion film production line is put into use, the equipment subsidy shall be recognizedin batches according to the corresponding proportion of the value of the imported equipment of the production line that has been putinto operation.Note 2: Chongqing Energy New Material Technology Co., Ltd., a third-level subsidiary of the Company, has built a productionline base of high-performance lithium-ion battery micropore separator in Changshou Economic and Technological DevelopmentZone, Chongqing City, with policy support from the local government. According to the relevant provisions of the investmentagreement, the government grants infrastructure construction industry development funds in the form of a government subsidy, andafter the commitment of the investment agreement is fulfilled, the subsidy shall be recognized in batches as the plant and equipmentsubsidy according to the corresponding proportion of the value of the plant and equipment.
Note 3: Chongqing Energy Newmi Technological Co., Ltd., Chongqing Energy New Material Technology Co., Ltd., and SuzhouGreenPower New Energy Materials Co., Ltd., which are the third-level subsidiaries of the Company, constructed the joint venturewith Suzhou RS Technology Co., Ltd. and Hubei Eve Power Co., Ltd., to jointly participate in implementation of the key tasksrecommended by the Chongqing Economic and Information Technology Commission for high-safety & high-reliability lithiumbatteries and high-strength separators for energy electronics applications. According to the project contract, the ElectronicInformation Department of the Ministry of Industry and Information Technology conducts assessments based on the annual progressand achievement of goals of the consortium, and issues funds according to the financial fund plan. The proposed approval of fiscalfunds shall not exceed 30% of the total project investment, and the amount of fiscal funds to be disbursed shall be determined basedon the final acceptance assessment.
Note 4: Hongchuang Packaging (Anhui) Co., Ltd., a third-level subsidiary of the Company, constructed the Hongchuang asepticpackaging production base project in Ma An Shan City, Anhui Province, with policy support from the local government. Accordingto the relevant provisions of the investment agreement, an initial government subsidy is provided for fixed asset investment. Afterthe commitments in the investment agreement are fulfilled, the project company will receive fixed asset investment subsidies inbatches.
Note 5: SEMCORP Hungary Kft., a third-level subsidiary of the Company, has built a factory in Hungary, with policy supportfrom the local government. An initial subsidy for the factory investment is provided by the government in the form of a grant.
37.
Share capital
Unit: RMB
| Opening balance | Increase or decrease (+, -) | Closing balance | |||||
| New issues | Bonus issuance | Conversion of reserve into share | Others | Subtotal | |||
| Total amount of shares | 977,754,217.00 | 2,791.00 | -6,477,852.00 | -6,475,061.00 | 971,279,156.00 |
Other explanations:
1. See “I. Basic information of the Company” of this Section. The convertible bonds publicly issued by the Company enteredthe share transfer period on August 17, 2020. As of December 31, 2024, the Company’s share capital increased by RMB2,791.00due to the share transfer.
2. See “I. Basic information of the Company” of this Section. The Company repurchased and cancelled the restricted shares ofRMB572,755.00.
3. See “I. Basic information of the Company” of this Section. The Company repurchased and cancelled the stocks ofRMB5,905,097.00.38.
Other equity instruments
(1) Outstanding preferred shares, perpetual bonds and other financial instruments as at the end of the Reporting Period
Under the Approval of the Issuance of Convertible Corporate Bonds by Yunnan Energy New Material Co., Ltd. (Zheng Jian XuKe [2019] No. 2701) issued by the China Securities Regulatory Commission, the Company publicly issued 16 million convertiblecorporate bonds on February 11, 2020, which was calculated as the value of the debt instruments of the convertible corporate bondswas RMB1,408,703,126.08, and the value of the equity instruments was RMB177,419,515.43 by referring to the interest rates of thecredit bonds of similar enterprises with AA credit rating and similar maturities in the market and deducting the bond issuance expenses.
(2) Table of changes in outstanding preferred shares, perpetual bonds and other financial instruments as at the end of theReporting Period
Unit: RMB
| Outstanding financial instruments | At the beginning of the period | Increase for the period | Decrease for the period | At the end of the period | ||||
| Number of shares | Book value | Number of shares | Book value | Number of shares | Book value | Number of shares | Book value | |
| Equity instrument of convertible corporate bonds | 50,242,778.32 | 20,758.07 | 50,222,020.25 | |||||
| Total | 50,242,778.32 | 20,758.07 | 50,222,020.25 | |||||
(3) Explanations on changes in other financial instruments and reasons thereof as at the end of the Reporting Period, and
basis for related accounting treatmentIn 2024, the Company’s “Energy Convertible Bonds” decreased by RMB187,200.00 (1,872.00 bonds) due to the transfer of
2,791.00 shares and reduced the other equity instrument by RMB20,758.07.39.
Capital reserve
Unit: RMB
| Item | Opening balance | Increase for the period | Decrease for the period | Closing balance |
| Capital premium (capital stock premium) | 14,963,863,058.16 | 202,223.94 | 455,551,281.93 | 14,508,514,000.17 |
| Other capital reserve | 107,091,049.60 | 31,983,522.94 | 50,699,435.55 | 88,375,136.99 |
| Total | 15,070,954,107.76 | 32,185,746.88 | 506,250,717.48 | 14,596,889,137.16 |
Other explanations, including changes and reasons thereof as at the end of the Reporting Period:
1. The capital premium (capital stock premium) increased by RMB202,223.94 for the period, mainly because:
The convertible bonds publicly issued by the Company entered the share transfer period on August 17, 2020. The Company’s
capital reserve increased by RMB202,223.94 due to the share transfer.
2. The capital premium (capital stock premium) decreased by RMB455,551,281.93 for the period, mainly because:
(1) The change in the shareholding ratio of the subsidiary Yunnan Hongchuang Packaging Co., Ltd. resulted in a decrease incapital reserve by RMB1,377,915.21.
(2) The repurchase and cancellation of restricted shares by the Company resulted in a decrease in capital reserve byRMB33,724,585.30.
(3) The issuance of new restricted shares by the Company resulted in a decrease in capital reserve by RMB226,110,698.92.
(4) The repurchase and cancellation of shares by the Company resulted in a decrease in capital reserve by RMB194,092,156.55.
(5) The capital reduction by the minority shareholders of the Company’s sub-subsidiary, Jiangxi Enpo New Materials Co., Ltd.,resulted in a decrease in capital reserve by RMB245,925.95.
3. The increase of other capital reserves was RMB15,747,813.37 for the period, mainly because:
(1) The Company implemented stock incentive for employees and recognized related expenses for share-based payments,resulting in an increase of RMB15,377,103.56 in other capital reserves.
(2) The subsidiary Yunnan Hongchuang Packaging Co., Ltd. implemented stock incentive for employees and recognized relatedexpenses for share-based payments, resulting in an increase of RMB370,709.80 in other capital reserves.
4. The decrease of other capital reserves was RMB34,463,725.98 for the period, mainly because the Company repurchased therestricted shares, resulting in a decrease of RMB34,463,725.98 in other capital reserves.
40.
Treasury stock
Unit: RMB
| Item | Opening balance | Increase for the period | Decrease for the period | Closing balance |
| Repurchase and cancellation | 199,997,253.55 | 199,997,253.55 | ||
| Equity incentive repurchase | 549,976,686.75 | 349,904,529.36 | 200,072,157.39 | |
| Restricted share repurchase obligation | 57,284,985.20 | 123,793,830.44 | 43,211,870.66 | 137,866,944.98 |
| Total | 607,261,671.95 | 323,791,083.99 | 593,113,653.57 | 337,939,102.37 |
41.
Other comprehensive income
Unit: RMB
| Amount for the current period | ||||||||
| Item | Opening balance | Amount incurred before the income tax in the current period | Less: Amount included into other comprehensive income in the prior period and transferred into the profit and loss in the current period | Less: Amount included into other comprehensive income in the prior period and transferred into the retained earnings in the current period | Less: Income tax expense | After-tax amount attributable to the parent company | After-tax amount attributable to minority shareholders | Closing balance |
| I. Other comprehensive income that cannot be reclassified subsequently to profit or loss | -15,750,000.00 | -17,000,000.00 | -4,250,000.00 | -12,750,000.00 | -28,500,000.00 | |||
| Changes in fair value of other equity instrument investments | -15,750,000.00 | -17,000,000.00 | -4,250,000.00 | -12,750,000.00 | -28,500,000.00 | |||
| II. Other comprehensive income that will be reclassified subsequently to profit or loss | 105,661,398.03 | -183,743,662.97 | -174,960,715.88 | -8,782,947.09 | -69,299,317.85 | |||
| Exchange differences from translation of statements denominated in foreign currencies | 105,661,398.03 | -183,743,662.97 | -174,960,715.88 | -8,782,947.09 | -69,299,317.85 | |||
| Total other comprehensive income | 89,911,398.03 | -200,743,662.97 | -4,250,000.00 | -187,710,715.88 | -8,782,947.09 | -97,799,317.85 | ||
42.
Surplus reserve
Unit: RMB
| Item | Opening balance | Increase for the period | Decrease for the period | Closing balance |
| Statutory surplus reserve | 376,444,440.62 | 22,791,931.34 | 399,236,371.96 | |
| Reserve fund | 21,153,681.64 | 21,153,681.64 | ||
| Enterprise development fund | 1,416,680.73 | 1,416,680.73 | ||
| Total | 399,014,802.99 | 22,791,931.34 | 421,806,734.33 |
Explanations on surplus reserve, including explanation about the reason of the change: The increase in surplus reserve for the yearwas due to the provision of 10% of the net profit of the parent company for the year.
43.
Undistributed profit
Unit: RMB
| Item | Current period | Previous period |
| Undistributed profit before adjustments at the end of the prior period | 10,945,879,862.09 | 9,000,475,751.88 |
| Undistributed profit adjusted at the beginning of the period | 10,945,879,862.09 | 9,000,475,751.88 |
| Add: Net profit attributable to owners of parent company in the current period | -556,317,501.09 | 2,526,688,570.92 |
| Less: Withdrawal of statutory surplus reserve | 22,791,931.34 | 207,369,959.40 |
| Common share dividends payable | 1,499,999,502.12 | 373,914,501.31 |
| Undistributed profits at the end of the period | 8,866,770,927.54 | 10,945,879,862.09 |
44． Operating income and operating cost
Unit: RMB
| Item | Amount for the current period | Amount for the previous period | ||
| Income | cost | Income | Cost | |
| Main businesses | 9,815,794,907.87 | 8,976,180,560.42 | 11,749,728,885.23 | 7,486,113,707.42 |
| Other businesses | 347,860,885.83 | 62,565,490.56 | 292,500,904.07 | 49,109,748.92 |
| Total | 10,163,655,793.70 | 9,038,746,050.98 | 12,042,229,789.30 | 7,535,223,456.34 |
Whether the lower of the audited net profit before and after deduction of non-recurring gains or losses is negative:
?Yes ?No
| Item | Current year | Deduction details | Previous year | Deduction details |
| Operating income amount | 10,163,655,793.70 | -- | 12,042,229,789.30 | -- |
| Total amount of deductions from operating income | 347,860,885.83 | Mainly material sales and waste material sales | 292,500,904.07 | Mainly material sales and waste material sales |
| Percentage of the total amount of deductions from operating income in the operating income | 3.42% | 2.43% | ||
| I. Income from business unrelated to the main businesses | ||||
| 1. Income from other businesses than normal operation, such as income realized by leasing fixed assets, intangible assets, packaging materials, sales of materials, exchange between non-monetary assets and materials, operation | 347,860,885.83 | Mainly material sales and waste material sales | 292,500,904.07 | Mainly material sales and waste material sales |
| of entrusted management business, as well as income included in income from main businesses but actually income other than income from the normal operation of the listed company. | ||||
| Subtotal of income from business unrelated to the main businesses | 347,860,885.83 | -- | 292,500,904.07 | -- |
| II. Income with no commercial nature | ||||
| Subtotal of income with no commercial nature | 0.00 | -- | 0.00 | -- |
| Amount of operating income after deductions | 9,815,794,907.87 | -- | 11,749,728,885.23 | -- |
Breakdown information of operating income and operating cost:
Unit: RMB
| Contract category | Segment 1 | Total | ||
| Operating income | Operating cost | Operating income | Operating cost | |
| Business type | 9,815,794,907.87 | 8,976,180,560.42 | 9,815,794,907.87 | 8,976,180,560.42 |
| Including: | ||||
| Film products | 8,820,269,726.46 | 8,138,634,785.33 | 8,820,269,726.46 | 8,138,634,785.33 |
| Cigarette labels | 14,865,512.42 | 21,424,360.12 | 14,865,512.42 | 21,424,360.12 |
| Aseptic packaging | 865,382,993.75 | 662,835,868.81 | 865,382,993.75 | 662,835,868.81 |
| Specialty paper | 75,937,714.53 | 65,167,589.32 | 75,937,714.53 | 65,167,589.32 |
| Other products | 39,338,960.71 | 88,117,956.84 | 39,338,960.71 | 88,117,956.84 |
| By business region | 9,815,794,907.87 | 8,976,180,560.42 | 9,815,794,907.87 | 8,976,180,560.42 |
| Including: | ||||
| Southwest China | 1,311,006,672.90 | 1,186,202,985.18 | 1,311,006,672.90 | 1,186,202,985.18 |
| East China | 3,369,474,416.37 | 3,471,310,224.24 | 3,369,474,416.37 | 3,471,310,224.24 |
| North China | 182,419,353.00 | 139,755,440.51 | 182,419,353.00 | 139,755,440.51 |
| Southcentral China | 2,702,637,349.12 | 2,789,772,430.68 | 2,702,637,349.12 | 2,789,772,430.68 |
| Northwest China | 23,338,560.04 | 21,744,618.99 | 23,338,560.04 | 21,744,618.99 |
| Northeast China | 23,857,599.47 | 19,647,713.07 | 23,857,599.47 | 19,647,713.07 |
| Overseas region | 2,203,060,956.97 | 1,347,747,147.75 | 2,203,060,956.97 | 1,347,747,147.75 |
| Total | 9,815,794,907.87 | 8,976,180,560.42 | 9,815,794,907.87 | 8,976,180,560.42 |
45. Taxes and surcharges
Unit: RMB
| Item | Amount for current period | Amount for previous period |
| City maintenance and construction tax | 12,061,643.77 | 11,959,666.52 |
| Education surcharge | 10,823,595.22 | 9,228,982.47 |
| Property tax | 44,807,551.79 | 32,927,258.96 |
| Land using tax | 14,868,310.83 | 11,181,669.21 |
| Vehicle and vessel usage tax | 10,451.71 | 38,704.59 |
| Stamp duty | 13,134,014.58 | 8,354,706.02 |
| Others | 566,911.32 | 1,074,092.67 |
| Total | 96,272,479.22 | 74,765,080.44 |
46．Administrative expenses
Unit: RMB
| Item | Amount for current period | Amount for previous period |
| Employee compensation | 280,348,818.55 | 206,470,581.73 |
| Share-based payment | -13,025,775.09 | 12,760,449.61 |
| Depreciation and amortization | 88,583,836.72 | 54,578,336.94 |
| Agencies | 138,290,456.03 | 27,679,857.67 |
| Maintenance costs | 5,630,388.12 | 5,663,215.76 |
| Office expense | 10,720,736.92 | 9,921,970.42 |
| Travel expense | 8,597,919.45 | 6,423,228.89 |
| Entertainment expense | 4,950,886.73 | 7,546,211.37 |
| Environmental protection fee | 18,650,827.87 | 14,810,244.45 |
| Others | 57,416,842.84 | 37,561,391.88 |
| Total | 600,164,938.14 | 383,415,488.72 |
47. Selling expense
Unit: RMB
| Item | Amount for current period | Amount for previous period |
| Employee compensation | 31,752,574.37 | 28,291,192.38 |
| Sales agency expense | 75,057,202.88 | 32,042,254.73 |
| Depreciation and amortization | 10,969,864.76 | 10,385,360.44 |
| Entertainment expense | 7,380,162.90 | 5,312,208.11 |
| Travel expense | 4,788,870.86 | 4,564,811.36 |
| Share-based payment | 1,618,519.39 | 590,797.55 |
| Others | 13,696,212.10 | 8,152,109.88 |
| Total | 145,263,407.26 | 89,338,734.45 |
48. R&D expenses
Unit: RMB
| Item | Amount for current period | Amount for previous period |
| Material costs | 212,097,316.60 | 345,485,094.08 |
| Employee compensation | 271,854,330.56 | 214,976,253.76 |
| Depreciation and amortization | 56,020,419.29 | 41,886,506.67 |
| Energy consumption costs | 80,684,132.22 | 63,170,087.39 |
| Others | 42,186,981.02 | 61,963,059.77 |
| Total | 662,843,179.69 | 727,481,001.67 |
49. Financial expenses
Unit: RMB
| Item | Amount for current period | Amount for previous period |
| Interest expenses | 353,090,934.03 | 376,997,402.81 |
| Interest income | -61,700,514.83 | -84,200,436.11 |
| Net exchange loss | 15,310,920.82 | -62,517,076.68 |
| Bank charges | 7,562,273.87 | 8,359,787.06 |
| Total | 314,263,613.89 | 238,639,677.08 |
Other explanations: The capitalized interest amount was included in the inventory and construction in progress. The capitalizationrate used for calculating and determining the capitalized borrowing expense amount was 2.40%-3.33% (compared to 3.05%-4.47%
used in the previous period)
50. Other income
Unit: RMB
| Sources of other income | Amount for current period | Amount for previous period |
| Government subsidy | 221,599,426.46 | 170,294,191.72 |
| Personal income tax withholding fee | 461,445.22 | 589,416.97 |
| Additional deduction of input tax | 83,034,083.97 | 36,168,201.97 |
| Tax incentives for independent entrepreneurship | 944,871.26 | 2,068,401.09 |
| Total | 306,039,826.91 | 209,120,211.75 |
Other explanations: Government subsidy is detailed in Note XI – “Government subsidy” under this Section.
