Goertek Inc.
Annual Report 2024
March 2025
Annual Report 2024
Section Ⅰ Important Notes, Contents and InterpretationsThe Board of Directors, the Board of Supervisors, directors, supervisors andsenior management of the Company guarantee that the information presented inthis report is true, accurate, and complete，free from false statements,misrepresentations and material omissions, and will undertake individual andjoint legal liabilities.Jiang Bin, the person in charge of the Company, and Li Yongzhi, the person incharge of accounting and the accounting department (accounting supervisor)guarantee that the financial report in this annual report is authentic, accurate,and complete.All directors have attended the board meeting to review the annual report.The future plans and some forward-looking statements mentioned herein areplanned matters which shall not constitute a substantial commitment of theCompany to investors. Therefore, both investors and relevant persons shouldmaintain their risk awareness and understand the differences among plan,forecast and commitment. Please pay attention to investment risks.The Company faces the risks in market, operation and management. Investorsare kindly reminded to pay attention to possible investment risks. For details, see"Section III Management Discussion and Analysis, XI. Outlook for the FutureDevelopment of the Company" in this report.The profit distribution proposal considered and approved by the Board ofDirectors of the Company is as follows: based on the total share capital registeredon the record date of equity distribution minus the repurchased shares in theCompany's specific securities repurchase account, the Company will distribute acash dividend of RMB 1.50 (tax inclusive) per 10 shares to all the shareholders,with no bonus shares and no conversion of capital surplus into share capital.
Contents
Section Ⅰ Important Notes, Contents and Interpretations ...... 2
Section Ⅱ Company Information and Financial Highlights ...... 7
Section III Management Discussion and Analysis ...... 11
Section IV Corporate Governance ...... 37
Section V Environmental and Social Responsibilities ...... 66
Section VI Important Matters ...... 69
Section VII Changes in Shares and Shareholder Information ...... 80
Section VIII Preference Shares ...... 89
Section IX Bonds ...... 90
Section X Financial Report ...... 91
Directory of Reference Files
(1) Financial statements signed and sealed by the Company's person in charge, the chief accountant,and the person in charge of accounting department (accounting supervisor);
(2) The originals of the 2024 annual report and its abstract signed by the Company's person in charge;
(3) The originals of the auditor's report with the seal of Zhongxi CPAs (Special General Partnership)and the signature and seal of the certified public accountants;
(4) The originals of all company documents and announcements publicly disclosed in mediadesignated by the China Securities Regulatory Commission (CSRC) during the reporting period.
Interpretations
| Terms | Refers to | Content of interpretation |
| Company, the Company, Goertek Inc. | Refers to | Goertek Inc. |
| Goertek Group | Refers to | Goertek Group Co., Ltd., Controlling shareholder of the Company |
| Goertek Microelectronics | Refers to | Goertek Microelectronics Inc. controlled subsidiary of the Company |
| ODM | Refers to | Original Design and Manufacturing |
| JDM | Refers to | Joint Design and Manufacturing |
| Micro speaker | Refers to | The micro electro-acoustic components that transform electrical signal into an acoustic signal, generate driving forces through the magnetic line cutting of the voice coil in a magnetic field, to drive the diaphragm vibration, which then pushes the air for sound. Compared with the micro receiver, it's characterized by a higher power, wide frequency response and high fidelity, which is generally used for playing sound. |
| MEMS | Refers to | Based on micron/nano technology, Micro Electro Mechanical System (MEMS) is a technology developed for designing, processing, manufacturing, measuring, and controlling micron/nano materials. MEMS can integrate mechanical components, optical systems and electric control systems of driving components into a whole unit of microsystem, featured with miniaturization, intelligence, multi-function, high integration and being suitable for mass production. |
| Speaker module | Refers to | The acoustic component composed of one or several micro speakers and other electronic devices, which are assembled together through an injection molded housing. |
| Smart wearable devices | Refers to | A portable device that can be worn or carried directly, or integrated into the user's clothes or accessories. |
| Virtual Reality/VR | Refers to | A computer simulation system that can generate a simulation environment where users can experience virtual situations. |
| Mixed Reality/MR | Refers to | A new visual environment that can integrate the real and virtual situations, where users, the real world, and virtual digital objects can coexist and interact in real time. |
| Augmented Reality/AR | Refers to | A technology that skillfully integrates virtual information with the real world. By making extensive use of multimedia, 3D modeling, real-time tracking and registration, intelligent interaction, sensing, and other technical means, it applies the computer-generated text, images, 3D models, music, video, and other virtual information to the real world after simulation. These two kinds of information complement each other to achieve "augmentation" of the real world. |
| AI Smart Glasses | Refers to | A wearable device that integrates AI technology, incorporating speakers, microphones, cameras, chips, storage, communication modules, and display modules into traditional glasses. It provides users with an AI assistant experience through intelligent interaction methods, such as voice and vision, and offers functions such as audio, photography, and wireless communication. |
| Smart Wireless Earphones | Refers to | The new types of smart wireless earphones represented by TWS (True Wireless Stereo) earphones connect the left and right earphones with smart phones or other terminal devices through Bluetooth technology to form an independent stereo system, which realizes touch control, voice control, body information collection, and other functions by adding various sensors. |
| Terms | Refers to | Content of interpretation |
| Microsystem module | Refers to | Also known as System in Package(SiP) packaging module at the system level, it integrates multiple chips and passive components into the same package through advanced packaging technologies such as 3D packaging, to form a module with whole or main functions of an electronic system, so as to realize the optimal combination of performance, volume, weight, and other indicators. It is a versatile next-generation microelectronics technology. |
| Sensor | Refers to | A detection device that is capable of feeling the measured information, and able to transform the information into electrical signals or other required forms of information for output based on certain rules, in order to meet the requirements of information transmission, processing, storage, display, recording and control. |
| Micro-display | Refers to | A technology that displays images or video information through tiny display units. This technology typically uses semiconductor manufacturing processes to integrate display devices onto a very small chip or substrate, achieving high resolution, high contrast, high brightness, and low power consumption. |
| Micro-nano Optical Devices | Refers to | Optical devices based on microstructured materials have significant advantages over traditional optical devices in terms of lightweight, integration, and the application of perceptive technology. |
| GPS | Refers to | Goertek Production System. It is a comprehensive operation system that integrates automation, information communication, artificial intelligence, green and low-carbon technologies. It aims to promote manufacturing transformation and upgrading, optimize the management and cooperation mode of the whole chain, and improve the core competitiveness of the company and the happiness of employees. |
| AR HUD | Refers to | A product that combines AR (Augmented Reality) technology with a Head-Up Display (HUD) system. By projecting key data, such as driving information, navigation instructions, and traffic alerts, in the form of virtual images directly onto the windshield in front of the driver, it can create a blended effect of reality and virtuality, allowing the driver to conveniently access the necessary information while keeping their focus on the road. |
| Company Law | Refers to | Company Law of the People's Republic of China |
| Securities Law | Refers to | Securities Law of the People's Republic of China |
| Articles of Association | Refers to | Articles of Association of Goertek Inc. |
| RMB, RMB 10,000, RMB 100,000,000 | Refers to | yuan (RMB), ten thousand yuan (RMB), hundred million yuan (RMB) |
| Reporting period | Refers to | January 1, 2024 to December 31, 2024 |
| Same period of the previous year | Refers to | January 1, 2023 to December 31, 2023 |
| End of the reporting period | Refers to | December 31, 2024 |
| Beginning of the period, beginning of the year | Refers to | January 1, 2024 |
Notes:
1. Explanation of other matters: In this report, any difference between the sum of some amounts and the sum of detailed items is dueto rounding.
2. This report has been prepared in both Chinese and English. Should there be any discrepancies or misunderstandings between thetwo versions, the Chinese version shall prevail.
Section Ⅱ Company Information and Financial Highlights
I. Company Information
| Stock abbreviation | Goertek Inc. | Stock code | 002241 |
| The stock exchange where stocks are listed | Shenzhen Stock Exchange | ||
| Name of the Company in Chinese | 歌尔股份有限公司 | ||
| Abbreviation of the Company in Chinese | 歌尔股份 | ||
| Name of the Company in English | Goertek Inc. | ||
| Abbreviation of the Company in English | Goertek | ||
| Legal representative of the Company | Jiang Bin | ||
| Registered address | 268 Dongfang Road, High-tech Industrial Development District, Weifang | ||
| Postal code of registered address | 261031 | ||
| History of changes in registered address of the Company | No change | ||
| Business address | 268 Dongfang Road, High-tech Industrial Development District, Weifang | ||
| Postal code of business address | 261031 | ||
| Company website | http://www.goertek.com | ||
| ir@goertek.com | |||
II. Contacts and Contact Information
| Board Secretary | Securities Affairs Representative | |
| Name | Xu Dapeng | Xu Yanqing |
| Contact address | 268 Dongfang Road, High-tech Industrial Development District, Weifang | 268 Dongfang Road, High-tech Industrial Development District, Weifang |
| Tel. | 0536-3055688 | 0536-3055688 |
| Fax | 0536-3056777 | 0536-3056777 |
| ir@goertek.com | ir@goertek.com |
III. Media for Information Disclosure and Place of the Report
| Website of the stock exchange for release of the Annual Report | Shenzhen Stock Exchange (http://www.szse.cn) |
| Name and website of the media for release of the Annual Report | Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily, CNINFO (http://www.cninfo.com.cn) |
| Place where the Annual Report is available for inspection | Office of Board of Directors of the Company |
IV. Changes in Registration
| Unified Social Credit Code | 91370700729253432M |
| The changes in main business since the Company was listed (if any) | No change |
| Changes of controlling shareholders of the Company (if any) | No change |
V. Other Relevant Information
Accounting firm engaged by the Company
| Name of the accounting firm | Zhongxi CPAs (Special General Partnership) |
| Business address of the accounting firm | Room 1101, F11, No. 11, Chongwenmenwai Street, Dongcheng District, Beijing |
| Names of accountants signing the report | Du Yeqin, Zhang Shuli |
The sponsor institution engaged by the Company to perform continuous supervision during the reporting period? Applicable ? Not applicableThe financial advisor engaged by the Company to perform continuous supervision during the reporting period? Applicable ? Not applicableⅥ. Key Accounting Data and Financial IndicatorsWhether the Company performed a retrospective adjustment or restatement of previous accounting data? Yes ? No
| 2024 | 2023 | YoY change | 2022 | |
| Revenue (RMB) | 100,953,848,156.08 | 98,573,902,273.14 | 2.41% | 104,894,324,162.26 |
| Net profit attributable to shareholders of the Company (RMB) | 2,665,044,826.06 | 1,088,076,730.88 | 144.93% | 1,749,181,131.83 |
| Net profit attributable to shareholders of the Company excluding non-recurring gains and losses (RMB) | 2,393,206,176.65 | 859,926,918.87 | 178.30% | 1,627,378,630.73 |
| Net cash flow from operating activities (RMB) | 6,200,452,181.84 | 8,151,888,243.38 | -23.94% | 8,317,113,364.68 |
| Basic earnings per share (RMB) | 0.79 | 0.32 | 146.88% | 0.52 |
| Diluted earnings per share (RMB) | 0.78 | 0.32 | 143.75% | 0.52 |
| Weighted average return on net assets | 8.46% | 3.59% | 4.87% | 6.17% |
| End of 2024 | End of 2023 | YoY change | End of 2022 | |
| Total assets (RMB) | 82,706,773,086.83 | 73,744,409,441.15 | 12.15% | 77,176,355,467.91 |
| Net assets attributable to shareholders of the Company (RMB) | 33,186,335,842.73 | 30,810,590,551.00 | 7.71% | 29,491,882,199.49 |
The lower of the net profit before and after non-recurring gains and losses was negative for the last three accounting years, and thelatest auditor's report indicated that there was uncertainty about the Company's ability to continue as a going concern.? Yes ? NoThe lower of the net profit before and after non-recurring gains and losses was negative.? Yes ? No
Ⅶ. Differences in Accounting Data between Domestic and Overseas Accounting Standards
1. Differences in net profits and net assets in the financial reports disclosed according to international andChinese accounting standards? Applicable ? Not applicableDuring the reporting period, there is no difference in net profits and net assets in the financial reports disclosed pursuant tointernational and Chinese accounting standards.
2. Differences in net profits and net assets in the financial reports disclosed according to overseas andChinese accounting standards? Applicable ? Not applicableDuring the reporting period, there is no difference in net profits and net assets in the financial reports disclosed pursuant to overseasand Chinese accounting standards.
Ⅷ. Key Quarterly Financial Indicators
Unit: RMB
| The first quarter | The second quarter | The third quarter | The fourth quarter | |
| Revenue | 19,311,868,351.19 | 21,070,445,175.29 | 29,263,552,701.56 | 31,307,981,928.04 |
| Net profit attributable to shareholders of the Company | 379,545,536.73 | 845,526,229.42 | 1,120,142,875.99 | 319,830,183.92 |
| Net profit attributable to shareholders of the Company excluding non-recurring gains and losses (RMB) | 275,495,406.41 | 908,618,562.28 | 861,935,824.78 | 347,156,383.18 |
| Net cash flow from operating activities | 1,534,517,201.91 | 939,435,085.68 | 185,997,335.24 | 3,540,502,559.01 |
Whether there is significant difference between the above financial indicators and that of what disclosed in the quarterly reports andsemi-annual reports? Yes ? No
Ⅸ. Non-recurring Gains and Losses
? Applicable ? Not applicable
Unit: RMB
| Item | 2024 | 2023 | 2022 | Explanation |
| Gains and losses on disposal of non-current assets (including the write-off portion of the provision for asset impairment) | -85,999,752.59 | -123,882,680.16 | 122,922,237.61 | Mainly for the loss on scrapping fixed assets |
| Government grants included in the current profits and losses (except for those that are closely related to the normal business operations of the Company, comply with national policy regulations, are enjoyed according to established standards, and have a continuous impact on the Company's gains and losses) | 196,923,255.19 | 331,548,590.64 | 351,383,799.43 | Mainly special funds for enterprise innovation and development and other government grants |
| Profits and losses from changes in the fair value of financial assets and liabilities, and from the disposal of financial assets and liabilities, held by non-financial enterprises, except for effective hedging businesses related to the normal operating business of the Company. | 112,020,093.46 | -26,138,756.91 | -367,080,970.87 | Mainly for changes in fair value of equity investments held by the Company and the investment income from foreign exchange derivatives |
| Other non-operating income and expenditures other than those mentioned above | 12,014,095.20 | 28,631,472.04 | 15,710,102.76 | |
| Other profit and loss items that meet the definition of non-recurring profit and loss | 62,609,433.16 | 66,527,741.91 | 42,288,231.23 | Mainly for investment income from products such as certificates of deposit |
| Less: Impact of income tax | 18,834,375.42 | 35,531,401.22 | 26,114,589.64 | |
| Impact of minority interests (after tax) | 6,894,099.59 | 13,005,154.29 | 17,306,309.42 | |
| Total | 271,838,649.41 | 228,149,812.01 | 121,802,501.10 | -- |
Details of other gains and losses that meet the definition of non-recurring gains and losses:
? Applicable ? Not applicableMainly for investment income from products such as certificates of depositNote for the definition of non-recurring gains and losses set out in the Explanatory Announcement No. 1 on Information Disclosurefor Companies with Public Offerings of Securities - Non-recurring Gains and Losses, as recurring gains and losses.? Applicable ? Not applicableThe Company did not classify any item of the non-recurring gains and losses listed in the Explanatory Announcement No. 1 onInformation Disclosure for Companies with Public Offerings of Securities - Non-recurring Gains and Losses, as recurring gains andlosses in the reporting period.
Section III Management Discussion and Analysis
Ⅰ. The Situation of the Industry during the Reporting PeriodDuring the reporting period, the Company's main business is categorized into the industry of the manufacturing of computer,communication, and other electronic devices, and is divided into three product segments: precision component, smart audio device andsmart hardware. The Company mainly focuses in consumer electronics and automotive electronics industries, and provides a widerange of products including acoustics, optics, microelectronics and structural precision components, as well as smart hardware productssuch as virtual reality (VR)/mixed reality (MR)/augmented reality (AR) products, smart wireless earphones, smart wearable devices,gaming console and accessories, and smart home products. The Company serves the global leading clients in the technology andconsumer electronics industry with vertically integrated product solutions of precision components and smart hardware, as well asR&D and manufacturing services.The consumer electronics industry has gradually entered the post-mobile era. Global smartphone product sales growth remains weak.Emerging smart hardware products, represented by VR/AR, smart wireless earphones, smart wearable devices, and smart home devices,have become new growth points in the consumer electronics industry. However, the growth rate of some emerging smart hardwareproducts has slowed in recent years due to factors such as global macroeconomic fluctuations, insufficient end-user demand, and a lackof hardware technology innovation. Major enterprises in the global technology and consumer electronics industry are actively exploringnew technological breakthroughs and industry development opportunities.Generative AI technologies, such as Large Language Model (LLM) and Multimodal Large Language Model (MLLM), continued todevelop in 2024. New LLM are continuously emerging, with modeling capabilities evolving rapidly and being adopted across variousfields, including technology, art, education, healthcare, and entertainment, driving efficiency improvements and intelligenttransformations in related industries. The combination of AI technology and smart hardware products is expected to open up newindustry development spaces, providing industry manufacturers with a new round of development opportunities. On the one hand, theintegration of AI technology with smartphone products is deepening, with leading enterprises actively developing AI smartphones thatfacilitate the deployment of LLM on the device side and possess multimodal capabilities. The AI capabilities of smartphones aregradually evolving from single applications to cross-application collaboration, cross-device collaboration, and end-cloud collaboration,promising consumers a more efficient and convenient intelligent experience suitable for diverse scenarios. This brings newdevelopment momentum to smartphones, the core hardware products of the consumer electronics industry, and subsequently drives thedevelopment of related smart hardware products, such as smart wireless earphones, smart wearable devices, and smart home devices,as well as related precision component products. On the other hand, the rapid development of AI technology injects new vitality intothe development of emerging smart hardware products. There is an urgent need for AI technology to be integrated into consumerterminal devices to continuously acquire vast amounts of natural data to promote the evolution of Large Language Model, establishconsumer usage stickiness, and innovate and close the business model loop. This demand has given rise to a variety of new usagescenarios and product forms for emerging smart hardware products, such as AI smart glasses and AR devices that can call upon AILarge Language Model technology in real-time to provide consumers with personal intelligent assistant experiences. These productshave developed rapidly in 2024 and gained widespread market attention, also driving innovation and development in relatedtechnologies such as optics, micro-displays, sensors, advanced materials, and advanced packaging. Moreover, generative AI technologyhas shown great potential in the field of content creation, promising to significantly improve the efficiency and cost of content creationin industries such as entertainment and gaming. It also brings imaginative possibilities for the future development of smart hardwarethat relies heavily on content, such as VR and gaming consoles.According to statistics from the well-known consulting firm IDC, the worldwide shipments of smartphones in 2024 totaledapproximately 1.24 billion units, representing a year-on-year increase of about 6.1%. This indicates a recovery in the overall market,which has also led to a recovery in the precision components market. Notably, products related to AI voice interaction, such as acousticsensors, have shown a clear trend of technological upgrading and an increase in the amount of product value. Similarly, according toIDC, the worldwide shipments of smart wearable devices in 2024 totaled approximately 190 million units, a slight year-on-yeardecrease of about 1.3%, with the overall market remaining stable. The worldwide shipments of TWS earphones totaled approximately280 million units, representing a year-on-year increase of about 14% and demonstrating a healthy growth trend. Against the backdropof a moderate recovery in consumer electronics terminal demand, along with the implementation of AI technology on terminal devicesand the ongoing iteration of hardware and software technologies, such as intelligent interaction and health monitoring, theaforementioned smart hardware products are expected to continue to maintain steady growth in the future.According to IDC, the worldwide shipments of VR, MR, and AR devices in 2024 totaled approximately 7.6 million units, representinga year-on-year increase of about 12%. Among them, the market size of VR/MR devices is showing signs of growth once again. With
the development of generative AI technology, future content creation efficiency is expected to be improved significantly, and thecontinuous enrichment of content will strongly support the long-term development of VR and MR devices. AR devices and thederivative AI smart glasses emerged as the most popular products in the market in 2024. Among these, AI smart glasses demonstratedparticular promise, becoming a highly promising new product in both the consumer electronics and metaverse industries. Accordingto statistics from the well-known consulting firm Counterpoint Research, the worldwide shipments of AI smart glasses grew by 210%year-on-year in 2024, surpassing 2 million units for the first time. AI smart glasses have unique advantages in user data collection andhuman-computer interaction, and are expected to become an important carrier for the implementation of AI LLM technology on thedevice side. This has led to sustained interest and investment from numerous well-known companies, underscoring their substantialmarket potential. At the same time, while the hardware technology and application scenarios of AR devices are still in the process ofmaturing, the industry's leading enterprises have been actively promoting their release, accelerating the speed of technology iterationof related optics, displays, communications, and new materials. As a result, the maturity of the products is improving, and it isanticipated that this will usher in a new round of rapid development in the coming years.Facing the new trend of the integration of AI technology and emerging smart hardware products, as well as new opportunities inindustries such as consumer electronics and the metaverse, the Company will make every effort to respond actively. Leveraging itsexisting advantages, the Company will invest in research and development, explore new technological directions for emerging products,and continuously consolidate its core competitiveness. The Company will engage in long-term strategic cooperation with leadingindustry clients and actively expand its business in emerging smart hardware and related precision components, thereby promoting thesustainable and healthy development of the Company's business.II. The Company's Main Business during the Reporting PeriodThe Company serves the global leading clients in the technology and consumer electronics industry with vertically integrated productsolutions of precision components and smart hardware, as well as R&D and manufacturing services.The Company's main business divides into three segments including precision components business, smart audio device business andsmart hardware business. The precision components business focuses on acoustics, optics, microelectronics, structural components,and other precision components. The related products include micro speaker/receiver, speaker module, haptic component (actuator),wireless charging device, antenna, VR/MR optical devices and modules, AR optical devices, micro-nano optical devices, 3D structuredlight modules, AR optical device modules, AR HUD modules, MEMS acoustic sensors, other MEMS sensors, SiP, precision structuralparts, etc. The above-mentioned products are widely applied in devices such as smartphones, tablets, smart wireless earphones, VR,MR, AR, AI smart glasses, smart wearable devices, smart home devices, and automotive electronics devices. Smart audio devicebusiness focuses on providing products related to audio, voice interaction, AI, and other technologies. The main products include smartwireless earphones, smart speakers, etc. Smart hardware business focuses on providing products related to entertainment, health andhome security. The main products include VR, MR, AR, smart wearable devices, gaming consoles and accessories, smart home devices,etc.The Company has innovative competitive advantages in the fields of acoustics, optics, MEMS microelectronics and precisionmanufacturing, and owns many intellectual property rights in the field of precision parts and components. In addition, the Companyhas accumulated rich experience in products and projects by cooperating with industry-leading clients in the field of smart audio deviceand smart hardware through "ODM", "JDM" and other business modes. During the reporting period, the Company maintained strong,long-term cooperative relationships with leading clients in the global technology and consumer electronics industry. As a result, theCompany has been highly recognized by global clients for its product solutions and services, and remains the industry-leadingmanufacturer in the fields of micro speakers, MEMS microphones, MEMS sensors, VR, MR, smart wearable devices, gaming consoleand accessories, etc.During the reporting period, the Company won multiple honors, including being ranked the 6th in the 2024 Top 100 ElectronicComponents Enterprises of China, 18th in the 2024 Top 100 Competitive Enterprises in China's Electronics Information Industry, 65thin the 2024 Top 500 Private Enterprises in China, and First Prize of Shandong Science and Technology Progress Award, iF DesignAward, International Design Excellence Awards (IDEA), etc.
Ⅲ. Analysis of Core Competitiveness
1. Industry-leading precision and intelligent manufacturing capabilities
In technology and consumer electronics related fields, the Company has been widely recognized for precision manufacturingcapabilities and obtains great reputation. Relying on the core capabilities and long-term experience in the field of precisionmanufacturing, the Company has continuously improved the processing accuracy, production efficiency and quality of precisioncomponents and smart hardware products. The Company has in-house development capabilities of various core raw materials, and TheCompany adopted multiple advanced processes and technologies such as ultra-high-precision mold, high-precision metal/non-metalprocessing, ultrasonic technology, and laser technology, to build industry-leading precision manufacturing capabilities in theproduction of precision optical components, micro-display devices, MEMS sensors, SiP and precision structural parts, thus ensuringthe delivery of the products with high precision, high efficiency and high quality.The Company, based on the capacities of advanced equipment development and flexible automation production, actively explores theintelligent manufacturing mode for upgrading, and creates the GPS, Goertek Production System. In the fields of automation, machinevision and AI related to intelligent manufacturing, the Company has built a future-oriented core capability of intelligent manufacturingby continuing investing in independent R&D, introducing global advanced technologies, core equipment and best practice experiencefor system integration, thus improving the manufacturing in all aspects through the application of information, automation, artificialintelligence and other technologies. The Company promotes the transformation of its manufacturing to a more digitalized, connected,intelligent, and service-oriented model, and to build the core capabilities of future-oriented intelligent manufacturing.
2. Multi-technologies integration platform and strong team of R&D personnel
The Company has established a product R&D and manufacturing platform integrating materials, structures, electronic circuits, softwarealgorithms, wireless communication, advanced technology, testing, automation and other technologies. Through cross-domaintechnology integration, the Company provides customers with advanced and systematic solutions for precision components and smarthardware products. The Company integrated and cultivated outstanding talents in the fields of acoustics, optics, microelectronics,micro-display, wireless communication, precision manufacturing, automation, and other sectors around the world. The Company hasset up a team of technical personnel with profound technical strength and rich experience in product projects, and has made long-termcooperation with many well-known universities and scientific research institutions, such as Tsinghua University, Shanghai Jiao TongUniversity, Shandong University, Southeast University, University of Science and Technology of China, Huazhong University ofScience and Technology, and Hong Kong University of Science and Technology, which forms an open and comprehensive technologyR&D platform in support of continuous innovation and R&D of technologies and products.During the reporting period, the Company and its subsidiaries applied for 2,663 patents, including 2,236 invention patents. A total of1,830 patents have been granted, including 1,387 invention patents. As of December 31, 2024, the Company and its subsidiaries havetotally applied for 34,872 patents, including 4,362 foreign patent applications and 20,132 invention patent applications; a total of 21,735patents have been granted, including 8,196 invention patents.
3. Continuous strategic innovation and transformation, and stable high-value client relationshipsFacing the complex macroeconomic situation of domestic and overseas, the management of the Company actively carries out strategicalinnovation and transformation. While continuing to consolidate the core competitive advantages in conventional business, the Companyfirmly grasps the innovation opportunities of next-generation smart hardware products, AI technology, and metaverse in the technologyand consumer electronics industry. Relying on high-value client resources and good client relationships worldwide, the Company,oriented by the market and technology, continues to expand the consumer electronics and automotive electronics business in areas suchas smart wireless earphones, VR, MR, AR, AI smart glasses, smart wearable devices, smart gaming consoles, smart home devices, andAR HUDs.In response to the trend of AI technology, the Company is actively exploring the application of AI algorithms, LLM, and MLLM inproduction, manufacturing, and management, further enhancing the intelligence level of production and the informatization level ofmanagement operations, thereby consolidating the Company's industry position and core competitiveness. The Company optimizes theallocation of strategical resource, supports strategical product development, continues strengthening and further utilizing the clientresource advantages by closely following the world-class customers, in an effort to transform the needs of high-value clients into aninexhaustible driving force for the Company's sustainable development.
4. Excellent core management team
Although the Company experiences a rapid and sound development, the core management team keeps a steady and efficient style asalways. Facing the challenges and demands of next-generation smart hardware products in the post-mobile era such as rapiddevelopment, high quality, high precision manufacturing, short delivery cycle, and complex client certification process, the coremanagement team promptly responds to the market and makes changes and innovations continuously, to keep and enhance the
Company's capabilities of strategic management, operation, R&D, precision and intelligent manufacturing. The Company attachesimportance to and promotes the internationalization, specialization and rejuvenation of its core management team, and actively bringsin senior management talents and professionals from many international leading enterprises. At the same time, the Company hasstrengthened the echelon of its talent team, more and more young talents grow up into the Company's core management team throughtraining and practice. The Company boasts a management team with both experience and vitality that continues to promote theCompany's stable and fast development in the future.IV. Analysis of Main Business
1. Overview
During the reporting period, the Company, by adhering to the product strategy of "Precision Components + Smart Hardware", servedthe leading enterprises in the global technology and consumer electronics industry, actively promoted the development of precisioncomponents (acoustics, optics, microelectronics, structural parts, etc.) and emerging smart hardware business (VR/MR/AR, AI smartglasses, smart wireless earphones, smart wearable devices, smart home devices, etc.). At the same time, the Company has enhanced itsbusiness development within the automotive electronics sector, focusing on areas such as MEMS sensors and augmented reality heads-up display (AR HUD) modules. In the field of intelligent manufacturing, the Company is actively building the Goertek ProductionSystem (GPS), applying advanced AI technology to enhance the intelligence and informatization level of production, and constructinga future-oriented intelligent manufacturing model with Goertek characteristics, thus continuously consolidating the Company's corecompetitiveness as a manufacturing enterprise.During the reporting period, the terminal demand in the consumer electronics industry recovered driven by new technologies such asAI. With the recovery of industry demand, the Company's precision components business, smart audio devices business, and sub-product lines in the smart hardware sector, including VR, MR, and smart wearable devices, all progressed smoothly. The integrationof AI technology and smart hardware products has driven performance upgrades in products such as acoustic sensors within theCompany's precision components business, leading to an increase in product value and profitability. The sales of the Company's VRand MR devices saw significant year-on-year growth, while the overall business of smart wireless earphones and smart wearabledevices maintained healthy growth, with improvements in revenue scale and profitability. Affected by the normal decline in sales inthe mid to late stage of the product life cycle, the operating income of some smart hardware projects with relatively low gross marginsdeclined, which constrained the overall revenue growth of the Company but had a positive impact on the overall business gross marginstructure. At the same time, the Company has made significant progress in strengthening its lean operations and improving profitability.Ultimately, with a slight increase in overall revenue scale, the Company's profitability level significantly improved compared to theprevious reporting period.During the reporting period, the Company's management team, based on the Company's client strategy, worked actively to promotecontinuous improvement in client-oriented awareness and client service capabilities. As a result, the Company's client cooperationrelationships remained stable. In terms of internal operational management, the Company continued to promote efforts to improveoperational management, maintaining high efficiency in internal decision-making processes. The Company also actively explored theapplication of big data and AI technology in internal operational management, continuously enhancing the digitalization andinformatization levels of the Company's operations. These efforts have established a solid management and operational foundation forthe Company's long-term future development.During the reporting period, the Company achieved revenue of RMB 100,953.85million, with a 2.41% YoY increase. The Companyrealized a net profit attributable to shareholders of listed companies of RMB 2,665.04 million, with a 144.93% YoY increase. TheCompany's operating costs amounted to RMB 89,759.39million, with a 0.01%YoY increase.During the reporting period, the total amount of the Company's selling expenses, general and administrative expenses, research anddevelopment expenses, and financial expenses was RMB 7,772.68 million, with a 0.33% YoY decline.During the reporting period, the Company invested RMB 4,569.38 million in R&D, accounting for 4.53% of the revenue and 13.77%of the latest audited net assets attributable to the shareholders of listed companies.During the reporting period, the net cash flow from operating activities of the Company was RMB 6,200.45 million, with a 23.94%YoY decline.
2. Revenue and cost
(1) Composition of revenue
Unit: RMB
| 2024 | 2023 | YoY change | |||
| Amount | Proportion in revenue | Amount | Proportion in revenue | ||
| Total of revenue | 100,953,848,156.08 | 100% | 98,573,902,273.14 | 100% | 2.41% |
| Classified by industry | |||||
| Electronic components | 98,545,585,814.34 | 97.61% | 95,885,691,189.51 | 97.27% | 2.77% |
| Other business income | 2,408,262,341.74 | 2.39% | 2,688,211,083.63 | 2.73% | -10.41% |
| Classified by product | |||||
| Precision components | 15,050,929,866.12 | 14.90% | 12,991,833,787.27 | 13.18% | 15.85% |
| Smart audio device | 26,296,149,936.78 | 26.05% | 24,185,269,052.84 | 24.54% | 8.73% |
| Smart hardware | 57,198,506,011.44 | 56.66% | 58,708,588,349.40 | 59.56% | -2.57% |
| Other business income | 2,408,262,341.74 | 2.39% | 2,688,211,083.63 | 2.73% | -10.41% |
| Classified by region | |||||
| Domestic | 9,379,102,600.90 | 9.29% | 7,180,017,243.40 | 7.28% | 30.63% |
| Overseas | 91,574,745,555.18 | 90.71% | 91,393,885,029.74 | 92.72% | 0.20% |
| Classified by sales mode | |||||
| Direct selling | 100,398,975,571.86 | 99.45% | 98,164,328,961.68 | 99.58% | 2.28% |
| Distribution | 554,872,584.22 | 0.55% | 409,573,311.46 | 0.42% | 35.48% |
(2) Industries, products, regions and sales modes accounting for more than 10% of the Company's revenue or operatingprofit? Applicable ? Not applicable
Unit: RMB
| Revenue | Operating cost | Gross profit margin | YoY change (%) of revenue | YoY change (%) of operating cost | YoY change (%) of gross profit margin | |
| Classified by industry | ||||||
| Electronic components | 98,545,585,814.34 | 87,572,307,509.64 | 11.14% | 2.77% | 0.28% | 2.21% |
| Classified by product | ||||||
| Precision components | 15,050,929,866.12 | 11,813,778,081.46 | 21.51% | 15.85% | 14.37% | 1.02% |
| Smart audio device | 26,296,149,936.78 | 23,806,494,507.31 | 9.47% | 8.73% | 5.55% | 2.73% |
| Smart hardware | 57,198,506,011.44 | 51,952,034,920.87 | 9.17% | -2.57% | -4.57% | 1.90% |
| Classified by region | ||||||
| Domestic | 7,431,287,003.70 | 6,729,030,381.85 | 9.45% | 27.29% | 25.08% | 1.60% |
| Overseas | 91,114,298,810.64 | 80,843,277,127.79 | 11.27% | 1.18% | -1.35% | 2.27% |
| Revenue | Operating cost | Gross profit margin | YoY change (%) of revenue | YoY change (%) of operating cost | YoY change (%) of gross profit margin | |
| Classified by sales mode | ||||||
| Direct selling | 97,991,075,276.04 | 87,111,509,252.31 | 11.10% | 2.63% | 0.16% | 2.19% |
| Distribution | 554,510,538.30 | 460,798,257.33 | 16.90% | 36.85% | 30.49% | 4.05% |
If the statistical caliber of the Company's main business data has been adjusted in the reporting period, adjusted statistics of mainbusiness are based on the caliber at the end of the reporting period of last year.? Applicable ? Not applicable
(3) Whether the Company's revenue from physical products sales is greater than the revenue from providing services? Yes ? No
| Classification of industry | Item | Unit | 2024 | 2023 | YoY change |
| Electronic components industry | Sales volume | Ten thousand PCS | 495,967.23 | 428,520.45 | 15.74% |
| Output volume | Ten thousand PCS | 503,833.02 | 425,166.92 | 18.50% | |
| Inventory volume | Ten thousand PCS | 46,388.60 | 38,522.81 | 20.42% |
Reasons for changes in the relevant data over 30% year-on-year? Applicable ? Not applicable
(4) Fulfillment of major sales contracts and major procurement contracts signed by the Company as of the reporting period? Applicable ? Not applicable
(5) Composition of operating cost
Classification of industry
Unit: RMB
| Classification of industry | Item | 2024 | 2023 | YoY change | ||
| Amount | Proportion in operating cost | Amount | Proportion in operating cost | |||
| Electronic components | Direct materials | 76,426,496,813.47 | 87.27% | 76,130,381,986.14 | 87.18% | 0.39% |
| Direct labor expenses | 3,893,957,684.38 | 4.45% | 4,052,203,462.29 | 4.64% | -3.91% | |
| Manufacturing expenses | 7,251,853,011.79 | 8.28% | 7,143,465,552.32 | 8.18% | 1.52% | |
(6) Whether there is any change in consolidation scope during the reporting period
? Yes ? NoDuring the reporting period, the Company established 12 subsidiaries, including Shanghai Goertek Technology Development Co., Ltd.,Qingdao Goertek Alpha Pixels Technology Co., Ltd., Chengdu Goertek Technology Co., Ltd., Xi'an Goertek Shijie Technology Co.,Ltd., Goertek Starshine (Qingdao) Inc., Goertek Electronics Vietnam Co., Ltd., Goertek Optical Technology (Hong Kong) HoldingsCo., Limited, Goertek Optical Technology (Hong Kong) Co., Limited, Goermicro Technology Development Company Limited,Qingdao MicroSense Intelligent Technology Co., Ltd., Goertek Singapore Pte. Ltd., and GMI Semiconductor Sdn. Bhd.During the reporting period, the Company deregistered 2 subsidiaries, namely Hefei 3D OptoLink Technology Co., Ltd. and JiaxingGuochao Optoelectronics Technology Co., Ltd.
(7) Significant changes or adjustments in the Company's business, products or services during the reporting period? Applicable ? Not applicable
(8) Major clients and suppliers
Major clients of the Company
| Total sales amount from top five clients (RMB) | 89,410,283,784.17 |
| Proportion of total sales from top five clients to total annual sales | 88.57% |
| Proportion of sales from related parties among top five clients to total annual sales | 0.00% |
Information of top five clients
| No. | Name of clients | Sales amount (RMB) | Proportion in total annual sales amount |
| 1 | Client 1 | 32,266,332,556.06 | 31.96% |
| 2 | Client 2 | 28,367,523,997.92 | 28.10% |
| 3 | Client 3 | 19,736,962,740.32 | 19.55% |
| 4 | Client 4 | 4,677,129,312.56 | 4.63% |
| 5 | Client 5 | 4,362,335,177.31 | 4.32% |
| Total | -- | 89,410,283,784.17 | 88.57% |
Other information of major clients? Applicable ? Not applicableMajor suppliers of the Company
| Total purchase amount from top five suppliers (RMB) | 34,473,499,479.54 |
| Proportion of total purchase amount from top five suppliers to total annual purchase amount | 42.91% |
| Proportion of purchase amount from related parties among top five suppliers to total annual purchase amount | 0.00% |
Information of top five suppliers
| No. | Name of supplier | Purchase amount (RMB) | Proportion in total annual purchase amount |
| 1 | Supplier 1 | 15,806,990,923.89 | 19.68% |
| 2 | Supplier 2 | 8,916,840,340.87 | 11.10% |
| 3 | Supplier 3 | 5,930,418,795.12 | 7.38% |
| 4 | Supplier 4 | 1,948,577,549.33 | 2.43% |
| 5 | Supplier 5 | 1,870,671,870.33 | 2.33% |
| Total | -- | 34,473,499,479.54 | 42.91% |
Other information of major suppliers? Applicable ? Not applicable
3. Expenses
Unit: RMB
| 2024 | 2023 | YoY change | Note of significant change | |
| Selling expenses | 619,834,481.67 | 528,150,303.42 | 17.36% | No significant change |
| General and administrative expenses | 2,200,022,715.70 | 2,202,814,353.55 | -0.13% | No significant change |
| Financial expenses | 70,707,836.97 | 351,775,148.64 | -79.90% | Mainly because of the increase in interest income and exchange income due to exchange rate fluctuations during the reporting period. |
| Research and development expenses | 4,882,112,487.52 | 4,715,969,451.42 | 3.52% | No significant change |
4. R&D Investment
? Applicable ? Not applicable
| Name of major R&D project | Purpose of project | Status of project | Objectives | Expected benefits to future development of the Company |
| R&D project of micro speaker module | Develop micro speaker module products suitable for next-generation smart hardware with high sensitivity, low distortion, large amplitude, waterproof, and dustproof features. | In progress | Collaborate with major customers to iterate smart hardware products and meet technical requirements, complete R&D of a number of micro speaker module products, and achieve mass production and application on customer products. | Continuously consolidate the Company's competitive advantage and market share in the field of acoustic precision components. |
| R&D project of MEMS sensor and SiP | To develop MEMS sensors and SiP products applied to next-generation smart hardware and automotive electronics. | In progress | To complete the R&D, verification, application, and mass production of MEMS sensors and SiP featuring AI smart voice interaction, adapterization and noise reduction, signal transmission, and status monitoring, used in the field of smart hardware and automotive electronics | The project facilitates the Company's business expansion in the field of MEMS sensors and SiP, and further enhances the Company's comprehensive strength in the field of MEMS. |
| R&D project of VR/MR/AR precision optical components and modules | Develop the precision optical components and module products by using emerging optical technologies such as "Pancake" folded-lightpath lenses and optical waveguide technology, and promote their application in VR/MR/AR devices. | In progress | Complete the R&D and mass production of optical lens and module products for a new generation of all-in-one VR/MR devices, and improve the ability of comprehensive solutions of optical devices and light engines for AR devices. | The project helps enhance the Company's competitive advantage and market share in the field of VR/MR/AR precision optical components and modules, promote the Company's ability to provide customers with customized VR/MR/AR optical solutions, and improve the Company's vertical integration ability and profitability in the field of VR/MR/AR. |
| Name of major R&D project | Purpose of project | Status of project | Objectives | Expected benefits to future development of the Company |
| R&D project of AI smart glasses optical components and modules | Develop high-performance, integrated, and lightweight optical devices and module products for AI smart glasses products that combine technologies such as optical waveguides and micro-displays with traditional eyeglass lenses. | In progress | In response to the demand for AI smart glasses products, develop high-performance, integrated, and lightweight product solutions that merge traditional eyeglass lenses with optical waveguides and micro-display technologies, and achieve their application in terminal AI smart glasses products. | This will help enhance the Company's vertical integration capability and overall competitiveness in AI smart glasses products, thereby enhancing the Company's business expansion capability and profitability in this field. |
| R&D project of AR optical modules | To develop micro projection modules for AI smart glasses, AR, AR-HUD, and so on, and promote its application in consumer electronics, automotive electronics, etc. | In progress | To complete the design, technical verification and commercial application of related micro projection modules, and develop micro projection module solutions for consumer electronics and automotive electronics | Enhance the competitiveness of the Company in AI smart glasses, and AR optical modules, and extend the Company's capabilities in optical modules to the field of automotive electronics |
| R&D project of all-in-one VR/MR Head Mounted Display(HMD) | Develop lightweight all-in-one VR/MR HMD products featured with a high-definition display, precise motion tracking, and other features. | In progress | Cooperate with our customer to complete R&D, validation, and mass production of a number of new-generation all-in-one VR/MR HMD products based on the latest chip platform | The project helps consolidate the Company's competitive advantage and market share in the field of VR/MR. |
| R&D project of smart wireless earphones | Develop a new generation of smart wireless earphones | In progress | Cooperate with our customer to complete R&D, validation, and mass production of a number of new-generation smart wireless earphones | It helps consolidate the Company's competitive advantage and market share in the field of smart wireless earphones. |
| R&D project of smart wearable devices for sport and health related applications | Develop a new generation of smart wearable devices with functions of independent communication, health monitoring features and etc. | In progress | Cooperate with our customer to complete R&D, validation, mass production of a new generation of smart watches and smart bands | Consolidate the Company's competitive advantage and market share in smart wearable devices such as smart watches and smart bands |
| R&D project of smart wireless lightweight AR glasses | Develop wireless lightweight AR glasses and their main functional modules for future AR applications. | In progress | To complete the R&D and trial production of a number of AR glasses products, based on the latest chip platform, so as to develop the solution capability for AR glasses and their main functional modules | It helps to promote the Company's R&D experience and technology accumulation in the field of AR and facilitate the business expansion of the Company in AR field. |
Details of R&D personnel
| 2024 | 2023 | YoY change | |
| Number of R&D personnel | 12,568 | 12,377 | 1.54% |
| Proportion of R&D personnel to total number of employees | 15.36% | 15.21% | 0.15% |
| Education background of R&D personnel | |||
| Bachelor | 8,136 | 8,078 | 0.72% |
| Master | 2,797 | 2,417 | 15.72% |
| 2024 | 2023 | YoY change | |
| Ph.D. | 75 | 63 | 19.05% |
| Age structure of R&D personnel | |||
| Below the age of 30 | 5,290 | 5,059 | 4.57% |
| Aged between 30 and 40 | 6,134 | 6,329 | -3.08% |
| Over the age of 40 | 1,144 | 989 | 15.67% |
The Company's investment in R&D
| 2024 | 2023 | YoY change | |
| Amount of R&D Investment (RMB) | 4,569,383,945.08 | 4,572,855,380.03 | -0.08% |
| Proportion of R&D investment to revenue | 4.53% | 4.64% | -0.11% |
| Capitalized amount of R&D investment (RMB) | 469,838,453.38 | 542,789,272.24 | -13.44% |
| Proportion of capitalized R&D investment to R&D investment | 10.28% | 11.87% | -1.59% |
Reasons and impacts of significant changes in R&D personnel composition of the Company? Applicable ? Not applicableReasons for significant changes in the proportion of total R&D investment in revenue compared with that of previous year? Applicable ? Not applicableReasons and explanation of its reasonableness of significant changes in capitalized R&D investment? Applicable ? Not applicable
5. Cash flow
Unit: RMB
| Item | 2024 | 2023 | YoY change |
| Sub-total of cash inflow from operating activities | 87,061,772,095.75 | 80,166,508,468.96 | 8.60% |
| Sub-total of cash outflow from operating activities | 80,861,319,913.91 | 72,014,620,225.58 | 12.28% |
| Net cash flow from operating activities | 6,200,452,181.84 | 8,151,888,243.38 | -23.94% |
| Sub-total of cash inflow from investing activities | 16,293,851,949.50 | 5,194,943,904.22 | 213.65% |
| Sub-total of cash outflow from investing activities | 21,539,783,874.54 | 12,778,336,083.57 | 68.56% |
| Net cash flow from investing activities | -5,245,931,925.04 | -7,583,392,179.35 | 30.82% |
| Sub-total of cash inflow from financing activities | 33,711,467,799.59 | 29,078,690,255.10 | 15.93% |
| Sub-total of cash outflow from financing activities | 36,001,703,325.76 | 27,304,205,611.87 | 31.85% |
| Net cash flow from financing activities | -2,290,235,526.17 | 1,774,484,643.23 | -229.06% |
| Net increase in cash and cash equivalents | -1,361,835,546.83 | 2,352,733,172.97 | -157.88% |
Main influencing factors of significant year-on-year changes in relevant data? Applicable ? Not applicable
The net cash flow from operating activities was RMB 6,200.45 million, a year-on-year decrease of 23.94%, mainly due to an increasein the closing balance of accounts receivable resulting from the year-on-year growth in revenue scale in the fourth quarter.The subtotal of cash inflow from investing activities was RMB 16,293.85million, with a year-on-year increase of 213.65%; the subtotalof cash outflow in investing activities was RMB 21,539.78million, with a year-on-year increase of 68.56%; and the net cash flow frominvesting activities was RMB -5,245.93 million, with a year-on-year increase of 30.82%, mainly due to the increament in purchasingand the maturation of structured deposits, alongside a reduction in cash expenditures related to the acquisition and development offixed assets and other long-term assets.The net cash flow from financing activities was RMB -2,290.24 million, a year-on-year decrease of 229.06%, mainly due to an increasein the deposits for bills and other business transactions.The reason for significant difference between the net cash flow from the Company's operating activities during the reporting periodand net profit in current year.? Applicable ? Not applicableThe net cash flow from operating activities exceeded the net profit for the year by 139.74%, mainly due to non-cash items such asdepreciation of fixed assets and amortization of intangible assets.V. Analysis of Non-Main Business? Applicable ? Not applicable
Unit: RMB
| Amount | Proportion in total profit | Explanation of the cause | Whether it is sustainable | |
| Investment income | 109,040,057.77 | 3.93% | Mainly for the investment income from certificates of deposit of large amounts and foreign exchange derivative investments held by the Company. | No |
| Gains on changes in fair value | 41,043,887.97 | 1.48% | Mainly for changes in the fair value of equity investments held by the Company. | No |
| Asset impairment losses | -643,065,577.73 | -23.18% | Mainly for the provisions for asset impairment on certain inventories and fixed assets made by the Company. | No |
| Non-operating income | 33,583,222.26 | 1.21% | Mainly for amounts the Company is unable to pay and liquidated damages collected. | No |
| Non-operating expenses | 107,214,393.27 | 3.87% | Mainly the loss from the scrapping of the Company's non-current assets. | No |
| Other income | 256,120,767.94 | 9.23% | Mainly for government grants included in the current profit and loss of the Company | No |
VI. Analysis of Assets and Liabilities
1. Major changes in asset composition
Unit: RMB
| End of 2024 | Beginning of 2024 | YoY change | Note of significant change | |||
| Amount | Proportion in total assets | Amount | Proportion in total assets | |||
| Cash and cash equivalents | 17,466,492,869.05 | 21.12% | 14,737,312,329.71 | 19.98% | 1.14% | Mainly due to the decrease in net cash outflow from investment activities and the increase in cash inflow due to the exercise of equity incentives |
| End of 2024 | Beginning of 2024 | YoY change | Note of significant change | |||
| Amount | Proportion in total assets | Amount | Proportion in total assets | |||
| Accounts receivable | 17,881,372,031.94 | 21.62% | 12,424,618,676.81 | 16.85% | 4.77% | Mainly due to the increase in the closing balance of accounts receivable resulting from the year-on-year growth in revenue scale in the fourth quarter |
| Contract assets | ||||||
| Inventory | 10,478,868,878.63 | 12.67% | 10,794,894,394.42 | 14.64% | -1.97% | |
| Investment properties | ||||||
| Long-term equity investments | 734,411,641.50 | 0.89% | 760,220,882.07 | 1.03% | -0.14% | |
| Fixed assets | 21,803,396,794.34 | 26.36% | 22,305,456,354.63 | 30.25% | -3.89% | Mainly due to the increase in the disposal of fixed assets by the Company during the reporting period |
| Construction in progress | 1,397,416,899.66 | 1.69% | 2,071,280,343.55 | 2.81% | -1.12% | |
| Right-of-use assets | 831,108,181.41 | 1.00% | 615,431,849.91 | 0.83% | 0.17% | |
| Short-term borrowings | 7,713,280,169.91 | 9.33% | 5,214,491,316.62 | 7.07% | 2.26% | Mainly due to the increase in bank borrowings during the reporting period due to operational requirements |
| Contract liabilities | 4,052,359,576.04 | 4.90% | 3,472,638,215.20 | 4.71% | 0.19% | |
| Long-term borrowings | 1,341,201,983.90 | 1.62% | 6,631,470,751.86 | 8.99% | -7.37% | |
Mainly due to the transferof certain long-termborrowings to non-currentliabilities due within oneyear at the end of thereporting period.
| Lease liabilities | 668,965,200.66 | 0.81% | 518,159,559.63 | 0.70% | 0.11% | |
| Accounts payable | 21,962,224,256.37 | 26.55% | 17,582,263,359.17 | 23.84% | 2.71% | Mainly due to the increase in accounts payable resulting from the growth in revenue scale in the fourth quarter. |
| Non-current liabilities due within one year | 4,923,444,540.44 | 5.95% | 1,072,169,260.73 | 1.45% | 4.50% |
Mainly due to the transferof certain long-termborrowings to non-currentliabilities due within oneyear at the end of thereporting period.
Foreign assets account for a relatively high proportion
? Applicable ? Not applicable
| Asset details | Cause of formation | Assets scale (RMB) | Location | Operation mode | Measures to ensure asset safety | Earnings | Proportion of overseas assets in the net assets of the Company | Whether there is a significant impairment risk |
| Goertek Technology Vina Co., Ltd. | Establishment | 5,365,247,150.40 | Vietnam | Production & sales | Effective internal control mechanism | Normal | 16.17% | No |
| Other circumstances | The assets scale refers to the net assets of overseas subsidiaries. The proportion of overseas assets in the net assets of the Company refers to the proportion of the net assets of overseas subsidiaries in the net assets attributable to the shareholders of the listed company at the end of the reporting period. | |||||||
2. Assets and liabilities measured at fair value
? Applicable ? Not applicable
Unit: RMB
| Item | Opening balance | Profit and loss from changes in fair value in the reporting period | Cumulative changes in fair value included in equity | Impairment accrued in current period | Purchase amount in the reporting period | Sales amount in the reporting period | Other changes | Closing balance |
| Financial assets | ||||||||
| 1. Financial assets held for trading (excluding derivative financial assets) | 483,215,197.26 | 91,494,430.64 | 10,602,489,796.00 | 10,628,530,463.95 | 548,668,959.95 | |||
| 2. Derivative financial assets | 104,229,894.43 | 445,298,402.32 | 2,786,743.61 | 552,315,040.36 | ||||
| 3. Investments in other equity instruments | 591,269,883.71 | -18,350,919.30 | 3,611,010.77 | -1,613,425.73 | 625,661,939.44 | |||
| 4. Other non-current financial assets | 322,640,244.40 | -9,039,275.08 | 185,903,574.96 | 70,000,000.00 | 3,218,238.00 | 432,722,782.28 | ||
| 5. Receivables financing | 9,059,230.11 | -349,198.22 | 8,710,031.89 | |||||
| Sub-total of financial assets | 1,510,414,449.91 | 527,753,557.88 | -18,350,919.30 | 10,788,393,370.96 | 10,702,141,474.72 | 4,042,357.66 | 2,168,078,753.92 | |
| Total of above amounts | 1,510,414,449.91 | 527,753,557.88 | -18,350,919.30 | 10,788,393,370.96 | 10,702,141,474.72 | 4,042,357.66 | 2,168,078,753.92 | |
| Financial liabilities | 129,579,785.95 | -486,709,669.91 | -11,309,212.87 | 604,980,242.99 | ||||
Other changesNoneWhether the measurement attributes of major assets of the Company have changed significantly during the reporting period? Yes ? No
3. Restrictions on asset rights as of the end of the reporting period
| Item | Book value at the end of the reporting period (RMB) | Reasons for restrictions |
| Cash and cash equivalents | 5,012,975,983.79 | Mainly for the deposits for bills, guarantees, and other business transactions. |
| Notes receivable | 113,923,842.73 | Bill pledges, unconfirmed bill discounts, etc. |
| Intangible assets | 60,553,375.19 | For mortgage loan |
| Non-current assets due within one year | 388,821,194.44 | Mainly include certificates of deposits pledged for financing guarantee letters, bills, etc. |
| Other current assets | 592,758,666.66 | |
| Other non-current assets | 731,674,555.99 | |
| Total | 6,900,707,618.80 |
Ⅶ. Analysis of Investment
1. Overall situation
? Applicable ? Not applicable
| Investment amount in 2024 (RMB) | Investment amount in 2023 (RMB) | YoY change |
| 4,129,810,663.79 | 8,889,964,898.25 | -53.55% |
2. Major equity investments acquired during the reporting period
? Applicable ? Not applicable
3. Major non-equity investments in progress during the reporting period
? Applicable ? Not applicable
4. Financial asset investment
(1) Securities investment
? Applicable ? Not applicable
Unit: RMB
| Security type | Security code | Security abbreviation | Initial investment cost | Accounting measurement model | Opening book value | Profit and loss from changes in fair value in the reporting period | Cumulative changes in fair value included in equity | Purchase amount in the reporting period | Sales amount in the reporting period | Profit and loss in the reporting period | Book value at the end of the reporting period | Accounting items | Source of funds |
| Domestic and foreign stocks | KOPN | KOPN | 67,530,463.95 | Fair value measurements | 43,356,500.16 | 24,173,963.79 | 67,530,463.95 | -19,000,471.79 | Trading financial assets | Self-raised funds | |||
| Domestic and foreign stocks | 2438.HK | Mobvoi | 122,344,000.00 | Fair value measurements | 141,654,000.00 | -55,578,551.41 | 3,611,010.77 | -481,132.08 | 84,024,083.70 | Investments in other equity instruments | Self-raised funds | ||
| Total | 189,874,463.95 | -- | 185,010,500.16 | 24,173,963.79 | -55,578,551.41 | 71,141,474.72 | -19,481,603.87 | 84,024,083.70 | -- | -- | |||
| Date of announcement disclosure by the Board of Directors for approval of securities investment | KOPN: February 11, 2017 Mobvoi: July 24, 2015 (listed on the Hong Kong Stock Exchange in April 2024). | ||||||||||||
| Date of announcement disclosure by shareholders meeting for approval of securities investment | KOPN: March 2, 2017 | ||||||||||||
(2) Derivatives investment
? Applicable ? Not applicable
1) Investments in derivatives for hedging during the reporting period
? Applicable ? Not applicable
Unit: RMB 10,000
| Type of derivatives investment | Amount of initial investment | Opening balance | Profit and loss from changes in fair value in the reporting period | Cumulative changes in fair value included in equity | Amount of purchase during the reporting period | Amount of sales during the reporting period | Closing balance | Proportion of investment amount in the Company's net asset at the end of the reporting period |
| Option | - | 197,607.33 | -1,135.05 | 104,950.64 | 302,557.97 | |||
| Forward | - | 960,414.12 | -30,171.92 | 4,259,145.73 | 3,447,044.18 | 1,772,515.67 | 53.41% | |
| Swap | - | 644,525.70 | 27,165.84 | 2,059,457.69 | 1,920,447.79 | 783,535.60 | 23.61% | |
| Total | - | 1,802,547.15 | -4,141.13 | 6,423,554.07 | 5,670,049.95 | 2,556,051.27 | 77.02% | |
| Description of whether the accounting policies and specific accounting principles for the Company's hedging business has changed significantly compared with that of previous reporting period | The Company's derivatives transactions are calculated in accordance with Accounting Standards for Business Enterprises No. 22 – Recognition and Measurement of Financial Instruments. The initial measurement is based on the fair value of the derivatives on the date of the signing of the transaction contracts, and the subsequent measurement is based on its fair value. The derivative instrument with positive fair value is recognized as an asset, while the one with negative fair value is recognized as a liability. The profits and losses generated by changes in fair value are directly recognized in current profit and loss. The accounting policies and specific accounting principles for the Company's derivatives have no significant change compared with that of previous reporting period. | |||||||
| Statement of actual profit and loss in the reporting period | The Company and its subsidiaries confirmed the profit and loss situation of derivative transactions for 2024, recognizing a fair value change loss of RMB 41.41million and investment income of RMB 76.31million, totaling a profit of RMB 34.90million. | |||||||
| Statement of hedging effect | To avoid exchange rate risks in daily operations, the Company hedged against its risks through financial derivatives. The changes in the value of the financial derivatives effectively hedged the risk of changes in the existing position, and the overall hedging result is within expectations. | |||||||
| Source of funds for derivatives investment | Self-raised funds | |||||||
| Risk analysis and control measures for derivatives positions during the reporting period (including but not limited to market risk, liquidity risk, credit risk, operational risk, legal risk, etc.) | 1. The financial derivatives transactions carried out by the Company are for the purpose of fixing costs, avoiding and preventing risks of foreign exchange rate and interest rate, and prohibiting any risk speculation. The trading quota of the Company's financial derivatives shall not exceed the authorized quota as reviewed and approved by the Board of Directors or the general meeting of shareholders. 2. The Company has formulated a strict management system for financial derivatives transactions, which clearly stipulates the operating principles, approval authority, responsible departments and persons, internal operating procedures, information isolation measures, internal risk reporting system and risk handling procedures, and information disclosure of financial derivatives transactions, in order to control trading risks arising therefrom. 3. The Company shall carefully review the terms of contracts signed with qualified banks and other financial institutions, and strictly implement the risk management system to prevent legal risks. 4. The Company's business personnel will continue to track the changes in the open market price or fair value of financial derivatives, timely assess the changes in risk exposure of financial derivatives transactions, and regularly report to the management of the Company. If any abnormal situation, inform the Board of Directors of the risk and take emergency measures accordingly. 5. The internal audit department regularly conducts internal audit on the compliance of financial derivatives transactions. |
| In case of changes in market price or fair value of invested derivatives during the reporting period, the analysis of fair value of the derivatives shall disclose the specific methods used and the setting of relevant assumptions and parameters | Changes in the fair value of foreign exchange derivatives are calculated based on the difference between the fair market price and the contract price in the month of the settlement date determined by the Company. |
| Involvement in litigation (if applicable) | None |
| Date of announcement disclosure by the Board of Directors for approval of the investment in derivatives | March 28, 2024 |
| Date of announcement disclosure by shareholders meeting for approval of the investment in derivatives | May 22, 2024 |
2) Investments in derivatives for speculation during the reporting period
? Applicable ? Not applicableThe Company did not make any investment in derivatives for speculation during the reporting period.
5. Use of raised funds
? Applicable ? Not applicableNo use of funds in the reporting period of the CompanyⅧ. Sales of Major Assets and Equities
1. Sales of major assets
? Applicable ? Not applicableThe Company did not sell any major assets during the reporting period.
2. Sales of major equity
? Applicable ? Not applicableⅨ. Analysis of Major Subsidiaries and Associates? Applicable ? Not applicableMajor subsidiaries and associates with an impact of more than 10% on the Company's net profit
Unit: RMB
| Name of company | Type of company | Main business | Registered capital | Total assets | Net asset | Revenue | Operating profit | Net profit |
| Yili Precision Manufacturing Co., Ltd. | Subsidiary | Electronic component manufacturing | 675,850,000 | 3,200,795,166.64 | 1,120,323,434.41 | 3,210,299,124.47 | 305,072,201.26 | 282,802,850.45 |
| Goertek (Hong Kong) Co., Limited | Subsidiary | Trade investment | USD 1,000,000 | 25,758,433,298.73 | 2,512,937,310.08 | 76,026,030,088.56 | 650,816,725.92 | 636,082,296.46 |
| Goertek Technology Vina Co., Ltd. | Subsidiary | Electronic component manufacturing | USD 120,000,000 | 9,448,722,077.44 | 5,365,247,150.40 | 20,192,780,792.39 | 1,437,900,861.90 | 1,317,606,703.46 |
| Goertek Electronics Vietnam Co., Ltd. | Subsidiary | Electronic component manufacturing | USD 60,000,000 | 1,721,989,962.36 | 136,832,810.04 | 1,424,351,455.41 | -293,067,243.66 | -292,948,873.14 |
Acquisition and disposal of subsidiaries during the reporting period? Applicable ? Not applicable
| Name of company | Approach on acquisition and disposal of subsidiaries during the reporting period | Impact on overall production, operation and performance |
| Shanghai Goertek Technology Development Co., Ltd. | Newly established | No significant impact |
| Qingdao Goertek Alpha Pixels Technology | Newly established | No significant impact |
| Name of company | Approach on acquisition and disposal of subsidiaries during the reporting period | Impact on overall production, operation and performance |
| Co., Ltd. | ||
| Chengdu Goertek Technology Co., Ltd. | Newly established | No significant impact |
| Xi'an Goertek Shijie Technology Co., Ltd. | Newly established | No significant impact |
| Goertek Starshine (Qingdao) Inc. | Newly established | No significant impact |
| Goertek Electronics Vietnam Co., Ltd. | Newly established | See the table above |
| Goertek Optical Technology (Hong Kong) Holdings Co., Limited | Newly established | No significant impact |
| Goertek Optical Technology (Hong Kong) Co., Limited | Newly established | No significant impact |
| Goermicro Technology Development Company Limited | Newly established | No significant impact |
| Qingdao MicroSense Intelligent Technology Co., Ltd. | Newly established | No significant impact |
| Goertek Singapore Pte. Ltd. | Newly established | No significant impact |
| GMI Semiconductor Sdn. Bhd. | Newly established | No significant impact |
| Hefei 3D OptoLink Technology Co., Ltd. | Cancel | No significant impact |
| Jiaxing Guochao Optoelectronics Technology Co., Ltd. | Cancel | No significant impact |
Description of major subsidiaries and associatesNoneⅩ. Structural Entities Controlled by the Company
? Applicable ? Not applicableXI. Outlook for the Future Development of the Company
1. Industry trend and competition
In recent years, the consumer electronics industry has gradually entered the post-mobile era. Influenced by global macroeconomicfluctuations, insufficient end-user demand, and a lack of hardware technological innovation, the growth rate of some emerging smarthardware products has slowed down. Major global technology and consumer electronics manufacturers are actively exploring newtechnological breakthroughs and industry development opportunities. At the same time, generative AI technologies, such as LargeLanguage Model and Multimodal Large Language Model, are undergoing rapid development. The integration of AI technology withthe consumer electronics industry and smart hardware products is expected to open up new avenues for industry development, bringinga new round of growth opportunities for global technology and consumer electronics manufacturers.According to the forecast of IDC, the global shipment of smartphones is expected to reach 1.26 billion units in 2025, with approximatelya 2.3% YoY increase. The CAGR of global shipment of smartphones from 2024 to 2029 is expected to be around 1.6%. As one of thecore hardware products in the consumer electronics industry, smartphones serve as terminal hardware platforms that combinecomputing, communication, display, and intelligent interaction functions. They are also one of the core edge devices where AItechnology integrates with smart hardware products. In the coming years, the integration of AI technology with smartphone productsis expected to deepen continuously. Leading enterprises are likely to successively launch smartphones equipped with AI features,providing consumers with a more intelligent and efficient user experience while also generating new market demand and developmentmomentum for smartphone products. Moreover, intelligent interaction with AI Large Language Model will become an importantapplication scenario for smartphone products, which will also contribute to the growth in market demand for high-performance acousticsensors, speakers, and other precision components.According to the updated forecast of IDC, the global shipment of VR/MR devices is expected to reach 15.3 million units in 2028. TheCAGR of global shipment of VR/MR devices from 2025 to 2028 is expected to be around 24%. The rapid development of generativeAI technology is expected to accelerate the resolution of the current issues faced by VR and MR devices regarding software andinsufficient richness of content, thereby promoting consumer demand, enhancing product usage stickiness, and better supporting
innovation and development in business models. The industry is expected to maintain healthy long-term growth through hardwareupgrades and iterations, an increase in the number of end users, and the continued development of application scenarios and content.According to the updated forecast of IDC, the global shipment of AR devices is expected to reach 6.9 million units in 2028. The CAGRof global shipment of AR devices from 2025 to 2028 is expected to be around 78%. Under the active investment and promotion ofleading industry enterprises, the pace of hardware technology innovation for AR devices is accelerating, with clearer technical solutionroutes and continuously improving product maturity, which is likely to see a new round of rapid development in the coming years. Atthe same time, AI smart glasses represent one of the most popular smart hardware product innovation directions in the global technologyand consumer electronics industry. AI smart glasses have unique advantages in user data collection and human-computer interaction,and are expected to become an important carrier for the implementation of AI Large Language Model technology on the device side.This has led to sustained interest and investment from numerous well-known companies. Compared to AR devices, AI smart glassesfocus more on AI assistant scenarios, with a simpler product definition and more mature technical solutions. The AI smart glassesproducts, which primarily feature intelligent voice interaction and image recognition, have already reached a significant global marketsize and are expected to experience explosive growth in the next three years. As technologies such as optics, micro-displays, and SiPcontinue to mature, future AI smart glasses products are expected to incorporate image display and visual interaction functions,providing consumers with a more comprehensive AI assistant experience and potentially driving long-term, rapid growth in the AIsmart glasses market.According to the forecast of IDC, the global shipment of TWS earphones is expected to reach 300 million units in 2025, withapproximately a 6.8% YoY increase. The CAGR of global shipment of TWS earphones from 2025 to 2028 is expected to be around4%. With the continued penetration of AI Large Language Model technology into smartphone products, the usage scenarios forintelligent voice interaction are expected to continue to increase. Smart wireless earphones, as one of the key hardware devices forintelligent voice interaction, are likely to benefit from this trend. Additionally, driven by product form innovation and the optimizationof features such as spatial audio, health monitoring, and sports tracking, the shipments of smart wireless earphones are projected toexperience steady growth in the future.According to the forecast of IDC, the global shipment of smart wearable devices is expected to reach 195 million units in 2025, withapproximately a 1.1% YoY increase. The CAGR of global shipment of smart wearable devices from 2025 to 2028 is around 0.4%. Theglobal market for smart wearable devices presents significant opportunities for substantial growth. For millions of people around theglobe who has hypertension, diabetes, and sub-health issues, high precision and reliable health monitoring technologies, especiallyprecise electrocardiogram monitoring, blood pressure monitoring, and non-invasive blood sugar monitoring technologies, are currentlythe focus of innovation of the industry. Breakthroughs in the technologies of the above fields are expected to bring dramatic growth tosmart wearable devices before long.Overall, the rapid development of AI technology will inject new vitality into the development of emerging smart hardware products.The implementation of AI technology on terminal devices will also give rise to a more diverse array of emerging smart hardwareproduct forms and usage scenarios. Leading global technology and consumer electronics enterprises are actively investing resourcesin related fields and continuously launching emerging smart hardware products equipped with AI technology. With the drive of theindustry and the recovery of the macroeconomy and consumer electronics sector, emerging smart hardware products are expected tocontinue to develop healthily in the future. This will promote performance improvements and market demand growth for relatedproducts such as acoustics, optics, sensors, SiP, micro-display devices, haptic devices, and precision structural components, therebybringing new development opportunities for the Company. In light of this development opportunity, the Company will make everyeffort to respond proactively by leveraging its existing advantages, investing in research and development, and exploring newtechnological directions for emerging products. The Company will continue to strengthen its core competitiveness, establish long-termstrategic partnerships with leading industry clients, and actively expand its emerging smart hardware and related precision componentbusinesses to promote the Company's sustained and healthy development.From the perspective of industry competition, the global technology and consumer electronics industry still presents a centralized trend.Well-known enterprises with strong competitiveness and brand awareness demonstrate clear competitive advantages by possessing alarge number of technologies, talents, funds, brands, and industrial ecosystem resources. These enterprises are committed to enhancingtheir investments in emerging technologies, including smart hardware and AI. It is anticipated that they will maintain their leadershipin technological innovation and product development within the consumer electronics sector. Concurrently, in the global competitionfor AI LLM technology, some emerging enterprises and startups are actively investing, developing, and launching numerous high-performance technologies and products. These innovations have the potential to become a new force driving global industrytechnological progress and changing the industry landscape. The Company will closely monitor the trends and developments of thesemanufacturers.From the perspective of industry supply chain layout, on one hand, China still has advantages in terms of political/economicenvironment, infrastructure, industrial foundation management/technical talent resources, and other aspects. The overall
competitiveness of electronic manufacturers in China is improving, and they undertake the demand for manufacturing services of theglobal supply chain. On the other hand, considering the complicated international political and economic environment, some enterprisesfaced the challenges of setting up a global supply chain, which needs to be tackled prudently in a scientific manner.
2. Strategy for future development
Looking into the future, the Company will actively respond to the national call for the in-depth implementation of the innovation-driven development strategy, optimizing and upgrading the industrial structure, enhancing the leading role of technological innovation,and accelerating the development of a modern industrial system, capitalize on industrial opportunities in the post-mobility era byclosely monitoring the advancements and applications of AI technology, and diligently observe the developmental trends of cutting-edge technologies, including 6G, IoT. The Company will continue to strengthen its development in the field of next-generation smarthardware products and related precision components, constantly consolidate the strategical cooperation with world-class clients, andfulfill the economic and social responsibilities of the enterprises, thus achieving stable and healthy growth of the Company's value inreturn for shareholders.
(1) Actively grasp the new opportunities in the post-mobile era, and further promote the Company's strategy of "precision components+ smart hardware". Continue to strengthen the competitiveness of precision components and smart hardware products, actively seizethe new opportunities for the application of AI technology in consumer electronics, and actively develop next-generation smarthardware products and related precision component businesses. Utilize the synergy between the Company's component business andintegrated device business, continue to strengthen the core capabilities in precision and intelligent manufacturing, build a GPS for thefuture of the intelligent manufacturing era, and provide clients with the first-class vertically integrated product solutions and "one-stop"R&D and manufacturing services.
(2) Continue the key-account strategy, remain client-oriented, continuously maintain good relationships with core clients, and utilizethe Company's advantages in client resources. Focus on serving leading clients in the global technology and consumer electronicsindustry, and continue to consolidate long-term strategic cooperation with clients. Closely follow the strategical planning anddevelopment of world-class clients, and to create a global system of R&D, manufacturing and sales services accordingly. Continue tosatisfy our clients with our business, technology, engineering, operation and delivery services, in order to achieve win-win cooperationand to grow with the world-class clients.
(3) Adhere to technological innovation and continue to invest in R&D. Constantly improve the Company's technical competitivenessin acoustics, optics, microelectronics, micro-display, precision manufacturing, automation, IT technology, software algorithm, etc., tobuild the core technical competitiveness for future development of the Company. Firmly implement the talent strategy by recruitingoutstanding personnel in management and technology fields around the world, build and effectively motivate a first-class talent team,thus providing sufficient talents for the future development of the Company.
(4) Constantly improve corporate governance and management, and promote the standardized and efficient internal operation.Continuously improve the internal processes and internal management system. Strengthen the awareness of lean operation, improvethe level of lean operation and seek benefits from it. Being market-oriented and client-oriented, continue to push forward internalreform and innovation, and to build core competitiveness upon continuous reform and innovation activities. The Company willcontinuously enhance the level of digitalization and informatization of its internal operations management, and actively explore theapplication of big data and AI technology in enterprise operations management. Create an excellent corporate culture, undertake thecore values of "client orientation, employee development, trustworthy, cooperation and mutual benefits", and earnestly fulfill theeconomic and social responsibilities of the enterprise, to become a respected world-class enterprise.
3. Business operation during the reporting period and business plan for next year
During the reporting period, the Company adhered to a client-oriented approach and a major customer strategy, leveraging the synergybetween its component and integrated device businesses. The Company successfully completed important tasks such as businessexpansion, project delivery, and operational improvement, further consolidating its core competitiveness and industry competitiveposition. With the recovery of end-user demand in the consumer electronics industry, the Company's precision component business,intelligent acoustic complete machine business, and sub-segment product lines in the smart hardware sector, including VR/MR andsmart wearable devices, have all progressed smoothly. Ultimately, while the overall income scale saw a slight increase, the overalllevel of profitability improved significantly year-over-year.Looking ahead to 2025, with the further development of generative AI technologies such as Large Language Model and MultimodalLarge Language Model, as well as the deeper integration of AI technology with emerging smart hardware products, the end-userdemand for global consumer electronics products is expected to continue to grow. High-performance precision component productssuitable for AI smart hardware, as well as smartphones, smart wireless earphones, AI smart glasses, MR, AR, smart wearable devices,and smart home devices equipped with richer AI features, are expected to see further development. Based on the integration ofestablished competitive advantages in the fields of precision components and smart hardware products, the Company will closely
monitor and actively seize new opportunities arising from the convergence and development of emerging smart hardware and AItechnologies. The management and the staff of the Company will continue to implement our strategy and to achieve business objectives,so as to return the investors with good business performance and continuous growth of the value of the Company.
(1) Adhere to the strategy and grasp development opportunities
The Company will seize the emerging opportunities arising from the integration of AI technology and emerging smart hardwareproducts by adhering to the "precision components + smart hardware" strategy and utilizing the synergy between the components andintegrated device business. On the one hand, the Company will continue to strengthen its research and development of technologiesand products in fields such as acoustics, optics, microelectronics, and precision structural components, thereby enhancing theCompany's future-oriented core competitiveness in the precision component field. On the other hand, the Company will actively seekopportunities in emerging smart hardware projects and expand the application of its self-developed precision component products,including acoustics, optics, micro-displays, sensors, SiP, and precision structural components in related projects. By integrating thecore capabilities in precision manufacturing and intelligent manufacturing, the Company will continuously enhance its solutioncapabilities and profitability.