51. Investment income
Unit: RMB
| Item | Amount for current period | Amount for previous period |
| Gain from long-term equity investments under the equity method | 1,347,859.55 | 1,351,086.12 |
| Investment income from disposal of long-term equity investments | -59,743.89 | |
| Investment income from disposal of financial assets held for trading | -15,436,640.64 | 7,906,094.29 |
| Proceeds from wealth management products | 27,410,362.50 | 29,064,274.85 |
| Investment income from derecognition of financial assets at amortized cost | -13,173,229.23 | -21,537,307.12 |
| Investment income from disposal of financial assets at amortized cost through the current profits or losses | 1,324,200.00 | |
| Total | 1,412,808.29 | 16,784,148.14 |
Other explanations:
52. Credit impairment losses
Unit: RMB
| Item | Amount for current period | Amount for previous period |
| Bad debt losses on notes receivable | 6,124,630.20 | 9,002,433.59 |
| Bad debt losses on accounts receivable | 1,256,441.23 | -12,674,580.15 |
| Bad debt losses on other receivables | -14,288.61 | -200,364.05 |
| Total | 7,366,782.82 | -3,872,510.61 |
53. Asset impairment losses
Unit: RMB
| Item | Amount for current period | Amount for previous period |
| I. Inventory depreciation losses and contract performance cost impairment losses | -456,866,962.99 | -186,376,180.23 |
| VI. Construction in progress impairment losses | -4,229,530.67 | |
| X. Goodwill impairment losses | -1,125,126.29 | |
| Total | -462,221,619.95 | -186,376,180.23 |
54. Gains on disposal of assets
Unit: RMB
| Source | Amount for current period | Amount for previous period |
| Gains or losses from disposal of fixed assets not classified as those held for sale, construction in progress, productive bio-assets and intangible assets | 2,755,562.94 | 204,866.12 |
| Including: Fixed assets | 2,755,562.94 | 204,866.12 |
| Total | 2,755,562.94 | 204,866.12 |
55. Non-operating income
Unit: RMB
| Item | Amount for current period | Amount for previous period | Amount of non-recurring gain or loss included in the current period |
| Accepting donations | 52,000.00 | 26,000.00 | 52,000.00 |
| Default compensation receipt | 719,483.46 | 354,106.48 | 719,483.46 |
| Payments that do not need to be made upon approval | 1,492,605.45 | 1,019,939.10 | 1,492,605.45 |
| Others | 3,209,157.05 | 1,116,185.56 | 3,209,157.05 |
| Total | 5,473,245.96 | 2,516,231.14 | 5,473,245.96 |
56. Non-operating expenses
Unit: RMB
| Item | Amount for current period | Amount for previous period | Amount of non-recurring gain or loss included in the current period |
| Donation | 843,660.42 | 645,413.15 | 843,660.42 |
| Abandonment losses of non-current assets | 3,332,501.62 | 2,840,110.13 | 3,332,501.62 |
| Others | 7,554,227.95 | 1,915,066.99 | 7,554,227.95 |
| Total | 11,730,389.99 | 5,400,590.27 | 11,730,389.99 |
57. Income tax expense
(1) Table of income tax expenses
Unit: RMB
| Item | Amount for current period | Amount for previous period |
| Current income tax expenses | 296,309,291.77 | 416,385,943.32 |
| Deferred income tax expenses | -481,213,791.10 | -40,257,819.24 |
| Total | -184,904,499.33 | 376,128,124.08 |
(2) Adjustment process of accounting profit and income tax expense
Unit: RMB
| Item | Amount for current period |
| Total profit | -844,801,658.50 |
| Income tax expenses calculated based on the statutory/applicable tax rates | -211,230,629.08 |
| Impact of different tax rates applied to subsidiaries | 109,543,708.03 |
| Impact of adjusting income tax in previous periods | 15,941,931.86 |
| Impact of non-deductible cost, expense and loss | 2,910,363.32 |
| Impact of the use of the deductible losses of the deferred income tax assets not recognized in the previous periods | -888,103.77 |
| Impact of deductible temporary differences or deductible losses of the deferred income tax assets not recognized in the current period | 5,039,897.43 |
| R&D expenses plus deduction | -101,035,756.45 |
| Allowed credit for investment in special equipment | -1,049,941.37 |
| Changes in the balance of deferred tax assets/liabilities at the beginning of the period from tax rate adjustments | -4,946,937.79 |
| Others | 810,968.49 |
| Income tax expenses | -184,904,499.33 |
Other explanations:
58. Other comprehensive income
For details, please see Note VII-41. “Other comprehensive income” under this Section.
59. Items of cash flow statement
(1) Cash receipts related to operating activities
Other cash receipts related to operating activities
Unit: RMB
| Item | Amount for current period | Amount for previous period |
| Interest income | 60,737,542.17 | 83,263,325.15 |
| Subsidy income | 434,555,563.04 | 332,690,039.01 |
| Recovered deposit | 32,336,723.67 | 23,568,900.61 |
| Petty cash receipts | 1,164,957.00 | 1,439,058.27 |
| Other accounts current | 1,105,574.42 | 16,292,885.44 |
| Income from penalty and liquidated damages | 719,483.46 | |
| Others | 3,261,157.05 | 1,496,292.04 |
| Total | 533,881,000.81 | 458,750,500.52 |
Description of other cash receipts related to operating activities:
Other cash payments related to operating activities
Unit: RMB
| Item | Amount for current period | Amount for previous period |
| Deposit payment | 171,384,771.65 | 252,595,453.94 |
| Payments for other accounts current | 15,886,246.40 | 2,381,661.10 |
| Administrative expenses and R&D expenses | 357,674,317.95 | 219,285,376.85 |
| Operating expenses | 96,576,091.88 | 49,819,589.40 |
| Service charge | 7,562,273.87 | 8,359,787.06 |
| Penalty expenditure | 6,197,090.59 | |
| Donation expenditure | 843,660.42 | 645,413.15 |
| Petty cash payments | 414,124.58 | 2,612,486.97 |
| Others | 1,357,137.35 | 1,915,066.99 |
| Total | 657,895,714.69 | 537,614,835.46 |
Description of other cash payments related to operating activities:
(2) Cash related to investment activities
Other cash payments related to investment activities
Unit: RMB
| Item | Amount for current period | Amount for previous period |
| Deposit for letter of credit and bill | 24,857,122.38 | 40,991,765.29 |
| Loss on foreign exchange locking | 20,306,695.04 | |
| Total | 45,163,817.42 | 40,991,765.29 |
(3) Cash related to financing activities
Other cash receipts related to financing activities
Unit: RMB
| Item | Amount for current period | Amount for previous period |
| Fund investment receipts | 160,000,000.00 | |
| Total | 160,000,000.00 | 0.00 |
Other cash payments related to financing activities
Unit: RMB
| Item | Amount for current period | Amount for previous period |
| Forfaiting business deposit | 672,587,862.20 | 777,800,000.00 |
| Lease payment | 1,601,902.98 | 1,375,995.60 |
| Share repurchase | 199,997,253.55 | 549,976,686.75 |
| Restricted stock repurchase | 36,518,711.91 | 5,732,126.20 |
| Total | 910,705,730.64 | 1,334,884,808.55 |
Changes in liabilities arising from financing activities?Applicable □Not applicable
Unit: RMB
| Item | Opening balance | Increase for the period | Decrease for the period | Closing balance | ||
| Cash movements | Non-cash movements | Cash movements | Non-cash movements | |||
| Short-term borrowings | 7,290,694,906.27 | 11,417,182,353.68 | 151,827,721.32 | 9,635,313,700.49 | 1,087,493,318.28 | 8,136,897,962.50 |
| Long-term borrowings | 5,773,423,974.25 | 2,314,504,342.00 | 192,938,704.00 | 1,547,096,889.09 | 6,733,770,131.16 | |
| Bonds payable | 441,970,853.72 | 12,669,879.06 | 6,796,021.50 | 189,163.80 | 447,655,547.48 | |
| Long-term accounts payable | 160,000,000.00 | 12,792,328.77 | 172,792,328.77 | |||
| Lease liabilities | 1,558,659.48 | 1,614,199.80 | 1,601,902.98 | 561,351.11 | 1,009,605.19 | |
| Total | 13,507,648,393.72 | 13,891,686,695.68 | 371,842,832.95 | 11,190,808,514.06 | 1,088,243,833.19 | 15,492,125,575.10 |
60. Supplementary information of cashflow statement
(1) Supplementary information of cash flow statement
Unit: RMB
| Supplementary information | Amount for the current period | Amount for the previous period |
| 1. Reconciliation of net profit to cash flows from operating activities | ||
| Net profit | -659,897,159.17 | 2,650,214,402.56 |
| Add: Provision of impairment of assets | 462,221,619.95 | 186,376,180.23 |
| Provision for credit impairment | -7,366,782.82 | 3,872,510.61 |
| Depreciation of fixed assets, depreciation of investment real estate, depreciation of oil and gas assets, and depreciation of productive biological assets | 1,761,236,323.30 | 1,448,870,122.29 |
| Depreciation of right-of-use assets | 1,618,716.33 | 1,539,070.83 |
| Amortization of intangible assets | 32,270,899.40 | 28,503,276.98 |
| Amortization of long-term deferred expenses | 1,090,006.19 | 793,491.24 |
| Losses from disposal of fixed assets, intangible assets, and other long-term assets (gain is indicated with “-”) | -2,755,562.94 | -204,866.12 |
| Losses from scrapping of fixed assets (gain is indicated with “-”) | 3,332,501.62 | 2,840,110.13 |
| Losses from change of fair value (gain is indicated with “-”) | ||
| Financial expenses (gain is indicated with “-”) | 387,091,376.86 | 332,671,324.28 |
| Investment losses (gain is indicated with “-”) | -1,412,808.29 | -16,784,148.14 |
| Decrease in deferred income tax assets (increase is indicated with “-”) | -199,626,820.57 | -117,330,364.97 |
| Increase in deferred income tax liabilities (decrease is indicated with “-”) | -281,817,774.64 | 71,572,545.73 |
| Decrease in inventory (increase is indicated with “-”) | -419,334,904.17 | -723,444,795.06 |
| Decrease in operating receivables (increase is indicated with “-”) | -1,008,250,349.46 | -2,526,548,835.52 |
| Increase in operating payables (decrease is indicated with “-”) | 1,110,332,472.51 | 1,300,453,267.13 |
| Others | -20,482,699.00 | 24,059,967.12 |
| Net cash flows from operating activities | 1,158,249,055.10 | 2,667,453,259.32 |
| 2. Significant investment and financing activities not involving cash receipts and payments | ||
| Conversion of debt into capital | ||
| 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 | 1,733,460,483.14 | 2,789,034,001.85 |
| Less: Opening balance of cash | 2,789,034,001.85 | 2,972,056,126.01 |
| Add: Closing balance of cash equivalents | ||
| Less: Opening balance of cash equivalents | ||
| Net increase in cash and cash equivalents | -1,055,573,518.71 | -183,022,124.16 |
Explanations: The bank acceptance bills received by the Company for sales of goods were endorsed and transferred at an amount ofRMB3,752,688,284.64.