(2) Adhere to the client-orientation philosophy, and identify and serve strategic clients
Follow the development plan of strategic clients, the Company will carry out corresponding business, technology R&D, product plans,and capacity plans. Focusing on the future product needs of strategic clients, the Company will conduct forward-looking technologyand product research and development, and build capabilities for future-oriented overall solutions. The Company works with strategicclient in their business schedules and provides industry-leading full-process R&D and manufacturing services. The Company willcontinuously enhance its ability to serve strategic clients, strengthen client loyalty through high-level service, consolidate strategicpartnerships, and achieve mutual benefits cooperation with clients.
(3) Empower business expansion and create new opportunities
While consolidating existing business competitive advantages, the Company will continuously develop new business directions andopportunities in response to the integration of AI technology and emerging smart hardware. The Company will actively seize newopportunities in fields such as acoustic devices, haptic devices, precision optical devices and modules, micro-display modules, sensors,SiP, AI smart glasses, MR, AR, smart wireless earphones, smart wearable devices, and smart home devices. Additionally, the Companywill continue to expand the application of its precision component products in the automotive electronics sector, and create new businessgrowth points around the needs of leading clients in the consumer electronics and automotive electronics industries.
(4) Improve lean operation and complete successful delivery of key projects
The Company will constantly promote the idea of lean operation to improve the level of operation and to support the business objectiveswith high-quality and efficient operation. The Company will actively build a GPS and establish a new intelligent manufacturing modelthat meets future market needs. The Company will make thorough planning of its resources, ensure the delivery of key projects thatclosely related to the strategy and the business objectives, and to achieve the goals of the Company.
(5) Continue to invest in independent R&D and technological innovation, strengthen core competitiveness with talent strategyThe Company will continue to invest in R&D and technological innovations centered on future strategic directions, and strengthen itstechnical capabilities in the fields of acoustics, optics, microelectronics, micro-display, precision manufacturing, and intelligentmanufacturing. The Company will embrace the management and technical talents globally, keep bringing in high-level talents, carryout solid efforts in the selection, cultivation, motivation and retention of talents, and to support the Company's strategic implementationand business development with high-quality talent echelon.
(6) Effectively control risks and maintain healthy operation
The Company will continue to maintain a sound business strategy, strengthen risk awareness, pay close attention to changes in theexternal environment, perform effective control on risk indicators in production operation of the Company, take the initiative to identifyand resolve potential risks, and ensure sustainable development of production and operation activities.
4. The demand and planning of fund
The Company maintains a healthy asset and liability structure, and obtained a good long-term cooperative relationship with banks andother major financial institutions. In 2025, the Company will continue to improve the management of cash, optimize payment terms,control capital expenditure, and enhance the efficiency of funds. The Company will carefully evaluate various financing tools tooptimize the asset-liability ratio and debt structure. The Company will also carefully manage financial derivatives trading activitieswith strict standards, to actively avoid liquidity risks, foreign exchange risks, and interest risks, and with all the measures above, tothus provide stable and sufficient financial support to the development of the Company.
5. Future risks
(1) Macroeconomic risks
Global economy has yet to recover. Unfavorable factors that affect investment and consumption still exist, which may influence thedevelopment of the global technology and consumer electronics industry in the short term. The world political and economic situationremains complex and grim. Trade disputes between major countries and geopolitical events have brought uncertainties to the globaleconomy, which may adversely affect the business of the Company. Some intelligent hardware products, such as smartphones, haveslowed down in growth rate, and some next-generation smart hardware products may develop slower than expected. This may impactthe global market demand as well as the Company's business performance.
(2) Operational risks
① Risks of relatively concentrated clients
The competitive pattern of global technology and consumer electronics industry, along with the Company's business model and keyaccount strategy, determined a relatively concentrated client structure. As a result, the business income from a few core clients accountsfor a large proportion of the Company's overall revenue. Although the aforementioned clients are all leading global industry enterpriseswith significant competitive advantages and market positions, and have maintained long-term stable cooperative relationships with theCompany, if major clients experience fluctuations in their business activities due to various factors, or if the cooperative relationshipbetween the clients and the Company changes, it may bring corresponding fluctuations and risks to the Company's business.
② Risks of exchange rate fluctuation
The export business accounts for a high proportion of the Company's overall revenue. At the same time, the Company also imports aconsiderable number of raw materials, equipments and other products from overseas. These import and export businesses are primarilysettled in US dollars. Although the Company has adopted appropriate risk hedging tools, the significant fluctuation of foreign exchangerates may still bring certain exchange rate risks to the Company.
③ Risks of loss of core technical talents
The technology and consumer electronics industry is a talent-intensive industry. Therefore, the demand for core technical talents isstrong, and the competition for talent is very fierce. Core technical talents are the key resources for the Company to continuouslyimprove its core competitiveness and realize long-term development. For this reason, the Company will continue to improve variousincentive and restraint mechanisms in order to retain core technical talents. Under fierce competition, there may still be the loss of coretechnical talents, which may put the Company at a disadvantage in the competition and affect the business development in some cases.
(3) Risks of management
In recent years, the Company's various product lines have expanded rapidly, leading to a larger business scale and a wider range ofproducts. This has placed higher demands on the Company's overall operational and management capabilities. The Companyimplements the strategic plan of developing core client business and exploring new opportunities, which also requires the Company'smanagement to maintain excellent abilities of judgment, execution and management. If the Company's management fails to match thebusiness growth, or fails to be improved to meet the needs of the Company's development, it may affect the execution of strategicplanning and the delivery of business objectives, thus bringing management risks to the Company.Ⅻ. Reception, Research, Communication, Interview and Other Activities during theReporting Period? Applicable ? Not applicable
| Reception time | Reception place | Type of communication | Type of attendees | List of attendees | Main content of discussion and information provided | Index of related information |
| April 8, 2024 | The Company | Other | Other | Investors participated in the Company's performance presentation meeting of 2023 | The Company's overall operation and business development | The record of investor relations activities on April 8, 2024 issued by CNINFO (http://www.cninfo.com.cn) |
| Reception time | Reception place | Type of communication | Type of attendees | List of attendees | Main content of discussion and information provided | Index of related information |
| May 7, 2024 - May 9, 2024 | Brokerage Strategy Conference | Other | Institutional Investors | Institutional investors include JPMorgan Asset Management, Huachuang Securities, GF Fund Management, AEGON-INDUSTRIAL Fund Management, Bank Of Communications Schroder Fund Management, China Asset Management, and China Merchants Fund Management. | The Company's overall operation and business development | The record of investor relations activities from May 7, 2024 to May 9, 2024, issued by CNINFO (http://www.cninfo.com.cn) |
| July 17, 2024 - July 18, 2024 | The Company | Field research | Institutional Investors | Institutional investors include GF Fund Management, China Asset Management, AEGON-INDUSTRIAL Fund Management, Wanjia Asset Management, China Southern Asset Management, and Harvest Fund Management. | The Company's overall operation and business development | The record of investor relations activities on from July 17, 2024 to July 18, 2024, issued by CNINFO (http://www.cninfo.com.cn) |
XIII. Formulation and Implementation of the Market Value Management System andValuation Enhancement PlanWhether the Company has established a market value management system.? Yes ? NoWhether the Company has disclosed the valuation enhancement plan.? Yes ? NoTo further strengthen the Company's market value management, standardize the Company's market value management conducts, andprotect the legitimate rights and interests of the Company, investors, and other stakeholders, the Company has formulated the MarketValue Management Rules of Goertek in accordance with relevant laws, regulations, normative documents such as the Company Law,the Securities Law, Regulatory Guidelines for Listed Companies No. 10 – Market Value Management, Rules Governing the Listing ofStocks on Shenzhen Stock Exchange, Self-Regulatory Guidelines No. 1 for Companies Listed on Shenzhen Stock Exchange - NormativeOperation of Listed Companies on the Main Board, as well as the provisions of the Articles of Association, taking into account theactual situation of the Company. This system was deliberated and approved at the 22nd meeting of the 6th board of directors held onDecember 27, 2024.In the future, the Company will strictly adhere to the relevant requirements of laws, regulations, and the market value managementrules. The Company is committed to enhancing the awareness of investor returns, taking measures to protect the investors' interests,particularly those of small and medium-sized investors, conducting operations with honesty and integrity, prioritizing its main business,and maintaining stable operations. By cultivating and utilizing new quality productive forces, the Company aims to improve theoperational level and quality of development, effectively manage investor relations, and improve the quality and transparency of
information disclosure. If necessary, the Company will proactively implement measures to enhance investor confidence and promotethe investment value of the Company to reasonably reflect its quality.XIV. Implementation of the Action Plan for Improving Quality and Investor ReturnsWhether the Company has disclosed the Action Plan for Improving Quality and Investor Returns?? Yes ? NoTo protect the interests of all shareholders, the Company has formulated the Action Plan for Improving Quality and Investor Returns.The specific measures and progress made by the Company are as follows:
1. Focus on the main business, create value for shareholders, and take actions to feedback the societyThe Company's main business include precision components business, smart audio device business and smart hardware business. TheCompany serves the leading global clients in the technology and consumer electronics industry by providing them with verticallyintegrated product solutions of precision components and smart hardware, as well as related design, R&D, and manufacturing services.Driven by the mission of "A better life enriched by technology", the Company is committed to creating value for all shareholders andthe society. After more than twenty years of development, the Company has built industry-leading precision manufacturing andintelligent manufacturing capabilities. In terms of internal management, the Company boasts a strong core management team thatensures efficient internal decision-making and maintains a high level of lean operations.In terms of external cooperation, the Companyhas long-term strategic cooperation with industry-leading clients and has stable client relationships.Looking into the future, the Company will actively respond to the national call for the in-depth implementation of the innovation-driven development strategy, optimizing and upgrading the industrial structure, enhancing the leading role of technological innovation,and accelerating the development of a modern industrial system, capitalize on industrial opportunities in the post-mobility era byclosely monitoring the advancements and applications of AI technology, and diligently observe the developmental trends of cutting-edge technologies, including 6G, IoT. The Company will continue to strengthen its development in the field of next-generation smarthardware products and related precision components, constantly consolidate the strategical cooperation with world-class clients, andfulfill the economic and social responsibilities of the enterprises, thus achieving stable and healthy growth of the Company's value inreturn for shareholders. The Company will always strive to create value for its shareholders while giving back to society through itsactions.
2. Continuously strengthen technological innovation capabilities and build industry-leading core competitivenessTechnological innovation is the driving force behind business growth. It is at the forefront of the Company's agenda. The Companyattaches great importance to the integration and cultivation of outstanding talents in the fields of acoustics, optics, microelectronics,wireless communication, precision manufacturing, automation, and other sectors around the world. The Company has set up a team oftechnical personnel with profound technical strength and rich experience in product projects, and has made long-term cooperation withmany well-known universities and scientific research institutions, which forms an open and comprehensive technology R&D platformin support of continuous innovation and R&D of technologies and products. As of December 31, 2024, the Company and its subsidiarieshave totally applied for 34,872 patents, including 4,362 foreign patent applications and 20,132 invention patent applications; a total of21,735 patents have been granted, including 8,196 invention patents.Looking into the future, the Company will continue to invest in R&D and technological innovations centered on future strategicdirections, and strengthen its technical capabilities in the fields of acoustics, optics, microelectronics, micro-display, precisionmanufacturing, and intelligent manufacturing. The Company will integrate the management and technical talents globally, keepbringing in high-level talents, carry out solid efforts in the selection, cultivation, motivation and retention of talents, and to support theCompany's strategic implementation and business development with high-quality talent echelon. In response to the trends in AItechnology, the Company will actively explore the application of AI algorithms, Large Language Model (LLMs), Multimodal LargeLanguage Model, and other technologies in production, manufacturing, operations, and management. This strategic initiative willfurther enhance the level of intelligence in manufacturing and the informationization in management and operations, therebymaintaining the Company's industry position and core competitiveness.
3. Continuously improve corporate governance, operational management, and lean operation levelsThe Company will continue to standardize governance mechanisms, enhance corporate governance levels, improve internal controlsystems, and fully leverage the role of independent directors in corporate governance. These efforts will continuously solidify thefoundation of internal governance. The Company will clearly define its rights and obligations, as well as those of its shareholders toprevent the abuse of shareholder rights or the exploitation of the management's dominant position that could harm the interests ofminority investors. The Company will encourage the active participation of minority investors in shareholder meetings, facilitate theinvolvement of various types of investors in decision-making on major matters, and enhance investors' influence and satisfaction. The
Company will continue to strengthen its internal control system and enhance risk management to improve decision-making capabilities.This will create a virtuous cycle for the Company's development and provide strong protection for the legitimate rights and interests ofthe shareholders.In the face of a complex and ever-changing market landscape and industry trends, the Company's management team will furtherenhance its operational management capabilities, uphold its client-centric approach, and strengthen business expansion to continuouslycultivate new growth drivers. The Company will continuously enhance its lean operations capabilities to drive efficiency and supportthe achievement of its business objectives. The Company will continue to maintain a sound business strategy, strengthen risk awareness,and take the initiative to identify and resolve potential risks to ensure the sustainable development of its production and operationalactivities.
4. Actively repurchase the Company's shares to enhance investor confidence
The Company has repurchased its shares in order to enhance investor confidence. This decision is made based on confidence in theCompany's future development and recognition of its long-term value. It is intended to further improve the Company's long-termincentive mechanism, effectively aligning the interests of shareholders, the Company, and the core team.On October 26, 2023, the Company's 6th board of directors held its tenth meeting and approved the Proposal on the Repurchase ofCompany Shares through Continuous Trading Approach. During the reporting period, the Company repurchased 29,802,246 sharesthrough continuous trading approach via the specific securities repurchase account using its own funds. The payment amount (excludingtransaction costs) was RMB 497,113,266.64. This share repurchase plan expired on October 25, 2024, with a total of 39,434,946 sharesrepurchased, accounting for 1.13% of the Company's total share capital at the end of the reporting period, with a payment amount ofRMB 674,750,693.64 (excluding transaction fees).
5. Increase cash dividends to enhance investor returns
The Company has always placed a high priority on shareholder returns, and has strictly implemented the Shareholder Return Plan forthe Next Three Years (2022-2024), and clarified the standard, ratio, and decision-making procedures of the distribution policy, whichensures the continuity and stability of the profit distribution policy, in order to fully protect the legitimate rights and interests of minorityinvestors.In 2024, the Company increased the level and frequency of its cash dividends. As a result, three profit distributions were implemented,and the total cash dividend amount exceeded RMB 850 million.In 2025, the Company intends to execute the annual profit distribution strategy for 2024 in the following manner: based on the totalshare capital registered on the record date of equity distribution minus the repurchased shares in the Company's specific securitiesrepurchase account, the Company will distribute a cash dividend of RMB 1.50 (tax inclusive) for per 10 shares to all the shareholders,as well as 0 bonus shares, and there is no conversion of capital surplus into share capital.Going forward, the Company will maintain its investor-centric approach, strive to enhance the level of shareholder returns, fulfill theresponsibilities and obligations of a listed company, and continuously practice the Action Plan for Improving Quality and InvestorReturns. In addition, the Company will focus on its main business, maintain sustainable and healthy development, improve the levelof corporate governance, and effectively enhance investors' return, thereby making a positive contribution to market stabilization andconfidence.
Section IV Corporate Governance
Ⅰ. Corporate Governance in PracticeThe Company continuously improved the corporate governance structure, the internal management and control system, and continuedto carry out corporate governance activities in strict accordance with the requirements of relevant laws, regulations, and normativedocuments such as the Company Law, the Securities Law, Basic Standard for Enterprise Internal Control, Guidelines for the Articlesof Association of Listed Companies, Code of Corporate Governance for Listed Companies, Rules Governing the Listing of Stocks onShenzhen Stock Exchange as well as with the requirements of the China Securities Regulatory Commission, so as to further standardizethe Company's operation and improve the level of corporate governance.During the reporting period, the Company comprehensively reviewed relevant governance systems. Furthermore, the Company revisedeight related rules, including the Articles of Association, Rules of Procedure for Shareholder Meetings and the Management Rules forProviding Financial Assistance to External Parties, etc. in line with the Company's actual situation and operational development needs.The Company also established the Working System for the meetings of Independent Directors and the Market Value Management Rules.By the end of the reporting period, the actual practice of corporate governance met the relevant requirements of the above laws,administrative regulations, departmental rules, and normative documents, specifically:
1. Shareholders and Shareholders' Meetings: The Company standardized the procedures for convening, holding, and voting atshareholders' meetings in strict compliance with the provisions and requirements of Rules on Shareholders' General Meetings of ListedCompanies, the Articles of Association, and the Rules of Procedure for Shareholder Meetings. The Company enhanced the conveniencefor small and medium-sized shareholders to participate shareholders’ meetings by offering a combination of on-site and online voting,thus ensuring that small and medium-sized shareholders can fully exercise their rights. At the same time, the Company hired lawyersto witness the shareholders' meetings on site and ensure that the convening, holding, and voting procedures of each meeting were legaland compliant, thus effectively safeguarding the legitimate rights and interests of the Company and all shareholders.
2. The Company and controlling shareholders: The Company, with independent operation autonomy, is independent of the controllingshareholders in business, personnel, assets, organizations, and finance. The Board of Directors, Board of Supervisors, and internalinstitutions of the Company operate independently. The controlling shareholders exercise their rights through shareholders' meetings,and there was no direct or indirect interference with the Company's operations and decision-making beyond the general meeting ofshareholders.
3. Directors and the Board of Directors: The Company elects directors in strict accordance with the procedures stipulated in theCompany Law, and the Articles of Association. At present, the Company has seven directors, including three independent directors,which accounts for more than one-third of all directors. The number of directors and the composition of the Board of Directors meetthe requirements of laws and regulations and the Articles of Association. The board of directors convened board meetings and executedthe resolutions of shareholders' meetings in strict accordance with Rules of Procedure of the Board of Directors. All directors of theCompany can perform their duties, diligently attend board and shareholder meetings, actively participate in relevant training, andearnestly fulfill their obligations of honesty, integrity, diligence, and responsibility in accordance with relevant laws and regulations.There are two specialized committees under the board of directors: the Audit Committee and the Remuneration and AssessmentCommittee. Each committee is responsible for key functions such as financial audit, internal control supervision, and the formulationof executive remuneration and performance assessment based on the Articles of Association and the authorization of the Board ofDirectors. They are also responsible for providing comprehensive oversight and guidance to the Company's operational managementto ensure compliance and efficiency in related matters.
4. Supervisors and the Board of Supervisors: The election of supervisors was conducted in strict accordance with relevant provisionsof the Company Law and Articles of Association. The current Board of Supervisors consists of three supervisors, including twoemployee supervisors. The number and composition of the Board of Supervisors comply with the requirements of laws and regulations.The Company's Board of Supervisors convenes supervisor meetings in strict accordance with the Rules of Procedure of the Board ofSupervisors. All supervisors legally supervised and issued opinions for major issues, related-party transactions, financial status,performance of directors and managers to protect the legitimate rights and interests of the Company and shareholders.
5. Performance evaluation and incentive-restraint mechanisms: The Company has established a relatively complete performanceevaluation and incentive-restraint mechanism, linking ESG performance, operational performance, and other indicators to theperformance of senior management. The shareholder meeting is responsible for determining the remuneration of directors andsupervisors. The Remuneration and Assessment Committee is responsible for formulating assessment standards for directors and seniormanagement and implementing according to the Implementation Rules of the Remuneration and Assessment Committee.
During the reporting period, the Company continued to promote the implementation of employee stock ownership plans and stockoption incentive plans. The initiative and motivation of senior management and the core business and technical backbones were fullymobilized to achieve a close integration of the interests of the shareholder, Company, and employee.
6. Stakeholders: The Company fully respects and protects the legitimate rights and interests of stakeholders, actively communicatesand coordinates with stakeholders, to balance the interests of the Company, the shareholders, the employees, the customers, the society,and other parties, and jointly promotes the Company's development in a sound and sustainable manner.
7. Information disclosure: The Company specifically established a department, equipped with professional teams, and duly performedthe disclosure obligations in strict accordance with the provisions of Measures for the Administration of Information Disclosure ofListed Companies, Rules Governing the Listing of Stocks on Shenzhen Stock Exchange, and Articles of Association, and disclosesinformation as per the law, so as to ensure that the information disclosure is true, accurate, complete, timely, fair, concise, clear, easyto read, free from false statement, misrepresentations and material omissions. All shareholders were given equal access to theinformation. The Company has continuously improved the Insider Information Management Rules, strengthened the confidentiality ofinsider information, maintained the fairness of information disclosure, and effectively protected the legitimate rights and interests ofinvestors.The Company has designated Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily, and CNINFO(http://www.cninfo.com.cn) as the information disclosure media. In 2024, the Company disclosed a total of 181 announcementdocuments, to reveal its financial statements, operating information and other significant matters to shareholders and the public in atimely manner, ensuring transparency of information.
8. Investor relations: To better serve investors, the Company has designated Board Secretary as the person in charge of investor relationsmanagement and has assembled a professional team to handle related matters, including investor reception, holding annual performancebriefings, providing online voting platforms, and participating in strategy meetings. The Company has launched a special column forinvestor relations on its official website and promptly answers investors' questions through interactive platforms of the Shenzhen StockExchange (http://irm.cninfo.com.cn) and the investors' hotline, which has successfully established a fair and effective communicationbridge between the Company, its investors, and the public.During the reporting period, details regarding the convening of the aforementioned meetings, the attendance of directors (includingindependent directors), and investor reception can be found in the relevant sections of this annual report.Whether there is any significant difference between actual situation of corporate governance and laws, administrative regulations andthe provisions on governance of listed companies issued by CSRC? Yes ? NoThere is no significant difference between the actual situation of corporate governance and the laws, administrative regulations andthe provisions on governance of listed companies issued by CSRCⅡ. Particulars about the independence of the Company from controlling shareholder andactual controller in terms of the assets, personnel, finance, organization and business
The Company has the capability of self-operation in its marketing, production, procurement, etc., and it does not depend on majorshareholders or their affiliated enterprises. The ownership of the assets is clear and belongs to the Company. There is no mixed operationwith major shareholders. The Company is completely separated from the controlling shareholders in terms of business, personnel,assets, organization, and finance. The Company has an independent and complete business, as well as the capability of self-operation.
1. Business independence: The Company had its own production, procurement and sales system, and was completely independent ofcontrolling shareholder in terms of business.
2. Personnel separation: There is a department responsible for the Company's labor, personnel and salary management in the Company,and rules and regulations has been established for appraisal of employees' performance. Personnel of the Company were independentfrom the controlling shareholder. The Senior Management of the Company did not hold any positions other than director and supervisorin the related shareholders and other entities with same or similar business.
3. Institutional independence: The Board of Directors, Board of Supervisors, Senior Management and other internal organization ofthe Company operated independently, and each functional department is completely independent from controlling shareholder in termsof authority, personnel, production operation premises, etc., and there is no subordinate relationship between the controlling shareholderand its functional departments.
4. Asset independence: The title relationship between the Company and the controlling shareholder was clear. The Company's assetswere complete. The Company has an independent and complete production system, auxiliary production system, and supportingfacilities, as well as land use rights, housing property rights, intellectual property rights, and other assets.
5. Financial independence: The Company has its own separate financial department and an independent accounting system and financialmanagement system from the controlling shareholder. The Company makes financial decisions on its own according to therequirements of relevant accounting systems of listed companies. The Company implements vertical management of the financialaffairs of its subsidiaries. The Company opened accounts in the bank independently, made tax declarations, and performed taxobligations independent of shareholders according to law.Ⅲ. Horizontal Competition? Applicable ? Not applicable
Ⅳ. Annual General Meeting and Extraordinary General Meeting held during the ReportingPeriod
1. General meeting of shareholders during the reporting period
| Session | Type of meeting | Percentage of investor participation | Convening date | Disclosure date | Meeting resolution |
| The first extraordinary general meeting of shareholders in 2024 | Extraordinary general meeting of shareholders | 21.88% | February 1, 2024 | February 2, 2024 | For details, refer to the Announcement of the Resolution of the 1st Extraordinary Shareholders' General Meeting in 2024 published by Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily, and CNINFO (http://www.cninfo.com.cn) |
| General meeting of shareholders of 2023 | Annual general meeting of shareholders | 21.53% | May 21, 2024 | May 22, 2024 | For details, refer to the Announcement of Resolutions of the 2023 Annual General Meeting published by Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily, and CNINFO (http://www.cninfo.com.cn) |
| The second extraordinary general meeting of shareholders in 2024 | Extraordinary general meeting of shareholders | 23.83% | July 15, 2024 | July 16, 2024 | For details, refer to the Announcement of the Resolution of the 2nd Extraordinary Shareholders' General Meeting in 2024 published by Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily, and CNINFO (http://www.cninfo.com.cn) |
| The 3rd Extraordinary Shareholders' | Extraordinary general meeting of shareholders | 32.89% | September 30, 2024 | October 8, 2024 | For details, refer to the Announcement of the Resolution of the 3rd |
| Session | Type of meeting | Percentage of investor participation | Convening date | Disclosure date | Meeting resolution |
| Meeting in 2024 | Extraordinary Shareholders' General Meeting in 2024 published by Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily, and CNINFO (http://www.cninfo.com.cn) | ||||
| The Fourth Extraordinary General Meeting of Shareholders in 2024 | Extraordinary general meeting of shareholders | 26.06% | November 19, 2024 | November 20, 2024 | For details, refer to the Announcement of the Resolution of the 4th Extraordinary Shareholders' General Meeting in 2024 published by Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily, and CNINFO (http://www.cninfo.com.cn) |
2. Extraordinary general meeting of shareholders requested by the Preference shareholders with votingrights restored
? Applicable ? Not applicable
V. Directors, Supervisors and Senior Management
1. Basic Information
| Name | Gender | Age | Position | Appointment status | Term start date | Term end date | Number of shares held at the beginning of the period | Number of shares increased during the period | Number of shares decreased during the period | Other increase or decrease changes | Number of shares held at the end of the period | Reason for change in shares |
| Jiang Bin | Male | 59 | Chairman | Incumbent | July 27, 2007 | November 14, 2025 | 287,397,406 | 287,397,406 | ||||
| Li Youbo | Male | 48 | Director | Incumbent | November 15, 2022 | November 14, 2025 | ||||||
| President | Incumbent | April 7, 2023 | November 14, 2025 | |||||||||
| Duan Huilu | Male | 49 | Director | Incumbent | February 4, 2016 | November 14, 2025 | 3,474,500 | 3,474,500 | ||||
| Vice President | Incumbent | March 25, 2011 | November 14, 2025 | |||||||||
| Liu Yaocheng | Male | 52 | Director | Incumbent | May 10, 2023 | November 14, 2025 | ||||||
| Vice President | Incumbent | August 14, 2024 | November 14, 2025 | |||||||||
| Huang Yidong | Female | 60 | Independent Director | Incumbent | November 15, 2022 | November 14, 2025 | ||||||
| Jiang Fuxiu | Male | 56 | Independent Director | Incumbent | November 15, 2022 | November 14, 2025 | ||||||
| Qiu Min | Male | 50 | Independent Director | Incumbent | May 21, 2024 | November 14, 2025 | ||||||
| Feng Pengbo | Male | 57 | Chairman of Board of Supervisors | Incumbent | November 15, 2022 | November 14, 2025 | ||||||
| Xu Xiaofeng | Female | 48 | Employee representative Supervisor | Incumbent | September 17, 2013 | November 14, 2025 | ||||||
| Wei Wenbin | Male | 47 | Employee representative Supervisor | Incumbent | April 27, 2021 | November 14, 2025 | ||||||
| Gao Xiaoguang | Male | 49 | Vice President | Incumbent | April 12, 2012 | November 14, 2025 |
| Name | Gender | Age | Position | Appointment status | Term start date | Term end date | Number of shares held at the beginning of the period | Number of shares increased during the period | Number of shares decreased during the period | Other increase or decrease changes | Number of shares held at the end of the period | Reason for change in shares |
| Liu Chunfa | Male | 49 | Vice President | Incumbent | October 10, 2013 | November 14, 2025 | 864,000 | 864,000 | ||||
| Jiang Hongzhai | Male | 55 | Vice President | Incumbent | October 10, 2013 | November 14, 2025 | ||||||
| Yu Dachao | Male | 47 | Vice President | Incumbent | October 24, 2016 | November 14, 2025 | ||||||
| Rao Yi | Male | 42 | Vice President | Incumbent | April 7, 2023 | November 14, 2025 | ||||||
| Li Yongzhi | Male | 47 | Chief Financial Officer | Incumbent | January 27, 2021 | November 14, 2025 | ||||||
| Xu Dapeng | Male | 41 | Board Secretary | Incumbent | April 23, 2023 | November 14, 2025 | ||||||
| Wang Kun | Female | 49 | Independent Director | Resigned | November 8, 2019 | May 21, 2024 | ||||||
| Total | -- | -- | -- | -- | -- | -- | 291,735,906 | 291,735,906 | -- |
Whether there is any resignation of directors, supervisors and senior management during the reporting period? Yes ? NoDuring the reporting period, Ms. Wang Kun resigned from her position as an independent director and member of the Audit Committee of the Company's 6th board of directors for personalreasons and will no longer hold any position in the Company after her resignation.
Changes in directors, supervisors and senior management? Applicable ? Not applicable
| Name | Position | Type | Date | Reason |
| Wang Kun | Independent Director | Resigned | May 21, 2024 | Personal reason |
| Qiu Min | Independent Director | Elected | May 21, 2024 | Elected as an independent director of the 6th Board of Directors of the Company |
| Liu Yaocheng | Vice President | Appointment | August 14, 2024 | Job transfer |
2. Biographical Information
Professional backgrounds, main working experience and current duties of the Directors, Supervisors and the Senior Management
(1) Members of the Board of Directors of the Company
Jiang Bin, male, a Chinese citizen with no foreign residency right, who was born on September 1966, holding a master's degree inbusiness administration from Tsinghua University and bachelor's degree in electronic engineering from Beihang University. Jiang Binis currently the board chairman of the Company; He has more than 30 years of experience in the electro-acoustic industry. Jiang Binserves as a deputy to the 14th National People's Congress, and a standing member of the 13th Executive Committee of the All-ChinaFederation of Industry and Commerce. He was once honored as a national model worker, a model worker in Shandong Province, anational leading entrepreneur in the electronic information industry, and an industry leader in Shandong Province. He also received thehighest award in science and technology in Shandong Province, and was honored as Qilu talent.Li Youbo, male, a Chinese citizen with no foreign residency right, who was born in December 1977, with a bachelor's degree inautomation from Dalian University of Technology. Li Youbo currently serves as the director and president of the Company. He joinedthe Company in 2003 and has held various positions, including engineer, technical manager, head of the business division, and vicepresident. He has over 20 years of experience in R&D and manufacturing of electro-acoustic components/complete machines.Duan Huilu, male, a Chinese citizen with no foreign residency right, who was born in February 1976, with a bachelor's degree inaccounting from Shandong University of Finance and Economics. Duan Huilu currently serves as the director and vice president of theCompany. He joined the Company in 2001 and has held various positions, including accountant, financial manager, manager of thefinance department, and chief financial officer. He has more than 20 years of experience in enterprise finance.Liu Yaocheng, male, a Chinese citizen with permanent residency in the United States, who was born in October 1973, with a Ph.D. inmaterials science and engineering and a master's degree in electronic engineering from Stanford University, and a master's degree andbachelor's degree in materials science and engineering from Tsinghua University. Mr. Liu currently serves as the director and vicepresident of the Company. He joined the Company in 2019 and has held various positions, including head of the Company's Strategyand Investment Department and head of the Company's Central Research Institute. Liu Yaocheng has worked at IBM semiconductorR&D center, McKinsey & Company, and Silex Microsystems AB, gaining extensive experience in technology R&D, strategic planning,investment, and M&A.Huang Yidong, female, a Chinese citizen with permanent residency in Japan, who was born in March 1965, with a Ph.D. in electronicengineering from Tsinghua University. She is currently a professor in the Department of Electronic Engineering at Tsinghua University,deputy director of the academic committee at Tsinghua University, foreign academician of the National Academy of Engineering, andfellow of the OSA. She is also the executive director of the Chinese Optical Society, vice chairman of the China Education Society ofElectronics, vice president of the Higher Education Branch, deputy editor-in-chief of ACS Photonics, and independent director of theCompany and Advanced Fiber Resources (Zhuhai), Ltd. She formerly served as a distinguished researcher at the NEC Institute ofOptical-Wireless Devices, as deputy dean and head of the Department of Electronic Engineering of Tsinghua University, and as deanof the Tianjin Institute of Electronic Information of Tsinghua University.Jiang Fuxiu, male, a Chinese citizen with no foreign residency right, who was born in June 1969, served as a postdoctoral fellow inaccounting at Guanghua School of Management, Peking University, and has a Ph.D. in economics from Nanjing University. He iscurrently a professor and doctoral supervisor in the Department of Finance, Business School of Renmin University of China, and adirector of the Environmental, Social and Governance (ESG) Research Center of the National Academy of Development and Strategyof Renmin University of China. He also serves as an independent director of the Company and Bank of China Wealth Management
Co., Ltd. He used to serve as an independent director of Beijing Chunju Technology Co., Ltd., Northcom Group Co., Ltd., YantaiLongyuan Power Technology Co., Ltd., Utour Group Co., Datang International Power Generation Co., Ltd., etc.Qiu Min, male, a Chinese citizen with no foreign residency right, who was born in January 1975, with a Ph.D. in Electromagneticsfrom the KTH Royal Institute of Technology and a Ph.D. in Condensed Matter Physics from Zhejiang University. He is currently aGuoqiang Chair Professor, and Vice President of Westlake University, where he also serve as the Dean of both the School ofEngineering and the Institute of Optoelectronics at Westlake University. He is a Fellow of the Optical Society of America (OSA), aFellow of the Society of Photo-Optical Instrumentation Engineers (SPIE), a Fellow of the Institute of Electrical and ElectronicsEngineers (IEEE), a Fellow of the Chinese Optical Society (COS), a Fellow and executive director of the Chinese Society for OpticalEngineering (CSOE), the deputy director and member of the Micro-Nano Optics Professional Committee of the Chinese Optical Society,the vice president of the Zhejiang Optical Society, the vice president of the Zhejiang Physical Society, the topical editor for Light:
Science & Applications (Springer Nature), the associate editor in engineering for Science Bulletin (Science China Press), as well asthe editor-in-chief of PhotoniX (Springer Nature). In 2022, he was awarded the first prize of the 2021 Zhejiang Provincial NaturalScience Award as the first completer. He is currently the Independent Director of the Company. He once served as the director of theState Key Laboratory of Modern Optical Instrumentation, professor in the College of Optoelectronic Science and Engineering atZhejiang University, and an assistant professor, associate professor, and full professor at the KTH Royal Institute of Technology. Healso served as an independent director of Phenix Optics Co., Ltd., a director of Hangzhou Zhuojian Information Technology Co., Ltd.,and a director of Taiping Science and Technology Insurance Co., Ltd.
(2) Members of the Supervisory Board of the Company
Feng Pengbo, male, a Chinese citizen with no foreign residency rights, was born in July 1968. He has a bachelor's degree in mechanicalmanufacturing technology and equipment from the Xi'an University of Technology and the professional title of Senior Engineer, andwon the honor of Model Worker in Shandong Province. He is currently the chairman of the Board of Supervisors of the Company.Feng Pengbo joined the Company in 2003 and successively served as an engineer, chief engineer, section supervisor, section chief, andvice president of the Company. Feng Pengbo is an expert in automation and has rich experience in automation equipment R&D andmanufacturing.Xu Xiaofeng, a female, is a Chinese citizen with no foreign residency right, who was born in October 1977, has a bachelor's degree inelectrical technology from Zhengzhou Institute of Aeronautical Industry Management and a bachelor's degree in businessadministration from China University of Petroleum. She is currently the supervisor of the Company. Ms. Xu joined the Company in2001, and successively served as the assistant manager of the Quality Control Department, the Enterprise Development Department,and the Operation Department, and the head of the Company's Employee Service Center. She has rich experience in enterprisemanagement.Wei Wenbin, male, a Chinese citizen with no foreign residency right, who was born in July 1978, has a bachelor's degree in materialshaping and control engineering from Jilin University. He is currently the supervisor and general manager of the Human ResourcesDepartment of the Company. Wei Wenbin joined the Company in 2004, and successively served as the head of the Company'sproduction and operation management department, human resources management department, lean manufacturing managementdepartment, employee management, etc.
(3) Senior management personnel of the Company
Li Youbo (Refer to the resume above for details.)Liu Chunfa, male, a Chinese citizen with no foreign residency right, who was born in October 1976, graduated from Lanzhou JiaotongUniversity majoring in mechatronics. He is currently Vice President of the Company. Liu Chunfa joined the Company in 2001. Hesuccessively served as engineer and assistant manager of the R&D department, technical manager of the technical engineeringdepartment, senior product manager, head of the manufacturing department, senior manager of the R&D department, person in chargeof one of the business divisions, etc. Mr. Liu has over 20 years of experience in the field of electroacoustic components, especially inminiature micro speakers and receivers.Jiang Hongzhai, male, a Chinese citizen with no foreign residency right, who was born in December 1970, graduated from ShandongCollege of Information Technology, majoring in computer application. He is currently the vice president of the Company. Mr. Jiang
used to serve as factory director of Yuefeng Electronic Technology (Dongguan) Co., Ltd., and engineer of Weifang Radio EighthFactory. He joined the Company in 2006 and successively served as deputy general manager of the equipment department, head of theemployee management department and the leader of subsidiaries’ business, etc. Mr. Jiang has more than 20 years of experience in thefield of precision machining, and has rich experience in administration and infrastructure, etc.Yu Dachao, male, a Chinese citizen with no foreign residency right, who was born in May 1978, has a bachelor's degree in computerscience and engineering, from Tianjin University of Technology. He is currently Vice President of the Company. Yu Dachao joinedthe Company in 2005 and successively served as the manager and deputy general manager of R&D department, product manager, headof one of the business divisions, and head of the supply chain management department. He has extensive experience in smart electronicsdevelopment and supply chain management.Gao Xiaoguang, male, a Chinese citizen with no foreign residency right, who was born in March 1976, has a master's degree in businessadministration from Southern Cross University, Australia. He is currently Vice President of the Company. Gao Xiaoguang joined theCompany in 2001, and successively served as manager, deputy general manager of the marketing department, deputy general managerof the electroacoustic device business division, and head of the marketing system. He has rich experience in market expansion, keyaccount operation and maintenance and human resources management, etc.Duan Huilu (Refer to the resume above for details.)Rao Yi, male, a Chinese citizen, was born in June 1983. He has a bachelor's degree in electronic science and technology from TsinghuaUniversity, and economics from Peking University, and a master's degree in electronic science and technology from TsinghuaUniversity. He has a Ph.D. in optoelectronics from the University of California, Berkeley. He is currently the vice president of theCompany. Rao Yi joined the Company in 2019. He used to work for Bandiwith10 Corporation and Rokid US in the United States. Hehas received several honorary titles, including the Science and Technology Youth Award of Shandong Province and the Special Prizeof Tianjin Science and Technology Invention. He has rich experience in the field of virtual reality/augmented reality optics.Liu Yaocheng (Refer to the resume above for details.)Li Yongzhi, male, a Chinese citizen with no foreign residency rights, who was born in November 1978, holds a master's degree inbusiness management and a bachelor's degree in management from Hefei University of Technology. He is currently the Chief FinancialOfficer and head of the accounting department of the Company. Li Yongzhi joined the Company in 2005 and successively served asaccountant and financial manager of the financial department. Li Yongzhi is a senior accountant and certified management accountant(CMA), with nearly 20 years of experience in corporate finance.Xu Dapeng, male, a Chinese citizen with no foreign residency rights, was born in November 1984. He holds a master's degree inmanagement from Renmin University of China and a bachelor's degree in economics from Hunan University. He is currently the BoardSecretary of the Company and possesses the Board Secretary Qualification Certificate. Xu Dapeng joined the Company in 2015 andsuccessively worked in the Company's marketing system and securities department. He successively held the positions of marketingdirector, securities affairs representative, etc. He has rich experience in the fields of marketing, securities finance, investor relationsmanagement, etc.Positions held in shareholders' entities? Applicable ? Not applicable
| Name | Name of the shareholder entity | Position | Term start date | Term end date | Receive remuneration or allowance from shareholders' entity (Yes/No) |
| Jiang Bin | Goertek Group Co., Ltd. | Chairman | September 27, 2007 | November 14, 2027 | No |
| Duan Huilu | Goertek Group Co., Ltd. | Director | September 27, 2007 | November 14, 2027 | No |
| Description of incumbency in shareholders' entities | None | ||||
Positions held in other entities? Applicable ? Not applicable
| Name | Name of other entity | Position | Term start date | Term end date | Receive remuneration or allowance from other entity (Yes/No) |
| Jiang Bin | Weifang Goertek Electronics Co., Ltd. | Chairman | November 23, 2004 | November 22, 2025 | No |
| Jiang Bin | Goertek Optical Technology Co., Ltd. | Chairman | April 20, 2022 | April 19, 2025 | No |
| Jiang Bin | Beijing Goertek Investment Management Co., Ltd. | Executive Director | January 22, 2016 | January 21, 2025 | No |
| Li Youbo | Goertek Starshine (Qingdao) Inc. | General Manager | October 15, 2024 | October 14, 2027 | No |
| Li Youbo | Weifang Goertek Electronic Technology Co., Ltd. | Executive Director / General Manager | November 16, 2023 | November 15, 2026 | No |
| Li Youbo | Goertek Intelligence Technology Co., Ltd. | Director | April 7, 2024 | April 6, 2027 | No |
| Duan Huilu | Beijing Goertek Investment Management Co., Ltd. | Supervisor | January 22, 2016 | January 21, 2025 | No |
| Duan Huilu | Goertek Technology Co., Ltd. | Supervisor | August 14, 2014 | August 13, 2026 | No |
| Duan Huilu | Goertek Investment Co., Ltd. | Executive Director / General Manager | December 7, 2015 | December 6, 2027 | No |
| Duan Huilu | Weifang Goertek Electronics Co., Ltd. | Director | November 23, 2004 | November 22, 2025 | No |
| Duan Huilu | Weifang Goertek Trading Co., Ltd. | Executive Director / General Manager | August 26, 2011 | August 25, 2026 | No |
| Duan Huilu | Qingdao Goertek Acoustics Technology Co., Ltd. | Executive Director / General Manager | November 15, 2023 | November 14, 2026 | No |
| Duan Huilu | Goertek (Hong Kong) Co., Limited | Director | April 24, 2013 | April 23, 2025 | No |
| Duan Huilu | Goertek Technology (Hong Kong) Co., Limited | Director | November 3, 2023 | November 2, 2026 | No |
| Duan Huilu | Qingdao Goertek Commercial Factoring Co., Ltd. | Executive Director | January 11, 2018 | January 10, 2027 | No |
| Liu Yaocheng | Goertek Optical Technology Co., Ltd. | Director | June 27, 2022 | June 26, 2025 | No |
| Liu Yaocheng | Uphoton Technology (Shaoxing) Co., Ltd. | Director | June 13, 2022 | June 12, 2025 | No |
| Liu Yaocheng | Qingdao Goertek Alpha Pixels Technology Co., Ltd. | Director / General Manager | June 27, 2024 | June 26, 2027 | No |
| Liu Yaocheng | Shanghai Goertek Technology Development Co., Ltd. | Director / General Manager | October 31, 2024 | October 30, 2027 | No |
| Liu Yaocheng | SeeYA Technology Corporation | Director | March 17, 2023 | March 16, 2026 | No |
| Liu | GravityXR Electronics and | Director | April 17, 2023 | April 16, 2026 | No |
| Name | Name of other entity | Position | Term start date | Term end date | Receive remuneration or allowance from other entity (Yes/No) |
| Yaocheng | Technology Co., Ltd. | ||||
| Liu Yaocheng | Qingdao Resonance Venture Capital Management Co., Ltd. | Executive Director, General Manager | February 9, 2022 | February 8, 2025 | No |
| Liu Yaocheng | Qingdao Tuopu Tanyuan Investment Partnership LP | Managing Partner | January 19, 2022 | January 18, 2025 | No |
| Liu Yaocheng | Beijing Glory Technology Co., Ltd. | Director, Manager | August 29, 2024 | August 28, 2027 | No |
| Liu Yaocheng | Jiaxing Zeray New Material Technology Co., Ltd | Director | May 8, 2024 | May 7, 2027 | No |
| Liu Yaocheng | DEEPMIRROR | Director | July 25, 2024 | July 24, 2027 | No |
| Liu Yaocheng | Helio Display Materials Limited | Director | November 4, 2024 | November 3, 2027 | No |
| Huang Yidong | Advanced Fiber Resources (Zhuhai), Ltd. | Independent Director | March 31, 2021 | March 28, 2027 | Yes |
| Jiang Fuxiu | Bank of China Wealth Management Co., Ltd. | Independent Director | April 1, 2024 | Yes | |
| Liu Chunfa | Goertek Vina Co., Ltd. | Director | January 1, 2019 | December 31, 2027 | No |
| Liu Chunfa | Shanghai Goertek Technology Co., Ltd. | Supervisor | August 7, 2014 | August 6, 2026 | No |
| Liu Chunfa | Yili Precision Manufacturing Co., Ltd. | Executive Director | November 9, 2023 | November 8, 2026 | No |
| Jiang Hongzhai | Goertek Electronics Vietnam Co., Ltd. | Director | February 22, 2024 | February 21, 2027 | No |
| Jiang Hongzhai | Weifang Goertek Communication Technology Co., Ltd. | Executive Director | June 26, 2015 | June 25, 2027 | No |
| Jiang Hongzhai | Nanning Goertek Electronics Co., Ltd. | Chairman | November 12, 2018 | November 11, 2027 | No |
| Jiang Hongzhai | Nanning Goertek Trading Co., Ltd. | Chairman | November 29, 2018 | November 28, 2027 | No |
| Jiang Hongzhai | Goertek Technology Vina Co., Ltd. | Director / General Manager | September 25, 2023 | September 24, 2026 | No |
| Jiang Hongzhai | Goertek Vina Co., Ltd. | Director / General Manager | September 22, 2023 | September 21, 2026 | No |
| Jiang Hongzhai | Goertek Precision Industry Vietnam Co., Ltd. | Director / General Manager | October 2, 2023 | October 1, 2026 | No |
| Jiang Hongzhai | Goertek Smart Technology Vina Co., Ltd. | Director / General Manager | March 15, 2023 | March 14, 2026 | No |
| Jiang Hongzhai | Dongguan Yili Precision Manufacturing Co., Ltd. | Executive Director | December 11, 2019 | January 31, 2024 | No |
| Gao Xiaoguang | Shenzhen Goertek Technology Co., Ltd. | Executive Director | October 29, 2012 | October 28, 2027 | No |
| Name | Name of other entity | Position | Term start date | Term end date | Receive remuneration or allowance from other entity (Yes/No) |
| Gao Xiaoguang | Shanghai Goertek Technology Co., Ltd. | Executive Director | August 7, 2014 | August 6, 2026 | No |
| Gao Xiaoguang | Goertek Electronics, Inc. | Manager | December 19, 2018 | December 18, 2027 | No |
| Gao Xiaoguang | Beijing Goertek Technology Co., Ltd. | Executive Director | November 13, 2023 | November 12, 2026 | No |
| Gao Xiaoguang | Goertek (Korea) Technology Inc. | Director | March 31, 2023 | March 30, 2026 | No |
| Rao Yi | Dongguan Yili Precision Manufacturing Co., Ltd. | Director/Manager | January 31, 2024 | January 30, 2027 | No |
| Rao Yi | Goertek Optical Technology (Hong Kong) Holdings Co., Limited | Director | March 4, 2024 | March 3, 2027 | No |
| Rao Yi | Goertek Optical Technology (Hong Kong) Co., Limited | Director | March 11, 2024 | March 10, 2027 | No |
| Rao Yi | Goertek Optical Technology Co., Ltd. | Director | April 21, 2022 | April 20, 2025 | No |
| Rao Yi | Goertek Optical Technology (Shanghai) Co., Ltd. | General Manager | February 16, 2022 | February 15, 2025 | No |
| Rao Yi | Goertek Optical Technology (Qingdao) Co., Ltd. | General Manager | June 29, 2022 | June 28, 2025 | No |
| Rao Yi | Uphoton Technology (Shaoxing) Co., Ltd. | Director | June 13, 2022 | June 12, 2025 | No |
| Rao Yi | Zhongrong Zhige Technology (Tianjin) Co., Ltd. | Executive Director | April 1, 2022 | March 31, 2025 | No |
| Li Yongzhi | Goertek Intelligence Technology Co., Ltd. | Supervisor | August 18, 2017 | August 17, 2026 | No |
| Li Yongzhi | Qingdao Goertek Commercial Factoring Co., Ltd. | Supervisor | January 11, 2018 | January 10, 2027 | No |
| Li Yongzhi | Nanning Goertek Electronics Co., Ltd. | Supervisor | November 12, 2018 | November 11, 2027 | No |
| Li Yongzhi | Nanning Goertek Trading Co., Ltd. | Supervisor | November 29, 2018 | November 28, 2027 | No |
| Li Yongzhi | Xi'an Goertek Electronic Technology Co., Ltd. | Supervisor | May 7, 2019 | May 6, 2025 | No |
| Li Yongzhi | Yishui TECO Electronics Technology Co., Ltd. | Supervisor | December 10, 2019 | December 9, 2025 | No |
| Li Yongzhi | Rongcheng Goertek Technology Co., Ltd. | Supervisor | July 15, 2020 | July 14, 2026 | No |
| Li Yongzhi | Goertek Microelectronics Inc. | Director | December 23, 2020 | December 22, 2026 | No |
| Li Yongzhi | Weifang Goertek Electronics Co., Ltd. | Supervisor | June 12, 2023 | June 11, 2026 | No |
| Li Yongzhi | Weifang Goertek Electronic Technology Co., Ltd. | Supervisor | November 16, 2023 | November 15, 2026 | No |
| Name | Name of other entity | Position | Term start date | Term end date | Receive remuneration or allowance from other entity (Yes/No) |
| Li Yongzhi | Goertek Investment Co., Ltd. | Supervisor | November 7, 2023 | November 6, 2026 | No |
| Feng Pengbo | Bei Ge (Weifang) Intelligent technology Co., Ltd | Chairman | August 31, 2021 | No | |
| Wei Wenbin | Weifang Goertek Communication Technology Co., Ltd. | General Manager | June 26, 2015 | June 25, 2027 | No |
| Description of incumbency in other entities | None | ||||
Penalties imposed by securities regulatory authorities on current and outgoing directors, supervisors and senior management of thecompany in the past three years? Applicable ? Not applicable
3. Remuneration of Directors, Supervisors and Senior Management
The decision-making procedure, basis and actual payment of the remuneration of directors, supervisors and senior managementThe remuneration for the directors and senior management of the Company shall be proposed to the Board of Directors by theRemuneration and Assessment Committee; The remuneration for the senior management shall be deliberated and determined by theBoard of Directors; The remuneration for directors shall be deliberated by the Board of Directors before being submitted to the generalmeeting of shareholders for determination;The remuneration for supervisors shall be deliberated by the Supervisory Board before being submitted to the general meeting ofshareholders for determination.Proposal on the remuneration for directors, supervisors, and senior management approved by the above-mentioned approval authorityof the Company is as follows:
Proposal on the remuneration of directors:
Non-independent directors who hold concurrent senior management or other positions in the Company will be compensated accordingto the remuneration proposal for senior management determined by the Board of Directors or the employment contract signed with theCompany. They will not be additionally compensated as directors. The remuneration standard of the Chairman of the Board is RMB
1.8 million per year before tax and paid on a monthly basis.
The allowance for independent directors of the Company is RMB 180,000 per person per year before tax and paid on a monthly basis.Proposal on the remuneration of senior management of the Company:
The remuneration for the Company's senior management is based on the remuneration standard for their respective positions or theprovisions of their employment contracts.The remuneration for senior management consists of basic remuneration and performance-based remuneration. Among them, the basicremuneration shall be determined by the Company by reference to the market or industry remuneration standards in combination withtheir positions, responsibilities, abilities, and other factors, and will be paid on a monthly basis; The performance-based remunerationshall be determined on the basis of factors such as the score of the performance appraisal period and the position weight of each seniormanagement with reference to the Company's relevant performance appraisal management regulations. The remuneration will then besubmitted to the Company's Remuneration and Assessment Committee for approval.Proposal on the remuneration of supervisors:
Supervisors who hold actual positions in the Company will receive remuneration based on their actual positions in the Company, inaccordance with the Company's relevant basic remuneration standards and performance-based appraisal standards, without additionalsupervisor's allowance; Supervisors who do not actually work in the Company will not be paid.Additional explanation of the above proposal:
Normal working expenses incurred by the directors, supervisors, and senior management of the Company in the course of theCompany's business shall be borne by the Company. When directors, supervisors, and senior management of the Company leavetheir positions due to a change in the term of office, re-election, resignation during their term, or for any other reason, theirremuneration will be calculated and paid based on their actual term of service.Remuneration of directors, supervisors and senior management during reporting period
Unit: RMB 10,000
| Name | Gender | Age | Position | Appointment status | The total amount of pre-tax remuneration received from the Company | Remuneration from related parties (Y/N) |
| Jiang Bin | Male | 59 | Chairman | Incumbent | 180.00 | No |
| Li Youbo | Male | 48 | Director, President | Incumbent | 144.13 | No |
| Duan Huilu | Male | 49 | Director, Vice President | Incumbent | 110.10 | No |
| Liu Yaocheng | Male | 52 | Director, Vice President | Incumbent | 163.31 | No |
| Huang Yidong | Female | 60 | Independent Director | Incumbent | 18.00 | No |
| Jiang Fuxiu | Male | 56 | Independent Director | Incumbent | 18.00 | No |
| Qiu Min | Male | 50 | Independent Director | Incumbent | 11.00 | No |
| Feng Pengbo | Male | 57 | Chairman of Supervisory Board | Incumbent | 45.24 | No |
| Xu Xiaofeng | Female | 48 | Employee Supervisor | Incumbent | 73.87 | No |
| Wei Wenbin | Male | 47 | Employee Supervisor | Incumbent | 75.39 | No |
| Gao Xiaoguang | Male | 49 | Vice President | Incumbent | 103.75 | No |
| Liu Chunfa | Male | 49 | Vice President | Incumbent | 116.92 | No |
| Jiang Hongzhai | Male | 55 | Vice President | Incumbent | 115.90 | No |
| Yu Dachao | Male | 47 | Vice President | Incumbent | 123.53 | No |
| Rao Yi | Male | 42 | Vice President | Incumbent | 153.91 | No |
| Li Yongzhi | Male | 47 | Chief Financial Officer | Incumbent | 102.99 | No |
| Xu Dapeng | Male | 41 | Board Secretary | Incumbent | 77.89 | No |
| Wang Kun | Female | 49 | Independent Director | Resigned | 7.00 | No |
| Total | -- | -- | -- | -- | 1,640.93 | -- |
Other circumstances? Applicable ? Not applicable
VI. Performance of Directors' Duties during the Reporting Period
1. Board of Directors
| Session | Convening date | Disclosure date | Meeting resolution |
| The 13th Meeting of the 6th Board of Directors | January 15, 2024 | January 16, 2024 | For details, refer to the Announcement on the Resolution of the 13th Meeting of the 6th Board of Directors and other announcements published in Securities Times, China Securities Journal, Shanghai Securities News, Securities |
| Session | Convening date | Disclosure date | Meeting resolution |
| Daily, and CNINFO (http://www.cninfo.com.cn) | |||
| The 14th Meeting of the 6th Board of Directors | March 27, 2024 | March 28, 2024 | For details, refer to the Announcement on the Resolution of the 14th Meeting of the 6th Board of Directors and other announcements published in Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily, and CNINFO (http://www.cninfo.com.cn) |
| The 15th Meeting of the 6th Board of Directors | April 24, 2024 | April 25, 2024 | For details, refer to the Announcement on the Resolution of the 15th Meeting of the 6th Board of Directors and other announcements published in Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily, and CNINFO (http://www.cninfo.com.cn) |
| The 16th Meeting of the 6th Board of Directors | May 22, 2024 | May 23, 2024 | For details, refer to the Announcement on the Resolution of the 16th Meeting of the 6th Board of Directors and other announcements published in Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily, and CNINFO (http://www.cninfo.com.cn) |
| The 17th Meeting of the 6th Board of Directors | June 27, 2024 | June 28, 2024 | For details, refer to the Announcement on the Resolution of the 17th Meeting of the 6th Board of Directors and other announcements published in Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily, and CNINFO (http://www.cninfo.com.cn) |
| The 18th Meeting of the 6th Board of Directors | August 14, 2024 | August 15, 2024 | For details, refer to the Announcement on the Resolution of the 18th Meeting of the 6th Board of Directors and other announcements published in Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily, and CNINFO (http://www.cninfo.com.cn) |
| The 19th Meeting of the 6th Board of Directors | September 13, 2024 | September 14, 2024 | For details, refer to the Announcement on the Resolution of the 19th Meeting of the 6th Board of Directors and other announcements published in Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily, and CNINFO (http://www.cninfo.com.cn) |
| The 20th Meeting of the 6th Board of Directors | October 23, 2024 | October 24, 2024 | For details, refer to the Announcement on the Resolution of the 20th Meeting of the 6th Board of Directors and other announcements published in Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily, and CNINFO (http://www.cninfo.com.cn) |
| Session | Convening date | Disclosure date | Meeting resolution |
| The 21st Meeting of the 6th Board of Directors | November 27, 2024 | November 28, 2024 | For details, refer to the Announcement on the Resolution of the 21st Meeting of the 6th Board of Directors and other announcements published in Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily, and CNINFO (http://www.cninfo.com.cn) |
| The 22nd Meeting of the 6th Board of Directors | December 27, 2024 | December 28, 2024 | For details, refer to the Announcement on the Resolution of the 22nd Meeting of the 6th Board of Directors published in Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily, and CNINFO (http://www.cninfo.com.cn) |
2. Directors' attendance at the meetings of Board of Directors and general meeting of shareholders
| Directors' attendance at the meetings of Board of Directors and general meeting of shareholders | |||||||
| Name | Number of attendance required during the reporting period (times) | Attendance in person (times) | Attendance by tele-communication (times) | Entrusted presence (times) | Absence (times) | Whether there is absence in person for two consecutive times | Attendance of the general meeting of shareholders (times) |
| Jiang Bin | 10 | 9 | 1 | 0 | 0 | No | 5 |
| Li Youbo | 10 | 4 | 6 | 0 | 0 | No | 5 |
| Duan Huilu | 10 | 5 | 5 | 0 | 0 | No | 5 |
| Liu Yaocheng | 10 | 3 | 7 | 0 | 0 | No | 3 |
| Wang Kun | 3 | 1 | 2 | 0 | 0 | No | 2 |
| Huang Yidong | 10 | 1 | 9 | 0 | 0 | No | 3 |
| Jiang Fuxiu | 10 | 1 | 9 | 0 | 0 | No | 4 |
| Qiu Min | 7 | 0 | 7 | 0 | 0 | No | 3 |
Statement on absence from two consecutive meetings of the BoardNone
3. Objections raised by directors to relevant matters of the Company
Whether directors raise any objection to relevant matters of the Company? Yes ? NoNo objection was raised to relevant matters of the Company during the reporting period.
4. Other details on the performance of duties by directors
Whether proposals made by directors were adopted by the Company? Yes ? NoStatement on the adoption or non-adoption of proposals made by the directorsDuring the reporting period, the directors of the Company carried out work in strict accordance with the provisions of the CompanyLaw, the Securities Law, Code of Corporate Governance for Listed Companies, Rules Governing the Listing of Stocks on ShenzhenStock Exchange, Self-Regulatory Guidelines No. 1 for Companies Listed on Shenzhen Stock Exchange - Normative Operation of ListedCompanies on the Main Board, Articles of Association and Rules of Procedure of the Board of Directors. They fulfilled their duty ofdue diligence through full discussion on major governance and business matters of the Company, ensured the decision-making process
being scientific, timely, and efficient, and resolutely supervised and drove the implementation of the relevant resolutions, so as to playa positive role in the sustainable, healthy and stable development of the Company, and effectively safeguard the legitimate rights andinterests of the Company and all shareholders.During the reporting period, the Company's independent directors carried out their work in strict accordance with the Measures for theAdministration of Independent Directors of Listed Companies, Articles of Association, Rules of Procedure of the Board of Directors,and Independent Director Working System. They maintained communication with other directors, senior management, and relevantpersonnel through on-site and remote methods to actively understand the Company's production and operating conditions as well as itsfinancial status. Based on their professional expertise, they made positive suggestions for improving corporate governance. Thesesuggestions effectively ensured the fairness and objectivity of board decisions, and played a positive role in perfecting the Company'ssupervision mechanism and governance structure, thereby safeguarding the legitimate rights and interests of the Company and allshareholders.
VII. Performance of Special Committees under the Board of Directors during the ReportingPeriod
| Committee name | Members | Number of meetings held | Convening date | Meeting content | Important opinions and suggestions proposed | Performance of other duties | Specific objections (if any) |
| Audit committee | Wang Kun, Jiang Bin, Jiang Fuxiu | 3 | February 1, 2024 | Reviewed and approved proposals such as Special Auditor's Report on the Deposit and Use of Funds Raised in Q4 2023 and Inspection Report on Related-Party Transactions, External Guarantees and Other Matters of the Company in the Second Half of 2023, etc. | Approved | Not applicable | Not applicable |
| March 16, 2024 | Reviewed and approved proposals such as Proposal on the Deliberation of Financial Accounts for 2023 and Proposal on the Deliberation of Self-assessment Report on Internal Control for 2023, etc. | Approved | Not applicable | Not applicable | |||
| April 19, 2024 | Reviewed and approved proposals such as Proposal on the Deliberation of the Company's Quarterly Report for the First Quarter of 2024, etc. | Approved | Not applicable | Not applicable | |||
| Jiang Fuxiu, Jiang Bin, Qiu Min | 2 | August 2, 2024 | Reviewed and approved proposals such as Proposal on the Deliberation of the Company's Semi-Annual Report for 2024 and Summary Thereof and Inspection Report on Related-Party Transactions, External Guarantees and Other Matters of the Company in the First Half of 2024. | Approved | Not applicable | Not applicable | |
| October 18, 2024 | Reviewed and approved proposals such as Proposal on the Deliberation of the Company's | Approved | Not applicable | Not applicable |
| Committee name | Members | Number of meetings held | Convening date | Meeting content | Important opinions and suggestions proposed | Performance of other duties | Specific objections (if any) |
| Quarterly Report for the Third Quarter of 2024, etc. | |||||||
| Remuneration and assessment committee | Huang Yidong, Jiang Bin, Jiang Fuxiu | 5 | March 15, 2024 | Reviewed and approved proposals such as Proposal on Adjustment of the List of Incentive Recipients and Granted Amounts for the Reserved Granted Portion under the Company's 2021 Stock Option Incentive Plan and the Cancellation of Part of the Stock Options and Proposal on the Achievement of the Exercise Conditions for the Second Exercise Period of the Reserved Granted Portion under the Company's 2021 Stock Option Incentive Plan, etc. | Approved | Not applicable | Not applicable |
| April 19, 2024 | Reviewed and approved Proposal on Cancellation of Stock Options Granted Unexercised at the Expiration of the First Exercise Period of the Reserved Portion under the Company's 2021 Stock Option Incentive Plan. | Approved | Not applicable | Not applicable | |||
| June 21, 2024 | Reviewed and approved proposals such as Proposal on Cancellation of Unexercised Stock Options at the Expiration of the Second Exercise Period of the Initial Granted Portion under the Company's 2021 Stock Option Incentive Plan and Proposal on Adjustment of the Price of the Company's Stock Option Incentive Plan, etc. | Approved | Not applicable | Not applicable | |||
| August 2, 2024 | Reviewed and approved proposals such as Proposal on the Adjustment of the List of Incentive Recipients and Granted Number for the Initial Granted Portion under the Company's 2023 Stock Option Incentive Plan and the Cancellation of Part of the Stock Options and Proposal on the Achievement of the Exercise Conditions for the First Exercise Period of the Initial Granted Portion under the Company's 2023 Stock Option Incentive Plan, etc. | Approved | Not applicable | Not applicable |
| Committee name | Members | Number of meetings held | Convening date | Meeting content | Important opinions and suggestions proposed | Performance of other duties | Specific objections (if any) |
| November 22, 2024 | Reviewed and approved Proposal on Adjustment of the Exercise Price of the Company's Stock Option Incentive Plan. | Approved | Not applicable | Not applicable |
VIII. Performance of the Supervisory Board
Whether the Board of Supervisors found out any risk of the Company in its supervision activities during the reporting period.? Yes ? NoThe Board of Supervisors has no objection to the matters supervised during the reporting period.IX. Personnel of the Company
1. Number of staff, specialty composition and educational level
| Number of staff of the parent company at the end of the reporting period | 24,288 |
| Number of Staff of major subsidiaries at the end of the reporting period | 57,531 |
| Total number of staff at the end of the reporting period | 81,819 |
| Total number of staff who receive remuneration during the reporting period | 81,819 |
| Number of retired staff the Company and its major subsidiaries are required to compensate | 0 |
| Specialty composition | |
| Category | Number |
| Production staff | 56,622 |
| Sales staff | 820 |
| Technical staff | 19,965 |
| Financial staff | 299 |
| Administrative staff | 4,113 |
| Total | 81,819 |
| Educational level | |
| Category | Number |
| Ph.D. | 110 |
| Master | 4,169 |
| Bachelor | 16,895 |
| College degree | 17,076 |
| Below college degree | 43,569 |
| Total | 81,819 |
2. Remuneration policy
The Company has always adhered to the cultural philosophy of "We Make, We Share, We Thrive". The Company is dedicated tobuilding a comprehensive, co-creation and sharing, differentiated, and secure compensation and benefits system that focuses on thebalance between employees' work and life, fostering a happy workplace that employees enjoy.The Company continued to optimize the remuneration distribution mechanism for all employees. This mechanism ensures aremuneration strategy that focuses on strategic businesses, correlates with job contributions and individual performance, and reflectsvalue differentials. In 2024, the Company has developed competitive salary and retention incentive as part of a comprehensivecompensation policy for outstanding fresh graduates from top universities, thereby strengthening the attraction and reserve of excellenttalent. For talents in core businesses and key positions, significant and special salary adjustments, incentive project of "moat", retentionincentive, and other incentives were implemented to achieve targeted talent retention and motivation.The Company continued to implement employee stock ownership plans and stock option incentive plans for its key business personnel,allowing them to continuously share the Company's value growth through innovative equity incentive mechanisms. In 2024, theCompany's ongoing long-term incentive plans included the "Home No. 6" Employee Stock Ownership Plan, the "Home No. 7"Employee Stock Ownership Plan, the 2021 Stock Option Incentive Plan, the 2022 Stock Option Incentive Plan, and the 2023 StockOption Incentive Plan, covering over 6,000 employees.The Company attached great importance to enhancing employees' sense of belonging and happiness at work, advocated "allowingemployees to enjoy fun in high-level work", and was committed to creating a welfare system with the characteristics of a home culture.The Company offered a variety of welfare programs for its employees, including eight categories: comfortable accommodation,education support, delightful entertainment, exclusive benefits, convenient living conditions, holiday benefits, health care, andemotional support. Additionally, the Company offered over 50 welfare sub-projects. In 2024, the Company continued to optimizediversified vacation policy, improve entertainment and health support, and hold welfare activities, such as collective weddings, childcare, social networking, and family Open Day to comprehensively enhance employee welfare experiences.
3. Training programs
In 2024, the human resources management department deepened the integration of strategic business and talent development, closelylinking major strategic projects, key operational management, and business development demands with talent cultivation. Thedepartment also continued to consolidate talent development projects in the areas of digitalization, leadership, cultural values, newemployees, professional competencies, and skilled talents, gradually building a talent development system that balances strategicsupport and basic capability building. The continuous improvement and refinement of talent cultivation programs have led to significantadvancements, including progress in cultivating digital talent, exploring international talent cultivation, and making progress in theconstruction of information management systems. The introduction of AI technology has also promoted management innovation.Meanwhile, various business departments worked together to achieve comprehensive expansion and development in cultivating keytalents and building process resources.In 2025, the human resources management department will adhere to the Company's operational orientations of digitalization,internationalization, and continuous improvement. This will lead to transformation and breakthroughs in training business,implementation of regional systems, deepening of business connection, innovation of training models, increase of resource construction,exploration of AI applications, and improvement of professional skills. The department will prioritize supporting and meeting businessdemands, rapidly assisting in the transformation and enhancement of talent capabilities, and contributing to the construction andsustainable healthy development of the Company's talent echelon.
4. Labor outsourcing
? Applicable ? Not applicable
X. Profit Distribution and Conversion of Capital Surplus into Share Capital
Formulation, execution or adjustment of profit distribution policy, especially the cash dividend during the reporting period? Applicable ? Not applicableThe Company has strictly implemented the Shareholder Return Plan for the Next Three Years (2022-2024), and clarified the standard,ratio, and decision-making procedures of the distribution policy, which ensures the continuity and stability of the profit distributionpolicy, in order to fully protect the legitimate rights and interests of minority investors. The Company did not make changes to theprofit distribution policy during the reporting period.
| Special description of the cash dividend policy | |
| Whether in compliance with provisions in the Articles of Association or requirements of the resolution of the extraordinary general meeting of shareholders: | Yes |
| Whether the dividend standard and the proportion are definite and clear: | Yes |
| Whether the related decision-making procedures and mechanisms are complete: | Yes |
| Whether independent directors perform their duties responsibly and play their due roles: | Yes |
| If the Company chooses not to distribute cash dividends, it shall disclose the specific reasons and outline the measures to be taken to enhance investor returns: | Not applicable |
| Whether minority shareholders have the opportunity to fully express their opinions and demands, and their legitimate rights and interests are fully protected: | Yes |
| Whether the conditions and procedures are transparent and comply with regulations while the cash dividend policy is adjusted or changed: | The cash dividend policy has not been adjusted. |
The Company was profitable during the reporting period and the parent company had positive distributable profits to shareholders,but no cash dividend distribution plan was proposed.? Applicable ? Not applicableProfit distribution and conversion of capital surplus into share capital during the reporting period.? Applicable ? Not applicable
| Number of bonus shares per 10 shares | 0 |
| Dividend per 10 shares (RMB) (tax inclusive) | 1.50 |
| Share capital base of the distribution proposal (shares) | 3,451,275,889 |
| Cash dividend amount (RMB) (tax inclusive) | 517,691,383.35 |
| Cash dividend amount distributed by other means (such as shares repurchase) (RMB) | 497,113,266.64 |
| Total cash dividends (including other means) (RMB) | 1,014,804,649.99 |
| Distributable profit (RMB) | 11,449,849,963.35 |
| Proportion of total cash dividends (including other means) in total profit distribution | 100% |
| Cash dividends | |
| If the Company is in developing stage, and there are major capital expenditure arrangements, the minimum proportion of cash dividends in profit distribution should reach at least 20%. | |
| Details of the proposal for profit distribution or conversion of capital surplus into share capital | |
| According to the auditor’s report issued by Zhongxi CPAs (Special General Partnership) for the Company, the net profit attributable to the shareholders of the Company in the Company's consolidated financial statement in 2024 is RMB 2,665,044,826.06. The parent Company reports a net profit of RMB 1,404,301,670.47. The statutory surplus reserve is RMB 140,430,167.05, plus the undistributed profit at the beginning of the period and minus the actually distributed cash dividend of RMB 850,462,393.45 for the year of 2024 and the loss from the disposal of investments in other equity instruments of RMB 481,132.08, the undistributed profit in the consolidated financial statement amounts to RMB 18,712,252,682.60 and the undistributed profit of the parent Company amounts to RMB 11,449,849,963.35 as of December 31, 2024. The Company's profit available for distribution to shareholders in 2024 is RMB 11,449,849,963.35, based on the principle that profit distribution should be based on the lower of the profit available for distribution of the parent Company and the profit available for distribution of the consolidated financial statements. In accordance with the relevant provisions of the Company Law and the Articles of Association, the Company’s proposed annual profit distribution plan of 2024 is as follows: Based on the total share capital registered on the record date of equity distribution minus the repurchased shares in the Company's specific securities repurchase account and the principle of unchanged distribution ratio, the Company will distribute cash dividend of RMB 1.50 (tax inclusive) per 10 shares to all shareholders. No bonus shares will be issued, | |
XI. Stock Option Incentive Plan, Employee Stock Ownership Plan or Other EmployeeIncentives? Applicable ? Not applicable
1. Stock option incentive plan
(1) Stock Option Incentive Plan in 2021 (hereinafter referred to as "the 2021 Incentive Plan ")On April 16, 2021, the Company convened the 19th meeting of the 5th Board of Directors and the 14th meeting of the 5th Board ofSupervisors, at which the Proposal on the Deliberation of the 2021 Stock Option Incentive Plan (Draft) and Its Abstract of GoertekInc. and other related porposals were approved. The incentive participants of the 2021 Stock Option Incentive Plan are the keymanagement and key business personnel of the Company and its wholly-owned and holding subsidiaries. The Company's 2020 annualshareholders' general meeting approved the aforementioned proposals and authorized the Board of Directors to handle matters relatedto the 2021 Incentive Plan.On March 27, 2024, the Company convened the 14th meeting of the 6th Board of Directors and the 11th meeting of the 6th Board ofSupervisors, and approved the Proposal on Adjustment of the List of Incentive Recipients and Granted Amounts for the ReservedGranted Portion under the Company's 2021 Stock Option Incentive Plan and the Cancellation of Part of the Stock Options and Proposalon the Achievement of the Exercise Conditions for the Second Exercise Period of the Reserved Granted Portion under the Company's2021 Stock Option Incentive Plan. The Company adjusted the total number of reserved granted incentive participants of the 2021Incentive Plan from 195 to 147. The number of reserved granted stock options was adjusted from 4,680,620 to 3,492,570, and1,188,050 granted stock options have been canceled. The cancellation process was completed on April 10, 2024. Concurrently, theBoard of Directors believed that conditions for the exercise of the second exercise period of the reserved granted portion of the 2021Incentive Plan have been fulfilled, and the incentive participants are permitted to exercise their rights from the completion of theexercise procedures until April 19, 2025.On April 24, 2024, the Company convened the 15th meeting of the 6th Board of Directors and the 12th meeting of the 6th Board ofSupervisors, where it reviewed and approved the Proposal on Cancellation of Stock Options Granted Unexercised at the Expiration ofthe First Exercise Period of the Reserved Portionunder the Company's 2021 Stock Option Incentive Plan. The Company canceled atotal of 2,329,520 reserved granted stock options of the 2021 Incentive Plan which were not exercised by the expiration date, and thecancellation was completed on April 30, 2024.On June 27, 2024, the Company held the 17th meeting of the 6th Board of Directors and the 14th meeting of the 6th Board ofSupervisors, where it reviewed and approved proposals, such as the Proposal on Adjustment of the Price of the Company's Stock OptionIncentive Plan and Proposal on Cancellation of Unexercised Stock Optionsat the Expiration of the Second Exercise Period of the InitialGranted Portionunder the Company's 2021 Stock Option Incentive Plan. The Company adjusted the exercise price of the 2021Incentive Plan from RMB 29.03 per share to RMB 28.93 per share and canceled a total of 15,016,130 stock options that had beengranted but had expired without being exercised. The Company completed the cancellation of the aforementioned stock options onJuly 1, 2024.On August 14, 2024, the Company convened the 18th meeting of the 6th Board of Directors and the 15th meeting of the 6th Board ofSupervisors, at which the Proposal on Adjustment of the Price of the Company's Stock Option Incentive Plan was approved. TheCompany has adjusted the exercise price of the 2021 Incentive Plan from RMB 28.93 per share to RMB 28.88 per share.