(2) Composition of cash and cash equivalents
Unit: RMB
| Item | Closing balance | Opening balance |
| I. Cash | 1,733,460,483.14 | 2,789,034,001.85 |
| Including: Cash on hand | 92,218.87 | 53,243.07 |
| Cash at bank that can be readily drawn on demand | 1,733,368,264.27 | 2,788,980,758.78 |
| III. Closing balance of the cash and cash equivalents | 1,733,460,483.14 | 2,789,034,001.85 |
(3) Monetary funds not included in the cash and cash equivalents
Unit: RMB
| Item | Amount for the current period | Amount for the previous period | Reason for it not to be included in the cash and cash equivalents |
| Monetary funds | 1,937,438.61 | 974,465.95 | Interest receivable not due |
| Other monetary funds | 838,743,097.78 | 1,045,522,070.90 | Restricted |
| Total | 840,680,536.39 | 1,046,496,536.85 |
Other explanations:
61. Monetary items denominated in foreign currencies
(1) Monetary items denominated in foreign currencies
Unit: RMB
| Item | Closing balance of foreign currency | Exchange rate | Closing balance of converted RMB |
| Monetary funds | |||
| Including: USD | 26,811,537.21 | 7.1884 | 192,732,054.67 |
| Euro | 1,165,904.59 | 7.5257 | 8,774,248.16 |
| HKD | 11.50 | 0.9261 | 10.65 |
| JPY | 1,526,252,307.94 | 0.0462 | 70,537,404.87 |
| HUF | 13,255,193,685.67 | 0.0185 | 245,221,083.18 |
| Accounts receivable | |||
| Including: USD | 89,524,437.92 | 7.1884 | 643,537,469.81 |
| Euro | 849,889.61 | 7.5257 | 6,396,014.26 |
| HKD | |||
| JPY | 1,342,595,587.76 | 0.0462 | 62,027,916.16 |
| Other receivables | |||
| Including: USD | 7,391.72 | 7.1884 | 53,134.66 |
| Accounts payable | |||
| Including: USD | 13,716,830.16 | 7.1884 | 98,602,061.98 |
| JPY | 5,397,478,715.85 | 0.0462 | 249,541,464.84 |
| Euro | 330,434.00 | 7.5257 | 2,486,747.15 |
62. Lease
(1) The Company as the lessor
?Applicable □Not applicableThe variable lease payments that are not included in the measurement of the lease liabilities
□Applicable ?Not applicable
The lease expense of the short-term leases and low-value assets that are simplified in accounting treatment
□Applicable ?Not applicable
Information about sale and leaseback transactionsLease related current profits or losses and cash flows
| Item | 2024 amount |
| Interest expense of the lease liabilities | 68,970.32 |
| Lease related total cash outflows | 1,601,902.98 |
VIII. R&D Expenses
Unit: RMB
| Item | Amount for current period | Amount for previous period |
| Material costs | 212,097,316.60 | 345,485,094.08 |
| Employee compensation | 271,854,330.56 | 214,976,253.76 |
| Depreciation and amortization | 56,020,419.29 | 41,886,506.67 |
| Energy consumption costs | 80,684,132.22 | 63,170,087.39 |
| Others | 42,186,981.02 | 61,963,059.77 |
| Total | 662,843,179.69 | 727,481,001.67 |
| Including: Expensed R&D expenditure | 662,843,179.69 | 727,481,001.67 |
IX. Changes in the Consolidation Scope
1. Changes in the consolidation scope for other reasons
Explain the changes in the scope of consolidation caused by other reasons (such as the establishment of new subsidiaries,liquidation of subsidiaries, etc.) and relevant information:
During the period, the number of entities included into the consolidated financial statement increased by 3 and decreased by 1,including:
Subsidiaries newly included in the consolidation scope in the current period:
| Company name | Reason for change |
| Shanghai Jiezhiyuan New Material Technology Co., Ltd. | New investment |
| Shanghai Hengjieyuan New Material Technology Co., Ltd. | New investment |
| SEMCO MALAYSIA SDN. BHD. | New investment |
Subsidiary not included in the consolidation scope in the current period:
| Company name | Reason for change |
| Guangdong Energy New Materials Research Institute Co., Ltd. | Cancellation |
X. Interests in Other Entities
1. Interests in subsidiaries
(1) Constitution of the enterprise group
Unit: RMB unless specified otherwise
| Name of subsidiaries | Registered capital | Principal place of business | Place of registration | Nature of business | Shareholding proportion | Method of acquisition | |
| Direct | Indirect | ||||||
| Yunnan Dexin Paper Co., Ltd. | 138,210,800.00 | Yuxi, Yunnan | Yuxi, Yunnan | Paper production and sales | 100.00% | Newly established | |
| Yunnan Jiechen Packaging Materials Co., Ltd. | 150,000,000.00 | Yuxi, Yunnan | Yuxi, Yunnan | Production and sales of packaging materials | 100.00% | Newly established | |
| Yunnan Hongchuang Packaging Co., Ltd. | 153,356,819.00 | Yuxi, Yunnan | Yuxi, Yunnan | Production and sales of aseptic packaging box | 65.49% | Newly established | |
| Hongchuang Packaging (Anhui) Co., Ltd. | 300,000,000.00 | Ma An Shan, Anhui | Ma An Shan, Anhui | Production and sales of aseptic packaging box | 100.00% | Newly established | |
| Yunnan Hongta Plastic Co., Ltd. | 330,723,617.77 | Yuxi, Yunnan | Yuxi, Yunnan | BOPP film production and sales | 100.00% | Newly established | |
| Hongta Plastic (Chengdu) Co., Ltd. | 172,581,213.03 | Chengdu, Sichuan | Chengdu, Sichuan | BOPP film production and sales | 100.00% | Newly established | |
| Yuxi Feiermu Trading Co., Ltd. | 39,907,500.00 | Yuxi, Yunnan | Yuxi, Yunnan | Trading | 100.00% | Newly established | |
| Ningbo Energy New Material Co., Ltd. | 10,000,000.00 | Ningbo, Zhejiang | Ningbo, Zhejiang | Trading | 100.00% | Newly established | |
| Xiamen Energy New Materials Co., Ltd. | 1,600,000,000.00 | Xiamen, Fujian | Xiamen, Fujian | Production and sales of new materials | 100.00% | Newly established | |
| Shanghai Energy New Material Research Co., Ltd. | 100,000,000.00 | Shanghai | Shanghai | Technical services | 100.00% | Newly established | |
| Shanghai Energy New Material Technology Co., Ltd. | 389,210,834.00 | Shanghai | Shanghai | Production and sales of lithium battery separator | 95.22% | Merger of enterprises under common control | |
| Zhuhai Energy New Material Technology Co., Ltd. | 1,600,000,000.00 | Zhuhai, Guangdong | Zhuhai, Guangdong | Production and sales of lithium battery separator | 100.00% | Newly established | |
| Wuxi Energy New Material Technology Co., Ltd. | 1,600,000,000.00 | Wuxi, Jiangsu | Wuxi, Jiangsu | Production and sales of lithium battery separator | 100.00% | Newly established | |
| Jiangxi Tonry New Energy Technology Development Co., Ltd. | 1,200,000,000.00 | Yichun, Jiangxi | Yichun, Jiangxi | Production and sales of lithium battery separator | 100.00% | Business combination not under the common control | |
| Jiangxi Ruijie New Material Technology Co., Ltd. | 8,000,000.00 | Yichun, Jiangxi | Yichun, Jiangxi | Production and sales of packaging materials | 82.00% | Business combination not under the common | |
| Suzhou GreenPower New Energy Materials Co., Ltd. | 421,741,780.69 | Suzhou, Jiangsu | Suzhou, Jiangsu | Production and sales of lithium battery separator | 100.00% | Business combination not under the common | |
| Chongqing Energy Newmi Technological Co., Ltd. | 291,000,000.00 | Chongqing | Chongqing | Production and sales of lithium battery separator | 76.36% | Business combination not under the common | |
| Jiangxi Enpo New Material Co., Ltd. | 600,000,000.00 | Yichun, Jiangxi | Yichun, Jiangxi | Production and sales of lithium battery separator | 51.00% | Newly established | |
| Jiangxi Energy New Material Technology Co., Ltd. | 100,000,000.00 | Yichun, Jiangxi | Yichun, Jiangxi | Production and sales of lithium battery separator | 100.00% | Newly established | |
| Chongqing Energy New Material Technology Co., Ltd. | 1,600,000,000.00 | Chongqing | Chongqing | Production and sales of lithium battery separator | 100.00% | Newly established | |
| Hainan Energy Investment Co., Ltd. | 390,000,000.00 | Chengmai County, Hainan Province | Chengmai County, Hainan Province | Investment and technology service | 100.00% | Newly established | |
| Chuangxin New Material (Hong Kong) Co., Ltd. | USD 46,000,000.00 | Hong Kong | Hong Kong | Trading | 100.00% | Newly established | |
| SEMCORP Global Holdings Kft. | USD 12,200.00 | Hungary | Hungary | Investment and technology service | 100.00% | Newly established | |
| SEMCORP Hungary Kft. | Euro 11,500.00 | Hungary | Hungary | Production and sales of lithium battery separator | 100.00% | Newly established | |
| SEMCORP Properties Kft. | HUF 3,000,000.00 | Hungary | Hungary | Sales of self-owned real estate | 100.00% | Newly established | |
| SEMCORP America Inc. | USD 83,000,000.00 | USA | USA | Investment and technology services | 100.00% | Newly established | |
| SEMCORP Manufacturing USA LLC | USD 82,949,000.00 | USA | USA | Production and sales of lithium battery separator | 100.00% | Newly established | |
| SEMCO MALAYSIA SDN. BHD. | RM 10,000.00 | Malaysia | Malaysia | Production and sales of lithium battery separator | 100.00% | Newly established | |
| Jiangsu Energy New Material Technology Co., Ltd. | 550,000,000.00 | Changzhou, Jiangsu | Changzhou, Jiangsu | Production and sales of lithium battery separator | 100.00% | Newly established | |
| Jiangsu Ruijie New Material Technology Co., Ltd. | 200,000,000.00 | Changzhou, Jiangsu | Changzhou, Jiangsu | Production and sales of packaging materials | 100.00% | Newly established | |
| Hunan Energy Frontier New Material Technology Co., Ltd. | 20,000,000.00 | Changsha, Hunan | Changsha, Hunan | Production and sales of new materials | 65.00% | Newly established | |
| Hubei Energy New Material Technology Co., Ltd. | 1,600,000,000.00 | Jingmen, Hubei | Jingmen, Hubei | Production and sales of new materials | 55.00% | Newly established | |
| Jiangsu Sanhe Battery Material Technology Co., Ltd. | 100,000,000.00 | Liyang, Jiangsu | Liyang, Jiangsu | Production and sales of new materials | 51.00% | Newly established | |
| Energy (Zhuhai Economic and Technological Development Zone) New Material Technology Co., Ltd. | 5,000,000.00 | Zhuhai, Guangdong | Zhuhai, Guangdong | Trading | 100.00% | Newly established | |
| Yuxi Energy New Materials Co., Ltd. | 500,000,000.00 | Yuxi, Yunnan | Yuxi, Yunnan | Production and sales of new materials | 100.00% | Newly established | |
| Shanghai Energy Trading Co., Ltd. | 30,000,000.00 | Shanghai | Shanghai | Trading | 100.00% | Newly established | |
| Jiangsu Energy New Material Research Co., Ltd. | 200,000,000.00 | Changzhou, Jiangsu | Changzhou, Jiangsu | Trading/technology services | 100.00% | Newly established | |
| Shanghai Jiezhiyuan New Material Technology Co., Ltd. | 20,000,000.00 | Shanghai | Shanghai | Trading | 100.00% | Newly established |
| Shanghai Hengjieyuan New Material Technology Co., Ltd. | 5,000,000.00 | Shanghai | Shanghai | Trading | 100.00% | Newly established |
Explanation of the difference between shareholding ratio in subsidiaries and voting right ratio: Not applicable
(2) Key non-wholly owned subsidiaries
Unit: RMB
| Name of subsidiaries | Percentage of shares held by minority shareholders | Profit or loss attributable to minority shareholders in the current period | Dividends declared to minority shareholders in the current period | Closing balance of minority interests |
| Shanghai Energy New Material Technology Co., Ltd. | 4.78% | -42,030,251.27 | 493,353,286.72 |
Explanation of the difference between shareholding ratio in subsidiaries and voting right ratio:
Other explanations:
(3) Main financial information of key non-wholly owned subsidiaries
Unit: RMB
| Name of subsidiaries | Closing balance | Opening balance | ||||||||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Shanghai Energy New Material Technology Co., Ltd. | 12,218,748,855.22 | 32,083,618,778.47 | 44,302,367,633.69 | 26,077,750,162.33 | 7,002,124,723.97 | 33,079,874,886.30 | 13,716,651,194.45 | 29,701,952,419.55 | 43,418,603,614.00 | 24,645,128,994.96 | 6,453,980,374.27 | 31,099,109,369.23 |
Unit: RMB
| Name of subsidiaries | Amount for current period | Amount for previous period | ||||||
| Operating income | Net profit | Total comprehensive income | Cash flow from operating activities | Operating income | Net profit | Total comprehensive income | Cash flow from operating activities | |
| Shanghai Energy New Material Technology Co., Ltd. | 8,616,878,965.47 | -976,813,990.69 | -1,160,557,653.66 | 1,143,914,431.56 | 10,378,457,282.96 | 2,306,778,425.88 | 2,410,367,112.20 | 2,385,389,946.51 |
Other explanations:
XI. Government grants
1. Liability items relating to government grants
? Applicable □ Not applicable
Unit: RMB
| Item related to accounting | Opening balance | Amount of new grants for the period | Amount recognized in non-operating | Amount transferred to other income | Other changes for the period | Closing balance | Relation with assets/revenue |
| income for the period | for the period | ||||||
| Deferred income | 963,273,539.79 | 87,457,428.68 | 0.00 | 138,766,985.42 | 455,517,694.55 | 1,367,481,677.60 | |
| Equipment subsidies of the Gao’an Municipal People’s Government | 220,122,436.26 | 66,150,520.74 | 455,517,694.55 | 609,489,610.07 | Related to assets | ||
| Support and incentive payment of the Xishan Economic and Technological Development Zone | 276,000,831.59 | 2,681,806.68 | 26,432,286.25 | 252,250,352.02 | Related to assets | ||
| Subsidies for advanced equipment manufacturing industry development projects | 133,870,744.22 | 14,308,295.40 | 119,562,448.82 | Related to assets | |||
| Subsidies for buildings of Jiangsu Energy | 44,951,331.93 | 25,864,850.00 | 3,164,080.36 | 67,652,101.57 | Related to assets | ||
| Subsidies for equipment of Ruijie | 35,907,266.17 | 1,257,893.40 | 34,649,372.77 | Related to assets | |||
| Special funds for the development of provincial strategic emerging industries of Wuxi Energy | 24,230,769.27 | 2,307,692.31 | 21,923,076.96 | Related to assets | |||
| Subsidies for infrastructure construction | 21,449,600.32 | 1,340,599.92 | 20,109,000.40 | Related to assets | |||
| Subsidy with interests of imported equipment for Jiangxi Tonry | 19,422,601.48 | 1,744,839.48 | 17,677,762.00 | Related to assets | |||
| Subsidies for buildings of Jiangsu Sanhe | 17,928,500.00 | 601,627.50 | 17,326,872.50 | Related to assets | |||
| Support fund for imported equipment industry of Gao’an Municipal People’s Government | 16,563,344.43 | 1,545,796.08 | 15,017,548.35 | Related to assets | |||
| National import discount for Wuxi Energy | 15,790,044.40 | 1,420,703.10 | 14,369,341.30 | Related to assets | |||
| Land subsidy for Jiangsu Sanhe | 14,611,043.50 | 299,713.68 | 14,311,329.82 | Related to assets | |||
| Subsidies for equipment of Jiangsu Energy | 15,014,840.07 | 1,178,719.92 | 13,836,120.15 | Related to assets | |||
| Enterprise support funds allocated by Gao’an New World Industrial City Finance Office | 14,601,677.92 | 804,404.76 | 13,797,273.16 | Related to assets | |||
| Special funds for the development of provincial strategic emerging industries of Jiangsu Energy | 11,940,717.21 | 929,097.00 | 11,011,620.21 | Related to assets | |||
| Enterprise development support funds (subsidy for plant construction of | 5,978,510.51 | 3,684,672.00 | 181,947.66 | 9,481,234.85 | Related to assets |
| Jiangxi Enpo) | |||||||
| Suzhou GreenPower Strategic Emerging Industry Cluster Demonstration | 9,000,000.00 | 574,715.04 | 8,425,284.96 | Related to assets | |||
| Financial rewards for effective investment by Suzhou GreenPower as an industrial enterprise | 8,000,000.00 | 581,146.41 | 7,418,853.59 | Related to assets | |||
| National import discount for Chongqing Energy | 7,559,837.88 | 667,044.48 | 6,892,793.40 | Related to assets | |||
| Lithium-ion battery microporous separator production digitalized workshop B of Chongqing Energy | 3,947,826.10 | 3,000,000.00 | 249,980.01 | 6,697,846.09 | Related to assets | ||
| Municipal technological transformation project for high-quality development | 7,781,250.00 | 1,125,000.00 | 6,656,250.00 | Related to assets | |||
| Land subsidies granted by the Administrative Committee of Yuxi High- tech Industrial Development Zone for the annual production of 1 billion liquid packaging boxes | 7,103,060.09 | 485,008.44 | 6,618,051.65 | Related to assets | |||
| Technological transformation project of the production line of lithium-ion battery separator | 6,925,245.34 | 1,080,781.56 | 5,844,463.78 | Related to assets | |||
| High-performance lithium-ion battery separator project with an output of 90 million square meters | 8,138,684.40 | 2,696,405.76 | 5,442,278.64 | Related to assets | |||
| Technical transformation funds for Jiangxi Tonry | 5,863,187.08 | 547,251.72 | 5,315,935.36 | Related to assets | |||
| Technical transformation guidance funds | 5,034,539.25 | 264,975.72 | 4,769,563.53 | Related to assets | |||
| Technological transformation project of the second batch of industrial transformation in 2020 | 5,550,000.00 | 900,000.00 | 4,650,000.00 | Related to assets | |||
| Special funds for 70,000- ton BOPP projects | 4,769,999.97 | 530,000.00 | 4,239,999.97 | Related to assets | |||
| Special fund for the industrial development at the provincial level for Jiangxi Tonry | 4,000,000.00 | 183,502.05 | 3,816,497.95 | Related to assets | |||
| Land subsidies for | 3,600,000.00 | 74,503.68 | 3,525,496.32 | Related to |
| Jiangsu Energy | assets | ||||||
| Provincial-level special funds for high quality development of manufacturing industry for Hubei Energy | 394,838.71 | 3,250,000.00 | 285,869.76 | 3,358,968.95 | Related to assets | ||
| Special fund for the development of small and medium-sized enterprises at the provincial level for Jiangxi Tonry | 3,088,060.14 | 266,127.24 | 2,821,932.90 | Related to assets | |||
| Fund for the development of digital economy and digital transformation for Wuxi Energy | 2,978,260.87 | 260,869.57 | 2,717,391.30 | Related to assets | |||
| Special funds for basic projects | 2,775,640.51 | 307,692.48 | 2,467,948.03 | Related to assets | |||
| Subsidies for equipment of Jiangsu Sanhe | 2,399,600.00 | 42,624.11 | 2,356,975.89 | Related to assets | |||
| Special fund for the industrial development at the provincial level for Jiangxi Energy | 2,000,000.00 | 13,775.94 | 1,986,224.06 | Related to assets | |||
| Special fund for the development of small and medium-sized enterprises at the provincial level in 2021 by Yuxi Municipal Bureau of Industry and Information Technology | 2,096,632.51 | 142,728.72 | 1,953,903.79 | Related to assets | |||
| Boiler upgrading and reconstruction projects | 1,968,307.84 | 196,830.72 | 1,771,477.12 | Related to assets | |||
| National import discount for Suzhou GreenPower | 1,909,850.64 | 164,374.77 | 1,745,475.87 | Related to assets | |||
| Cable trench subsidy | 1,841,667.21 | 339,999.96 | 1,501,667.25 | Related to assets | |||
| National import discount for Jiangxi Energy | 1,625,684.87 | 136,981.56 | 1,488,703.31 | Related to assets | |||
| Support subsidies of cleaner production for Shanghai Energy | 2,875,000.00 | 1,500,000.00 | 1,375,000.00 | Related to assets | |||
| Investment subsidies for high-performance lithium-ion battery microporous separator key project (Phase I) of Chongqing Energy | 986,547.10 | 53,811.60 | 932,735.50 | Related to assets | |||
| Core technical know-how for industrialization of Wuxi Energy | 968,255.43 | 76,923.08 | 891,332.35 | Related to assets | |||
| VOCs subsidies for project governance of | 536,250.00 | 448,000.00 | 111,185.64 | 873,064.36 | Related to assets |
| Hongchuang Packaging | |||||||
| Key industrial technology innovation project funds of Suzhou | 700,000.00 | 700,000.00 | Related to assets | ||||
| Special funds for basic projects of Jiangxi Tonry | 692,308.28 | 76,922.88 | 615,385.40 | Related to assets | |||
| Low-nitrogen transformation project subsidy of the Finance Bureau of Changshou | 857,142.88 | 242,470.32 | 614,672.56 | Related to assets | |||
| Highly Environmentally Adaptable Sulfide Electrolyte Materials and Electrolyte Membrane Research and Development Project Subsidy for Hunan Energy | 600,000.00 | 600,000.00 | Related to assets | ||||
| Enterprise development support funds of Wuxi Energy | 646,153.73 | 61,538.47 | 584,615.26 | Related to assets | |||
| Subsidies for talent leading of Shanghai Energy | 570,212.77 | 51,063.84 | 519,148.93 | Related to assets | |||
| District-level administrative approval pre-intermediary service project of Hubei Energy | 443,926.05 | 11,098.15 | 432,827.90 | Related to assets | |||
| Suzhou GreenPower Diaphragm Intelligent Manufacturing Project Based on “5G+Industrial Internet” | 500,000.00 | 75,090.85 | 424,909.15 | Related to assets | |||
| Suzhou GreenPower Industrial High-quality Development Policy Project - 5G Construction and Application Project | 500,000.00 | 84,701.64 | 415,298.36 | Related to assets | |||
| Special funds for the construction of the Yuxi municipal industrial park in 2017 | 434,304.80 | 34,977.60 | 399,327.20 | Related to assets | |||
| Funds for the preparation of touring inspection activities in Yichun and centralized commencement and completion activities of major projects in Yichun, allocated by Gao’an New World Industrial City Finance Office | 247,786.57 | 14,720.04 | 233,066.53 | Related to assets | |||
| Reward for Suzhou to build an intelligent | 263,736.27 | 65,934.07 | 197,802.20 | Related to assets |
| demonstration workshop of advanced manufacturing base in 2020 | |||||||
| Subsidies of the Yuxi Municipal Bureau of Finance for the first major technical equipment | 301,886.96 | 113,207.52 | 188,679.44 | Related to assets | |||
| National-level subsidy for new energy projects of Shanghai Energy | 165,649.39 | 12,907.79 | 152,741.60 | Related to assets | |||
| Subsidies for the renovation of power supporting projects outside the plants in the Jiulong district of the Yuxi High-Tech Development Zone Management Committee | 116,666.37 | 50,000.04 | 66,666.33 | Related to assets | |||
| National-level subsidy for new energy projects of Shanghai Energy | 659,380.50 | 344,024.63 | 315,355.87 | Related to income |
2. Government grants recognized in profit or loss for the period
? Applicable □ Not applicable
Unit: RMB
| Item related to accounting | Amount incurred in the current period | Amount incurred in the previous period |
| Other income | 71,436,581.31 | 28,818,978.59 |
| Other income | 26,432,286.25 | 22,463,447.44 |
| Other income | 14,308,295.40 | 14,308,295.40 |
| Other income | 5,802,187.32 | 5,802,187.32 |
| Other income | 13,000,000.00 | |
| Other income | 12,300,000.00 | 24,252,700.00 |
| Other income | 10,595,080.00 | 300,950.00 |
| Other income | 10,000,000.00 | |
| Other income | 8,566,400.00 | 2,400,000.00 |
| Other income | 5,330,000.00 | |
| Other income | 5,058,500.00 | 11,897,179.30 |
| Other income | 12,854,416.65 | |
| Other income | 8,136,616.07 | |
| Other income/financial expenses | 41,882,008.46 | 40,411,724.11 |
Other explanations:
XII. Risks Related to Financial Instruments
1. Categories of risks arising from financial instruments
The risks associated with financial instruments of the Company stem from various financial assets and liabilities recognizedduring operations, including credit risk, liquidity risk, and market risk.The management objectives and policies for various risks related to financial instruments of the Company are theresponsibilities of the management team. The management team is responsible for daily risk management through functionaldepartments (for example, the credit management department of the Company reviews the credit sales transactions on a case-by-case
basis). The internal audit department performs regular audit on risk management controls and procedures, and promptly reports theaudit results to the audit committee.The overall goal of the Company's risk management is to develop risk management policies that minimize various risks relatedto financial instruments without excessively affecting the Company’s competitiveness and adaptability.A. Credit riskCredit risk refers to the risk that one party of a financial instrument fails to fulfill its obligations, resulting in financial lossesfor the other party. The credit risk of the Company mainly arises from monetary funds, accounts receivable, accounts receivablefinancing, other receivables, etc. The credit risk of these financial assets originates from counterparty defaults, and the maximum riskexposure is equal to the carrying amount of these instruments.
The Company's monetary funds are mainly deposited in financial institutions such as commercial banks. The Companybelieves that these commercial banks have high creditworthiness and asset status, and low credit risk as a result thereof.For notes receivable, accounts receivable, accounts receivable financing, and other receivables, the Company has establishedrelevant policies to control the credit risk exposure. The Company evaluates customers' credit qualifications and sets correspondingcredit periods based on their financial status, possibility of obtaining guarantees from third parties, credit records, and other factorssuch as current market conditions. The Company will monitor customer credit records on a regular basis. For customers with poorcredit records, the Company will use written reminders, shorten credit periods, or cancel credit periods to ensure that its overall creditrisk is within a controllable range.
(1) Judgment criteria for significant increase in credit risk
The Company assesses on each balance sheet date whether the credit risk of relevant financial instruments has significantlyincreased since initial recognition. When determining whether credit risk has significantly increased since initial recognition, theCompany considers obtaining reasonable and evidence-based information without unnecessary additional costs or efforts, includingqualitative and quantitative analysis based on the Company’s historical data, external credit risk ratings, and forward-lookinginformation. The Company identifies the changes in the expected default risk of financial instruments during their expected lifespan,based on individual financial instruments or a combination of financial instruments with similar credit risk characteristics, and bycomparing the risk of default of financial instruments on the balance sheet date with that on the initial recognition date.
When one or more of the following quantitative or qualitative criteria are triggered, the Company considers that the credit riskof financial instruments has significantly increased: the quantitative criterion is mainly that the probability of default during theremaining existence period on the reporting date has increased by more than a certain proportion compared to the initial recognition,and the qualitative criteria include significant adverse changes in the business or financial position of the main debtors, a list ofcustomers for early warning, etc.
(2) Definition of credit impaired assets
To determine whether credit impairment has occurred, the Company adopts the defining standards that are aligned with theinternal credit risk management objectives for relevant financial instruments, while considering quantitative and qualitative indicators.