On November 27, 2024, the Company convened the 21st meeting of the 6th Board of Directors and the 18th meeting of the 6th Boardof Supervisors, at which the Proposal on Adjustment of the Price of the Company's Stock Option Incentive Plan was approved. TheCompany has adjusted the exercise price of the 2021 incentive plan from RMB 28.88 per share to RMB 28.78 per share.As of the end of the reporting period, the reserved granted stock option of the Company's 2021 Incentive Plan was in the secondexercise period.
(2) Stock Option Incentive Plan in 2022 (hereinafter referred to as "the 2022 Incentive Plan")On July 8, 2022, the Company convened the 31st meeting of the 5th Board of Directors and the 25th meeting of the 5th Board ofSupervisors, at which the Proposal on Deliberation of the 2022 Stock Option Incentive Plan (Draft) and Its Abstract of Goertek Inc.and other related proposals were approved. The incentive participants of the 2022 Stock Option Incentive Plan are the key managementand key business personnel of the Company and its wholly-owned and holding subsidiaries. The proposals mentioned above wereapproved at the shareholders’ 1st extraordinary general meeting of 2022, authorizing the Board of Directors to handle relevant matterson the Company's 2022 Incentive plan.On March 27, 2024, the Company convened the 14th meeting of the 6th Board of Directors and the 11th meeting of the 6th Board ofSupervisors, where it reviewed and approved the Proposal on the Adjustment of the List of Incentive Recipients and Granted Numberfor the Initial Granted Portion under the Company's 2022 Stock Option Incentive Plan and the Cancellation of Part of the StockOptions. The Company adjusted the total number of incentive participants under the 2022 Incentive Plan from 4,800 to 3,765, adjustedthe number of granted stock options from 59,279,400 to 23,994,510 and canceled 35,284,890 granted stock options. The cancellationwas completed on April 10, 2024.On June 27, 2024, the Company held the 17th meeting of the 6th Board of Directors and the 14th meeting of the 6th Board ofSupervisors, where it reviewed and approved the Proposal on Adjustment of the Price of the Company's Stock Option Incentive Plan.The Company adjusted the exercise price of the 2022 Incentive Plan from RMB 34.14 per share to RMB 34.04 per share.As of the end of the reporting period, the 2022 Incentive Plan was in its second vesting period.
(3) Stock Option Incentive Plan in 2023 (hereinafter referred to as "the 2023 Incentive Plan")On July 19, 2023, the Company convened the 7th meeting of the 6th Board of Directors and the 6th meeting of the 6th Board ofSupervisors, at which the Proposal on Deliberation of the 2023 Stock Option Incentive Plan (Draft) and Its Abstract of Goertek Inc.and other related proposals were approved. The incentive participants of the 2023 Stock Option Incentive Plan are the key managementand key business personnel of the Company and its subsidiaries. The proposals mentioned above were approved at the shareholders’1st extraordinary general meeting of 2023, authorizing the Board of Directors to handle relevant matters on the Company's 2023Incentive plan.On June 27, 2024, the Company convened the 17th meeting of the 6th Board of Directors and the 14th meeting of the 6th Board ofSupervisors, where it reviewed and approved proposals, such as the Proposal on Adjustment of the Price of the Company's Stock OptionIncentive Plan, the Proposal to Grant Reserved Stock Options to Incentive Recipients Under the 2023 Stock Option Incentive Plan,and the Proposal on Adjustment of the 2023 Stock Option Incentive Plan. The Company adjusted the exercise price of the stock optionsfrom RMB 18.37 per share to RMB 18.27 per share and adjusted 2023 Incentive Plan’s performance assessment indicators for fiscalyears 2024-2025 and the exercisable date. The Company designated June 27, 2024 as the grant date of reserved stock options underthe Company's 2023 Stock Option Incentive Plan and granted the reserved stock options to the incentive participants who are eligibleto receive such grants. On July 17, 2024, the Company completed the granting and registration of reserved stock options in the 2023Incentive Plan.On July 15, 2024, the Company convened its second extraordinary general meeting of shareholders in 2024, where it reviewed andapproved the Proposal on Adjustment of the 2023 Stock Option Incentive Plan, adjusting the 2023 Incentive Plan’s performanceassessment indicators for fiscal years 2024-2025 and the exercisable date. Jiang Fuxiu, the independent director, openly solicited votingrights for the proposals related to the 2023 Incentive Plan submitted for deliberation at the shareholders’ meeting.On August 14, 2024, the Company convened its 18th meeting of the 6th Board of Directors and the 15th meeting of the 6th Board ofSupervisors, where it reviewed and approved proposals, such as the Proposal on the Adjustment of the List of Incentive Recipients andGranted Number for the Initial Granted Portion under the Company's 2023 Stock Option Incentive Plan and the Cancellation of Partof the Stock Options, the Proposal on the Achievement of the Exercise Conditions for the First Exercise Period of the Initial GrantedPortion under the Company's 2023 Stock Option Incentive Plan, and the Proposal on Adjustment of the Price of the Company's StockOption Incentive Plan. The Company adjusted the total number of initial granted incentive recipients of the 2023 Incentive Plan from5,551 to 5,002, and the number of initial granted stock options from 208,990,900 to 193,646,042, and canceled 15,344,858 stockoptions that had been granted. The Company completed the cancellation of the aforementioned stock options on August 16, 2024. TheBoard of Directors believes that the exercise conditions for the first exercise period of the initial granted stock options of 2023 IncentivePlan have been achieved, and the incentive participants are permitted to exercise their rights according to the relevant provisions of
2023 Incentive Plan. The Company adjusted the exercise price of the 2023 Incentive Plan from RMB 18.27 per share to RMB 18.22per share.On November 27, 2024, Goertek convened the 21st meeting of the 6th Board of Directors and the 18th meeting of the 6th Board ofSupervisors, at which the Proposal on Adjustment of the Price of the Company's Stock Option Incentive Plan was approved. TheCompany has adjusted the exercise price of the 2023 Incentive Plan from RMB 18.22 per share to RMB 18.12 per share.As of the end of the reporting period, the Company's initial granted stock options of 2023 Incentive Plan were in the first exerciseperiod, while the reserved granted stock options were in the vesting period.For details, please refer to the relevant announcements published in CNINFO (http://www.cninfo.com.cn), Securities Times, ChinaSecurities Journal, Shanghai Securities News, and Securities Daily.Stock options granted to Directors and senior management? Applicable ? Not applicable
Unit: share
| Name | Position | Number of stock options held at the beginning of the year | Number of stock options newly granted during the reporting period | Number of exercisable stocks during the reporting period | Number of stocks exercised during the reporting period | Exercise price of stocks exercised during the reporting period (RMB/share) | Number of stock options held at the end of the reporting period | Market price at the end of the reporting period (RMB/share) | Number of restricted stocks held at the beginning of the period | Number of stocks unlocked in the current period | Number of restricted stocks newly granted during the reporting period | Grant price of restricted stocks (RMB/share) | Number of restricted stocks held at the end of the reporting period |
| Xu Dapeng | Board Secretary | 30,100 | 0 | 30,100 | 0 | Not applicable | 0 | 25.81 | 0 | 0 | 0 | Not applicable | 0 |
| Total | - | 30,100 | 0 | 30,100 | 0 | - | 0 | - | 0 | 0 | 0 | - | 0 |
The Appraisal and incentive mechanism for senior managementThe remuneration standard for senior management shall be formulated by the remuneration and assessment committee, andimplemented after approval by the Board of Directors.
2. Implementation of employee stock ownership plan
? Applicable ? Not applicableAll valid employee stock ownership plans during the reporting period
| Participants | Number | Total shares held | Changes | Shareholding percentage | Source of funds |
| "Home No. 6" ESOP: Directors (excluding independent directors), supervisors, senior management, and key business personnel | 843 | 47,150,240 | 1. The Company convened the 17th meeting of the 6th Board of Directors and the 14th meeting of the 6th Board of Supervisors on June 27, 2024, where it reviewed and approved the Proposal Regarding the Adjustment of the "Home No. 6" Employee Stock Ownership Plan. It was decided that relevant terms including the performance assessment indicators of the Company for years 2024-2026, the period of restriction on trading shares, and the terms related to holders would be adjusted, while other terms remain unchanged. The proposal mentioned above was deliberated and approved by the Company at the shareholders’ 2nd extraordinary general meeting in 2024. 2. Due to reasons such as the departure of some holders, they no longer meet the eligibility criteria to participate in the Company's "Home No. 6" | 1.35% | self-raised |
| Participants | Number | Total shares held | Changes | Shareholding percentage | Source of funds |
| Employee Stock Ownership Plan, resulting in changes to the total number of holders and the shares held by them. | |||||
| "Home No. 7" ESOP: Middle and senior management and key business personnel of the Company and its holding subsidiaries and other eligible employees, as determined by the Board of Directors | 38 | 2,744,100 | 1. On June 27, 2024, the Company convened the 17th meeting of the 6th Board of Directors and the 14th meeting of the 6th Board of Supervisors, where it reviewed and approved the Proposal Regarding Adjustments to the Company's "Home No. 7" Employee Stock Ownership Plan. It was decided that relevant terms including the performance assessment indicators of the Company for years 2024-2026, the period of restriction on trading shares, and the status of the holders would be adjusted, while other terms remain unchanged. The proposal mentioned above was deliberated and approved by the Company at the shareholders’ 2nd extraordinary general meeting in 2024. 2. Due to performance assessment reasons for some holders, changes have occurred in the shares held by the holders of the "Home No. 7" Employee Stock Ownership Plan. | 0.08% | self-raised |
Total shares held by directors, supervisors and senior management in ESOPs during the reporting period
| Name | Position | Number of shares held at the beginning of the reporting period | Number of shares held at the end of the reporting period | Shareholding percentage |
| Duan Huilu, Liu Yaocheng, Xu Xiaofeng, Wei Wenbin, Gao Xiaoguang, Liu Chunfa, Jiang Hongzhai, Feng Pengbo, Yu Dachao, Li Yongzhi, Li Youbo, and Xu Dapeng | Directors, Supervisors, senior management | 11,780,000 | 8,835,000 | 0.25% |
Changes of asset management agency during the reporting period? Applicable ? Not applicableChanges in shareholders' equity caused by shares disposal of the participants and other reasons during the reporting period? Applicable ? Not applicableDuring the reporting period, the Company, after the expiration of the lock-up period of "Home No. 6" ESOP and "Home No. 7" ESOP,reduced part of its shares in accordance with relevant regulations. By the end of the reporting period, the Company's "Home No. 6"ESOP held 47,150,240 shares, accounting for 1.35% of total shares, while the "Home No. 7" ESOP held 2,744,100 shares, accountingfor 0.08% of total share capital.Exercise of shareholders' rights during the reporting periodDuring the reporting period, the Company's Employee Stock Ownership Plan exercised shareholders’ rights to participate in cashdividends for the fiscal year 2023, the first half year of 2024, and the first three quarters of 2024.Other relevant situations and descriptions related to ESOPs during the reporting period? Applicable ? Not applicableDuring the reporting period, 4,520,649 shares were revoked under the "Home No. 6" ESOP due to the departure of the holders.Changes in members of the Management Committee of the ESOPs? Applicable ? Not applicableFinancial impacts of the ESOPs during the reporting period and relevant accounting treatment? Applicable ? Not applicable
In accordance with the Accounting Standard for Business Enterprises No.11 - Share-based Payments: if an equity-settled share-basedpayment in exchange for services received from employees could not exercise until the completion of services for a vesting period, oruntil the achievement of a specified performance condition, Goertek at each balance sheet date during the vesting period recognizesthe services received for the current period as related costs or expenses, and capital surplus, at amount equal to the fair value of theequity instruments at the grant date, based on the best estimate of the number of equity instruments expected to exercise. In 2024, theamortized expenses of the Company’s "Home No. 6" ESOP and "Home No. 7" ESOP were RMB 197.678 million, and RMB 13.348million respectively.Termination of ESOP during the reporting period? Applicable ? Not applicableExplanation of other matters:
None
3. Other employee incentive measures
? Applicable ? Not applicable
XII. Establishment and Implementation of the Company's Internal Control System during theReporting Period
1. Establishment and implementation of internal control system
The Company has implemented a rigorous and effective internal control system that is tailored to its specific needs in strict accordancewith the Basic Standards for Enterprise Internal Control, as well as relevant laws, regulations, and normative documents. The internalaudit department is responsible for overseeing and assessing the implementation of this system. The Board of Directors conducts anannual self-evaluation of the Company's internal controls and discloses the Internal Control Self-Evaluation Report. Simultaneously,the Company engages an accounting firm to conduct an internal control audit of the Company.The Company consistently enhances its internal control in compliance with relevant laws, regulations, normative documents, and theArticles of Association. During the reporting period, all work in the Company was carried out in accordance with the establishedregulations. The Company manages its major internal controls and matters, including governance and organizational structure, internalsupervision, human resources policies, corporate culture building, social responsibility, fund management, sales and procurement,R&D, engineering projects, asset management, related party transactions, external guarantees, investment management, managementof raised funds, financial reports, information disclosure, and subsidiary control, in a strict, adequate and effective manner.During the reporting period, the Company did not have any material or significant deficiencies in its internal control of financial andnon-financial reports. The Company has maintained effective internal control in all material respects in accordance with therequirements of the corporate internal control standard system and relevant regulations.
2. Details of material deficiency of internal control detected during the Reporting Period? Yes ? NoXIII. Management and Controls of Subsidiaries during the Reporting Period
Not applicable
XIV. Assessment Report on Internal Control or Auditor's Report on Internal Control
1. Assessment of internal control
| Disclosure date of the Internal Control Self-Assessment Report | March 27, 2025 |
| Disclosure index of the Internal Control Self-Assessment Report | The Goertek Inc. Self-Assessment Report on Internal Control of 2024 Disclosed on CNINFO on March 27, 2025 |
| Proportion of the total assets of entities included in the assessment scope to the total assets of the Company's consolidated financial statements | 100.00% | |
| Proportion of the total revenue of entities included in the assessment scope to the total revenue of the Company's consolidated financial statements | 100.00% | |
| Deficiency Identification Standard | ||
| Category | Financial report | Non-financial report |
| Qualitative criteria | The qualitative standards of the assessment of internal control deficiencies in financial reporting are as follows: Signs of material deficiencies in financial reporting include: (1) Fraud of directors, supervisors and senior management; (2) Corrections of previously disclosed financial reports; (3) Material misstatement of current period financial statements identified by certified public accountant but not identified by the Company's internal control; (4) Ineffective supervision on the financial statements by the audit committee and the internal audit department. Signs of significant deficiencies in financial reporting include: (1) Failure to select and apply accounting policies in accordance with generally accepted accounting principles; (2) No anti-fraud procedures and control measures have been established; (3) No corresponding control mechanism has been established or implemented for the accounting treatment of unconventional or special transactions, and there is no corresponding compensatory control; (4) One or more deficiencies is or are existing in the control of the financial reporting process, that the prepared financial statements cannot be reasonably guaranteed to be true and complete. General deficiencies: other internal control deficiencies. | The qualitative standards of the assessment of internal control deficiencies in non-financial reporting are as follows: The identification of deficiencies in non-financial reports is mainly determined by the impact of deficiencies on the effectiveness of business processes and the possibility of occurrence. Deficiencies are defined as material deficiencies if it is highly probable that the deficiencies will happen and will seriously lower the work efficiency or effect, seriously increase the uncertainty of the effect, or make it seriously deviate from the expected goal; Deficiencies are defined as significant deficiencies if they are likely to happen and will significantly lower the work efficiency or effect, significantly increase the uncertainty of the effect, or make it significantly deviate from the expected goal; Deficiencies are defined as general deficiencies if they are less likely to happen, and will lower the work efficiency or effect, increase the uncertainty of the effect, or make it deviate from the expected goal. |
| Quantitative criteria | The quantitative standards of the assessment of internal control deficiencies in financial reporting are as follows: (1) If one of the following conditions is met, it can be recognized as a material deficiency: Potential misstatement of total profit ≥ 5% of total profit, and amount ≥ RMB 10 million; potential misstatement of total assets ≥ 1% of total assets; potential misstatement of total revenue ≥ 1% of total revenue. (2) If one of the following conditions is met, it can be recognized as a significant deficiency: 3% of total profit ≤ potential misstatement of total profit < 5% of total profit; 0.5% of total assets ≤ potential misstatement of total assets < 1% of total assets; 0.5% of total revenue ≤ potential misstatement of total revenue < 1% of total revenue. (3) If one of the following conditions is met, it can be recognized as a general deficiency: Potential misstatement of total profit < 3% of total profit; potential misstatement of total assets < 0.5% of total assets; potential misstatement of total revenue < 0.5% of total revenue. | The quantitative standard of the assessment of internal control deficiencies in non-financial reporting is in accordance with the quantitative standard of deficiencies in financial reporting. |
| Number of material deficiencies in financial reporting | 0 | |
| Number of material deficiencies in non-financial reporting | 0 | |
| Number of significant deficiencies in financial reporting | 0 | |
| Number of significant deficiencies in non-financial reporting | 0 | |
2. Auditor's Report on internal control
? Applicable ? Not applicable
| The opinion paragraph in the auditor's report on internal control | |
| We believe that Goertek Inc. maintained effective internal control over financial reports in all material respects in accordance with the Basic Standards for Internal Corporate Control and relevant provisions on December 31, 2024. | |
| Disclosure of the Auditor's Report on Internal Control | Disclosed |
| Disclosure date of the Auditor's Report on Internal Control | March 27, 2025 |
| Disclosure index of the Auditor's Report on Internal Control | The disclosed Auditor’s Report on Internal Control of Goertek Inc. (Zhong Xi Special Audit No. 2025T00104) was published on CNINFO on March 27, 2025 |
| Type of auditor’s opinion | Standard unqualified opinion |
| Material deficiencies found in non-financial reporting | No |
Whether the accounting firm issued a modified auditor's report on internal controls? Yes ? NoWhether the Auditor's Report on internal control is consistent with the Self-Assessment Report of the board of directors? Yes ? No
XV. Rectification of Problems Identified by Self-examination in the Special Actions onGovernance of Listed CompaniesNot applicable
Section V Environmental and Social Responsibilities
I. Major Environmental IssuesWhether the listed company or its subsidiaries are entities with pollutant discharges announced by local environmental protectionauthorities? Yes ? NoPolicies and industry standards related to environmental protectionAll projects of the Company are classified as encouraged projects according to the Decision of the National Development and ReformCommission on Amending the Catalogue of Industrial Structure Adjustment (2019 version) and are in line with national industrialdevelopment policies, and the projects meet the requirements of the Opinions of the People's Government of Shandong Province onthe Implementation of the "Three Lines and One List" Ecological Zoning Management Approach. The project's pollutants are incompliance with the requirements of environmental assessment and emission permit standards.All projects of Yili Precision Manufacturing Co., Ltd. are carried out in line with national industrial development policies according tothe Decision of the National Development and Reform Commission on Amending the Catalogue of Industrial Structure Adjustment(2019 version); and the projects meet the requirements of the Opinions of the People's Government of Shandong Province on theImplementation of the "Three Lines and One List" Ecological Zoning Management Approach. The project's pollutants are in compliancewith the requirements of environmental assessment and emission permit standards.Administrative licenses for environmental protectionThe Company obtained the registration receipt of the pollution discharge permit in accordance with the Measures for the Managementof Pollution Discharge Permits (Trial) (Revised in 2019). The registration number is 91370700729253432M004Y, and the certificateis valid from August 9, 2024, to August 8, 2029.Yili Precision Manufacturing Co., Ltd. has applied for a pollution discharge permit as required. The certificate number is913707840744048096001V, and the certificate is valid from July 7, 2022, to July 6, 2027.Industry emission standards and the details of pollutant emissions involved in production and operation activities
| Name of the Company or subsidiaries | Types of major pollutants and particular pollutants | Name of major pollutants and particular pollutants | Type of discharge | Number of discharging ports | Locations of discharging ports | Concentration/intensity of pollutant discharged | Enforced standards of pollutant discharge | Total discharge volume | Total approved discharge volume | Discharge exceeding the standard |
| Yili Precision Manufacturing Co., Ltd. | Waste-water | COD; ammonia nitrogen | Intermittent discharge | 1 | In the plant | COD: 50mg/L; ammonia nitrogen: 5mg/L | COD: 500mg/L; ammonia nitrogen: 45mg/L | COD16.525t, ammonia nitrogen 1.545t | COD65.133t/a; ammonia nitrogen: 5.862t/a | None |
| Yili Precision Manufacturing Co., Ltd. | Solid waste | Hazardous waste | Indirect discharge | Not applicable | Not applicable | Not applicable | Not applicable | Not applicable | Not applicable | None |
Treatment of pollutantsIn accordance with the Environmental Impact Assessment and Approval, the Company constructs supporting treatment facilities forgas waste, establishes supporting measures for solid waste storage, disposal, and comprehensive utilization, along with leakageprevention and seepage prevention measures, and ensures the normal operation of all the above measures.In accordance with the Environmental Impact Assessment and Approval, Yili Precision Manufacturing Co., Ltd. constructssupporting treatment facilities for water and gas waste, takes measures of noise reduction, storage, disposal and comprehensiveutilization of solid waste, and leakage and seepage prevention, and ensures the normal operation of all above measures.For details, see the 2024 Environmental, Social and Governance (ESG) Report of Goertek Inc. released on "www.cninfo.com.cn" onMarch 27, 2025.Environmental self-monitoring programThe Company entrusts third-party monitoring organizations to monitor the environmental factors of the plant area and issue aninspection report every year in strict accordance with the requirements of the discharge permit.
Yili Precision Manufacturing Co., Ltd. has installed online equipment for monitoring COD, ammonia nitrogen, flow rate and PHvalue at the main wastewater discharge outlet, which is networked with the local department of environmental protection authorities.A third-party monitoring organization shall be entrusted to conduct monitoring of waste-water, waste gas, groundwater, and soilpollutants in strict accordance with the requirements of the discharge permit and to issue an inspection report, and related informationshall be disclosed as required.Emergency response plan for unexpected environmental eventsThe Company, combined with the National Environmental Emergency Response Plan and the Guidelines to Develop EmergencyResponse Plan for Environmental Pollution Accidents, has formulated the Environmental Emergency Response Plan of Goertek Inc.based on various risk factors, and has reported the plan to the High-tech Branch of Weifang Municipal Ecology and EnvironmentBureau for recording (No. 370708-2024-043-L). Goertek also organizes relevant training and drills on a regular basis, in order toimprove the emergency response ability of employees and achieve continuous improvement.In view of various risk factors, Yili Precision Manufacturing Co., Ltd. refers to the National Environmental Emergency Plan and theGuidelines to Develop Emergency Response Plan for Environmental Pollution Accidents, formulates the Yili Environmental EmergencyPlan, and puts it on record in the Anqiu Branch of Weifang Municipal Ecology and Environment Bureau (record No. 370784-2023-003-H). Relevant training and drills are organized on a regular basis to further improve employees' ability to deal with emergencyevents and achieve continuous improvement.Investment in environmental governance and protection and the payment of environmental protection taxDuring the reporting period, the Company paid the environmental protection tax in full and in accordance with the law.Measures taken to reduce carbon emissions during the reporting period and their effects? Applicable ? Not applicableThe Company and its subsidiaries actively responded to the national strategy of "achieving peak carbon dioxide emissions by 2030 andcarbon neutrality by 2060", and consistently adhere to the carbon reduction concept of reducing carbon emissions, improving energyefficiency, and adopting sustainable production methods. They set company-level emission reduction targets and implemented refinedcarbon emission management to contribute to the green and low-carbon development of society.During the reporting period, the Company and its subsidiaries' manufacturing plants located in Weifang and Rongcheng in ShandongProvince, Dongguan in Guangdong Province, and Bac Ninh Province in Vietnam emitted 37,104 tons of CO
equivalent in Scope 1and 444,981 tons of CO
equivalent in Scope 2. The third-party certification authority verified in accordance with ISO 14064-1:2018Greenhouse Gases - Part 1: Specification with Guidance at the Organization Level for Quantification and Reporting of GreenhouseGas Emissions and Removals and issued the greenhouse gas verification statement.To reduce energy consumption during operations, the Company actively promoted energy conservation and carbon reduction effortsin accordance with the Energy Conservation Project Management System. During the reporting period, the Company and itssubsidiaries achieved a cumulative reduction of 17,422 tons of CO
equivalent of greenhouse gas emissions through 80 energy-savingimprovements such as air conditioning, air pressure, and lighting systems.To optimize the energy structure, the Company and its subsidiaries implemented the construction of distributed photovoltaic powerstations, market-oriented direct green electricity transactions, renewable energy certificate trading, and other methods to enhance theutilization of clean energy. During the reporting period, the total installed capacity of the Company's photovoltaic power stationsreached 51.3 MW, and renewable electricity purchased amounted to 161,172 MWh.Administrative penalties received for environmental issues during the reporting periodNoneOther environmental information that should be disclosedFor details, see the 2024 Environmental, Social and Governance (ESG) Report of Goertek Inc. released on "www.cninfo.com.cn" onMarch 27, 2025.Other information related to environmental protectionIn September 2024, Weifang Goertek Electronics Co., Ltd. passed the "Green Factory" certification in Shandong Province.In December 2024, Goertek Inc. passed the "Waste-Free Factory" certification in Shandong Province.In December 2024, Weifang Goertek Electronics Co., Ltd. also passed the "Waste-Free Factory" certification in Shandong Province.
II. Performance of Social ResponsibilityDuring the reporting period, while the Company was committed to achieving its own development, it has also performed well in theprotection of the rights and interests of shareholders, creditors, employees, suppliers, clients and consumers, as well as in environmentalprotection and sustainable development, public relations and social public welfare undertakings. For details, see the 2024Environmental, Social and Governance (ESG) Report of Goertek Inc. released on "www.cninfo.com.cn" on March 27, 2025.III. Consolidate and Carry Forward the Achievements of Poverty Alleviation and RuralRevitalization
For details, see the 2024 Environmental, Social and Governance (ESG) Report of Goertek Inc. released on "www.cninfo.com.cn" onMarch 27, 2025.
Section VI Important Matters
I. Fulfilment of Commitments
1. The commitments of the Company's actual controllers, shareholders, related parties, purchasers and companies that have been completely fulfilledduring the reporting period or remain valid by the end of the reporting period.? Applicable ? Not applicable
| Commitment matters | Commitment party | Commitment type | Commitment content | Commitment time | Commitment period | Performance of commitments |
| Commitments made during the joint-stock reform | Not applicable | |||||
| Commitments made in the report of acquisition or in the report of equity changes | Not applicable | |||||
| Commitments made during asset restructuring | Not applicable | |||||
| Commitments made during initial public offering or refinancing | Jiang Bin, the actual controller, and Jiang Long, the shareholder and the related party of the actual controller | Commitment to restricted stock | Jiang Bin and Jiang Long promise that the Company shares transferred each year during their tenure will not exceed 25% of the total Company shares held by them, and the shares will not be transferred within six months after their resignation in future | October 8, 2007 | Long-term standing | Strictly fulfilled |
| Commitments made during initial public offering or refinancing | Jiang Bin and Hu Shuangmei, the actual controllers of the Company, Goertek Group Co., Ltd. and Jiang Long, the shareholders who hold more than 5% of the Company shares | Horizontal competition related commitment | At present, there is no competition between the main businesses of Goertek Inc. and the commitment parties (company and persons) in this clause or other entities controlled by the commitment parties (company and persons). In future, in order to fundamentally avoid the possibility of competing with Goertek Inc., the commitment parties (company and persons) promise as follows: 1) The commitment parties (company and persons) will not engage in the same or similar business as Goertek Inc. in order to avoid direct or indirect competition to the production and operation of Goertek Inc. Efforts will be made to urge other entities controlled | October 8, 2007 | Long-term standing | Strictly fulfilled |
| Commitment matters | Commitment party | Commitment type | Commitment content | Commitment time | Commitment period | Performance of commitments |
| by the commitment parties (company and persons) not to directly or indirectly participate in or carry out any business activity that compete with the production and operation of Goertek Inc. 2) If the commitment parties (company and persons) and the other entities controlled by the commitment parties (company and persons) except Goertek Inc., have competitive businesses of the same kind with Goertek Inc., which may bring unfair impacts on Goertek Inc. in terms of market share, business opportunities and resource allocation, etc. The commitment parties (company and persons) and other entities controlled by the commitment parties (company and persons) except Goertek Inc. will voluntarily give up business competition with Goertek Inc. 3) The commitment parties (company and persons) undertake to give Goertek Inc. the pre-emption right on the purchase of any assets and business to be sold, and will do its best to ensure that the price of the transaction is determined on the basis of fair, reasonable and normal commercial transactions with independent third parties. 4) The commitment parties (company and persons) will not be restricted from engaging in or continuing to engage in existing production business, in particular to provide Goertek Inc. with relevant materials and services needed for its operation. Since the date of issuance of this letter of commitment, the commitment parties (company and persons) undertake to indemnify Goertek Inc. for any loss or expense suffered or incurred in violation of any of the terms of this commitment. |
| Commitment matters | Commitment party | Commitment type | Commitment content | Commitment time | Commitment period | Performance of commitments |
| Stock option incentive commitments | The Company | Others commitments | Stock option incentive plan of 2021: The Company undertakes not to provide loans or any other form of financial assistance to any participants to obtain relevant rights and interests under this incentive plan, including guarantee for their loans | April 16, 2021 | From the issuance date of the commitment to the completion of the implementation of the stock option incentive plan of 2021 | Strictly fulfilled |
| Stock option incentive commitments | The Company | Others commitments | Stock option incentive plan of 2022: The Company undertakes not to provide loans or any other form of financial assistance to any participants to obtain relevant rights and interests under this incentive plan, including guarantee for their loans | July 8, 2022 | From the issuance date of the commitment to the completion of the implementation of the stock option incentive plan of 2022 | Strictly fulfilled |
| Stock option incentive commitments | The Company | Others commitments | Stock option incentive plan of 2023: The Company undertakes not to provide loans or any other form of financial assistance to any participants to obtain relevant rights and interests under this incentive plan, including guarantee for their loans | July 19, 2023 | From the issuance date of the commitment to the completion of the implementation of the stock option incentive plan of 2023 | Strictly fulfilled |
| Other commitments made to minority shareholders | All directors of the Company | Commitment on repurchase | This share repurchase will not impair the Company's ability to fulfill its debt obligations and its going concern. | October 26, 2023 | Within 12 months following October 26, 2023, or until this repurchase closes | Fully performed |
| Other commitments made to minority shareholders | The Company | Others commitments | Within one month after the announcement of the termination of the spin-off and listing matter of Goertek Microelectronics Inc., no major asset restructuring matters (including the spin-off and listing) will be planned. | May 22, 2024 | May 22, 2024 to June 22, 2024 | Fully performed |
| Whether the commitments are fulfilled on time | Yes | |||||
| Commitment matters | Commitment party | Commitment type | Commitment content | Commitment time | Commitment period | Performance of commitments |
| If the commitments are not fulfilled within the time limit, specific reasons for the failure of complying and the work plan for the next step shall be explained in details | Not applicable | |||||
2. If the Company's assets or projects have profit forecasts and the reporting period is still in the profitforecasting period, the Company shall make statement on whether the assets or projects reach the originalprofit forecast and provide relevant reasons? Applicable ? Not applicableII. Non-operational Occupation of Funds by Controlling Shareholders and Other RelatedParties to Listed Companies? Applicable ? Not applicableDuring the reporting period of the Company, there is no non-operational occupation of funds by controlling shareholders or otherrelated parties to the Company.III. External Guarantee in Violation of Regulations
? Applicable ? Not applicableThe Company has no violation of external guarantee during the reporting period.IV. Explanation made by the Board of Directors about the modified audit opinion for thelatest period? Applicable ? Not applicableV. Explanation of the Accounting Firm's "Modified Auditor's Report" by the Board ofDirectors, the Board of Supervisors and Independent Directors (if Any) During the ReportingPeriod? Applicable ? Not applicableVI. Explanation of changes in Accounting Policies, Accounting Estimates or Correction ofMajor Accounting Errors Compared with the Financial Report of Previous Year
? Applicable ? Not applicableSee Section X (V) 37 "Changes in significant accounting policies and accounting estimates" for details.VII. Explanation of Changes in the Scope of the Consolidated Financial StatementsCompared with Previous Year's Financial Report? Applicable ? Not applicableDuring the reporting period, the Company established 12 subsidiaries, including Shanghai Goertek Technology Development Co., Ltd.,Qingdao Goertek Alpha Pixels Technology Co., Ltd., Chengdu Goertek Technology Co., Ltd., Xi'an Goertek Shijie Technology Co.,Ltd., Goertek Starshine (Qingdao) Inc., Goertek Electronics Vietnam Co., Ltd., Goertek Optical Technology (Hong Kong) HoldingsCo., Limited, Goertek Optical Technology (Hong Kong) Co., Limited, Goermicro Technology Development Company Limited,Qingdao MicroSense Intelligent Technology Co., Ltd., Goertek Singapore Pte. Ltd., and GMI Semiconductor Sdn. Bhd.During the reporting period, the Company deregistered 2 subsidiaries, namely Hefei 3D OptoLink Technology Co., Ltd. and JiaxingGuochao Optoelectronics Technology Co., Ltd.VIII. Appointment and Dismissal of Accounting FirmsAccounting firm currently appointed
| Name of the domestic accounting firm | Zhongxi CPAs (Special General Partnership) |
| Remuneration of the domestic accounting firm (unit: RMB 10,000) | 300 |
| Consecutive audit service years of the domestic accounting firm | 6 |
| Name of certified public accountant of the domestic accounting firm | Du Yeqin, Zhang Shuli |
| Consecutive audit service years of certified public accountant of the domestic accounting firm | Du Yeqin has been in service for 5 years on end, and Zhang Shuli for 3 years |
| Name of overseas accounting firms (if any) | None |
| Remuneration of overseas accounting firms (unit: RMB 10,000) (if any) | 0 |
| Consecutive audit service years of overseas accounting firms (if any) | None |
| Names of certified public accountants of the overseas accounting firms | None |
| Consecutive audit service years of certified public accountants of overseas accounting firms (if any) | None |
Whether to reappoint accounting firm in current period? Yes ? NoEmployment of internal control audit accounting firms, financial consultants or sponsors? Applicable ? Not applicableDuring the reporting period, the Company engaged Zhongxi CPAs (Special General Partnership) as the internal control audit accountingfirm and paid the internal control audit fee of RMB 800,000 that has been included in the total compensation of RMB 3 million (tax-inclusive) paid to Zhongxi CPAs (Special General Partnership).IX. Delisting After the Disclosure of Annual Report? Applicable ? Not applicableX. Bankruptcy or Reorganization Related Events? Applicable ? Not applicableNo bankruptcy or reorganization related events occurred during the reporting period.XI. Significant Lawsuit and Arbitration Events? Applicable ? Not applicableNo significant litigation or arbitration events occurred during the reporting period.
XII. Punishment and Rectification
? Applicable ? Not applicableNo punishment or rectification occurred during the reporting period.
XIII. Integrity Issues of the Company, Controlling Shareholders and Actual Controllers? Applicable ? Not applicable
XIV. Significant Related Party Transactions
1. Related party transactions related to daily operations
? Applicable ? Not applicable
No significant related party transactions related to daily operations occurred during the reporting period.
2. Related party transactions involving the acquisition or sale of assets or equity
? Applicable ? Not applicableNo significant related party transactions involving the acquisition or sale of assets or equity occurred during the reporting period.
3. Related party transactions of joint external investment
? Applicable ? Not applicableNo significant related party transactions of joint external investment occurred during the reporting period.
4. Related party transactions of credits and liabilities
? Applicable ? Not applicableWhether there are non-operating related creditor's rights and debts? Yes ? NoCreditor's rights receivable from related partiesNoneDebt due to related parties
| Related parties | Relations with related party | Cause of formation | Opening balance (RMB 10,000) | Increased amount in the current period (RMB 10,000) | Amount returned in the current period (RMB 10,000) | Interest rate | Interest in the current period (RMB 10,000) | Closing balance (RMB 10,000) |
| Goertek Group Co., Ltd. | Controlling shareholder of the Company | Financial assistance in the same proportion to the holding subsidiary of Goertek Inc. | 1,100 | 0 | 1,100 | 3.45% | 24.67 | 0 |
| Goertek Group Co., Ltd. | Controlling shareholder of the Company | Financial assistance in the same proportion to the holding subsidiary of Goertek Inc. | 0 | 2,700 | 0 | 2.80% | 28.35 | 2,700 |
| Impact of related parties' debts on the Company's operating results and financial position | No significant impact | |||||||
5. Business with affiliated financial company
? Applicable ? Not applicableThere is no finance company that has a related party relationship with the Company.
6. Business between the related parties and the financial company controlled by the Company
? Applicable ? Not applicableThere was no financial company controlled by the Company.
7. Other significant related party transactions
? Applicable ? Not applicableNo other significant related party transactions occurred during the reporting period.XV. Significant Contracts and Executions
1. Trusteeship, contracting and leasing
(1) Trusteeship
? Applicable ? Not applicableNo trusteeship occurred during the reporting period.
(2) Contracting
? Applicable ? Not applicableNo major contracting occurred during the reporting period.
(3) Leasing
? Applicable ? Not applicableNo significant leasing occurred during the reporting period.