When evaluating whether a debtor has experienced credit impairment, the Company mainly considers the following factors:
the issuer or debtor experiences significant financial difficulties; the debtor violates the contract by, for example, defaulting ordelaying the payment of interest or principal; a creditor, due to economic or contractual considerations related to the debtor's financialdifficulties, makes concessions that the debtor would not make under any other circumstances; the debtor is likely to go bankrupt orundergo other financial restructuring; the financial difficulties of the issuer or debtor result in the disappearance of the active marketfor financial assets; and a financial asset is purchased or generated at a significant discount that reflects the fact of credit loss.
Credit impairment of financial assets may be caused by the combined effect of multiple events, and may not necessarily becaused by individually identifiable events.
(3) Parameters for measuring expected credit losses
Based on whether there has been a significant increase in credit risk and whether credit impairment has occurred, the Companymeasures impairment provisions for different assets with expected credit losses over 12 months or the entire lifespan. The keyparameters for measuring expected credit losses include default probability, default loss rate, and default risk exposure. The Companyconsiders quantitative analysis and forward-looking information of historical statistical data (such as counterparty ratings, guaranteemethods and collateral types, and repayment methods) to establish the default probability, default loss rate, and default risk exposuremodels.
The relevant definitions are as follows:
Default probability refers to the likelihood that the debtor will be unable to fulfill its payment obligations in the next 12 monthsor throughout the remaining period of existence.
Default loss rate refers to the expected degree of loss incurred by the Company in response to default risk exposure. Defaultloss rate varies depending on the type of counterparty, the method and priority of recourse, and the different collateral. Default lossrate is the percentage of risk exposure loss at the time of default, calculated based on the next 12 months or the entire duration.
Default risk exposure refers to the amount that the Company should be paid in the next 12 months or throughout the remainingperiod of existence when a default occurs. The assessment of significantly increased credit risk from forward-looking informationand the calculation of expected credit losses both involve forward-looking information. The Company identifies key economicindicators that affect credit risk and expected credit losses for various business types through historical data analysis.
The maximum credit risk exposure borne by the Company is the carrying amount of each financial asset in the balance sheet.The Company has not provided any other guarantees that may expose us to credit risk.
Among the accounts receivable of the Company, the accounts receivable of the top five customers account for 42.93% of thetotal (compared to 42.67% for the previous period). Among the Company’s other receivables, the top five companies with outstandingamounts account for 51.17% of the total (compared to 48.29% for the previous period).
B. Liquidity risk
Liquidity risk refers to the risk of a shortage of funds when an enterprise fulfills its obligation to settle by delivering cash orother financial assets. The Company is responsible for the overall cash management of various subsidiaries under it, including short-term investments of cash surplus and loans to meet expected cash needs. The Company’s policy is to regularly monitor short-term
and long-term liquidity needs, as well as compliance with loan agreements, to ensure the sufficient cash reserves and marketablesecurities available for immediate realization.
As of December 31, 2024, the maturity dates of the Company’s financial liabilities are as follows:
| Item | December 31, 2024 | |
| Less than 1 year | 1-5 years | |
| Short-term borrowings | 8,136,897,962.50 | |
| Notes payable | 514,689,404.62 | |
| Accounts payable | 2,009,858,521.55 | |
| Other payables | 212,623,069.42 | |
| Long-term payables | 172,792,328.77 | |
| Long-term borrowings | 1,663,741,019.86 | 5,070,029,111.30 |
| Bonds payable | 7,403,847.66 | 440,251,699.82 |
| Lease liabilities | 1,009,605.19 | |
| Total | 12,546,223,430.80 | 5,683,073,139.89 |
(Cont’d)
| Item | December 31, 2023 | |
| Less than 1 year | 1-5 years | |
| Short-term borrowings | 7,290,694,906.27 | |
| Notes payable | 802,933,704.02 | |
| Accounts payable | 1,608,309,616.46 | |
| Other payables | 244,698,302.33 | |
| Long-term borrowings | 1,088,108,156.55 | 4,685,315,817.70 |
| Bonds payable | 6,070,366.96 | 435,900,486.76 |
| Lease liabilities | 1,375,995.60 | 182,663.88 |
| Total | 11,042,191,048.19 | 5,121,398,968.34 |
C. Market risk
(1) Foreign exchange risk
The exchange rate risk of the Company mainly comes from foreign currency assets and liabilities held by the Company andits subsidiaries that are not denominated in their functional currency. The Company's exposure to exchange rate risk is mainly relatedto accounts payable denominated in Japanese yen and US dollars. Except for subsidiaries located in the Hong Kong SpecialAdministrative Region of the People's Republic of China and other overseas areas where HKD, JPY, USD, EUR, RMB, or HUF areused for settlement, the Company’s businesses are mainly settled in RMB.
① As of December 31, 2024, the main foreign exchange risk exposures of the Company's various foreign currency asset andliability items are as follows (for reporting purposes, the risk exposure amounts are presented in RMB and converted at the spotexchange rate on the balance sheet date):
| Item | December 31, 2024 | |||||||||
| USD | JPY | EUR | HKD | HUF | ||||||
| Foreign currency | RMB | Foreign currency | RMB | Foreign currency | RMB | Foreign currency | RMB | Foreign currency | RMB | |
| Monetary funds | 26,811,537.21 | 192,732,054.67 | 1,526,252,307.94 | 70,537,404.87 | 1,165,904.59 | 8,774,248.16 | 11.5 | 10.65 | 13,255,193,685.67 | 245,221,083.18 |
| Accounts receivable | 89,524,437.92 | 643,537,469.81 | 1,342,595,587.76 | 62,027,916.16 | 849,889.61 | 6,396,014.26 | ||||
| Other receivables | 7,391.72 | 53,134.66 | ||||||||
| Accounts payable | 13,716,830.16 | 98,602,061.98 | 5,397,478,715.85 | 249,541,464.84 | 330,434.00 | 2,486,747.15 | ||||
(Cont’d)
| Item | December 31, 2023 | |||||||||
| USD | JPY | EUR | HKD | HUF | ||||||
| Foreign currency | RMB | Foreign currency | RMB | Foreign currency | RMB | Foreign currency | RMB | Foreign currency | RMB | |
| Monetary funds | 24,736,411.72 | 175,200,583.29 | 772,807,782.14 | 38,804,997.16 | 17,417,685.56 | 136,889,074.35 | 9.23 | 8.36 | 340,721,456.23 | 6,965,709.45 |
| Accounts receivable | 69,650,072.81 | 493,310,570.69 | 1,161,599,532.00 | 58,327,397.30 | 499,491.62 | 3,925,604.54 | ||||
| Accounts payable | 33,900,073.59 | 240,104,051.22 | 3,000,000.00 | 150,639.00 | 81,063.20 | 637,091.90 | ||||
The Company closely monitors the impact of exchange rate fluctuations on its exchange rate risk. The Company has not takenany measures to mitigate exchange rate risks at present, but the management is responsible for monitoring exchange rate risks andwill consider hedging significant exchange rate risks when necessary.
② Sensitivity analysis
As of December 31, 2024, assuming all other risk variables remain constant, if RMB appreciates or depreciates by 10% againstUSD, EUR, JPY, HUF, and HKD, the net profit of the Company for that year will increase or decrease by RMB65.8987 million.
(2) Interest rate risk
The Company’s interest rate risk mainly arises from long-term interest-bearing debts such as bank loans and bonds payable.Financial liabilities with floating interest rates expose the Company to cash flow interest rate risk, while financial liabilities withfixed interest rates expose the Company to fair value interest rate risk. The Company determines the relative proportion of fixed rateand floating rate contracts based on the current market environment.
The finance department of the headquarters continuously monitors the level of interest rate. The increase in interest rates willincrease the cost of new interest-bearing debts and the interest expenses of the Company’s interest-bearing debts with floating interestrates that have not been fully paid, and will have a significant adverse impact on its financial performance, so the management willmake timely adjustments based on the latest market conditions.During the period ending December 31, 2024, if the loan interest rate calculated based on floating rates increases or decreasesby 50 basis points with other risk variables remaining constant, the net profit of the Company for that year will decrease or increaseby RMB53.6756 million.
XIII. Disclosure of Fair Value
1. Fair value of assets and liabilities measured at fair value at the end of the period
Unit: RMB
| Item | Closing fair value | |||
| Fair value measured at the first level | Fair value measured at the second level | Fair value measured at the third level | Total | |
| I. Continuous fair value measurement | -- | -- | -- | -- |
| (II) Other debt investments | 408,092,531.80 | 408,092,531.80 | ||
| (III) Other equity instrument investments | 78,000,000.00 | 78,000,000.00 | ||
| Total liabilities measured at fair value on a continuous basis | 486,092,531.80 | 486,092,531.80 | ||
| II. Non-continuous fair value measurement | -- | -- | -- | -- |
For financial instruments traded in an active market, the Company determines their fair value based on their active market quotes,and for financial instruments that are not traded in an active market, the Company uses valuation techniques to determine their fairvalue. The valuation models used mainly include discounted cash flow model and market comparable company model. The inputvalues of valuation techniques mainly include risk-free interest rates, benchmark interest rates, exchange rates, credit spreads, liquiditypremiums, lack of liquidity discounts, etc.
2. Determination basis of the market price of the item measured using the first-level continuous andnon-continuous fair value measurement: None
3. Valuation techniques and qualitative and quantitative information on important parametersadopted for the second-level continuous and non-continuous fair value measurement: None
4. Valuation techniques and qualitative and quantitative information on important parametersadopted for the third-level continuous and non-continuous fair value measurementThe receivables financing held by the Company were the bank acceptance bills held by the Company, whose remaining life isshort and book value is close to their fair value.The non-trading equity instruments at fair value through other comprehensive income held by the Company, whose fair valueis measured at the third level, are mainly the equity investment projects that are not available for verification by data in observableactive markets, for which the financial forecast is made using their own information.
5. Continuous third-level fair value measurement items, adjustment information between the openingand closing book values and sensitivity analysis of unobservable parameters
| Item | December 31, 2023 | Transfer into Level 3 | Transfer out of Level 3 | Total gains or losses for the period | Purchases, issues, sales and settlements | December 31, 2024 | Changes in unrealized gains or losses for the period included in profit or loss for assets held at the end of the Reporting Period | ||||
| Charged to profit or loss | Charged to other comprehensive income | Purchase | Issue | Sales | Settlement | ||||||
| Receivables financing | 408,354,641.63 | 408,092,531.80 | 408,354,641.63 | 408,092,531.80 | |||||||
| Investments in other equity instruments | 89,000,000.00 | -17,000,000.00 | 6,000,000.00 | 78,000,000.00 | |||||||
| Total | 497,354,641.63 | -17,000,000.00 | 414,092,531.80 | 408,354,641.63 | 486,092,531.80 | ||||||
6. For the continuous fair value measurement items, if there is a conversion between levels in thecurrent period, describe the reason for the conversion and the policy for determining the time point ofthe conversionThis year, the fair value measurement of the Company’s financial assets and financial liabilities has not undergone anyconversion between the first and second levels, nor has there been any transfer to or from the third level.
7. Changes in valuation techniques and the cause of changes in the current periodThe fair value valuation techniques of the Company’s financial instruments have not changed during this year.
8. Fair value of financial assets and financial liabilities that are not measured at fair valueThe Company’s financial assets and liabilities measured at amortized cost mainly include: monetary funds, notes receivable,accounts receivable, other receivables, short-term borrowings, notes payable, accounts payable, other payables, long-term borrowingsdue within one year, long-term borrowings, and bonds payable.
XIV. Related Parties and Related Party Transactions
1. Actual controller of the Company
As of December 31, 2024, the actual controller of the Company was the Paul Xiaoming Lee family. The Paul Xiaoming Leefamily held 42.0882% of the Company’s shares directly and indirectly. The shareholding of the Paul Xiaoming Lee’s family is asfollows: family member Paul Xiaoming Lee holds 13.2241% of the shares directly, family member Li Xiaohua holds 7.08% of theshares directly, family member Sherry Lee holds 7.3407% of the shares directly, and family member Jerry Yang Li holds 1.5171% ofthe shares directly. The family members indirectly hold 12.9262% equity of the Company through Yuxi Heyi Investment Co., Ltd.,Yuxi Heli Investment Co., Ltd. and Shanghai Hengzou Enterprise Management Firm (Limited Partnership).
2. Subsidiaries of the Company
Please refer to Note X-1. “Interest in subsidiaries” for details about the subsidiaries of the Company.
3. Joint ventures and associates of the Company
Information on other associates or joint ventures which have related-party transactions with the Company in the current period orwhose related-party transactions with the Company produced balance in previous years is as follows:
| Name of joint venture or associate | Relationship with the Company |
| Yuxi Kunshasi Plastic Masterbatch Co., Ltd. | An associate of the Company |
4. Other related parties
| Name of other related party | Relationship with the Company |
| Yuxi Heli Investment Co., Ltd. | Shareholder |
| Yuxi Heyi Investment Co., Ltd. | A company controlled by the actual controller |
| Zhuhai Chenyu New Material Technology Co., Ltd. | A company controlled by the actual controller |
| Chenyu (Zhuhai Hengqin) New Material Technology Co., Ltd. | A company controlled by the actual controller |
| Suzhou Jiesheng Technology Co., Ltd. | A company controlled by the actual controller |
| Suzhou Fuqiang Technology Co., Ltd. | A company controlled by the actual controller |
| Suzhou Fuqiang Jianeng Machinery Co., Ltd. | A company controlled by the actual controller |
| Changshu Juxing Machinery Co., Ltd. | A company controlled by the actual controller |
| Paul Xiaoming Lee | A main member of the actual controller's family |
| Li Xiaohua | A main member of the actual controller's family |
| Yan Ma | A main member of the actual controller's family |
| Yan Yang Hui | A main member of the actual controller's family |
| Sherry Lee | A main member of the actual controller's family |
| Jerry Yang Li | A main member of the actual controller's family |
Other explanations: In addition to the related parties listed in the table above, other related parties of the Company include: theCompany’s employee stock ownership platform; other directors, supervisors, senior executives of the Company and their closerelatives; as well as enterprises controlled by them or where they serve as directors or senior executives. Other related parties havenot engaged in related party transactions with the Company.