2. Significant guarantees
? Applicable ? Not applicable
Unit: RMB 10,000
| External guarantee of the Company and its subsidiaries (excluding guarantees for subsidiaries) | ||||||||||
| Name of guaranteed party | Disclosure date of the amount limit of the guarantee | The amount limit of the guarantee | Actual occurrence date | Actual amount guaranteed | Guarantee type | Collateral (if any) | Counter-guarantee (if any) | Guarantee period | Whether the guarantee is complete | Whether guarantee for related parties |
| Not applicable | ||||||||||
| The Company's guarantee to its subsidiaries | ||||||||||
| Name of guaranteed party | Disclosure date of the amount limit of the guarantee | The amount limit of the guarantee | Actual occurrence date | Actual amount guaranteed | Guarantee type | Collateral (if any) | Counter-guarantee (if any) | Guarantee period | Whether the guarantee is complete | Whether guarantee for related parties |
| Goertek Technology Vina Co., Ltd. | April 18, 2023 | 20,990.13 | September 1, 2023 | 1,307.80 | Joint liability guarantee | 1 year | Yes | No | ||
| Goertek Technology Vina Co., Ltd. | December 1, 2021 | 345,043.20 | April 1, 2023 | 61,767.77 | Joint liability guarantee | 94 months | No | No | ||
| Goertek Precision Industry Vietnam Co., Ltd. | December 1, 2021 | 258,782.40 | April 1, 2023 | 0.00 | Joint liability guarantee | 94 months | No | No | ||
| Qingdao | April 18, | 650.00 | July 6, 2023 | 8.01 | Joint | 1 year | Yes | No | ||
| Goertek Horizons Technology Co., Ltd. | 2023 | liability guarantee | ||||||||||
| Goertek Microelectronics Inc. | April 18, 2023 | 1,078.26 | November 16, 2023 | 61.29 | Joint liability guarantee | 1 year | Yes | No | ||||
| Goertek Technology Vina Co., Ltd. | March 28, 2024 | 210,620.12 | July 19, 2024 | 14,244.86 | Joint liability guarantee | 1 year | No | No | ||||
| Goertek Smart Technology Vina Co., Ltd. | March 28, 2024 | 39,679.97 | July 19, 2024 | 853.33 | Joint liability guarantee | 1 year | No | No | ||||
| Goertek Intelligence Technology Co., Ltd. | March 28, 2024 | 2,300.00 | July 19, 2024 | 804.51 | Joint liability guarantee | 1 year | No | No | ||||
| Goertek (Hong Kong) Co., Limited | March 28, 2024 | 155,988.28 | July 19, 2024 | 1,616.23 | Joint liability guarantee | 1 year | No | No | ||||
| November 8, 2024 | 243.94 | |||||||||||
| Total amount of guarantee limit to subsidiaries approved during the reporting period (B1) | 445,249.21 | Total amount of actual guarantee to subsidiaries occurred during the reporting period (B2) | 17,762.87 | |||||||||
| Total amount of guarantee limit to subsidiaries approved at the end of the reporting period (B3) | 1,049,074.81 | Total balance of actual guarantee to subsidiaries occurred at the end of the reporting period (B4) | 79,530.64 | |||||||||
| The guarantee between subsidiaries | ||||||||||||
| Name of guaranteed party | Disclosure date of the amount limit of the guarantee | The amount limit of the guarantee | Actual occurrence date | Actual amount guaranteed | Guarantee type | Collateral (if any) | Counter-guarantee (if any) | Guarantee period | Whether the guarantee is complete | Whether guarantee for related parties | ||
| Not applicable | ||||||||||||
| Total amount of company guarantee (namely the sum of the previous three items) | ||||||||||||
| Total amount of guarantee limit approved during the reporting period (A1+B1+C1) | 445,249.21 | Total amount of actual external guarantee occurred during the reporting period (A2+B2+C2) | 17,762.87 | |||||||||
| Total amount of external guarantee limit approved at the end of the reporting period (A3+B3+C3) | 1,049,074.81 | Total balance of actual external guarantee occurred at the end of the reporting period (A4+B4+C4) | 79,530.64 | |||||||||
| The proportion of the total amount of actual guarantee (i.e. | 2.40% | |||||||||||
| A4+B4+C4) to the net assets of the Company | ||
| Including: | ||
| Balance of guarantees for shareholders, actual controllers and their affiliate parties (D) | 0 | |
| Balance of guarantee provided directly or indirectly to the parties with an asset-liability ratio of more than 70% (E) | 2,664.68 | |
| Amount of total guarantees exceeding 50% of net assets (F) | 0 | |
| Total amount of the above three kinds of guarantees (D+E+F) | 2,664.68 | |
| Explanation of unexpired guarantee contracts for which there are guarantee liabilities or there is evidence showing the possibility of joint and several liability for repayment during the reporting period | None | |
| Notes on providing external guarantees in violation of specified procedures | None | |
Specific description of complex guaranteesNone
3. Entrusted management of cash assets
(1) Entrusted wealth management
? Applicable ? Not applicableEntrusted wealth management during the reporting period
Unit: RMB 10,000
| Specific type | Source | Amount | Unexpired balance | Overdue outstanding amount | Impairment amount accrued for overdue wealth management products |
| Bank wealth management product | Self-owned funds | 250,600.00 | |||
| Total | 250,600.00 | ||||
Details of high-risk entrusted wealth management with a large amount for a single item, or with low security and poor liquidity? Applicable ? Not applicableCases of entrusted wealth management expected to be unable to recover the principal or cases that may result in impairment? Applicable ? Not applicable
(2) Entrusted loans
? Applicable ? Not applicableNo entrusted loans occurred during the reporting period.
4. Other major contracts
? Applicable ? Not applicableNo other significant contracts occurred during the reporting period.
XVI. Explanation of Other Significant Matters? Applicable ? Not applicable
In accordance with the requirements of laws and regulations, the Company has disclosed the significant matters that should be disclosedand occurred during the reporting period on http://www.cninfo.com.cn, Securities Times, China Securities Journal, Shanghai SecuritiesNews and Securities Daily. Other than that, no other significant matters occurred.On February 27, 2025, the Company disclosed announcement related to shareholding increasing plan of its controlling shareholder,indicating that Goertek Group Co., Ltd., intends to increase its shareholding in the Company through continuous trading approachwithin six months from the date of the announcement, with an increase amount not less than RMB 500 million and not exceeding RMB1 billion. Details can be found in related announcements published in China Securities Journal, Securities Times, Shanghai SecuritiesNews, Securities Daily, and http://www.cninfo.com.cn. As of the date of disclosure of this report, Goertek Group Co., Ltd. has increasedits shareholding in the Company by 3,568,400 shares through continuous trading approach, accounting for 0.10% of the Company'scurrent total share capital.XVII. Significant Matters Occurred to Subsidiaries of the Company? Applicable ? Not applicableOn November 10, 2020, the Company convened a board meeting and approved the plan for its subsidiary, Goertek Microelectronics,to prepare for a spin-off and listing. According to the Announcement on the Results of the 74th Review Meeting of the GEM ListingCommittee in 2022 issued by the Shenzhen Stock Exchange on October 19, 2022, Goertek Microelectronics meets the requirementsfor issuance, listing, and information disclosure. Considering factors such as the market environment, in order to coordinate the capitaloperation planning of Goertek Microelectronics, on May 22, 2024, the Company's Board of Directors reviewed and approved theResolution on the Termination of the Spin-off and Listing of the Subsidiary Goertek Microelectronics Inc. on the ChiNext after sufficientcommunication and prudent verification with relevant parties based on the authorization from the first extraordinary general meetingof shareholders in 2021. The Resolution agreed to terminate the spin-off and listing of Goertek Microelectronics on the ChiNext of theShenzhen Stock Exchange and to withdraw the relevant listing application documents.On September 13, 2024, the Company held the 19th meeting of the 6th Board of Directors, which approved the Proposal of Planningon the Spin-off of Goertek Microelectronics Inc. and Listing on the Main Board of the Hong Kong Stock Exchange and other relatedproposals. The above-mentioned proposals were reviewed and approved at the Company's third extraordinary general meeting ofshareholders held in 2024.On January 20, 2025, Goertek Microelectronics submitted an application for the initial public offering of overseas listed foreign shares(H shares) and their listing on the main board of the Hong Kong Stock Exchange to the Stock Exchange of Hong Kong Limited(hereinafter referred to as "HKEX"), and published the application materials for such offering and listing on the website of HKEX(www.hkexnews.hk).For details, please refer to the relevant announcements published in CNINFO (http://www.cninfo.com.cn), Securities Times, ChinaSecurities Journal, Shanghai Securities News, and Securities Daily.
Section VII Changes in Shares and Shareholder Information
I. Changes in Shares
1. Changes in shares
Unit: share
| Before the change | Increases or decreases (+, -) | After the change | |||||||
| Number | Percentage | New shares | Bonus shares | Transferred from reserves | Other | Sub-total | Number | Percentage | |
| I. Shares Subject to Selling Restrictions | 407,160,827 | 11.90% | 407,160,827 | 11.68% | |||||
| 1. State shareholding | |||||||||
| 2. Shares held by state-owned corporates | |||||||||
| 3. Shares held by other domestic shareholders | 407,160,827 | 11.90% | 407,160,827 | 11.68% | |||||
| Including: held by domestic corporates | |||||||||
| held by domestic individuals | 407,160,827 | 11.90% | 407,160,827 | 11.68% | |||||
| 4. Shares held by foreign shareholders | |||||||||
| Including: held by foreign corporates | |||||||||
| held by foreign individuals | |||||||||
| II. Shares Without Restrictions | 3,013,242,373 | 88.10% | 69,210,155 | -3,268,611 | 65,941,544 | 3,079,183,917 | 88.32% | ||
| 1. RMB common shares | 3,013,242,373 | 88.10% | 69,210,155 | -3,268,611 | 65,941,544 | 3,079,183,917 | 88.32% | ||
| 2. Domestic listed foreign shares | |||||||||
| 3. Overseas listed foreign shares | |||||||||
| 4. Others | |||||||||
| III. Total Number of Shares | 3,420,403,200 | 100.00% | 69,210,155 | -3,268,611 | 65,941,544 | 3,486,344,744 | 100.00% | ||
Reasons for changes in shares? Applicable ? Not applicable
(1) Cancellation of Remaining Repurchased Shares in 2021
On February 24, 2021, the Company issued the Announcement of Goertek Inc. Regarding the Results of Share Repurchase and Changesin Shares, stating that it had cumulatively repurchased 59,929,533 shares with a specific securities repurchase account throughcontinuous trading approach. Among them, 56,660,922 shares have been used for the Company's "Home No. 6" and "Home No. 7"Employee Stock Ownership Plans, while the remaining 3,268,611 shares were not used for Employee Stock Ownership Plans or equityincentive plans. In accordance with relevant regulations, the Company completed the cancellation of the remaining shares on February23, 2024, resulting in a corresponding reduction of the Company's share capital by 3,268,611 shares.
(2) Exercise of Reserved Granted Portion of the 2021 Stock Option Incentive Plan in the Second Exercise PeriodOn March 27, 2024, the Company convened the 14th meeting of the 6th Board of Directors and the 11th meeting of the 6th Board ofSupervisors, which approved the Proposal on the Achievement of the Exercise Conditions of Initial Granted Stock Options for theSecond Exercise Period in the 2021 Stock Option Incentive Plan. Incentive recipients who meet the exercise conditions may exercisestock options during the second exercise period by means of voluntary exercise. The actual exercise period is from April 20, 2024, toApril 19, 2025. During the reporting period, the exercise of rights by some incentive recipients led to an increase in the Company'sshare capital by 8,600 shares.
(3) Exercise for the First Exercise Period of the Initial Granted Portion of the 2023 Stock Option Incentive PlanOn August 14, 2024, the Company convened the 18th meeting of the 6th Board of Directors and the 15th meeting of the 6th Board ofSupervisors, which approved the Proposal on the Achievement of the Exercise Conditions for the First Exercise Period of the InitialGranted Portion under the Company's 2023 Stock Option Incentive Plan. Incentive recipients who meet the exercise conditions mayexercise stock options during the first exercise period by means of voluntary exercise. The actual exercise period is from August 28,2024, to August 27, 2025. During the reporting period, the exercise of rights by some incentive recipients led to an increase in theCompany's share capital by 69,201,555 shares.Approval of changes in shares? Applicable ? Not applicable
(1) Cancellation of Remaining Repurchased Shares in 2021
The Company convened the 13th meeting of the sixth Board of Directors on January 15, 2024, and the first extraordinary generalmeeting of shareholders in 2024 on February 1, 2024. They reviewed and approved the Proposal to Cancel a Portion of the Company'sRepurchased Shares, agreeing to cancel the remaining 3,268,611 shares, which will correspondingly reduce the Company's capital.The relevant cancellation procedures have been completed.
(2) Exercise of Reserved Granted Portion of the 2021 Stock Option Incentive Plan in the Second Exercise PeriodOn March 27, 2024, the Company held the 14th meeting of the 6th Board of Directors and the 11th meeting of the 6th Board ofSupervisors, which approved the Proposal on the Achievement of the Exercise Conditions of Initial Granted Stock Options for theSecond Exercise Period in the 2021 Stock Option Incentive Plan, among others. The Board of Directors approved that the exerciseconditions had been met. 147 incentive recipients with reserved grants may exercise stock options during the second exercise periodby means of voluntary exercise.
(3) Exercise for the First Exercise Period of the Initial Granted Portion of the 2023 Stock Option Incentive PlanOn August 14, 2024, the Company convened the 18th meeting of the 6th Board of Directors and the 15th meeting of the 6th Board ofSupervisors, which approved the Proposal on the Achievement of the Exercise Conditions for the First Exercise Period of the InitialGranted Portion under the Company's 2023 Stock Option Incentive Plan among others. The Board of Directors approved that theexercise conditions had been met. 5,001 incentive recipients may exercise stock options during the first exercise period by means ofvoluntary exercise.Ownership transfer of changes in shares? Applicable ? Not applicable
(1) Cancellation of Remaining Repurchased Shares in 2021
On February 23, 2024, the Shenzhen Branch of China Securities Depository and Clearing Co., Ltd. confirmed that the cancellationconducted by the Company had been completed.
(2) Exercise of Reserved Granted Portion of the 2021 Stock Option Incentive Plan in the Second Exercise PeriodAccording to the 2021 Stock Option Incentive Plan of Goertek Inc. (Draft), the exercise period of the Second Exercise Period of theReserved Granted Portion of the 2021 Stock Option Incentive Plan is from April 20, 2024, to April 19, 2025. China Securities
Depository and Clearing Co., Ltd. will handle the corresponding stock changes in conjunction with the incentive recipients exercisingtheir rights during the aforementioned exercise period.
(3) Exercise for the First Exercise Period of the Initial Granted Portion of the 2023 Stock Option Incentive PlanAccording to the 2023 Stock Option Incentive Plan of Goertek Inc. (Draft) (Revised), the exercise period of the First Exercise Periodof the Initial Grant of the 2023 Stock Option Incentive Plan is from August 28, 2024, to August 27, 2025. China Securities Depositoryand Clearing Co., Ltd. will handle the corresponding stock changes in conjunction with the incentive recipients exercising their rightsduring the aforementioned exercise period.The impact of share changes on the financial indicators such as basic earnings per share, diluted earnings per share and net assets pershare attributable to the Company's common shareholders in the latest year and period? Applicable ? Not applicableDuring the reporting period, the cancellation of some repurchased shares, the exercise of stock options for 2021 Incentive Plan and2023 Incentive Plan affected basic earnings per share and diluted earnings per share, but did not have a significant impact.Other content that the Company considers necessary or that the securities regulator requires to be disclosed? Applicable ? Not applicable
2. Changes in restricted shares
? Applicable ? Not applicable
Unit: share
| Name of shareholder | Number of restricted shares in opening period | Increased in reporting period | Decreased in reporting period | Number of restricted shares in closing period | Type for restricted shares | Unlock date |
| Jiang Bin | 215,548,054 | 215,548,054 | Restricted shares of senior executives | Unlock 25% of shares held per annum | ||
| Jiang Long | 187,758,898 | 187,758,898 | ||||
| Duan Huilu | 2,605,875 | 2,605,875 | ||||
| Jia Jun'an | 600,000 | 600,000 | ||||
| Liu Chunfa | 648,000 | 648,000 | ||||
| Total | 407,160,827 | 407,160,827 | -- | -- |
II. Issuance and Listing of Securities
1. Securities issuance (excluding preferred stocks) during the reporting period
? Applicable ? Not applicable
| Name of the stock and its derivative securities | Issue Date | Issuance price (or interest rate) | Quantity of issuance | Listing date | Number of stocks permitted to be listed and traded | Transaction termination date | Disclosure index | Disclosure date |
| Stocks | ||||||||
| Goertek Inc. (2021 Stock Option Exercise) | - | RMB 28.78/share | 8,600 | - | 8,600 | - | Announcement of Goertek Inc. on the Adoption of a Voluntary Exercise Mode for the Second Exercise Period of the Reserved Granted Portion of the 2021 Stock Option Incentive Plan | November 18, 2024 |
| Goertek Inc. (2023 Stock Option Exercise) | - | RMB 18.22 per share, RMB 18.12 per share | 69,201,555 | - | 69,201,555 | - | Announcement of Goertek Inc. on the Adoption of a Voluntary Exercise Mode for the First Exercise Period of the Initial Granted Portion of the 2023 Stock Option Incentive Plan | September 3, 2024 |
| Convertible corporate bonds, separately-traded convertible corporate bonds, corporate bonds | ||||||||
| None | ||||||||
| Other derivative securities | ||||||||
| None | ||||||||
Description of the issuance of securities (excluding preferred stocks) during the reporting period
(1) Exercise of Reserved Granted Portion of the 2021 Stock Option Incentive Plan in the Second Exercise PeriodAfter being reviewed and approved by the Company's Board of Directors, the exercise conditions for the second exercise period of the2021 Stock Option Incentive Plan have been achieved. During the reporting period, the Company's share capital increased by 8,600shares due to the exercise of rights by some incentive recipients.
(2) Exercise for the First Exercise Period of the Initial Granted Portion of the 2023 Stock Option Incentive PlanAfter being reviewed and approved by the Company's Board of Directors, the exercise conditions for the first exercise period of the2023 Stock Option Incentive Plan have been achieved. During the reporting period, the Company's share capital increased by69,201,555 shares due to the exercise of rights by some incentive recipients.
2. Description of changes in the total number of shares, the structure of shareholders, and the structure ofassets and liabilities? Applicable ? Not applicableIn 2024, the Company's share capital increased by 69,210,155 shares due to the exercise of rights by incentive recipients, resulting inan increase of RMB 1.26 billion in the Company's cash. The cancellation of the remaining 3,268,611 shares in the specific securitiesrepurchase account does not affect the Company's asset-liability structure. See Section VII (I), Item 1 "Changes in Shares" of this reportfor details.
3. Internal employee shares
? Applicable ? Not applicable
III. Shareholders and Actual Controllers
1. Number of shareholders and corresponding shareholding
Unit: share
| Total of common shareholders at the end of the reporting period | 335,175 | Total of common shareholders at the end of the previous month before disclosure date of the annual report | 305,858 | Total of preference shareholders whose voting rights were restored at the end of the reporting period | 0 | Total of preference shareholders whose voting rights were restored at the end of the previous month before disclosure date of the annual report | 0 | |||||||
| Shareholding of shareholders with more than 5% of shares or the top 10 shareholders (Excluding lending of shares through refinancing) | ||||||||||||||
| Name of shareholder | Type of shareholder | Percentage | Total common shares held at the end of the reporting period | Increase/decrease during the reporting period | The number of common shares held with trading restrictions | The number of shares held without trading restrictions | Pledge or freeze status | |||||||
| Share status | Number | |||||||||||||
| Goertek Group Co., Ltd. | Domestic non-state-owned corporation | 14.56% | 507,680,170 | 507,680,170 | Not applicable | |||||||||
| Jiang Bin | Domestic individual | 8.24% | 287,397,406 | 215,548,054 | 71,849,352 | Not applicable | ||||||||
| Jiang Long | Domestic individual | 7.18% | 250,345,197 | 187,758,898 | 62,586,299 | Pledged | 65,000,000 | |||||||
| Hong Kong Securities Clearing Company Ltd. (HKSCC) | Overseas corporation | 3.29% | 114,642,500 | 2,114,553 | 114,642,500 | Not applicable | ||||||||
| China Securities Finance Corporation Limited | Domestic General Legal Person | 2.38% | 83,044,011 | 83,044,011 | Not applicable | |||||||||
| Goertek Inc. - Home No. 6 ESOP | Other | 1.35% | 47,150,240 | -20,187,800 | 47,150,240 | Not applicable | ||||||||
| Industrial and Commercial Bank of China Limited - Huatai-Pinebridge CSI300 Exchange-Traded Index Securities Investment Fund | Other | 1.21% | 42,055,393 | 26,119,300 | 42,055,393 | Not applicable | ||||||||
| China Construction Bank Corporation - E Fund CSI300 Exchange-Traded Initiative-type Index Securities Investment Fund | Other | 0.83% | 28,982,903 | 23,981,930 | 28,982,903 | Not applicable | |||||
| Wang Ping | Overseas natural person | 0.80% | 28,019,947 | 16,900,131 | 28,019,947 | Not applicable | |||||
| Industrial and Commercial Bank of China Limited - China Asset Management CSI300 Exchange-Traded Index Initiative-type Securities Investment Fund | Other | 0.55% | 19,256,487 | 14,571,600 | 19,256,487 | Not applicable | |||||
| Strategic investors or general legal entities who become the top 10 shareholders as a result of the placement of new shares | None | ||||||||||
| Explanation of the association of the above shareholders or their action in concert | Jiang Bin and Jiang Long are brothers. Goertek Group Co., Ltd. is controlled by Jiang Bin and Jiang Long; Goertek Inc. - Home No. 6 ESOP is the Company's ESOP; The Company does not know whether the other top ten shareholders are related or acting in concert with each other. | ||||||||||
| Explanation on entrustment/acceptance and waiver of voting rights by the aforesaid shareholders | None | ||||||||||
| Special notes on the existing special account of securities repurchasing in the top 10 shareholders | As of December 31, 2024, the specific securities repurchase account of Goertek Inc. holds 39,434,946 company shares, accounting for 1.13% of the Company's total share capital. | ||||||||||
| Shareholding of the top 10 shareholders with unlimited conditions of sale (Excluding lending of shares through refinancing, and restricted shares of senior executives) | |||||||||||
| Name of shareholder | Number of shares without sales restrictions held at the end of the reporting period | Type of shares | |||||||||
| Type of shares | Number | ||||||||||
| Goertek Group Co., Ltd. | 507,680,170 | Ordinary shares in RMB | 507,680,170 | ||||||||
| Hong Kong Securities Clearing Company Ltd. (HKSCC) | 114,642,500 | Ordinary shares in RMB | 114,642,500 | ||||||||
| China Securities Finance Corporation Limited | 83,044,011 | Ordinary shares in RMB | 83,044,011 | ||||||||
| Jiang Bin | 71,849,352 | Ordinary shares in RMB | 71,849,352 | ||||||||
| Jiang Long | 62,586,299 | Ordinary shares in RMB | 62,586,299 | ||||||||
| Goertek Inc. - Home No. 6 ESOP | 47,150,240 | Ordinary shares in RMB | 47,150,240 | ||||||||
| Industrial and Commercial Bank of China Limited - Huatai-Pinebridge CSI300 Exchange-Traded Index Securities Investment Fund | 42,055,393 | Ordinary shares in RMB | 42,055,393 | ||||||||
| China Construction Bank Corporation - E Fund CSI300 Exchange-Traded Initiative-type Index Securities Investment Fund | 28,982,903 | Ordinary shares in RMB | 28,982,903 | ||||||||
| Wang Ping | 28,019,947 | Ordinary shares in RMB | 28,019,947 | ||||||||
| Industrial and Commercial Bank of China Limited - China Asset Management CSI300 | 19,256,487 | Ordinary shares in RMB | 19,256,487 | ||||||||
| Exchange-Traded Index Initiative-type Securities Investment Fund | |
| Explanation on association or action in concert among top 10 shareholders of shares without sales restrictions, or between top 10 shareholders of shares without sales restrictions and top 10 shareholders | Jiang Bin and Jiang Long are brothers. Goertek Group Co., Ltd. is controlled by Jiang Bin and Jiang Long; Goertek Inc. - Home No. 6 ESOP is the Company's ESOP; The Company does not know whether the other top ten shareholders are related or acting in concert with each other. |
| Explanation of the top 10 common shareholders' participation in the financing and loan businesses of securities trades | At the end of the reporting period, the shares held by Goertek Group Co., Ltd., the controlling shareholder of the Company include the 150,000,000 shares held in the customer credit transaction guarantee securities account of Southwest Securities Co., Ltd. At the end of the period, Wang Ping held 28,019,947 shares of the Company through the credit securities account. |
Whether shareholders holding more than 5%, the top 10 shareholders, and the top 10 unrestricted public shareholders participating in the lending of shares through refinancing business? Applicable ? Not applicable
Unit: share
| Whether shareholders holding more than 5%, the top 10 shareholders, and the top 10 unrestricted public shareholders participating in the lending of shares through refinancing business | ||||||||
| Name of shareholder (full name) | Shareholding of the general account and credit account at the beginning of the period | Shares involved in the short sale and securities relending transactions that have not been returned at the beginning of the period | Shareholding of the general account and credit account at the end of the period | Shares involved in the short sale and securities relending transactions that have not been returned at the end of the period | ||||
| Number in total | Proportion of total share capital | Number in total | Proportion of total share capital | Number in total | Proportion of total share capital | Number in total | Proportion of total share capital | |
| Industrial and Commercial Bank of China Limited - Huatai-Pinebridge CSI300 Exchange-Traded Index Securities Investment Fund | 15,936,093 | 0.47% | 1,264,000 | 0.04% | 42,055,393 | 1.21% | 0 | 0.00% |
| China Construction Bank Corporation - E Fund CSI300 Exchange-Traded Initiative-type Index Securities Investment Fund | 5,000,973 | 0.15% | 1,492,700 | 0.04% | 28,982,903 | 0.83% | 0 | 0.00% |
Any change in the top 10 shareholders and the top 10 unrestricted public shareholders compared to the previous period due to reasons related to the lending/returning of shares throughrefinancing business? Applicable ? Not applicableWhether the Company's top 10 common shareholders and top 10 common shareholders without share sales restrictions agreed on any repurchase transaction in the reporting period? Yes ? NoNone of the Company's top 10 common shareholders and top 10 common shareholders without share sales restrictions agreed on any repurchase in the reporting period.
2. Particulars about the controlling shareholder
Nature of the controlling shareholder: Private corporateType of the controlling shareholder: Legal entity
| Name of the controlling shareholder | Legal representative/Head of the Company | Date of establishment | Organization code | Business scope |
| Goertek Group Co., Ltd. | Jiang Bin | April 24, 2001 | 913707007286084226 | Residential interior decoration; medical services; technology import and export; investing activities conducted with own funds; non-residential real estate leasing; technical services; wholesale of edible agricultural products; tree planting management; electronic products sales, etc. |
| Shareholdings of the controlling shareholder in other listed companies | None | |||
Change of the controlling shareholders in the reporting period? Applicable ? Not applicableNo change on the controlling shareholder of the Company in the reporting period
3. Actual controllers of the Company and persons acting in concert with the actual controller
Nature of the actual controllers: Domestic individualType of the actual controllers: Individual
| Name of the actual controller | Relationship with the actual controller | Nationality | Whether he/she has obtained the right of residence in another country or region |
| Jiang Bin | Himself | China | No |
| Hu Shuangmei | Himself | China | No |
| Jiang Long | Acting in concert (including agreement, relative and common control) | China | No |
| Main occupation and title | Jiang Bin is currently the board chairman of the Company; Jiang Long served as the senior consultant of the Company | ||
| Information about other listed companies at home and abroad controlled in the last ten years | Goertek Inc. | ||
Change on the actual controllers in the reporting period? Applicable ? Not applicableNo change on the actual controllers of the Company in the reporting periodBlock Diagram for Property Right and Control Relationship Between the Company and its Actual Controllers
The actual controller controls the Company via trust or other ways of asset management? Applicable ? Not applicable
4. All the pledged shares account for 80% of the total shares held by the controlling shareholder or No.1shareholder of the Company and their persons acting in concert? Applicable ? Not applicable
5. Particulars about other corporate shareholders with over 10% shares of the Company
? Applicable ? Not applicable
6. Particulars on share sales restrictions for controlling shareholders, actual controllers, or other partiesinvolved in the reorganization of the Company or in any commitments related to the sales of share
? Applicable ? Not applicable
IV. Specific Implementation of Share Repurchase in the Reporting Period
Progress of share repurchase? Applicable ? Not applicable
| Disclosure time of the plan | Number of shares to be repurchased (share) | Proportion of total share capital | Amount to be repurchased (RMB 10,000) | Period of proposed repurchase | Purpose of repurchase | Number of repurchases (share) | Proportion of repurchased shares to the underlying shares covered by the Stock Incentive Plan (if any) |
| October 27, 2023 | Based on the repurchase price and the upper limit of the repurchase amount, it is estimated that approximately 27,461,749 shares can be repurchased | 0.80% | 50,000 (inclusive) - 70,000 (inclusive) | Within 12 months from the date on which the Board of Directors deliberates and approves the repurchase plan, but the repurchase period will expire earlier if the relevant conditions are met | For ESOP or equity incentive plan | 39,434,946 |
The progress of repurchased shares reduction through centralized trading at competitive price? Applicable ? Not applicable
| Jiang Bin | Hu Shuangmei |
Goertek Group Co., Ltd.
Goertek Group Co., Ltd.Goertek Inc.
Section VIII Preference Shares? Applicable ? Not applicableThere are no preference stocks in the reporting period.
Section IX Bonds? Applicable ? Not applicable
Section X Financial Report
I. Auditor's Report
| Auditor's Opinion | Standard unqualified opinion |
| Auditor's Report Sign-off Date | March 26, 2025 |
| Name of the audit institution | Zhongxi CPAs (Special General Partnership) |
| Auditor's Report Number | Zhong Xi Cai Shen No. 2025S00783 |
| Name of the Certified Public Accountant | Du Yeqin, Zhang Shuli |
Auditor's Report
Zhong Xi Cai Shen No. 2025S00783To all the shareholders of Goertek Inc.,I. OpinionWe have audited the accompanying financial statements of Goertek Inc. (hereinafter referred to as "Goertek"), including theconsolidated and Company's balance sheets as of December 31, 2024, consolidated and Company's income statements, consolidatedand Company's cash flow statements, consolidated and Company's statements of changes in owner's equity, and notes to the financialstatements for the year then ended.In our opinion, the accompanying financial statements have been prepared in all material aspects in accordance with the AccountingStandards for Business Enterprises, fairly reflecting the consolidated and Company's financial position as of December 31, 2024 andof the consolidated and Company's financial performance and cash flows for 2024.II. Basis for OpinionWe conducted our audit in accordance with the Auditing Standards for Certified Public Accountants of China. Our responsibilitiesunder those Standards are further described in the "Certified Public Accountants' Responsibilities for the Audit of the FinancialStatements" section of the auditor's report. We are independent of Goertek Inc. in accordance with the Code of Ethics for CertifiedPublicAccountants of China ("Code"), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis for our auditor's opinion.III. Key Audit MattersKey audit matters are those matters that, in our professional judgment, are of most significance in our audit of the financial statementsof the current period. These matters were 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. We determine that the following matters are criticalaudit matters that need to be communicated in the audit report.(I) Revenue recognition
1. Description of the matters
Goertek Inc. is mainly in the business of producing and selling electronic components, and for the accounting policy of revenuerecognition, please refer to ''27. Revenue '' in ''III. Significant Accounting Policies and Accounting Estimates'' of notes to the financialstatements. In 2024, the revenue in the consolidated financial statements of Goertek Inc. is RMB 100,953.85million.Revenue is one of the key performance indicators of Goertek Inc. and is the major source of profit of the Company, and the accuracyand completeness of revenue recognition has a significant impact on the profits of the Company. Therefore, we identified therecognition of Goertek Inc.'s revenue as a key audit matter.
2. Audit measures
We performed the following audit procedures in recognition of the revenue:
(1) Understood, evaluated and tested the design and operation effectiveness of internal control related to revenue recognition;
(2) Performed analytical review procedure to analyze the rationality of changes in the operating revenue and gross profits;
(3) Identified the risk in the commodity ownership and the contractual terms related to remuneration transfer, evaluated whether theaccounting policies for revenue recognition in different modes were appropriate, and evaluated whether the time point for revenuerecognition of the Company was consistent with the requirements in the Accounting Standards for Business Enterprises by checking
the major sales contracts or orders, understanding the policies for receipt and return of goods, communicating with the managementand other procedures;
(4) Selected samples to check the supporting documents related to revenue recognition, and executed external confirmation procedureson a sampling basis;
(5) Selected samples to reconcile the supporting documents against the product sales revenue recognized before and after the balancesheet date to evaluate whether the revenue was recognized in the appropriate accounting period.(II) Goodwill impairment
1. Description of the matters
For the provision for goodwill impairment, please refer to the financial statements ''21. Impairment of Long-term Assets'' in ''III.Significant Accounting Policies and Accounting Estimates''. As of December 31, 2024, the book value of goodwill was RMB
605.03million, which mainly resulted from the goodwill generated from the acquisition of the subsidiary Uphoton Technology(Shaoxing) Co., Ltd., which amounted to RMB 588.17million.In accordance with the Accounting Standards for Business Enterprises, the Company's management performs an impairment test ongoodwill at the end of each year and adjusts the book value of goodwill based on the results of the impairment test. The process ofassessing goodwill impairment is complex. Predicting the recoverable amount involves estimating the present value of future cashflows for the asset group. The management needs to make significant judgments and assumptions in their forecasts. The use of differentassumptions can have a significant impact on the assessment of the recoverable amount of goodwill, as they are affected bymanagement's judgment of the future market and economic environment.Since the book value of goodwill has a significant impact on financial statements and the provision for impairment of goodwill requiresthe management to make significant accounting judgments and estimates, we identified the impairment of goodwill as a key auditmatter.
2. Audit measures
We mainly implemented the following audit procedures for the impairment of goodwill:
(1) Understood, evaluated, and tested the design and operation effectiveness of internal control related to the impairment of goodwill;
(2) Review whether the management's determination of the asset group and allocation method for goodwill comply with the provisionsof the Accounting Standards for Business Enterprises;
(3) Assess the competency, professionalism, and objectivity of the external evaluation organization hired by the management;
(4) Discuss with the external evaluation institution the reasonableness of the evaluation method, key evaluation assumptions, parameterselection, forecast of future income, and discount rate of cash flow used in the goodwill impairment test;
(5) Review the valuation method used for the asset group containing the goodwill and the evaluation report issued by the externalevaluation institution.IV. Other InformationThe Management of Goertek Inc. (the Management) is responsible for Other Information. Other Information includes informationcovered in the 2024 Annual Report of Goertek Inc. but excludes financial statements and auditor's reports.Our auditor's opinions on financial statements do not cover Other Information. We also do not express any kind of verificationconclusion on Other Information.In combination with our audit of the financial statements, we're obliged to read the Other Information. In the process, we considerwhether the Other Information is materially inconsistent with the financial statements or the information we learned during the audit,or whether there is a material misstatement.Based on the work that we have already done, if we determine that the Other Information contains material misstatements, we shouldreport the fact. In this regard, we have nothing to report.V. Responsibilities of Management and Governance for the Financial StatementsThe management of Goertek Inc. is responsible for the preparation and fair presentation of the financial statements in accordance withthe Accounting Standards for Business Enterprises, and for the design, implementation and maintenance of such internal controlnecessary to ensure that the financial statements are free from material misstatement, whether due to fraud or error.In preparing the financial statements, Management is responsible for assessing the ability of Goertek Inc. to continue as a going concern,disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless Management intendsto liquidate Goertek Inc. or to cease operations, or has no realistic alternative but to do so.Those charged with governance are responsible for overseeing the financial reporting process of Goertek Inc.
VI. Auditor's Responsibilities for the Audit of the Financial StatementsOur objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatementdue to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, butis not a guarantee that an audit conducted in accordance with the Auditing Standards 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 couldreasonably be expected to influence the economic decisions of users made on the basis of these financial statements.As part of an audit in accordance with the Auditing Standards, we exercise professional judgment and maintain professional skepticismthroughout the audit. We also:
1. Identify and assess the risks of material misstatement of the financial statements due to fraud or error, design and perform auditprocedures to address those risks, and obtain audit evidence that is sufficient and appropriate as the basis for our opinion. The risk ofnot detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,forgery, intentional omissions, misrepresentations, or the override of internal control.
2. Obtain an understanding of internal control relevant to the audit to design appropriate audit procedures.
3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosuresmade by Management.
4. Conclude on the appropriateness of Management's use of the going concern basis of accounting. And, based on the audit evidenceobtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on Goertek Inc.'s abilityto continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor'sreport to the related disclosures in the financial statements or, if such disclosures are inadequate, to express a qualified opinion. Ourconclusions are based on the information obtained up to the date of our auditor's report. However, future events or conditions maycause Goertek Inc. 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 fairlyrepresent the underlying transactions and events.
6. Obtain sufficient and appropriate audit evidence on the financial information of entities or business activities within Goertek Inc. toexpress an opinion on the financial statements. We are responsible for the instruction, supervision and execution of the Group's audit,and assume full responsibility for the auditor's opinion.We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit andsignificant audit findings, including any significant 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 affect our independenceand, where applicable, related safeguards.From the matters communicated with those charged with governance, we determine those matters that were of most significance in theaudit 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 determinethat a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expectedto outweigh the public interest benefits of such communication.
| Zhongxi CPAs (Special General Partnership) | Certified Public Accountant in China (Engagement partner) | |
| Du Yeqin | ||
| Beijing China | Certified Public Accountant in China | |
| Zhang Shuli |
March 26, 2025
II. Financial StatementsThe currency in the notes to the financial statements is: RMB
1. Consolidated balance sheet
Prepared by: Goertek Inc.
December 31, 2024
Unit: RMB
| Item | Closing balance | Opening balance |
| Current assets: | ||
| Cash and cash equivalents | 17,466,492,869.05 | 14,737,312,329.71 |
| Deposit reservation for balance | ||
| Lending funds | ||
| Financial assets held for trading | 1,100,984,000.31 | 587,445,091.69 |
| Derivative financial assets | ||
| Notes receivable | 149,898,502.69 | 139,468,321.29 |
| Accounts receivable | 17,881,372,031.94 | 12,424,618,676.81 |
| Receivables financing | 8,710,031.89 | 9,059,230.11 |
| Prepayments | 236,914,434.64 | 254,633,800.07 |
| Premium receivable | ||
| Reinsurance accounts receivable | ||
| Provision of cession receivable | ||
| Other receivables | 99,984,370.19 | 89,261,417.90 |
| Including: Interest receivable | ||
| Dividends receivable | ||
| Redemptory financial asset for sale | ||
| Inventory | 10,478,868,878.63 | 10,794,894,394.42 |
| Including: Data resources | ||
| Contract assets | ||
| Assets held for sale | ||
| Non-current assets due within one year | 388,821,194.44 | 494,634,708.33 |
| Other current assets | 1,627,479,062.68 | 509,834,064.49 |
| Total current assets | 49,439,525,376.46 | 40,041,162,034.82 |
| Non-current assets: | ||
| Loans and advances disbursed | ||
| Debt investments | ||
| Other debt investments | ||
| Long-term receivables | ||
| Long-term equity investments | 734,411,641.50 | 760,220,882.07 |
| Investments in other equity instruments | 625,661,939.44 | 591,269,883.71 |
| Other non-current financial assets | 432,722,782.28 | 322,640,244.40 |
| Investment properties | ||
| Fixed assets | 21,803,396,794.34 | 22,305,456,354.63 |
| Item | Closing balance | Opening balance |
| Construction in progress | 1,397,416,899.66 | 2,071,280,343.55 |
| Bearer biological assets | ||
| Oil and gas assets | ||
| Right-of-use assets | 831,108,181.41 | 615,431,849.91 |
| Intangible assets | 3,051,389,711.82 | 3,280,071,024.41 |
| Including: Data resources | ||
| Development expense | 170,050,760.76 | 446,804,705.86 |
| Including: Data resources | ||
| Goodwill | 605,033,979.56 | 605,033,979.56 |
| Long-term prepaid expenses | 367,577,226.56 | 412,046,659.67 |
| Deferred tax assets | 1,673,617,312.92 | 1,609,355,102.73 |
| Other non-current assets | 1,574,860,480.12 | 683,636,375.83 |
| Total non-current assets | 33,267,247,710.37 | 33,703,247,406.33 |
| Total assets | 82,706,773,086.83 | 73,744,409,441.15 |
| Current liabilities: | ||
| Short-term borrowings | 7,713,280,169.91 | 5,214,491,316.62 |
| Borrowings from banks and other financial institutions | ||
| Borrowing funds | ||
| Financial liabilities held for trading | 604,980,242.99 | 129,579,785.95 |
| Derivative financial liabilities | ||
| Notes payable | 3,960,266,092.27 | 4,538,354,620.68 |
| Accounts payable | 21,962,224,256.37 | 17,582,263,359.17 |
| Advances from clients | ||
| Contract liabilities | 4,052,359,576.04 | 3,472,638,215.20 |
| Financial assets sold for repurchase | ||
| Client deposits and deposits from banks and other financial institutions | ||
| Receivings from vicariously traded securities | ||
| Amount received from agency underwriting of securities | ||
| Employee benefits payable | 1,285,301,671.81 | 1,219,545,540.65 |
| Tax payable | 355,577,450.15 | 120,856,054.02 |
| Other payables | 96,306,705.81 | 87,474,942.48 |
| Including: Interest payable | ||
| Dividends payable | ||
| Handling charges and commissions payable | ||
| Dividend payable for reinsurance | ||
| Liabilities held for sale | ||
| Non-current liabilities due within one year | 4,923,444,540.44 | 1,072,169,260.73 |
| Other current liabilities | 3,214,059.97 | 4,718,260.10 |
| Item | Closing balance | Opening balance |
| Total current liabilities | 44,956,954,765.76 | 33,442,091,355.60 |
| Non-current liabilities: | ||
| Provision for insurance contracts | ||
| Long-term borrowings | 1,341,201,983.90 | 6,631,470,751.86 |
| Bonds payable | ||
| Including: Preference shares | ||
| Perpetual bonds | ||
| Lease liabilities | 668,965,200.66 | 518,159,559.63 |
| Long-term payables | ||
| Long-term employee benefits payable | ||
| Provisions | ||
| Deferred income | 517,913,990.19 | 519,084,658.34 |
| Deferred tax liabilities | 721,366,698.78 | 757,980,175.34 |
| Other non-current liabilities | 452,293,738.43 | 348,058,624.72 |
| Total non-current liabilities | 3,701,741,611.96 | 8,774,753,769.89 |
| Total liabilities | 48,658,696,377.72 | 42,216,845,125.49 |
| Shareholders' equity: | ||
| Share capital | 3,486,344,744.00 | 3,420,403,200.00 |
| Other equity instruments | ||
| Including: Preference shares | ||
| Perpetual bonds | ||
| Capital surplus | 10,293,187,264.59 | 8,998,372,370.61 |
| Less: Treasury stock | 674,818,183.40 | 278,530,746.47 |
| Other comprehensive income | -445,220,994.00 | -40,934,939.89 |
| Specific reserve | 3,012,357.93 | 1,551,313.67 |
| Surplus reserve | 1,805,496,771.01 | 1,665,066,603.96 |
| General risk reserve | 6,081,200.00 | 6,081,200.00 |
| Undistributed profits | 18,712,252,682.60 | 17,038,581,549.12 |
| Total equity attributable to the owners of the Company | 33,186,335,842.73 | 30,810,590,551.00 |
| Minority interests | 861,740,866.38 | 716,973,764.66 |
| Total shareholders' equity | 34,048,076,709.11 | 31,527,564,315.66 |
| Total liabilities and shareholders' equity | 82,706,773,086.83 | 73,744,409,441.15 |
Legal representative: Jiang Bin Principal in charge of accounting: Li Yongzhi Head of the accounting department: Li Yongzhi
2. Parent company balance sheet
Unit: RMB
| Item | Closing balance | Opening balance |
| Current assets: | ||
| Cash and cash equivalents | 7,149,879,508.27 | 7,261,479,909.89 |
| Financial assets held for trading | 177,628,577.00 | 43,356,500.16 |
| Item | Closing balance | Opening balance |
| Derivative financial assets | ||
| Notes receivable | 100,000,000.00 | 118,113,089.55 |
| Accounts receivable | 6,886,317,365.30 | 6,598,701,135.53 |
| Receivables financing | 19,322,467.03 | 14,606,619.59 |
| Prepayments | 15,256,011.77 | 25,044,450.75 |
| Other receivables | 4,119,484,430.97 | 5,265,145,730.57 |
| Including: Interest receivable | ||
| Dividends receivable | ||
| Inventory | 1,582,215,097.26 | 2,635,810,098.44 |
| Including: Data resources | ||
| Contract assets | ||
| Assets held for sale | ||
| Non-current assets due within one year | 358,821,194.44 | 494,634,708.33 |
| Other current assets | 677,367,092.72 | 97,125,290.56 |
| Total current assets | 21,086,291,744.76 | 22,554,017,533.37 |
| Non-current assets: | ||
| Debt investments | ||
| Other debt investments | ||
| Long-term receivables | ||
| Long-term equity investments | 9,179,124,798.47 | 9,126,400,831.64 |
| Investments in other equity instruments | ||
| Other non-current financial assets | 187,623,367.90 | 212,858,392.98 |
| Investment properties | ||
| Fixed assets | 7,548,959,971.95 | 8,821,843,731.49 |
| Construction in progress | 273,634,271.41 | 445,271,386.99 |
| Bearer biological assets | ||
| Oil and gas assets | ||
| Right-of-use assets | 217,909,651.02 | 223,664,825.78 |
| Intangible assets | 1,297,404,258.03 | 1,567,110,323.92 |
| Including: Data resources | ||
| Development expense | 68,036,054.29 | 369,518,862.88 |
| Including: Data resources | ||
| Goodwill | ||
| Long-term prepaid expenses | 37,825,188.03 | 34,955,204.06 |
| Deferred tax assets | 775,083,130.47 | 808,632,854.34 |
| Other non-current assets | 912,012,437.84 | 536,224,536.38 |
| Total non-current assets | 20,497,613,129.41 | 22,146,480,950.46 |
| Total assets | 41,583,904,874.17 | 44,700,498,483.83 |
| Current liabilities: | ||
| Short-term borrowings | 350,768,160.41 | 3,053,875,769.23 |
| Financial liabilities held for trading | 9,365,000.00 | |
| Derivative financial liabilities | ||
| Notes payable | 4,818,757,278.34 | 4,648,667,927.19 |
| Item | Closing balance | Opening balance |
| Accounts payable | 5,188,570,435.79 | 5,790,045,232.84 |
| Advances from clients | ||
| Contract liabilities | 915,086,687.46 | 683,902,938.19 |
| Employee benefits payable | 483,374,610.26 | 520,368,677.52 |
| Tax payable | 83,564,268.04 | 28,220,254.58 |
| Other payables | 143,268,625.77 | 1,143,932,322.71 |
| Including: Interest payable | ||
| Dividends payable | ||
| Liabilities held for sale | ||
| Non-current liabilities due within one year | 4,245,428,792.53 | 380,313,974.50 |
| Other current liabilities | 455,123.77 | 1,280,795.69 |
| Total current liabilities | 16,229,273,982.37 | 16,259,972,892.45 |
| Non-current liabilities: | ||
| Long-term borrowings | 270,000,000.00 | 4,894,000,000.00 |
| Bonds payable | ||
| Including: Preference shares | ||
| Perpetual bonds | ||
| Lease liabilities | 214,963,508.87 | 222,212,481.50 |
| Long-term payables | ||
| Long-term employee benefits payable | ||
| Provisions | ||
| Deferred income | 153,340,899.07 | 171,703,915.50 |
| Deferred tax liabilities | 306,612,090.55 | 400,038,411.93 |
| Other non-current liabilities | ||
| Total non-current liabilities | 944,916,498.49 | 5,687,954,808.93 |
| Total liabilities | 17,174,190,480.86 | 21,947,927,701.38 |
| Shareholders' equity: | ||
| Share capital | 3,486,344,744.00 | 3,420,403,200.00 |
| Other equity instruments | ||
| Including: Preference shares | ||
| Perpetual bonds | ||
| Capital surplus | 8,342,856,094.74 | 6,909,206,304.38 |
| Less: Treasury stock | 674,818,183.40 | 278,530,746.47 |
| Other comprehensive income | -12,213.99 | -12,650.40 |
| Specific reserve | ||
| Surplus reserve | 1,805,493,988.61 | 1,665,063,821.56 |
| Undistributed profits | 11,449,849,963.35 | 11,036,440,853.38 |
| Total shareholders' equity | 24,409,714,393.31 | 22,752,570,782.45 |
| Total liabilities and shareholders' equity | 41,583,904,874.17 | 44,700,498,483.83 |
3. Consolidated income statement
Unit: RMB
| Item | 2024 | 2023 |
| I. Revenue | 100,953,848,156.08 | 98,573,902,273.14 |
| Including: Operating Revenue | 100,953,848,156.08 | 98,573,902,273.14 |
| Interest income | ||
| Earned premium | ||
| Total revenue from handling charges and commissions | ||
| II. Total Operating Cost | 97,810,796,274.54 | 97,795,818,309.31 |
| Including: cost of sales | 89,759,386,768.92 | 89,753,064,209.99 |
| Interest expense | ||
| Handling charge and commission expense | ||
| Surrender value | ||
| Net payments for insurance claims | ||
| Net amount of withdrawal of insurance contract reserve | ||
| Expenditures of policy dividend | ||
| Amortized reinsurance expenditures | ||
| Taxes and surcharges | 278,731,983.76 | 244,044,842.29 |
| Selling expenses | 619,834,481.67 | 528,150,303.42 |
| General and administrative expenses | 2,200,022,715.70 | 2,202,814,353.55 |
| Research and development expenses | 4,882,112,487.52 | 4,715,969,451.42 |
| Financial expenses | 70,707,836.97 | 351,775,148.64 |
| Including: Interest expenses | 572,194,609.11 | 544,691,878.33 |
| Interest income | 400,653,329.10 | 279,661,791.52 |
| Add: Other income | 256,120,767.94 | 372,861,056.96 |
| Investment income ("-" for loss) | 109,040,057.77 | -73,393,865.89 |
| Including: Investment income from associates and joint ventures | -26,835,728.84 | -28,435,998.08 |
| Income recognized at the termination of financial assets measured at amortized cost | -36,419,794.69 | -5,724,287.70 |
| Exchange gains ("-" for loss) | ||
| Net exposure hedging income ("-" for loss) | ||
| Gains on changes in fair value ("-" for loss) | 41,043,887.97 | 115,909,152.44 |
| Credit impairment losses ("-" for loss) | -58,415,027.69 | 17,395,066.06 |
| Asset impairment losses ("-" for loss) | -643,065,577.73 | -299,625,741.31 |
| Gains on disposal of assets ("-" for loss) | -307,473.69 | -2,037,658.52 |
| III. Operating Profit ("-" for Loss) | 2,847,468,516.11 | 909,191,973.57 |
| Add: Non-operating income | 33,583,222.26 | 34,817,135.08 |
| Less: Non-operating expenses | 107,214,393.27 | 152,852,797.95 |
| IV. Total Profit ("-" for Total Losses) | 2,773,837,345.10 | 791,156,310.70 |
| Less: Income tax expenses | 187,548,219.70 | -228,254,892.89 |
| V. Net Profit ("-" for Net Loss) | 2,586,289,125.40 | 1,019,411,203.59 |
| (I) Classification by continuity of operations | ||
| 1. Net profit from continuing operations ("-" for net loss) | 2,586,289,125.40 | 1,019,411,203.59 |
| Item | 2024 | 2023 |
| 2. Net profit from discontinued operations ("-" for net loss) | ||
| (II) Classification by ownership of the equity | ||
| 1. Net profit attributable to the shareholders of the Company | 2,665,044,826.06 | 1,088,076,730.88 |
| 2. Minority interests | -78,755,700.66 | -68,665,527.29 |
| VI. Other comprehensive income, net of tax | -408,200,238.17 | -161,476,471.40 |
| Other comprehensive income, net of tax attributable to the shareholders of the Company | -404,286,054.11 | -163,312,274.25 |
| (I) Other comprehensive income items which will not be reclassified subsequently to profit or loss | 9,082,795.67 | -92,161,581.61 |
| 1. Changes in remeasurement of defined benefit plan | ||
| 2. Shares of other comprehensive income of the investee accounted for using equity method that will not be subsequently reclassified to profit or loss | ||
| 3. Changes in fair value of investments in other equity instruments | 9,082,795.67 | -92,161,581.61 |
| 4. Changes in fair value attributable to change in the credit risk of financial liability designated at FVPL | ||
| 5. Others | ||
| (II) Other comprehensive income items which will be reclassified subsequently to profit or loss | -413,368,849.78 | -71,150,692.64 |
| 1. Shares of other comprehensive income of the investee accounted for using equity method that will be reclassified to profit or loss | 436.41 | -12,650.40 |
| 2. Changes in fair value of other debt investments | ||
| 3. Shares of financial assets reclassified to other comprehensive income | ||
| 4. Provision for credit impairment of other debt investments | ||
| 5. Effective portion of gains or losses on hedging instruments in a cash flow hedge | ||
| 6. Translation differences on translation of foreign currency financial statements | -413,369,286.19 | -71,138,042.24 |
| 7. Others | ||
| Net other comprehensive income, net of tax, attributable to minority shareholders | -3,914,184.06 | 1,835,802.85 |
| VII. Total comprehensive income | 2,178,088,887.23 | 857,934,732.19 |
| Attributable to the shareholders of the Company | 2,260,758,771.95 | 924,764,456.63 |
| Attributable to minority shareholders | -82,669,884.72 | -66,829,724.44 |
| VIII. Earnings per share | ||
| (I) Basic earnings per share | 0.79 | 0.32 |
| (II) Diluted earnings per share | 0.78 | 0.32 |
In case of combination of enterprises under common control during current period, the net profit before combination realized byacquiree is RMB 0.00. The net profit realized by the acquiree in the previous period is RMB 0.00.Legal representative: Jiang Bin Principal in charge of accounting: Li Yongzhi Head of the accounting department: Li Yongzhi
4. Parent company income statement
Unit: RMB
| Item | 2024 | 2023 |
| I. Revenue | 24,841,538,078.97 | 28,761,890,617.55 |
| Less: Cost of sales | 19,566,465,346.45 | 24,341,394,089.94 |
| Taxes and surcharges | 162,511,630.34 | 124,703,875.55 |
| Selling expenses | 350,187,302.71 | 388,403,329.76 |
| General and administrative expenses | 1,511,219,517.41 | 1,688,533,595.04 |
| Research and development expenses | 2,527,786,668.27 | 2,298,748,673.83 |
| Financial expenses | -87,231,349.63 | 262,664,628.13 |
| Including: Interest expenses | 270,389,421.59 | 339,586,343.34 |
| Interest income | 223,496,061.01 | 135,037,374.40 |
| Add: Other income | 121,748,106.62 | 62,665,388.48 |
| Investment income ("-" for loss) | 468,650,734.00 | 2,299,697,147.05 |
| Including: Investment income from associates and joint ventures | -14,691,875.13 | -23,010,602.53 |
| Income recognized at the termination of financial assets measured at amortized cost ("-" for loss) | -313,191.66 | |
| Net exposure hedging income ("-" for loss) | ||
| Gains on changes in fair value ("-" for loss) | 219,932,515.71 | -81,515,891.85 |
| Credit impairment losses ("-" for loss) | -3,642,953.38 | 4,387,353.96 |
| Asset impairment losses ("-" for loss) | -249,965,077.81 | -71,056,486.81 |
| Gains on disposal of assets ("-" for loss) | 40,819,273.41 | 245,214,426.66 |
| II. Operating Profit ("-" for Loss) | 1,408,141,561.97 | 2,116,834,362.79 |
| Add: Non-operating income | 8,339,193.19 | 20,530,603.91 |
| Less: Non-operating expenses | 72,055,682.20 | 108,467,674.06 |
| III. Total Profit ("-" for Total Losses) | 1,344,425,072.96 | 2,028,897,292.64 |
| Less: Income tax expenses | -59,876,597.51 | -156,407,531.88 |
| IV. Net profit ("-" for Net Loss) | 1,404,301,670.47 | 2,185,304,824.52 |
| (I) Net profit from continuing operations ("-" for net loss) | 1,404,301,670.47 | 2,185,304,824.52 |
| (II) Net profit from discontinued operations ("-" for net loss) | ||
| V. Other comprehensive income, net of tax | 436.41 | -12,650.40 |
| (I) Other comprehensive income items which will not be reclassified subsequently to profit or loss | ||
| 1. Changes in remeasurement of defined benefit plan | ||
| 2. Shares of other comprehensive income of the investee accounted for using equity method that will not be subsequently reclassified to profit or loss | ||
| 3. Changes in fair value of investments in other equity instruments | ||
| 4. Changes in fair value attributable to change in the credit risk of financial liability designated at FVPL | ||
| 5. Others | ||
| (II) Other comprehensive income items which will be reclassified subsequently to profit or loss | 436.41 | -12,650.40 |
| 1. Shares of other comprehensive income of the investee accounted for using equity method that will be reclassified to profit or loss | 436.41 | -12,650.40 |
| Item | 2024 | 2023 |
| 2. Changes in fair value of other debt investments | ||
| 3. Shares of financial assets reclassified to other comprehensive income | ||
| 4. Provision for credit impairment of other debt investments | ||
| 5. Effective portion of gains or losses on hedging instruments in a cash flow hedge | ||
| 6. Translation differences on translation of foreign currency financial statements | ||
| 7. Others | ||
| VI. Total comprehensive income | 1,404,302,106.88 | 2,185,292,174.12 |
| VII. Earnings per share | ||
| (I) Basic earnings per share | ||
| (II) Diluted earnings per share |
5. Consolidated statement of cash flow
Unit: RMB
| Item | 2024 | 2023 |
| I. Cash flows from operating activities: | ||
| Cash received from sale of goods or rendering of services | 83,445,136,080.81 | 75,929,642,962.84 |
| Net increase in borrowings from banks and other financial institutions | ||
| Net increase in borrowing from central bank | ||
| Net increase in capital borrowed from other financial institutions | ||
| Cash receipts from original insurance contract premium | ||
| Net cash received from reinsurance business | ||
| Net increase in deposits and investments from policy holders | ||
| Cash received from for interests, fees and commissions | ||
| Net increase in borrowing funds | ||
| Net increase in repurchase business funds | ||
| Net cash received from securities trading brokerage | ||
| Refund of taxes and surcharges | 1,549,152,951.97 | 2,261,673,960.35 |
| Cash received relating to other operating activities | 2,067,483,062.97 | 1,975,191,545.77 |
| Sub-total of cash inflow from operating activities | 87,061,772,095.75 | 80,166,508,468.96 |
| Cash paid for goods and services | 67,988,438,849.28 | 59,071,783,992.11 |
| Net increase in loans and advances to clients | ||
| Net increase in deposits with central bank and other financial institutions | ||
| Payments of claims for original insurance |
| Item | 2024 | 2023 |
| contracts | ||
| Net increase in lending funds | ||
| Cash paid for interests, fees and commissions | ||
| Cash payments of policy dividend | ||
| Cash paid to and on behalf of employees | 8,726,656,239.35 | 8,776,104,462.25 |
| Payments of taxes and surcharges | 647,185,473.86 | 919,231,302.84 |
| Cash paid relating to other operating activities | 3,499,039,351.42 | 3,247,500,468.38 |
| Sub-total of cash outflow from operating activities | 80,861,319,913.91 | 72,014,620,225.58 |
| Net cash flow from operating activities | 6,200,452,181.84 | 8,151,888,243.38 |
| II. Cash flows from investing activities | ||
| Cash received from disposal of investments | 14,866,628,432.41 | 4,634,462,748.31 |
| Cash received from returns on investments | 77,023,062.40 | 60,793,940.52 |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 1,322,049,989.09 | 386,789,592.09 |
| Net cash received from disposal of subsidiaries and other business units | 2,205,000.00 | |
| Cash received relating to other investing activities | 28,150,465.60 | 110,692,623.30 |
| Sub-total of cash inflow from investing activities | 16,293,851,949.50 | 5,194,943,904.22 |
| Cash paid to acquire fixed assets, intangible assets and other long-term assets | 3,634,412,755.75 | 6,949,791,208.28 |
| Cash paid to acquire investments | 17,893,371,118.79 | 5,298,074,936.07 |
| Net increase in pledged loans | ||
| Net cash paid to acquire subsidiaries and other business units | 457,663,281.50 | |
| Cash paid relating to other investing activities | 12,000,000.00 | 72,806,657.72 |
| Sub-total of cash outflow from investing activities | 21,539,783,874.54 | 12,778,336,083.57 |
| Net cash flow from investing activities | -5,245,931,925.04 | -7,583,392,179.35 |
| III. Cash flows from financing activities | ||
| Cash received from capital contributions | 1,260,159,248.49 | |
| Including: Cash received from capital contributions by minority shareholders of subsidiaries | ||
| Cash received from borrowings | 27,855,466,967.04 | 25,573,744,456.01 |
| Cash received relating to other financing activities | 4,595,841,584.06 | 3,504,945,799.09 |
| Sub-total of cash inflow from financing activities | 33,711,467,799.59 | 29,078,690,255.10 |
| Cash repayments of borrowings | 26,975,242,473.72 | 23,316,046,943.91 |
| Cash payments for distribution of dividends, profits, or cash payments for interest expenses | 1,366,966,690.52 | 836,849,923.30 |
| Including: Cash payments for dividends and profits to minority shareholders of the subsidiaries | ||
| Cash payments relating to other financing activities | 7,659,494,161.52 | 3,151,308,744.66 |
| Sub-total of cash outflow from financing activities | 36,001,703,325.76 | 27,304,205,611.87 |
| Item | 2024 | 2023 |
| Net cash flow from financing activities | -2,290,235,526.17 | 1,774,484,643.23 |
| IV. Effect of foreign exchange rate changes on cash and cash equivalents | -26,120,277.46 | 9,752,465.71 |
| V. Net Increase in cash and cash equivalents | -1,361,835,546.83 | 2,352,733,172.97 |
| Add: Cash and cash equivalents at beginning of year | 13,152,726,641.78 | 10,799,993,468.81 |
| VI. Cash and cash equivalents at end of year | 11,790,891,094.95 | 13,152,726,641.78 |
6. Parent company cash flow statement
Unit: RMB
| Item | 2024 | 2023 |
| I. Cash flows from operating activities: | ||
| Cash received from sale of goods or rendering of services | 25,977,349,092.81 | 31,268,693,118.12 |
| Refund of taxes and surcharges | 638,104,683.87 | 965,640,380.86 |
| Cash received relating to other operating activities | 847,599,221.29 | 257,945,473.34 |
| Sub-total of cash inflow from operating activities | 27,463,052,997.97 | 32,492,278,972.32 |
| Cash paid for goods and services | 17,919,823,512.79 | 23,349,870,042.92 |
| Cash paid to and on behalf of employees | 3,443,521,502.80 | 3,681,964,108.86 |
| Payments of taxes and surcharges | 197,671,935.75 | 136,209,295.26 |
| Cash paid relating to other operating activities | 2,511,886,174.13 | 1,854,137,805.40 |
| Sub-total of cash outflow from operating activities | 24,072,903,125.47 | 29,022,181,252.44 |
| Net cash flow from operating activities | 3,390,149,872.50 | 3,470,097,719.88 |
| II. Cash flows from investing activities | ||
| Cash received from disposal of investments | 10,591,064,015.80 | 3,264,003,156.55 |
| Cash received from returns on investments | 515,857,409.47 | 2,387,913,891.50 |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 1,251,303,260.88 | 2,668,167,310.60 |
| Net cash received from disposal of subsidiaries and other business units | ||
| Cash received relating to other investing activities | 50,654,491,774.76 | 40,656,843,708.32 |
| Sub-total of cash inflow from investing activities | 63,012,716,460.91 | 48,976,928,066.97 |
| Cash paid to acquire fixed assets, intangible assets and other long-term assets | 1,228,282,383.98 | 2,957,290,194.36 |
| Cash paid to acquire investments | 11,701,746,960.51 | 5,640,909,149.45 |
| Net cash paid to acquire subsidiaries and other business units | ||
| Cash paid relating to other investing activities | 49,442,166,694.99 | 38,368,792,587.00 |
| Sub-total of cash outflow from investing activities | 62,372,196,039.48 | 46,966,991,930.81 |
| Net cash flow from investing activities | 640,520,421.43 | 2,009,936,136.16 |
| III. Cash flows from financing activities | ||
| Cash received from capital contributions | 1,260,159,248.49 | |
| Cash received from borrowings | 8,973,754,900.01 | 16,889,444,099.91 |
| Item | 2024 | 2023 |
| Cash received relating to other financing activities | 4,279,087,094.57 | 10,860,975,443.26 |
| Sub-total of cash inflow from financing activities | 14,513,001,243.07 | 27,750,419,543.17 |
| Cash repayments of borrowings | 12,328,502,300.00 | 16,265,467,720.00 |
| Cash payments for distribution of dividends, profits, or cash payments for interest expenses | 1,121,029,942.79 | 680,133,116.84 |
| Cash payments relating to other financing activities | 5,383,650,336.62 | 11,831,691,300.83 |
| Sub-total of cash outflow from financing activities | 18,833,182,579.41 | 28,777,292,137.67 |
| Net cash flow from financing activities | -4,320,181,336.34 | -1,026,872,594.50 |
| IV. Effect of foreign exchange rate changes on cash and cash equivalents | -7,417,097.98 | 4,961,350.31 |
| V. Net Increase in cash and cash equivalents | -296,928,140.39 | 4,458,122,611.85 |
| Add: Cash and cash equivalents at beginning of year | 6,408,538,205.30 | 1,950,415,593.45 |
| VI. Cash and cash equivalents at end of year | 6,111,610,064.91 | 6,408,538,205.30 |
7. Consolidated statement of changes in owner's equity
Amount of current period
Unit: RMB
| Item | 2024 | ||||||||||||||
| Shareholders' equity attributable to the Company | Minority interests | Total shareholders' equity | |||||||||||||
| Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserve | General risk reserve | Undistributed profits | Other | Sub-total | |||||
| Preference Shares | Perpetual bonds | Other | |||||||||||||
| I. Balance at December 31, 2023 | 3,420,403,200.00 | 8,998,372,370.61 | 278,530,746.47 | -40,934,939.89 | 1,551,313.67 | 1,665,066,603.96 | 6,081,200.00 | 17,038,581,549.12 | 30,810,590,551.00 | 716,973,764.66 | 31,527,564,315.66 | ||||
| Add: Changes in accounting policy | |||||||||||||||
| Corrections of errors in previous period | |||||||||||||||
| Other | |||||||||||||||
| II. Balance at January 1, 2024 | 3,420,403,200.00 | 8,998,372,370.61 | 278,530,746.47 | -40,934,939.89 | 1,551,313.67 | 1,665,066,603.96 | 6,081,200.00 | 17,038,581,549.12 | 30,810,590,551.00 | 716,973,764.66 | 31,527,564,315.66 | ||||
| III. Changes in Current Period ("-" for Decrease) | 65,941,544.00 | 1,294,814,893.98 | 396,287,436.93 | -404,286,054.11 | 1,461,044.26 | 140,430,167.05 | 1,673,671,133.48 | 2,375,745,291.73 | 144,767,101.72 | 2,520,512,393.45 | |||||
| (I) Total | - | 2,665,044,826 | 2,260,758,771 | - | 2,178,088,887 | ||||||||||
| Item | 2024 | ||||||||||||||
| Shareholders' equity attributable to the Company | Minority interests | Total shareholders' equity | |||||||||||||
| Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserve | General risk reserve | Undistributed profits | Other | Sub-total | |||||
| Preference Shares | Perpetual bonds | Other | |||||||||||||
| comprehensive income | 404,286,054.11 | .06 | .95 | 82,669,884.72 | .23 | ||||||||||
| (II) Capital invested and reduced by owners | 65,941,544.00 | 1,293,788,842.12 | 396,287,436.93 | 963,442,949.19 | 227,436,986.44 | 1,190,879,935.63 | |||||||||
| 1. Common shares invested by owners | 65,941,544.00 | 883,874,188.64 | 396,287,436.93 | 553,528,295.71 | 206,250,686.97 | 759,778,982.68 | |||||||||
| 2. Capital contributed from other equity instrument holders | |||||||||||||||
| 3. Amounts of share-based payments recognized in shareholders' equity | 331,566,990.51 | 331,566,990.51 | 21,186,299.47 | 352,753,289.98 | |||||||||||
| 4. Other | 78,347,662.97 | 78,347,662.97 | 78,347,662.97 | ||||||||||||
| (III) Profit | 140,430,167. | - | - | - | |||||||||||
| Item | 2024 | ||||||||||||||
| Shareholders' equity attributable to the Company | Minority interests | Total shareholders' equity | |||||||||||||
| Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserve | General risk reserve | Undistributed profits | Other | Sub-total | |||||
| Preference Shares | Perpetual bonds | Other | |||||||||||||
| distribution | 05 | 990,892,560.50 | 850,462,393.45 | 850,462,393.45 | |||||||||||
| 1. Appropriation of surplus reserve | 140,430,167.05 | -140,430,167.05 | |||||||||||||
| 2. Appropriation of general risk reserve | |||||||||||||||
| 3. Dividends to owners or shareholders | -850,462,393.45 | -850,462,393.45 | -850,462,393.45 | ||||||||||||
| 4. Other | |||||||||||||||
| (IV) Internal carry-over of shareholders' equity | -481,132.08 | -481,132.08 | -481,132.08 | ||||||||||||
| 1. Capital surplus converted | |||||||||||||||
| Item | 2024 | ||||||||||||||
| Shareholders' equity attributable to the Company | Minority interests | Total shareholders' equity | |||||||||||||
| Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserve | General risk reserve | Undistributed profits | Other | Sub-total | |||||
| Preference Shares | Perpetual bonds | Other | |||||||||||||
| into capital (or share capital) | |||||||||||||||
| 2. Surplus reserve converted into capital (or share capital) | |||||||||||||||
| 3. Surplus reserve for making up losses | |||||||||||||||
| 4. Carry-over undistributed profits from defined benefit plan changes | |||||||||||||||
| 5. Carry-over undistributed profits from other comprehensive | -481,132.08 | -481,132.08 | -481,132.08 | ||||||||||||
| Item | 2024 | ||||||||||||||
| Shareholders' equity attributable to the Company | Minority interests | Total shareholders' equity | |||||||||||||
| Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserve | General risk reserve | Undistributed profits | Other | Sub-total | |||||
| Preference Shares | Perpetual bonds | Other | |||||||||||||
| income | |||||||||||||||
| 6. Other | |||||||||||||||
| (V) Specific reserve | 1,461,044.26 | 1,461,044.26 | 1,461,044.26 | ||||||||||||
| 1. Withdrawal in current period | 8,193,801.30 | 8,193,801.30 | 8,193,801.30 | ||||||||||||
| 2. Use in current period | -6,732,757.04 | -6,732,757.04 | -6,732,757.04 | ||||||||||||
| (VI) Other | 1,026,051.86 | 1,026,051.86 | 1,026,051.86 | ||||||||||||
| IV. Balance at December 31, 2024 | 3,486,344,744.00 | 10,293,187,264.59 | 674,818,183.40 | -445,220,994.00 | 3,012,357.93 | 1,805,496,771.01 | 6,081,200.00 | 18,712,252,682.60 | 33,186,335,842.73 | 861,740,866.38 | 34,048,076,709.11 | ||||
Amount of previous period
Unit: RMB
| Item | 2023 | ||||||||||||||
| Shareholders' equity attributable to the Company | Minority interests | Total shareholders' equity | |||||||||||||
| Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserve | General risk reserve | Undistributed profits | Other | Sub-total | |||||
| Preference shares | Perpetual bonds | Other | |||||||||||||
| I. Balance at December 31, 2022 | 3,420,403,200.00 | 10,280,659,251.03 | 2,291,973,146.75 | 122,377,334.36 | 1,446,536,121.51 | 6,081,200.00 | 16,507,798,239.34 | 29,491,882,199.49 | 765,942,754.69 | 30,257,824,954.18 | |||||
| Add: Changes in accounting policy | 1,753,356.25 | 1,753,356.25 | 23,573.67 | 1,776,929.92 | |||||||||||
| Corrections of errors in previous period | |||||||||||||||
| Other | |||||||||||||||
| II. Balance at January 1, 2023 | 3,420,403,200.00 | 10,280,659,251.03 | 2,291,973,146.75 | 122,377,334.36 | 1,446,536,121.51 | 6,081,200.00 | 16,509,551,595.59 | 29,493,635,555.74 | 765,966,328.36 | 30,259,601,884.10 | |||||
| III. Changes in Current Period ("-" for Decrease) | -1,282,286,880.42 | -2,013,442,400.28 | -163,312,274.25 | 1,551,313.67 | 218,530,482.45 | 529,029,953.53 | 1,316,954,995.26 | -48,992,563.70 | 1,267,962,431.56 | ||||||
| (I) Total comprehensive | -163,312,274.25 | 1,088,076,730.88 | 924,764,456.63 | -66,829,724.44 | 857,934,732.19 | ||||||||||
| Item | 2023 | ||||||||||||||
| Shareholders' equity attributable to the Company | Minority interests | Total shareholders' equity | |||||||||||||
| Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserve | General risk reserve | Undistributed profits | Other | Sub-total | |||||
| Preference shares | Perpetual bonds | Other | |||||||||||||
| income | |||||||||||||||
| (II) Capital invested and reduced by owners | -1,290,364,092.98 | -2,013,442,400.28 | 723,078,307.30 | 16,911,244.29 | 739,989,551.59 | ||||||||||
| 1. Common shares invested by owners | 184,101,356.18 | 177,655,190.77 | 6,446,165.41 | 8,649,522.87 | 15,095,688.28 | ||||||||||
| 2. Capital contributed from other equity instrument holders | |||||||||||||||
| 3. Amounts of share-based payments recognized in shareholders' equity | 172,286,003.87 | 172,286,003.87 | 8,159,660.58 | 180,445,664.45 | |||||||||||
| 4. Other | -1,646,751,453.03 | -2,191,097,591.05 | 544,346,138.02 | 102,060.84 | 544,448,198.86 | ||||||||||
| Item | 2023 | ||||||||||||||
| Shareholders' equity attributable to the Company | Minority interests | Total shareholders' equity | |||||||||||||
| Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserve | General risk reserve | Undistributed profits | Other | Sub-total | |||||
| Preference shares | Perpetual bonds | Other | |||||||||||||
| (III) Profit distribution | 218,530,482.45 | -559,046,777.35 | -340,516,294.90 | -340,516,294.90 | |||||||||||
| 1. Appropriation of surplus reserve | 218,530,482.45 | -218,530,482.45 | |||||||||||||
| 2. Appropriation of general risk reserve | |||||||||||||||
| 3. Dividends to owners or shareholders | -340,516,294.90 | -340,516,294.90 | -340,516,294.90 | ||||||||||||
| 4. Other | |||||||||||||||
| (IV) Internal carry-over of shareholders' equity | |||||||||||||||
| 1. Capital | |||||||||||||||
| Item | 2023 | ||||||||||||||
| Shareholders' equity attributable to the Company | Minority interests | Total shareholders' equity | |||||||||||||
| Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserve | General risk reserve | Undistributed profits | Other | Sub-total | |||||
| Preference shares | Perpetual bonds | Other | |||||||||||||
| surplus converted into capital (or share capital) | |||||||||||||||
| 2. Surplus reserve converted into capital (or share capital) | |||||||||||||||
| 3. Surplus reserve for making up losses | |||||||||||||||
| 4. Carry-over undistributed profits from defined benefit plan changes | |||||||||||||||
| 5. Carry-over undistributed profits | |||||||||||||||
| Item | 2023 | ||||||||||||||
| Shareholders' equity attributable to the Company | Minority interests | Total shareholders' equity | |||||||||||||
| Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserve | General risk reserve | Undistributed profits | Other | Sub-total | |||||
| Preference shares | Perpetual bonds | Other | |||||||||||||
| from other comprehensive income | |||||||||||||||
| 6. Other | |||||||||||||||
| (V) Specific reserve | 1,551,313.67 | 1,551,313.67 | 1,551,313.67 | ||||||||||||
| 1. Withdrawal in current period | 7,551,472.89 | 7,551,472.89 | 7,551,472.89 | ||||||||||||
| 2. Use in current period | -6,000,159.22 | -6,000,159.22 | -6,000,159.22 | ||||||||||||
| (VI) Other | 8,077,212.56 | 8,077,212.56 | 925,916.45 | 9,003,129.01 | |||||||||||
| IV. Balance at December 31, 2023 | 3,420,403,200.00 | 8,998,372,370.61 | 278,530,746.47 | -40,934,939.89 | 1,551,313.67 | 1,665,066,603.96 | 6,081,200.00 | 17,038,581,549.12 | 30,810,590,551.00 | 716,973,764.66 | 31,527,564,315.66 | ||||
8. Parent company statement of changes in owner's equity
Amount of current period
Unit: RMB
| Item | 2024 | |||||||||||
| Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserve | Undistributed profits | Other | Total shareholders' equity | |||
| Preference shares | Perpetual bonds | Other | ||||||||||
| I. Balance at December 31, 2023 | 3,420,403,200.00 | 6,909,206,304.38 | 278,530,746.47 | -12,650.40 | 1,665,063,821.56 | 11,036,440,853.38 | 22,752,570,782.45 | |||||
| Add: Changes in accounting policy | ||||||||||||
| Corrections of errors in previous period | ||||||||||||
| Other | ||||||||||||
| II. Balance at January 1, 2024 | 3,420,403,200.00 | 6,909,206,304.38 | 278,530,746.47 | -12,650.40 | 1,665,063,821.56 | 11,036,440,853.38 | 22,752,570,782.45 | |||||
| III. Changes in Current Period ("-" for Decrease) | 65,941,544.00 | 1,433,649,790.36 | 396,287,436.93 | 436.41 | 140,430,167.05 | 413,409,109.97 | 1,657,143,610.86 | |||||
| (I) Total comprehensive income | 436.41 | 1,404,301,670.47 | 1,404,302,106.88 | |||||||||
| (II) Capital invested and reduced by owners | 65,941,544.00 | 1,432,623,738.50 | 396,287,436.93 | 1,102,277,845.57 | ||||||||
| 1. Common shares invested by owners | 65,941,544.00 | 1,093,342,148.79 | 396,287,436.93 | 762,996,255.86 | ||||||||
| Item | 2024 | |||||||||||
| Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserve | Undistributed profits | Other | Total shareholders' equity | |||
| Preference shares | Perpetual bonds | Other | ||||||||||
| 2. Capital contributed from other equity instrument holders | ||||||||||||
| 3. Amounts of share-based payments recognized in shareholders' equity | 260,933,926.74 | 260,933,926.74 | ||||||||||
| 4. Other | 78,347,662.97 | 78,347,662.97 | ||||||||||
| (III) Profit distribution | 140,430,167.05 | -990,892,560.50 | -850,462,393.45 | |||||||||
| 1. Appropriation of surplus reserve | 140,430,167.05 | -140,430,167.05 | ||||||||||
| 2. Dividends to owners or shareholders | -850,462,393.45 | -850,462,393.45 | ||||||||||
| 3. Other | ||||||||||||
| (IV) Internal carry-over of shareholders' equity | ||||||||||||
| 1. Capital surplus converted into | ||||||||||||
| Item | 2024 | |||||||||||
| Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserve | Undistributed profits | Other | Total shareholders' equity | |||
| Preference shares | Perpetual bonds | Other | ||||||||||
| capital (or share capital) | ||||||||||||
| 2. Surplus reserve converted into capital (or share capital) | ||||||||||||
| 3. Surplus reserve for making up losses | ||||||||||||
| 4. Carry-over undistributed profits from defined benefit plan changes | ||||||||||||
| 5. Carry-over undistributed profits from other comprehensive income | ||||||||||||
| 6. Other | ||||||||||||
| (V) Specific reserve | ||||||||||||
| 1. Withdrawal in current period | 4,406,305.64 | 4,406,305.64 | ||||||||||
| 2. Use in current period | -4,406,305.64 | -4,406,305.64 | ||||||||||
| Item | 2024 | |||||||||||
| Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserve | Undistributed profits | Other | Total shareholders' equity | |||
| Preference shares | Perpetual bonds | Other | ||||||||||
| (VI) Other | 1,026,051.86 | 1,026,051.86 | ||||||||||
| IV. Balance at December 31, 2024 | 3,486,344,744.00 | 8,342,856,094.74 | 674,818,183.40 | -12,213.99 | 1,805,493,988.61 | 11,449,849,963.35 | 24,409,714,393.31 | |||||
Amount of previous period
Unit: RMB
| Item | 2023 | |||||||||||
| Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserve | Undistributed profits | Other | Total shareholders' equity | |||
| Preference shares | Perpetual bonds | Other | ||||||||||
| I. Balance at December 31, 2022 | 3,420,403,200.00 | 8,421,030,014.05 | 2,291,973,146.75 | 1,446,533,339.11 | 9,410,101,500.47 | 20,406,094,906.88 | ||||||
| Add: Changes in accounting policy | 81,305.74 | 81,305.74 | ||||||||||
| Corrections of errors in previous period | ||||||||||||
| Other | ||||||||||||
| II. Balance at January 1, 2023 | 3,420,403,200.00 | 8,421,030,014.05 | 2,291,973,146.75 | 1,446,533,339.11 | 9,410,182,806.21 | 20,406,176,212.62 | ||||||
| III. Changes in Current Period ("-" for Decrease) | -1,511,823,709.67 | -2,013,442,400.28 | -12,650.40 | 218,530,482.45 | 1,626,258,047.17 | 2,346,394,569.83 | ||||||
| Item | 2023 | |||||||||||
| Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserve | Undistributed profits | Other | Total shareholders' equity | |||
| Preference shares | Perpetual bonds | Other | ||||||||||
| (I) Total comprehensive income | -12,650.40 | 2,185,304,824.52 | 2,185,292,174.12 | |||||||||
| (II) Capital invested and reduced by owners | -1,513,757,170.83 | -2,013,442,400.28 | 499,685,229.45 | |||||||||
| 1. Common shares invested by owners | 177,655,190.77 | -177,655,190.77 | ||||||||||
| 2. Capital contributed from other equity instrument holders | ||||||||||||
| 3. Amounts of share-based payments recognized in shareholders' equity | 132,994,282.20 | 132,994,282.20 | ||||||||||
| 4. Other | -1,646,751,453.03 | -2,191,097,591.05 | 544,346,138.02 | |||||||||
| (III) Profit distribution | 218,530,482.45 | -559,046,777.35 | -340,516,294.90 | |||||||||
| 1. Appropriation of surplus | 218,530,482.45 | -218,530,482.45 | ||||||||||
| Item | 2023 | |||||||||||
| Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserve | Undistributed profits | Other | Total shareholders' equity | |||
| Preference shares | Perpetual bonds | Other | ||||||||||
| reserve | ||||||||||||
| 2. Dividends to owners or shareholders | -340,516,294.90 | -340,516,294.90 | ||||||||||
| 3. Other | ||||||||||||
| (IV) Internal carry-over of shareholders' equity | ||||||||||||
| 1. Capital reserve converted into capital (or share capital) | ||||||||||||
| 2. Surplus reserve converted into capital (or share capital) | ||||||||||||
| 3. Surplus reserve for making up losses | ||||||||||||
| 4. Carry-over undistributed profits from defined benefit plan changes | ||||||||||||
| Item | 2023 | |||||||||||
| Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserve | Undistributed profits | Other | Total shareholders' equity | |||
| Preference shares | Perpetual bonds | Other | ||||||||||
| 5. Carry-over undistributed profits from other comprehensive income | ||||||||||||
| 6. Other | ||||||||||||
| (V) Specific reserve | ||||||||||||
| 1. Withdrawal in current period | 4,789,872.64 | 4,789,872.64 | ||||||||||
| 2. Use in current period | -4,789,872.64 | -4,789,872.64 | ||||||||||
| (VI) Other | 1,933,461.16 | 1,933,461.16 | ||||||||||
| IV. Balance at December 31, 2023 | 3,420,403,200.00 | 6,909,206,304.38 | 278,530,746.47 | -12,650.40 | 1,665,063,821.56 | 11,036,440,853.38 | 22,752,570,782.45 | |||||
III. Company ProfileGoertek Inc. (hereinafter referred to as ''the Company'' or ''Goertek'') was established on July 27, 2007, through an overall change ofWeiFang IEA Electro-Acoustic Co., Ltd.As approved by the document of China Securities Regulatory Commission [2008] No. 613, the principal undertaker CITIC SecuritiesCo., Ltd. issued 30 million common shares (Class A shares) through offline inquiry and placement in combination with onlinesubscription, pricing, and issue, at the price of RMB 18.78 per share. The stocks of the Company were officially listed and traded onthe Shenzhen Stock Exchange on May 22, 2008.As of December 31, 2024, the registered capital is RMB 3,417,134,589, and the total number of shares issued by the Company is3,486,344,744 shares.The registered address of the Company’s headquarters: 268 Dongfang Road, Weifang Hi-Tech Industrial Development Zone.The main business of the Company and its subsidiaries (collectively referred to as the "Group") is categorized into the industry of themanufacturing of computers, communication, and other electronic equipment, and is divided into three segments including precisioncomponents business, smart audio device business, and smart hardware business. The Company operates mainly in consumerelectronics, automotive electronics, and other industries, with the main products including acoustics, optics, microelectronics, structuralcomponents, and other precision components, as well as smart hardware products such as Virtual Reality (VR)/Mixed Reality(MR)/Augmented Reality (AR), TWS, smart wearable devices, gaming console and accessories, and smart home devices.These financial statements have been approved by the Board of Directors of the Company on March 26, 2025.IV. Basis for Preparing the Financial Statement
1. Basis for the preparation
The Group has prepared the financial statements on a going concern basis, based on the actual transactions and matters in accordancewith the Accounting Standards for Business Enterprises - Basic Standards (issued by Order No. 33 of the Ministry of Finance andamended by Order No. 76 of the Ministry of Finance) issued by the Ministry of Finance, 42 specific accounting standards, applicationguidelines of accounting standards for business enterprises, explanations on the accounting standards for business enterprises and otherrelated regulations (hereinafter collectively referred to as "Accounting Standards for Business Enterprises") issued and amended on orafter February 15, 2006, and Preparation Rules for Information Disclosure by Companies Offering Securities to the Public No. 15 -General Provisions on Financial Reports (2023 Revision) issued by CSRC.According to relevant provisions in the Accounting Standards for Business Enterprises, the accounting calculation of the Group wason the accrual basis. These financial statements are prepared on the basis of historical cost, except for certain financial instruments. Incase of asset impairment, the appropriate impairment provision shall be accrued according to relevant regulations.