5. Related party transactions
(1) Related party transactions on purchase and sales of goods and rendering and receiving of servicesStatement of purchase of goods/acceptance of services
Unit: RMB
| Related party | Particulars of related party transaction | Amount for the current period | Approved transaction limit | Whether exceeding the transaction limit | Amount for the previous period |
| Yuxi Kunshasi Plastic Masterbatch Co., Ltd. | Purchase of additives | 27,786,128.30 | 40,000,000.00 -55,000,000.00 | No | 29,859,590.68 |
| Zhuhai Chenyu New Material Technology Co., Ltd. | Procurement of materials | 94,070,099.94 | No more than 205,000,000 | No | 112,972,507.96 |
| Suzhou Jiesheng Technology Co., Ltd. and its subsidiaries | Purchase of equipment and spare parts | 430,180,054.32 | No more than 659,030,000 | No | 271,815,892.27 |
Statement of sales of goods / rendering of services
Unit: RMB
| Related party | Particulars of related party transactions | Amount for the current period | Amount for the previous period |
| Yuxi Kunshasi Plastic Masterbatch Co., Ltd. | Sales of raw materials | 9,520,584.86 | 8,394,304.54 |
| Zhuhai Chenyu New Material Technology Co., Ltd. | Sales of packaging materials | 104,867.27 | 1,114,800.87 |
Description of related party transactions on purchase and sales of goods and rendering and receiving of services
(2) Leases with related parties
The Company as the lessor:
Unit: RMB
| Lessee’s name | Type of leased assets | Rental income recognized for the current period | Rental income recognized for the previous period |
| Yuxi Heli Investment Co., Ltd. | Office | 2,285.72 | 2,285.72 |
| Yuxi Heyi Investment Co., Ltd. | Office | 3,027.52 | 3,077.77 |
| Yuxi Kunshasi Plastic Masterbatch Co., Ltd. | Workshop | 22,018.34 | 22,018.34 |
The Company as the Lessee: None
(3) Related party guarantees
The Company as the guarantor
Unit: RMB
| Secured party | Guarantee amount | Commencement date of guarantee | Expiry date of guarantee | Whether the guarantee has been fully fulfilled |
| Zhuhai Energy New Material Technology Co., Ltd. | 200,000,000.00 | February 21, 2023 | February 21, 2028 | No |
| Zhuhai Energy New Material Technology Co., Ltd. | 270,000,000.00 | February 7, 2022 | February 6, 2025 | No |
| Zhuhai Energy New Material Technology Co., Ltd. | 300,000,000.00 | July 13, 2023 | July 14, 2025 | No |
| Zhuhai Energy New Material Technology Co., Ltd. | 150,000,000.00 | May 29, 2023 | May 29, 2026 | No |
| Zhuhai Energy New Material Technology Co., Ltd. | 220,000,000.00 | December 1, 2023 | December 31, 2027 | No |
| Zhuhai Energy New Material Technology Co., Ltd. | 300,000,000.00 | January 15, 2024 | July 15, 2025 | No |
| Zhuhai Energy New Material Technology Co., Ltd. | 32,000,000.00 | March 1, 2024 | March 1, 2027 | No |
| Zhuhai Energy New Material Technology Co., Ltd. | 270,967,000.00 | April 12, 2024 | March 31, 2026 | No |
| Zhuhai Energy New Material Technology Co., Ltd. | 200,000,000.00 | April 12, 2024 | April 11, 2025 | No |
| Zhuhai Energy New Material Technology Co., Ltd. | 200,000,000.00 | April 24, 2024 | April 23, 2029 | No |
| Zhuhai Energy New Material Technology Co., Ltd. | 300,000,000.00 | April 25, 2024 | April 24, 2025 | No |
| Zhuhai Energy New Material Technology Co., Ltd. | 356,820,000.00 | July 30, 2024 | Indefinite period | No |
| Shanghai Energy New Material Technology Co., Ltd. | July 30, 2025 | |||
| Chongqing Energy New Material Technology Co., Ltd. | 100,000,000.00 | February 23, 2024 | February 22, 2027 | No |
| Chongqing Energy New Material Technology Co., Ltd. | 80,000,000.00 | August 2, 2024 | August 1, 2025 | No |
| Chongqing Energy New Material Technology Co., Ltd. | 300,000,000.00 | November 8, 2024 | October 29, 2025 | No |
| Chongqing Energy Newmi Technological Co., Ltd. | 100,000,000.00 | August 13, 2024 | August 12, 2027 | No |
| Chongqing Energy Newmi Technological Co., Ltd. | 35,000,000.00 | October 24, 2024 | October 23, 2025 | No |
| Yunnan Hongta Plastic Co., Ltd. | 44,000,000.00 | June 11, 2024 | Indefinite period | No |
| Yunnan Hongta Plastic Co., Ltd. | 40,000,000.00 | November 9, 2020 | October 23, 2025 | No |
| Yunnan Hongta Plastic Co., Ltd. | 78,000,000.00 | November 29, 2021 | November 29, 2024 | No |
| Yunnan Hongta Plastic Co., Ltd. | 51,650,000.00 | May 5, 2022 | May 4, 2025 | No |
| Yunnan Hongta Plastic Co., Ltd. | 129,000,000.00 | July 7, 2023 | April 6, 2026 | No |
| Yunnan Hongta Plastic Co., Ltd. | 60,000,000.00 | July 15, 2023 | July 15, 2025 | No |
| Yunnan Hongta Plastic Co., Ltd. | 70,000,000.00 | January 2, 2024 | January 2, 2027 | No |
| Yunnan Hongta Plastic Co., Ltd. | 80,000,000.00 | January 12, 2024 | January 11, 2028 | No |
| Yunnan Hongta Plastic Co., Ltd. | 100,000,000.00 | April 19, 2024 | April 19, 2025 | No |
| Yunnan Hongta Plastic Co., Ltd. | 50,000,000.00 | November 15, 2024 | May 15, 2026 | No |
| Yunnan Hongchuang Packaging Co., Ltd. | 66,000,000.00 | June 11, 2024 | Indefinite period | No |
| Yunnan Hongchuang Packaging Co., Ltd. | 50,000,000.00 | February 23, 2022 | February 23, 2027 | No |
| Yunnan Hongchuang Packaging Co., Ltd. | 162,000,000.00 | March 21, 2022 | March 20, 2025 | No |
| Yunnan Hongchuang Packaging Co., Ltd. | 60,000,000.00 | September 22, 2023 | September 22, 2026 | No |
| Yunnan Hongchuang Packaging Co., Ltd. | 90,000,000.00 | January 2, 2024 | January 2, 2027 | No |
| Yunnan Hongchuang Packaging Co., Ltd. | 120,000,000.00 | January 15, 2024 | January 14, 2025 | No |
| Yunnan Hongchuang Packaging Co., Ltd. | 7,258,788.30 | March 29, 2024 | March 28, 2025 | No |
| Yunnan Hongchuang Packaging Co., Ltd. | 20,000,000.00 | January 29, 2024 | January 29, 2027 | No |
| Yunnan Hongchuang Packaging Co., Ltd. | 130,000,000.00 | April 26, 2024 | April 26, 2025 | No |
| Yunnan Hongchuang Packaging Co., | 40,000,000.00 | April 30, 2024 | April 2, 2025 | No |
| Ltd. | ||||
| Yunnan Hongchuang Packaging Co., Ltd. | 13,667,784.90 | August 21, 2024 | August 20, 2025 | No |
| Yunnan Hongchuang Packaging Co., Ltd. | 40,000,000.00 | September 29, 2024 | September 17, 2025 | No |
| Yunnan Hongchuang Packaging Co., Ltd. | 100,000,000.00 | November 13, 2024 | November 13, 2025 | No |
| Yunnan Hongchuang Packaging Co., Ltd. | 100,000,000.00 | December 26, 2024 | December 26, 2027 | No |
| Yunnan Dexin Paper Co., Ltd. | 20,000,000.00 | January 2, 2024 | January 2, 2027 | No |
| Yunnan Dexin Paper Co., Ltd. | 10,000,000.00 | January 12, 2024 | January 11, 2028 | No |
| Yuxi Energy New Materials Co., Ltd. | 1,000,000,000.00 | March 1, 2023 | December 31, 2026 | No |
| Yuxi Energy New Materials Co., Ltd. | 800,000,000.00 | October 26, 2023 | October 25, 2032 | No |
| Yuxi Energy New Materials Co., Ltd. | 700,000,000.00 | April 10, 2024 | April 10, 2027 | No |
| Yuxi Energy New Materials Co., Ltd. | 1,000,000,000.00 | July 16, 2024 | October 30, 2034 | No |
| Wuxi Energy New Material Technology Co., Ltd. | 100,000,000.00 | January 5, 2024 | January 4, 2028 | No |
| Wuxi Energy New Material Technology Co., Ltd. | 100,000,000.00 | July 12, 2024 | June 16, 2025 | No |
| Wuxi Energy New Material Technology Co., Ltd. | 150,000,000.00 | August 21, 2024 | August 4, 2025 | No |
| Wuxi Energy New Material Technology Co., Ltd. | 100,000,000.00 | September 24, 2024 | September 24, 2029 | No |
| Wuxi Energy New Material Technology Co., Ltd. | 200,000,000.00 | September 2, 2024 | September 1, 2025 | No |
| Suzhou GreenPower New Energy Materials Co., Ltd. | 104,000,000.00 | March 9, 2022 | March 9, 2027 | No |
| Suzhou GreenPower New Energy Materials Co., Ltd. | 100,000,000.00 | December 27, 2023 | November 20, 2024 | No |
| Suzhou GreenPower New Energy Materials Co., Ltd. | 180,000,000.00 | January 9, 2024 | January 8, 2029 | No |
| Suzhou GreenPower New Energy Materials Co., Ltd. | 140,000,000.00 | March 5, 2024 | March 5, 2027 | No |
| Suzhou GreenPower New Energy Materials Co., Ltd. | 200,000,000.00 | November 14, 2024 | November 13, 2025 | No |
| Suzhou GreenPower New Energy Materials Co., Ltd. | 100,000,000.00 | December 10, 2024 | December 10, 2029 | No |
| Shanghai Energy New Material Technology Co., Ltd. | 856,000,000.00 | September 28, 2020 | September 27, 2027 | No |
| Shanghai Energy New Material Technology Co., Ltd. | 660,000,000.00 | February 7, 2022 | February 7, 2027 | No |
| Shanghai Energy New Material Technology Co., Ltd. | 240,000,000.00 | June 5, 2022 | June 4, 2025 | No |
| Shanghai Energy New Material Technology Co., Ltd. | 46,225,860.00 | June 10, 2022 | June 10, 2027 | No |
| Shanghai Energy New Material Technology Co., Ltd. | 300,000,000.00 | August 18, 2022 | August 18, 2027 | No |
| Shanghai Energy New Material Technology Co., Ltd. | 1,200,000,000.00 | August 1, 2023 | August 1, 2038 | No |
| Shanghai Energy New Material Technology Co., Ltd. | 165,000,000.00 | October 27, 2023 | October 26, 2025 | No |
| Shanghai Energy New Material Technology Co., Ltd. | 500,000,000.00 | December 22, 2023 | December 21, 2027 | No |
| Shanghai Energy New Material Technology Co., Ltd. | 800,000,000.00 | March 20, 2024 | August 25, 2025 | No |
| Shanghai Energy New Material Technology Co., Ltd. | 213,084,000.00 | April 16, 2024 | April 16, 2027 | No |
| Shanghai Energy New Material Technology Co., Ltd. | 200,000,000.00 | April 18, 2024 | April 17, 2025 | No |
| Shanghai Energy New Material Technology Co., Ltd. | 200,000,000.00 | April 24, 2024 | April 23, 2025 | No |
| Shanghai Energy New Material Technology Co., Ltd. | 213,584,910.00 | June 24, 2024 | Indefinite period | No |
| Shanghai Energy New Material Technology Co., Ltd. | 200,000,000.00 | June 17, 2024 | June 16, 2025 | No |
| Shanghai Energy New Material Technology Co., Ltd. | 900,000,000.00 | August 9, 2024 | August 8, 2027 | No |
| Shanghai Energy New Material Technology Co., Ltd. | 196,000,000.00 | August 20, 2024 | July 22, 2025 | No |
| Shanghai Energy New Material Technology Co., Ltd. | 500,000,000.00 | August 22, 2024 | August 21, 2025 | No |
| Shanghai Energy New Material Technology Co., Ltd. | 875,000,000.00 | August 27, 2024 | July 22, 2025 | No |
| Shanghai Energy New Material Technology Co., Ltd. | 209,000,000.00 | September 2, 2024 | May 31, 2025 | No |
| Shanghai Energy New Material Technology Co., Ltd. | 150,000,000.00 | September 6, 2024 | September 6, 2027 | No |
| Shanghai Energy New Material Technology Co., Ltd. | 200,000,000.00 | September 11, 2024 | September 9, 2025 | No |
| Shanghai Energy New Material Technology Co., Ltd. | 546,000,000.00 | December 3, 2024 | September 22, 2025 | No |
| Shanghai Energy New Material Technology Co., Ltd. | 50,000,000.00 | December 30, 2024 | December 30, 2025 | No |
| Shanghai Energy Trading Co., Ltd. | 10,000,000.00 | September 20, 2024 | September 19, 2027 | No |
| Jiangxi Tonry New Energy Technology Development Co., Ltd. | 1,500,000,000.00 | September 17, 2019 | December 31, 2024 | No |
| Jiangxi Tonry New Energy Technology Development Co., Ltd. | 250,000,000.00 | June 25, 2024 | June 20, 2025 | No |
| Jiangxi Tonry New Energy Technology Development Co., Ltd. | 50,000,000.00 | June 25, 2024 | June 20, 2025 | No |
| Jiangxi Tonry New Energy Technology Development Co., Ltd. | 200,000,000.00 | October 8, 2024 | October 7, 2025 | No |
| Jiangxi Tonry New Energy Technology Development Co., Ltd. | 10,000,000.00 | October 9, 2024 | September 21, 2026 | No |
| Jiangxi Tonry New Energy Technology Development Co., Ltd. | 40,000,000.00 | October 9, 2024 | September 21, 2026 | No |
| Jiangxi Tonry New Energy Technology Development Co., Ltd. | 135,000,000.00 | October 31, 2024 | October 30, 2027 | No |
| Jiangxi Tonry New Energy Technology Development Co., Ltd. | 100,000,000.00 | November 11, 2024 | November 11, 2025 | No |
| Jiangxi Tonry New Energy Technology Development Co., Ltd. | 200,000,000.00 | December 2, 2024 | December 2nd, 2025 | No |
| Jiangxi Ruijie New Material Technology Co., Ltd. | 400,000,000.00 | April 12, 2023 | April 12th, 2030 | No |
| Jiangxi Enpo New Materials Co., Ltd. | 433,500,000.00 | April 28, 2024 | April 27th, 2032 | No |
| Jiangsu Energy New Material Technology Co., Ltd. | 200,000,000.00 | November 18, 2024 | November 17, 2025 | No |
| Hubei Energy New Material Technology Co., Ltd. | 495,000,000.00 | May 24, 2023 | May 23, 2028 | No |
| Hubei Energy New Material Technology Co., Ltd. | 1,650,000,000.00 | May 24, 2023 | November 21, 2029 | No |
| Hongta Plastic (Chengdu) Co., Ltd. | 30,000,000.00 | January 12, 2024 | January 11th, 2028 | No |
| Hongchuang Packaging (Anhui) Co., Ltd. | 210,000,000.00 | November 15, 2023 | February 1st, 2025 | No |
| Hongchuang Packaging (Anhui) Co., Ltd. | 550,000,000.00 | July 23, 2024 | February 8th, 2030 | No |
| Chuangxin New Material (Hong Kong) Co., Ltd. | 101,600,070.00 | February 1, 2024 | Indefinite period | No |
| Chuangxin New Material (Hong Kong) Co., Ltd. | 1,206,439,000.00 | April 12, 2024 | Indefinite period | No |
| Wuxi Energy New Material Technology Co., Ltd., Jiangxi Tonry New Energy Technology Development Co., Ltd., Suzhou GreenPower New Energy Materials Co., Ltd., Chongqing Energy New Material Technology Co., Ltd., Jiangxi Ruijie New Material Technology Co., Ltd., Jiangsu Energy New Material Technology Co., Ltd., Jiangsu Ruijie New Material Technology Co., Ltd., Jiangxi Enpo New Materials Co., Ltd., Hubei Energy New Material Technology Co., Ltd., Jiangsu Sanhe Battery Material Technology Co., Ltd., Yuxi Energy New Materials Co., Ltd., Xiamen Energy New Materials Co., Ltd., and Jiangxi Energy New Material Technology Co., Ltd. | 2,000,000,000.00 | March 1, 2024 | December 31, 2025 | No |
| Wuxi Energy New Material Technology Co., Ltd., Jiangxi Tonry New Energy Technology Development Co., Ltd., Suzhou GreenPower New Energy Materials Co., Ltd., Chongqing Energy New Material Technology Co., Ltd., Jiangxi Ruijie New Material Technology Co., Ltd., Jiangsu Energy New Material Technology Co., Ltd., Jiangsu Ruijie New Material Technology Co., Ltd., Jiangxi Enpo New Materials Co., Ltd., Hubei Energy New Material Technology Co., Ltd., Yuxi Energy New Materials Co., Ltd., Xiamen Energy New Materials Co., Ltd., Jiangxi Energy New Material Technology Co., Ltd., and Hongchuang Packaging (Anhui) Co., Ltd. | 1,500,000,000.00 | April 10, 2024 | April 10, 2027 | No |
| Wuxi Energy New Material Technology Co., Ltd., Jiangxi Tonry New Energy Technology Development Co., Ltd., | 700,000,000.00 | May 6, 2022 | April 10, 2026 | No |
| Suzhou GreenPower New Energy Materials Co., Ltd., Chongqing Energy New Material Technology Co., Ltd., Jiangxi Ruijie New Material Technology Co., Ltd., Jiangsu Energy New Material Technology Co., Ltd., Jiangsu Ruijie New Material Technology Co., Ltd., Jiangxi Enpo New Materials Co., Ltd., Hubei Energy New Material Technology Co., Ltd., Jiangsu Sanhe Battery Material Technology Co., Ltd., and Yuxi Energy New Materials Co., Ltd. | ||||
| Wuxi Energy New Material Technology Co., Ltd., Jiangxi Tonry New Energy Technology Development Co., Ltd., Suzhou GreenPower New Energy Materials Co., Ltd., Chongqing Energy New Material Technology Co., Ltd., Jiangxi Ruijie New Material Technology Co., Ltd., Jiangsu Energy New Material Technology Co., Ltd., Jiangsu Ruijie New Material Technology Co., Ltd., Jiangxi Enpo New Materials Co., Ltd., Hubei Energy New Material Technology Co., Ltd., Jiangsu Sanhe Battery Material Technology Co., Ltd., Yuxi Energy New Materials Co., Ltd., Xiamen Energy New Materials Co., Ltd., and Jiangxi Energy New Material Technology Co., Ltd. | 1,500,000,000.00 | April 11, 2022 | April 11, 2025 | No |
| Yunnan Hongchuang Packaging Co., Ltd., Shanghai Energy New Material Technology Co., Ltd., Wuxi Energy New Material Technology Co., Ltd., and Jiangsu Energy New Material Technology Co., Ltd. | 392,249,000.00 | November 30, 2020 | May 30, 2028 | No |
The Company as the secured party: None
(4) Remuneration for key management
Unit: RMB
| Item | Amount for the current period | Amount for the previous period |
| Remuneration for key management personnel | 7,417,913.45 | 8,565,304.72 |
(5) Other related party transactions
6. Amounts due to and due from related parties
(1) Receivables
Unit: RMB
| Item | Related party | Closing balance | Opening balance | ||
| Book balance | Provision for bad debt | Book balance | Provision for bad debt | ||
| Accounts receivable | Zhuhai Chenyu New Material Technology Co., Ltd. | 1,294,218.60 | 11,840.48 | ||
| Other non-current assets | Changshu Juxing Machinery Co., Ltd. | 4,266,962.20 | 155,840,000.00 | ||
| Other non-current assets | Suzhou Fuqiang Jianeng Machinery Co., Ltd. | 6,331,858.41 | 43,734,000.00 | ||
| Other non-current assets | Suzhou Jiesheng Technology Co., Ltd. | 94,546,169.67 | |||
| Dividends receivable | Yuxi Kunshasi Plastic Masterbatch Co., Ltd. | 1,347,859.55 | |||
(2) Payables
Unit: RMB
| Item | Related party | Book balance at the end of the Reporting Period | Book balance at the beginning of the Reporting Period |
| Accounts payable | Chenyu (Zhuhai Hengqin) New Material Technology Co., Ltd. | 17,700.00 | |
| Accounts payable | Suzhou Fuqiang Technology Co., Ltd. | 2,136,686.00 | 31,914,852.79 |
| Accounts payable | Suzhou Jiesheng Technology Co., Ltd. | 10,751,701.00 | |
| Accounts payable | Yuxi Kunshasi Plastic Masterbatch Co., Ltd. | 2,401,471.87 | 7,565,425.22 |
| Accounts payable | Zhuhai Chenyu New Material Technology Co., Ltd. | 27,429,230.36 | 26,867,834.58 |
XV. Share-based Payment
1. General information about share-based payment
? Applicable □ Not applicable
Unit: RMB
| Category of grantee | Grant for the period | Exercise for the period | Unlock for the period | Lapse for the period | ||||
| Number | Amount | Number | Amount | Number | Amount | Number | Amount | |
| Sales | 915,200.00 | 19,832,168.00 | 211,497.00 | 5,369,082.60 | ||||
| Management | 4,264,113.00 | 87,681,938.67 | 1,103,394.00 | 26,839,026.37 | ||||
| R&D | 700.00 | 17,213.00 | 110,915.00 | 3,513,167.70 | ||||
| Production | 1,289,303.00 | 24,593,760.77 | 801,227.00 | 15,550,616.63 | ||||
| Total | 6,469,316.00 | 132,125,080.44 | 2,227,033.00 | 51,271,893.30 | ||||
Options or other equity instruments outstanding at the end of the period? Applicable ? Not applicable
| Category of grantee | Options outstanding at the end of the period | Other equity instruments outstanding at the end of the period | ||
| Range of option exercise price | Remaining contractual term | Range of option exercise price | Remaining contractual term | |
| Sales personnel | RMB265.36 per share | 2 months | ||
| Management personnel | RMB265.36 per share | 2 months | ||
| R&D personnel | RMB265.36 per share | 2 months | ||
| Production personnel | RMB265.36 per share | 2 months | ||
2. Information on equity-settled share-based payment
? Applicable □ Not applicable
Unit: RMB
| Determination method of the fair value of equity instruments on the grant date | (1) The fair value of restricted shares is recognized at the closing price on the grant date; (2) The fair value of stock options is recognized by Black-Scholes model |
| Important parameters of fair value of equity instruments on the grant date | Historical volatility, risk-free return rate, dividend yield |
| Basis for determining the number of vested equity instruments | On each balance sheet date of lock-up periods, the estimation shall be made according to the latest number of people whose stock options are vested, performance indicators and other follow-up information |
| Reasons for significant differences between the current estimates and the previous estimates | Nil |
| Accumulated amount of equity-settled share-based payment included in capital reserve | 88,375,136.99 |
| Total expenses recognized for equity-settled share-based payment in the current period | -20,482,699.00 |
Other explanations:
3. Share-based payment for the period
? Applicable □ Not applicable
Unit: RMB
| Category of grantee | Information on equity-settled share- based payment | Information on cash-settled share-based payment |
| Sales personnel | 1,618,519.39 | |
| Management personnel | -13,025,775.09 | |
| R&D personnel | -4,544,946.64 | |
| Production personnel | -4,530,496.66 | |
| Total | -20,482,699.00 |
Other explanations:
XVI. Commitments and Contingencies
1. Significant commitments
Significant commitments on the balance sheet date
(1) Mortgage of assets
As of December 31, 2024, the Company has obtained a bank comprehensive credit line of RMB1.4458568 billion with themortgage of fixed assets property, plant, machinery and equipment, intangible asset land use right and construction in progress. See NoteVII 21 for details.
(2) Pledge of assets
As of December 31, 2024, the Company obtained a bank loan of RMB565.8750 million by pledging certificate of deposit, and100% equity interest in its sub-subsidiary Suzhou GreenPower New Energy Materials Co., Ltd. See Notes VII 21, 22 and 31 fordetails.
2. Contingencies
(1) Significant contingencies on the balance sheet date
As at December 31, 2024, the Company had no important contingencies to disclose.
(2) If the Company had no important contingencies to disclose, it is also required to specify it
The Company had no important contingencies to disclose.XVII. Events Subsequent to the Balance Sheet Date
1. Details of other events subsequent to the balance sheet date
As at April 22, 2025 (Board’s approved report date), the Company had no events subsequent to the balance sheet date todisclose.XVIII. Other Significant Events
1. Segment information
(1) Determination basis and accounting policy of reporting segments
The Company classifies its businesses into two reporting segments based on its internal organizational structure, managementrequirements and internal reporting system. These reporting segments are determined based on the financial information as requiredunder the Company’s daily internal management. The Company’s management level regularly evaluates these reporting segments interms of their operating results, in order to decide the resources to allocate to them and evaluate their performance.
The Company’s reporting segments include:
①Lithium battery separator business segment: It is responsible for production and sale of lithium battery separator, whichproduct is mainly used for EV battery and 3C product battery production;
②BOPP film business segment: This product is mainly used for outer packaging for cigarette box, food and other products.
The segment reporting information should be disclosed in line with the accounting policies and measurement standards usedby respective segment for reporting to the management. These accounting policies and measurement basis should be consistent withthose used for preparing the financial statements.
(2) Financial information of the reporting segment
Unit: RMB
| Item | Lithium battery separation film business segment | BOPP film business segment | Others | Elimination | Total |
| Operating income | 861,687.90 | 58,371.33 | 103,024.29 | -6,717.94 | 1,016,365.58 |
| Including: Income from external trade | 861,687.90 | 58,371.33 | 96,306.35 | 1,016,365.58 | |
| Income from inter-segment trade | 6,717.94 | -6,717.94 |
| Including: Income from main businesses | 4,123.52 | -4,123.52 | |||
| Operating cost | 778,689.51 | 50,618.32 | 80,337.19 | -5,770.41 | 903,874.61 |
| Including: Cost of main businesses | 773,721.25 | 49,570.68 | 80,096.54 | -5,770.41 | 897,618.06 |
| Operating expense | 188,301.01 | 4,813.92 | -11,781.61 | 547.44 | 181,880.76 |
| Operating profit (loss) | -122,488.58 | 3,699.65 | 39,389.94 | -5,081.18 | -84,480.17 |
| Total assets | 4,340,733.19 | 101,807.91 | 2,137,423.25 | -1,923,250.17 | 4,656,714.18 |
| Total liabilities | 3,269,916.19 | 45,361.11 | 182,408.02 | -1,400,447.84 | 2,097,237.48 |
XIX. Notes to Major Items of Financial Statements of the Parent Company
1. Accounts receivable
(1) Disclosure by aging
Unit: RMB
| Aging | Closing book balance | Opening book balance |
| Less than 1 year (inclusive) | 14,842,420.52 | |
| Over 3 years | 5,927.37 | |
| 3 to 4 years | 5,927.37 | |
| Total | 0.00 | 14,848,347.89 |
(2) Disclosure by provision for bad debt
Unit: RMB
| Category | Closing balance | Opening balance | ||||||||
| Book balance | Provision for bad debts | Book value | Book balance | Provision for bad debts | Book value | |||||
| Amount | Percentage | Amount | Proportion | Amount | Percentage | Amount | Proportion | |||
| Accounts receivable subject to provision for bad debt made on an individual basis | 5,390.00 | 0.04% | 5,390.00 | 100.00% | ||||||
| Including: | ||||||||||
| Accounts receivable subject to provision for bad debt made on a portfolio basis | 14,842,957.89 | 99.96% | 816.42 | 0.01% | 14,842,141.47 | |||||
| Including: | ||||||||||
| 1. Companies not included in the consolidated scope | 698,160.59 | 4.70% | 816.42 | 0.12% | 697,344.17 | |||||
| 2. Portfolio of related parties included in the consolidated scope | 14,144,797.30 | 95.30% | 14,144,797.30 | |||||||
| Total | 0.00 | 14,848,347.89 | 100.00% | 6,206.42 | 0.04% | 14,842,141.47 | ||||
If provision was made for bad debts of accounts receivable in accordance with the general expected credit loss model:
□Applicable ?Not applicable
(3) Provision for bad debts accrued, recovered or reversed during the Reporting Period
Provision for bad debts during the Reporting Period:
Unit: RMB
| Type | Opening balance | Changes in amount for the period | Closing balance | |||
| Provision | Recovery or reversal | Write-offs | Others | |||
| Provision for bad debts made on an individual basis | 5,390.00 | 5,390.00 | ||||
| Provision for expected credit loss on a portfolio basis | 816.42 | -279.05 | 537.37 | |||
| Total | 6,206.42 | -279.05 | 5,927.37 | |||
(4) Accounts receivable actually written off during the Reporting Period
Unit: RMB
| Item | Amount written off |
| Accounts receivable actually written off | 5,927.37 |
2. Other receivables
Unit: RMB
| Item | Closing balance | Opening balance |
| Dividends receivable | 786,539,232.73 | 2,011,040,000.00 |
| Other receivables | 12,911,608,164.83 | 12,121,782,217.29 |
| Total | 13,698,147,397.56 | 14,132,822,217.29 |
(1) Dividends receivable
1) Category of dividends receivable
Unit: RMB
| Item (investee) | Closing balance | Opening balance |
| Yunnan Dexin Paper Co., Ltd. | 40,000,000.00 | |
| Shanghai Energy New Material Technology Co., Ltd. | 666,539,232.73 | 1,841,040,000.00 |
| Yunnan Hongta Plastic Co., Ltd. | 120,000,000.00 | 130,000,000.00 |
| Total | 786,539,232.73 | 2,011,040,000.00 |
(2) Other receivables
1) Other receivables by nature
Unit: RMB
| Nature of amount | Closing book balance | Opening book balance |
| Capital lending | 12,907,906,230.22 | 12,116,102,707.88 |
| Other | 3,870,292.33 | 5,937,803.88 |
| Total | 12,911,776,522.55 | 12,122,040,511.76 |
2) Disclosure by aging
Unit: RMB
| Aging | Closing book balance | Opening book balance |
| 1 years or below | 1,563,908,800.83 | 6,349,115,309.07 |
| 1-2 years | 5,851,547,826.80 | 584,822,661.99 |
| 2-3 years | 382,813,869.07 | 4,421,873,925.04 |
| Over 3 years | 5,113,506,025.85 | 766,228,615.66 |
| 3-4 years | 5,113,306,025.85 | 766,228,615.66 |
| 4-5 years | 200,000.00 | |
| Total | 12,911,776,522.55 | 12,122,040,511.76 |
3) Disclosure by provision for bad debt
Unit: RMB
| Type | Closing balance | Opening balance | ||||||||
| Book balance | Provision for bad debts | Book value | Book balance | Provision for bad debts | Book value | |||||
| Amount | Percentage | Amount | Provision percentage | Amount | Percentage | Amount | Provision percentage | |||
| Including: | ||||||||||
| Provision for bad debts made on a portfolio basis | 12,911,776,522.55 | 100.00% | 168,357.72 | 0.00% | 12,911,608,164.83 | 12,122,040,511.76 | 100.00% | 258,294.47 | 0.00% | 12,121,782,217.29 |
| Including: | ||||||||||
| 1. Companies within the consolidation scope | 12,907,906,230.23 | 99.97% | 12,907,906,230.23 | 12,116,102,707.88 | 99.95% | 12,116,102,707.88 | ||||
| 2. Companies not within the consolidation scope | 3,870,292.32 | 0.03% | 168,357.72 | 4.35% | 3,701,934.60 | 5,937,803.88 | 0.05% | 258,294.47 | 4.35% | 5,679,509.41 |
| Total | 12,911,776,522.55 | 100.00% | 168,357.72 | 0.00% | 12,911,608,164.83 | 12,122,040,511.76 | 100.00% | 258,294.47 | 0.00% | 12,121,782,217.29 |
Provision for bad debts made on a portfolio basis: 1. Companies within the consolidation scope
Unit: RMB
| Name | Closing balance | ||
| Book balance | Provision for bad debts | Provision percentage | |
| Stage I | 12,907,906,230.23 | 0.00 | 0.00% |
| Total | 12,907,906,230.23 | 0.00 | |
Provision for bad debts made on a portfolio basis: 2. Companies not within the consolidation scope
Unit: RMB
| Name | Closing balance | ||
| Book balance | Provision for bad debts | Provision percentage | |
| Stage I | 3,870,292.32 | 168,357.72 | 4.35% |
| Total | 3,870,292.32 | 168,357.72 |
If provision was made for bad debts in accordance with the general expected credit loss model:
Unit: RMB
| Provision for bad debts | Stage I | Stage II | Stage III | Total |
| 12-month ECL | Lifetime ECL (not credit- impaired) | Lifetime ECL (credit-impaired) | ||
| Balance on January 1, 2024 | 258,294.47 | 258,294.47 | ||
| Balance on January 1, 2024 for the current period | ||||
| Provision for the period | -89,936.75 | -89,936.75 | ||
| Balance on December 31, 2024 | 168,357.72 | 168,357.72 |
Basis of classification of each stage and percentage of provision for bad debtsMovement of book balance of significant change in provision for loss for the period
□Applicable ?Not applicable
4) Provision for bad debts accrued, recovered or reversed during the period
Provision for bad debts during the period:
Unit: RMB
| Type | Opening balance | Changes in amount for the period | Closing balance | |||
| Provision | Recovery or reversal | Transfer or write-off | Others | |||
| Provision for bad debts made on a portfolio basis | 258,294.47 | -89,936.75 | 168,357.72 | |||
| Total | 258,294.47 | -89,936.75 | 168,357.72 | |||
5) Top five customers with closing balance of other receivables collected by arrear party
Unit: RMB
| Company name | Nature of amount | Closing balance | Aging | As a percentage of total closing balance of other receivables | Closing balance of provision for bad debts |
| Shanghai Energy New Material Technology Co., Ltd. | Capital lending | 5,475,905,150.23 | Less than 1 year, 1-2 years | 42.41% | |
| Wuxi Energy New Material Technology Co., Ltd. | Capital lending | 3,528,794,296.26 | Less than 1 year, 1-2 years, 2-3 years and over 3 years | 27.33% | |
| Jiangxi Tonry New Energy Technology Development Co., Ltd. | Capital lending | 2,359,587,873.63 | Less than 1 year, 1-2 years, 2-3 years and over 3 years | 18.27% | |
| Jiangsu Energy New Material Technology Co., Ltd. | Capital lending | 1,455,078,615.28 | Less than 1 year, and 1-2 years, | 11.27% | |
| Jiangsu Ruijie New Material Technology Co., Ltd. | Capital lending | 70,956,858.97 | Less than 1 year | 0.55% |
| Total | 12,890,322,794.37 | 99.83% |
3. Long-term equity investment
Unit: RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
| Investment in subsidiaries | 4,971,553,501.90 | 4,971,553,501.90 | 4,959,728,962.52 | 4,959,728,962.52 | ||
| Total | 4,971,553,501.90 | 4,971,553,501.90 | 4,959,728,962.52 | 4,959,728,962.52 | ||
(2) Investments in subsidiaries
Unit: RMB
| Name of investee | Opening balance (book value) | Opening balance of provision for impairment | Increase/Decrease for the period | Closing balance (book value) | Closing balance of provision for impairment | |||
| Increase in investment | Decrease in investment | Provision for impairment | Others | |||||
| Yunnan Dexin Paper Co., Ltd. | 162,135,598.40 | 162,135,598.40 | ||||||
| Yunnan Hongta Plastic Co., Ltd. | 418,898,313.03 | 418,898,313.03 | ||||||
| Yunnan Hongchuang Packaging Co., Ltd. | 441,809,808.43 | 441,809,808.43 | ||||||
| Shanghai Energy New Material Technology Co., Ltd. | 3,683,485,584.35 | 2,670,118.00 | 3,680,815,466.35 | |||||
| Zhuhai Energy New Material Technology Co., Ltd. | 10,264,323.09 | 3,252,437.91 | 7,011,885.18 | |||||
| Jiangxi Tonry New Energy Technology Development Co., Ltd. | 9,322,420.92 | 2,568,423.89 | 6,753,997.03 | |||||
| Jiangxi Enpo New Materials Co., Ltd. | 428,671.32 | 245,276.83 | 183,394.49 | |||||
| Energy (Zhuhai Economic and Technological Development Zone) New Material Technology Co., Ltd. | 6,160,268.61 | 1,148,218.29 | 5,012,050.32 | |||||
| Jiangxi Ruijie New Material Technology Co., Ltd. | 3,232,056.72 | 1,005,064.64 | 2,226,992.08 | |||||
| Suzhou GreenPower New Energy Materials Co., Ltd. | 11,035,140.82 | 3,093,298.55 | 7,941,842.27 | |||||
| Wuxi Energy New Material Technology Co., Ltd. | 15,796,085.82 | 4,701,519.81 | 11,094,566.01 | |||||
| Chongqing Energy Newmi Technological Co., Ltd. | 10,821,104.27 | 2,967,181.03 | 7,853,923.24 | |||||
| Chongqing Energy New Material Technology Co., Ltd. | 44,233.51 | -5,284.52 | 49,518.03 | |||||
| Jiangsu Energy New Material Technology Co., Ltd. | 295,353.23 | -401,887.42 | 697,240.65 | |||||
| Shanghai Energy New Materials Research Co., Ltd. | 100,000,000.00 | -1,968.75 | 100,001,968.75 | |||||
| Yunnan Jiechen Packaging Materials Co., Ltd. | 86,000,000.00 | 33,000,000.00 | 119,000,000.00 | |||||
| Shanghai En Er Jie Trading Co., Ltd. | -328.13 | 328.13 | ||||||
| Hubei Energy New Material Technology Co., Ltd. | -65,953.26 | 65,953.26 | ||||||
| Jiangsu Ruijie New Material Technology Co., Ltd. | -656.25 | 656.25 | ||||||
| Total | 4,959,728,962.52 | 33,000,000.00 | 21,175,460.62 | 4,971,553,501.90 |
4. Operating income and operating cost
Unit: RMB
| Item | Amount for the current period | Amount for the previous period | ||
| Income | Cost | Income | Cost | |
| Main businesses | 1,257,706.70 | 1,666,195.21 | 47,324,192.93 | 37,369,699.69 |
| Other businesses | 3,664,149.86 | 2,150,884.53 | 15,791,845.68 | 12,555,992.03 |
| Total | 4,921,856.56 | 3,817,079.74 | 63,116,038.61 | 49,925,691.72 |
Breakdown information of the operating income and operating cost:
Unit: RMB
| Contract category | Segment 1 | Total | ||
| Operating income | Operating cost | Operating income | Operating cost | |
| Business type | 1,257,706.70 | 1,666,195.21 | 1,257,706.70 | 1,666,195.21 |
| Including: | ||||
| Cigarette label | 1,257,706.70 | 1,666,195.21 | 1,257,706.70 | 1,666,195.21 |
| Others | ||||
| By business region | 1,257,706.70 | 1,666,195.21 | 1,257,706.70 | 1,666,195.21 |
| Including: | ||||
| Southwest China | 1,092,368.02 | 1,500,856.53 | 1,092,368.02 | 1,500,856.53 |
| Southcentral China | 165,338.68 | 165,338.68 | 165,338.68 | 165,338.68 |
| Total | 1,257,706.70 | 1,666,195.21 | 1,257,706.70 | 1,666,195.21 |
5. Investment income
Unit: RMB
| Item | Amount for the current period | Amount for the previous period |
| Gain from long-term equity investment under the cost method | 45,000,000.00 | 1,850,000,000.00 |
| Gain from wealth management products | 2,775,000.00 | |
| Total | 47,775,000.00 | 1,850,000,000.00 |
6. Others
XX. Supplementary Information
1. Breakdown of non-recurring gain or loss for the current period
?Applicable □Not applicable
Unit: RMB
| Item | Amount | Remarks |
| Gains and losses from the disposal of non-current assets | -636,682.57 | |
| Government subsidies recognized in current profit or loss (except for those closely related to the Company’s normal business and are in line with national policies and in accordance with defined criteria that have a continuing impact on the Company’s profit or loss) | 86,288,377.95 | |
| Gains or losses from changes in fair value arising from financial assets and financial liabilities held by non-financial corporation, and gains or losses from disposal of financial assets and financial liabilities, excluding the effective hedging business related to the Company’s normal business operations | 124,692.63 | |
| Reversal of the provisions for impairment of receivables subject to separate impairment test | 2,384,991.32 | |
| Non-operating income and expenses other than above-mentioned items | -2,924,642.41 | |
| Other items within the definition of non-recurring gains or losses | 461,445.22 | |
| Less: Effect of the income tax | 21,424,545.54 | |
| Effect of minority equities (after tax) | 7,293,154.24 | |
| Total | 56,980,482.36 | -- |
Details of other profit or loss items that fall within the meaning of non-recurring gain or loss:
□Applicable ?Not applicable
There was no other profit or loss item of the Company that fall within the meaning of non-recurring gain or lossThe reason for the Company to define the non-recurring profit or loss items illustrated in the Information Disclosure and PresentationRules for Companies Making Public Offering of Securities No. 1 – Non-recurring Profit or Loss as recurring profit or loss items.
□Applicable ?Not applicable
2. Return on equity and earnings per share
| Profit during the Reporting Period | Weighted average return on equity | Earnings per share | |
| Basic earnings per share (RMB/share) | Diluted earnings per share (RMB/share) | ||
| Net profits attributable to common stockholders of the Company | -2.17% | -0.57 | -0.8733 |
| Net profits attributable to common stockholders of the Company after the deduction of non-recurring gains and losses | -2.39% | -0.63 | -0.93 |
3. Accounting data differences under Chinese and overseas accounting standards
(1) Difference between the net profit and net assets of the financial report disclosed in accordance with theinternational accounting standards and the Chinese accounting standards
□Applicable ?Not applicable
(2) Difference between the net profit and net assets of the financial report disclosed in accordance with theoverseas accounting standards and the Chinese accounting standards
□Applicable ?Not applicable
(3) Specifications of the reason for the accounting data difference under Chinese and overseas accountingstandards. In the case of any difference adjustment made to any data audited by overseas auditor, the nameof this overseas auditor should be specified.
4. Others