2. Continue as a going concern
The Company evaluated its ability to continue as a going concern for 12 months after the end of the reporting period, without mattersor circumstances causing significant doubt over the ability to continue as a going concern. Therefore, these financial statements wereprepared on a going concern basis.V. Significant Accounting Policies and Accounting EstimatesNotes to specific accounting policies and accounting estimates:
The Group has formulated several specific accounting policies and accounting estimates with respect to revenue recognition, researchand development expense, and other transactions and matters, according to the provisions of relevant Accounting Standards forBusiness Enterprises on the basis of the actual production and operation characteristics. For details, please refer to the descriptions in
30. "Revenue" and 23. "Intangible assets" (2) of Note V. For explanation on the major accounting judgments and estimates made bythe management, please refer to 36. "Other significant accounting policies and accounting estimates" of Note V.
1. Statement of compliance with Accounting Standards for Business Enterprises
The financial statements have been prepared by the Group in compliance with the requirements of the Accounting Standards forBusiness Enterprises, and give a true and complete view of the financial status of the Company and the Group as at December 31, 2024,as well as the business performance, and cash flows and other relevant information for the year 2024. In addition, the financialstatements of the Company and the Group comply in all material aspects with the requirements concerning disclosure of the financialstatements and the notes specified in Preparation Rules for Information Disclosure by Companies Offering Securities to the Public No.15 - General Provisions on Financial Reports (2023 Revision) by CSRC.
2. Accounting period
The accounting period of the Group is divided by annual accounting period and interim accounting period. Interim accounting periodmeans a reporting period that is shorter than a complete accounting year. The Company adopts the calendar year as its accounting year,namely January 1 to December 31 of each year.
3. Business cycle
The normal business cycle means the period from the Group's purchase of the assets for processing to realization of cash or cashequivalents. The Group takes 12 months as a business cycle and adopts the business cycle as liquidity classification standard for assetsand liabilities.
4. Functional currency
RMB is the currency in the main economic environment in which the Company and its domestic subsidiaries are operated, and theCompany and its domestic subsidiaries take RMB as the functional currency. Goertek (Hong Kong) Co., Limited, Goertek Technology(Hong Kong) Co., Limited, Goertek Microelectronics (Hong Kong) Co., Limited, OPTIMAS CAPITAL PARTNERS FUND LP,Goertek Microelectronics Holdings Co., Ltd., Goertek Optical Technology (Hong Kong) Holdings Co., Limited, Goertek OpticalTechnology (Hong Kong) Co., Limited, Goermicro Technology Development Company Limited, and Goertek Singapore Pte. Ltd.take USD as their functional currency, and all other overseas subsidiaries of the Company take the lawful currency of the country orregion where their registered addresses are located as their functional currency. The currency adopted by the Group in preparing thesefinancial statements is RMB.
5. Determination method and selection basis of importance standards
? Applicable ? Not applicable
| Item | Importance standards |
| Significant provision for bad debts on an individual basis | The amount of single provision accounts for more than 10% of the total amount of bad debt provisions for various receivables and is more than RMB 10 million |
| Significant prepayments with an aging of more than one year |
Prepayments with an aging of more than one year account for more than 10% of the totalprepayments and the amount is more than RMB 10 million
| Significant construction in progress | Singe budget greater than RMB 100 million and closing balance greater than RMB 50 million |
| Significant goodwill | The individual amount accounts for more than 10% of the total goodwill and is greater than RMB 100 million |
| Significant accounts payable aged over one year | Accounts payable with an aging of more than one year account for more than 10% of the total accounts payable and the amount is more than RMB 10 million |
| Significant contract liabilities aged over one year | Contract liabilities with an aging of more than one year account for more than 10% of the total contract liabilities and the amount is more than RMB 10 million |
| Significant other payables aged over one year | Other payables with an aging of more than one year account for more than 10% of the total other payables and the amount is more than RMB 10 million |
| Significant investment activities | A single investment activity accounts for more than 10% of the total cash inflow or outflow related to the investment activity received or paid, and the amount is more than RMB 500 million |
| Item | Importance standards |
| Significant capitalized R&D projects | The balance of a single capitalized R&D project accounts for 10% of the total development expense and is greater than RMB 50 million |
| Significant non-wholly-owned subsidiaries | The total assets or revenue accounts for more than 10% of those of the Group |
| Significant joint ventures and associated enterprises | The value of a single investment accounts for more than 2% of the total assets of the Group and the amount is more than RMB 500 million. |
6. Accounting treatments for business combination of enterprises under and not under common controlBusiness combination means the transaction or matter in which two or more separate enterprises are combined into one reporting entity.Business combination is divided into business combination of enterprises under common control and business combination ofenterprises not under common control.
(1) Business combination of enterprises under common control
Business combination of enterprises under common control is the combination in which enterprises combined are controlled by thesame party or parties before and after the combination, and such control is not temporary. In the business combination of enterprisesunder common control, the party which acquires the control of other enterprises in the business combination is the acquirer and theother enterprises in the business combination are the acquirees. Business combination date is the date on which the acquirer actuallyacquires the control of the acquirees.The assets and liabilities acquired by the acquirers are measured on the basis of book value of acquirees on business combination date.The difference between the book value of the net assets acquired by the acquirer and the book value of the consideration paid for thecombination (or total par value of the shares issued) is adjusted to capital surplus (share capital premiums). Adjustments shall be madeto undistributed profits in the event that the capital surplus (share capital premiums) are not sufficient for write-down.Any direct costs incurred by the acquirer as a result of the business combination are recognized in the profit or loss for current periodwhen incurred.
(2) Business combination of enterprises not under common control
Business combination of enterprises not under common control is the combination in which the enterprises combined are not controlledby the same party or parties before and after the business combination. In the business combination of enterprises not under commoncontrol, the party which acquires the control of other enterprises in the business combination on the acquisition date is the acquirer andthe other enterprises in the business combination are the acquired parties. Acquisition date is the date on which the acquiring partyactually acquires the control of the acquired parties.In the business combination of enterprises not under common control, the cost of combination includes the fair value of assets paid,liabilities incurred or assumed and equity securities issued by the acquiring party in exchange for the control of the acquired parties onthe acquisition date, the audit, legal service, assessment, consulting and other intermediate fees incurred for business combination ofenterprises, and other management fees, which are recognized in the profit or loss for the current period when incurred. The costs ofthe acquiring party for issuing equity or debt securities as part of the business consideration for the business combination are includedin the initially recognized amount of these equity or debt securities. The contingent business consideration shall be included in thecombination cost at its fair value on the acquisition date, and the goodwill shall be adjusted and combined accordingly if the contingentconsideration needs to be adjusted when new or further evidences arise in connection with the circumstances existing on the acquisitiondate within 12 months after the acquisition date. The acquisition cost incurred by the acquiring party and the identifiable net assetsacquired in the business combination shall be measured at the fair value on the acquisition date. If the combination cost is higher thanthe fair value of the identifiable net assets acquired from the acquired parties on the acquisition date, the difference thereof shall berecognized as the goodwill. If the combination cost is lower than the fair value of the identifiable net assets acquired from the acquiredparties in the business combination, the fair value of the identifiable assets, liabilities and contingent liabilities as well as themeasurement of the combination cost shall be first reviewed. If upon review, the combination cost is still lower than the fair value ofthe identifiable net assets acquired from the acquired parties in the business combination, such difference shall be recognized in theprofit or loss for current period.If the deductible temporary difference acquired by the acquiring party from the acquired parties is not recognized for failure to meetthe conditions for recognition of the deferred tax assets on the acquisition date, and if new or further information is obtained within 12months after the acquisition date, showing that relevant circumstances on the acquisition date have already existed and it is expectedthat the economic benefits brought about by the deductible temporary difference of the acquiring party on the acquisition date may berealized, relevant deferred tax assets shall be recognized and the goodwill shall be reduced. If the goodwill is insufficient for write-
down, the difference will be recognized in the profit or loss for current period. In addition to the above condition, the deferred taxassets recognized in connection with the combination of enterprises shall be recognized in the profit or loss for current period.If the business combination of enterprises not under common control is realized step by step through multiple transactions, whethersuch transactions fall within a "package deal" shall be judged according to the standards for judgment of "package deal" in the Noticeby the Ministry of Finance of Issuing the Interpretation No. 5 of the Accounting Standards for Business Enterprises (Finance andAccounting [2012] No. 19) and Article 51 of the Accounting Standards for Business Enterprises No. 33 - Consolidated FinancialStatements (see 7 (2) of Note V). If they fall within "package deal", see the description in the previous paragraphs of this part and 18."Long-term equity investments" of Note V for accounting treatment. If they do not fall within "package deal", relevant accountingtreatment shall be distinguished for individual financial statements and consolidated financial statements:
In the individual financial statements, the sum of the book value of the equity investment of the acquired parties held before theacquisition date and the increased investment cost on the acquisition date shall be taken as the initial investment cost of such investment.If other comprehensive income is involved in the equity of the acquired parties held before the acquisition date, the accounting treatmentof other comprehensive income while disposing such investment, shall be conducted on the same basis as the direct disposal of relatedassets or liabilities by the acquired parties.In the consolidated financial statements, the equity of the acquired parties held before the acquisition date shall be remeasured at thefair value of such equity on the acquisition date, and the difference between the fair value and its book value shall be recognized ininvestment income in current period. If other comprehensive income is involved in the equity of the acquired parties held before theacquisition date, the accounting treatment of other comprehensive income related, shall be conducted on the same basis as the directdisposal of related assets or liabilities by the acquired parties.
7. Criteria for judging control and method for preparing the consolidated financial statement
(1) Principles for determination of the scope of consolidated financial statements
The scope of the consolidation of consolidated financial statements shall be determined on the basis of control. Control means that theGroup enjoys variable returns through its power in the invested parties and its participation in relevant activities of the invested parties,and is able to influence the amount of such returns by applying its power in the invested parties. The Company and all its subsidiariesare included in the scope of consolidation. Subsidiary means the entity controlled by the Group.The Group shall launch re-assessment, if the changes in relevant facts and circumstances that lead to changes in relevant elements ofthe above control definition occur.
(2) Method for preparing the consolidated financial statements
The Company shall include the subsidiaries into the scope of consolidation from the date when it obtains the net assets and actualcontrol over the production and operation decisions of the subsidiaries. It shall cease to do so as of the date when the actual control islost. For the disposal subsidiaries, the business performance and cash flows prior to the disposal date have been appropriately includedin the consolidated income statement and consolidated statement of cash flows. The opening balance of the consolidated balance sheetsshall not be adjusted for the subsidiaries disposed in current period. For the subsidiaries added through the combination of enterprisesnot under common control, the business performance and cash flows have been appropriately included in the consolidated incomestatement and consolidated cash flow statement after acquisition date. The opening balance and comparative figures of consolidatedfinancial statements shall not be adjusted. For the subsidiaries added during combination of enterprises under common control and thesubsidiaries under absorption combination, the business performance and cash flows, from the beginning of current period toacquisition date, have been appropriately included in consolidated income statement and consolidated cash flow statement. Thecomparison figures in the consolidated financial statements shall be adjusted at the same time.In preparing the consolidated financial statements, if the accounting policies or accounting periods of the subsidiaries are different fromthose of the Company, the financial statements of the subsidiaries shall be adjusted based on the accounting policies and accountingperiods of the Company. The individual financial statements of the subsidiaries acquired from combination of enterprises not undercommon control are adjusted based on the fair value of the identifiable net assets on the acquisition date.All the material account balances, transactions and unrealized profits within the Group shall be offset during preparation of theconsolidated financial statements.The shareholders' equity and current net profits or losses of the subsidiaries which are not owned by the Company shall be separatelylisted under the shareholders' equity and net profit in the consolidated financial statements as minority interest and minority interests.These current profits or losses of the subsidiaries which are attributable to the minority interest shall be presented as "minority interests"under the net profit of the consolidated financial statements. If the losses of the subsidiaries attributed to the minority shareholders are
more than the shareholders' equity owned by the minority shareholders in such subsidiaries at the beginning of the period, the minorityinterests shall be offset.If the control of the previous subsidiaries is lost due to disposal of some equity investments or for any other reasons, the remainingequity shall be re-measured at fair value on the date when control is lost. The difference between the sum of consideration receivedfrom disposal of equity and the fair value of the remaining equity, and the Company's share of the previous subsidiaries' net assetscalculated at the previous shareholding proportion from the acquisition date, shall be recognized in investment income in the periodwhen control is lost. Other comprehensive income related to the equity investment of the previous subsidiaries shall be conducted onthe same basis as the direct disposal of related assets or liabilities by the acquired parties when the control is lost (Except for the changecaused by the re-measurement of net liabilities or net assets of the defined benefit plan in the previous subsidiary, the remaining partshall be converted into investment income for current period). Thereafter, such remaining equity shall be subject to subsequentmeasurement according to the Accounting Standards for Business Enterprises No. 2 - Long-term Equity Investments or AccountingStandards for Business Enterprises No. 22 - Confirmation and Measurement of Financial Instruments and other relevant regulations.For details, please refer to 18. "Long-term equity investments" of Note V or 10. "Financial instruments" of Note V.If the Group disposes of the equity investment of the subsidiaries step by step through multiple transactions until it loses the controlthereof, it is necessary to determine whether such transactions fall within "a package deal". The multiple transactions shall be taken asa "package deal" for accounting treatment, if the terms, conditions, and economic impacts of the transactions undertaken to dispose ofthe equity investment of the subsidiaries meet one or more of the following conditions: ① these transactions are entered into at thesame time or with their impacts on each other considered; ② a complete business result may be achieved only when these transactionswhen taken as a whole; ③ one transaction depends on at least one of the other transactions; ④ one transaction is not economical onits own, but it is economical when considered together with other transactions. If they do not fall within a "package deal", each of themshall be subject to accounting treatment according to the principles applicable to "Partial disposal of the long-term equity investmentsin the subsidiaries without losing control" (for details, please refer to (2) ④ of 18 of Note V) and ''Loss of control of the previoussubsidiaries due to disposal of some equity investments or for any other reasons'', as appropriate. If the transactions taken to dispose ofthe equity investment in the subsidiaries until loss of control are recognized as "package deal", these transactions shall be subject toaccounting treatment as one transaction in which the subsidiaries are disposed and the control is lost. However, the difference betweenthe price for each disposal before the control is lost and share of such subsidiaries' net assets as a result of disposal of investment, shallbe recognized in other comprehensive income in the consolidated financial statements, and be included in profit or loss for the periodwhen the control is lost.
8. Criteria for determining cash and cash equivalents
Cash and cash equivalents of the Group include cash on hand, deposits available at any time for payment, and short-term (generallydue within three months from the date of purchase) and highly liquid investments which are readily convertible into known amountsof cash and subject to an insignificant risk of changes in value.
9. Foreign currency business and foreign currency statement translation
(1) Conversion method of foreign currency transaction
A foreign currency transaction of the Group is translated into the functional currency at initial recognition, using the spot exchangerate prevailing at the date of the transaction (it means, in most cases, the central parity of the foreign exchange rate announced by thePeople's Bank of China on that day; the same hereinafter). However, a foreign currency exchange transaction or other foreign currencyexchange involved transaction of the Group is translated into the functional currency using the actual exchange rate.
(2) Translation method of monetary items denominated in foreign currencies and non-monetary items denominated in foreigncurrenciesThe foreign currency monetary items on the balance sheet date are translated at the spot exchange rate on the balance sheet date, andthe exchange differences arising therefrom are included in the current profits and losses, except for the exchange difference of theprincipal and interest of foreign currency special loans related to the acquisition and construction of assets eligible for capitalization.Non-monetary items denominated in foreign currency that are measured at historical cost shall still be valued in the functional currencyand converted at the spot exchange rate as of the transaction date. Non-monetary items denominated in foreign currency that aremeasured at fair value are converted by using the exchange rate at the date when fair value is determined and the difference betweenthe converted functional currency amount and the prior amount in functional currency is recorded as profit or loss arising from a changein fair value (including exchange rate change) for the current period or other comprehensive income.
(3) Translation method of foreign currency financial statements
The foreign currency financial statements of overseas operations shall be converted into Chinese currency statements in accordancewith the following methods: The assets and liabilities items in the balance sheet are translated at the spot exchange rate on the balancesheet date; except for "undistributed profits", other items of shareholder's equity are converted at the spot exchange rate at the time ofoccurrence. Revenues and expenses in the profit statement are translated using the average exchange rates prevailing in the period ofthe transactions. Undistributed profits in the beginning of the year are the undistributed profits at the end of the prior year as translated;undistributed profits at the end of the period are calculated and presented according to the translated profit distributions; exchangedifferences from translation between translated assets and translated liabilities and equities are recognized in other comprehensiveincome as exchange differences from translation. When the Group disposes of, and loses the control over, an overseas operation,exchange differences from translation which are presented in "equity" of the balance sheet and related to the overseas operation are,all or based on the disposal proportion, transferred to the profit or loss of the period of disposal.Cash flows denominated in foreign currencies and cash flows of overseas subsidiaries are translated using the average exchange ratesprevailing in the period of the cash flows. Any impact of exchange rate changes on cash is presented as a separate adjusting item in thecash flow statement.The amount in the beginning of the year and the actual amount of the prior year are presented as translated amounts based on the prioryear's financial statements.When all the equities of the Group in an overseas operation are disposed, or the control over an overseas operation is lost for a disposalof partial equity investments or any other reason, exchange differences which are presented in "shareholder's equity/owner's equity" ofthe balance sheet, related to the overseas operation and attributable to the parent company are all transferred to the profit or loss of theperiod of disposal.If the proportion of equities in an overseas operation declines (but the control over that overseas operation is not lost) for a disposal ofpartial equity investments or any other reason, exchange differences which are related to that partial disposal are attributed to minorityinterest and not transferred to the profit or loss of the period of disposal. When the disposal of overseas operation involves a part of theequities in an associate or joint venture, exchange differences from translation which are related to the overseas operation are, basedon the disposal proportion, transferred to the profit or loss of the period of disposal.For any monetary item denominated in a foreign currency which is substantially net investment in an overseas operation, in theconsolidated financial statements, exchange differences from the exchange rate changes are recognized in other comprehensive incomeas "exchange differences from translation", and when the overseas operation is disposed, are transferred to the profit or loss of theperiod of disposal.
10. Financial instruments
A financial asset or financial liability shall be recognized when the Group becomes a party to a financial instrument contract.
(1) Classification, recognition and measurement of financial assets
Pursuant to the business model of managing financial assets and the contractual cash flow characteristics of financial assets, financialassets are classified by the Group into financial assets at amortized cost, financial assets at fair value through other comprehensiveincome, and financial assets at fair value through profit and loss.Financial assets, when initially recognized, shall be measured at fair value. For the financial assets measured at fair value through profitand loss, the related transaction costs shall be included directly into current profits and losses. For the financial assets or financialliabilities of other categories, the related transaction costs shall be included in the initially recognized amount. For the accountsreceivable or notes receivable arising from the sale of products or the provision of labor services, which do not include or considermajor financing components, the amount of consideration that the Group is expected to be entitled to is taken as the initially recognizedamount.
① Financial assets measured at amortized cost
The Group's business model for managing financial assets is aimed to collect contractual cash flow, and the contractual cash flowcharacteristics of such financial assets are consistent with the basic lending arrangement, i.e., the cash flow generated on a specific dateis only the payment of principal and interest based on the amount of outstanding principal. For such financial assets, the Group shallperform subsequent measurements at the amortized cost by effective interest method. The gains or losses arising from amortization orimpairment shall be included in current profits and losses.
② Financial assets measured at fair value with changes recorded in other comprehensive incomeThe Group's business model for managing this type of financial assets aims both to collect the contractual cash flow and to sell it, andthe characteristics of contractual cash flow of this type of financial assets shall be consistent with the basic lending arrangement. TheGroup measures these financial assets at fair value and the changes thereof shall be included in other comprehensive income, but the
impairment losses or gains, exchange gains and losses and interest income calculated by the effective interest method shall be includedin current profits and losses.Apart from that, the Group shall designate some investments in non-trading equity instruments as financial assets measured at fairvalue and the changes thereof shall be included in other comprehensive income. The Group will include the relevant dividend incomeof this type of financial assets into current profits and losses, and the changes in fair value into other comprehensive income. Upon thetermination of recognition of financial assets, the accumulated gains or losses previously included in other comprehensive income shallbe transferred out of other comprehensive income and transferred to the undistributed profits, other than being included in currentprofits and losses.
③ Financial assets measured at fair value through profit or loss
The financial assets except those classified into financial assets measured at amortized cost and financial assets at fair value throughother comprehensive income as mentioned above, are classified by the Group into those measured at fair value through profit and loss.In addition, at initial recognition, part of the financial assets can be recognized by the Group as financial assets measured at fair valuethrough profit and loss, to eliminate or significantly reduce accounting mismatch. The financial assets are subsequently measured bythe Group at fair value, and changes in fair value are included in current profits and losses.
(2) Classification, recognition and measurement of financial liabilities
At initial recognition, financial liabilities are classified into financial liabilities at fair value through profit and loss, and other financialliabilities. For the financial liabilities at fair value through profit and loss, the related transaction costs shall be included directly incurrent profits and losses. For other financial liabilities, the related transaction costs shall be included in the initially recognized amount.
① Financial liabilities measured at fair value with changes recorded in the current profits and lossesThe financial liabilities at fair value through profit and loss shall include financial liabilities held for trading (including derivativesfalling into the category of financial liabilities) and financial liabilities designated as those measured at fair value through profit or lossat initial recognition.Financial liabilities held for trading (including derivatives falling into the category of financial liabilities) shall be subsequentlymeasured at fair value. Except for hedging accounting, changes in fair value shall be included in current profits and losses.The amount of change in the fair value of a financial liability which is designated as those measured at fair value through profit or lossdue to change in the Group's own credit risks shall be included in other comprehensive income. Upon the termination of recognitionof such liability, the accumulative change in its fair value caused by the change of its own credit risk included in other comprehensiveincome is transferred to undistributed profits. The changes in its fair value shall be recorded in current gains and losses. If the treatmentof the impact on the credit risk change of the financial liabilities in the above manner will cause or expand the accounting mismatch inthe profit and loss, the Group will recognize all the gains or losses (including the changes in the Group's own credit risks) of thefinancial liabilities into current profits and losses.
② Other financial liabilities
Other financial liabilities except those caused by the transfer of financial assets that do not conform to the conditions for derecognitionor continue to relate to the transferred financial assets and financial guarantee contracts shall be classified as financial liabilitiesmeasured at amortized cost, which shall be subsequently measured at amortized cost, and the gains or losses arising from derecognitionor amortization shall be included in current profits and losses.
(3) Principle of recognition and measurement method of financial asset transfer
The financial asset shall be de-recognized if: ① The contractual right to receive cash flows of the financial asset is terminated; ② Thefinancial asset has been transferred and almost all risks and rewards in the ownership of the financial asset have been transferred to thetransferee; or ③ The financial asset has been transferred and the enterprise has neither transferred nor retained almost all risks andrewards in the ownership of the financial asset, but has waived its control over the financial asset.If the enterprise does not transfer or retain substantially all of the risks and rewards related to the ownership of a financial asset and ifthe enterprise does not waive its control over the financial asset, it shall, according to the extent of its continuous involvement in thetransferred financial asset, recognize the relevant financial asset and recognize the relevant liabilities accordingly. The extent ofinvolvement in the financial asset transferred, refers to the company's exposure to changes in the value of the financial assets.If the overall transfer of a financial asset meets the conditions for de-recognition, the difference between the carrying value of thetransferred financial asset and the sum of the transfer consideration received and the change in fair value originally recognized in othercomprehensive income will be recognized in current profits and losses.If the partial transfer of financial assets meets the conditions for derecognition, the carrying value of the transferred financial assets isapportioned between the derecognized part and the non-derecognized part according to their respective relative fair values, and thedifference between the sum of the transfer consideration received and the change in fair value originally recognized in other
comprehensive income and apportioned to the de-recognition component and the aforesaid attributed carrying value will be recognizedin current profits and losses.If a financial asset is sold with the right of recourse or an endorsement, the Group needs to determine whether almost all the risks andrewards related to the ownership of the financial asset have been transferred. If all the risks and rewards related to the ownership of thefinancial asset have been transferred to the transferee, the Group shall de-recognize the financial asset; If all the risks and rewardsrelated to the ownership of the financial asset have been retained, the Group shall not de-recognize the financial asset. If none of therisks and rewards related to the ownership of the financial asset has been transferred or retained, the Group shall continue to determinewhether it retains the control over the asset, and the accounting standard stated in the aforesaid paragraphs shall apply.
(4) Derecognition of financial liabilities
When the current obligations of a financial liability (or part of it) have been discharged, the financial liability (or that part of thefinancial liability) shall be de-recognized by the Group accordingly. When the Group (borrower) signs an agreement with a lender toreplace a financial liability with a new one, in case of substantially different terms of contract between the new one and the originalone, the Group shall derecognize the original one and recognize the new one. If a substantial modification is made to all (or part of)the original financial liabilities by the Group, the original financial liabilities shall be de-recognized, and at the same time, a newfinancial liability shall be recognized in accordance with the modified terms.If all (or a part of) the financial liability is de-recognized, the difference between the carrying value allocated to the derecognized partand the consideration paid (including the transferred non-cash assets or the liabilities assumed) is included in current profits and lossesby the Group.
(5) Offset of financial assets and financial liabilities
When the Group has the legal right to offset the recognized financial assets and financial liabilities, which is enforceable for the timebeing, and the Group plans to settle on a netting basis or capitalize financial assets and serve financial liabilities, any net amount fromnetting of financial assets and financial liabilities shall be included in the balance sheet. Otherwise financial assets and financialliabilities shall be included separately in the balance sheet and shall not offset each other.
(6) Method of determining the fair value of financial assets and financial liabilities
Fair value refers to the price that market participants can receive by selling an asset or need to pay by transferring a liability in theorderly transactions on the measurement date. The fair value of a financial instrument in an active market is determined by the Groupat the price quoted in the active market. The quotation in an active market refers to the price that is easily acquired from exchanges,brokers, industry associations, pricing service agencies, and the like on a regular basis and represents the actual market transactions infair trade. If there is no financial instrument in an active market, its fair value shall be determined by the Group via valuation techniques.Valuation techniques include looking into the prices used in recent market transactions by parties who refer to familiar situations andtrade voluntarily and the current fair value of other financial instruments which are essentially the same, as well as using the discountedcash flow method, the option pricing model and the like. During valuation, the Group shall adopt the valuation techniques applicableunder the current circumstances and supported by sufficient available data and other information, select the input values consistentwith the characteristics of assets or liabilities considered by market participants in the transactions of related assets or liabilities, andgive priority to the relevant observable input values as much as possible. The unobservable input values are used only when the relevantinput values are unavailable or impracticable.
(7) Equity instruments
An equity instrument is a contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. TheGroup's issuance (including refinancing), repurchase, sales or cancellation of an equity instrument shall be accounted for as a changeto equity. Transaction costs of an equity transaction are accounted for as a deduction from equity. The Group does not recognizechanges in the fair value of equity instruments.If the Group's equity instruments distribute dividends (covering "interest" incurred by instruments classified as equity instruments)during the existence thereof, the dividends shall be treated as profit distribution.
11. Impairment of financial assets
The financial assets for which the Group needs to recognize the impairment losses are financial assets measured at amortized cost,which mainly include notes receivable, accounts receivable, other receivables, contract assets, and so on.
(1) Method for recognizing provision for impairment
Based on the expected credit loss, the Group shall make provision for impairment of the aforementioned items by its applicablemeasurement method (general method or simplified method) of expected credit loss and recognize the credit impairment losses.
Credit loss means the difference between all contractual cash flows receivable by the Group in accordance with the contract and allcash flows expected to be received, discounted at the original actual interest rate, i.e., the present value of all cash shortages. Purchasedor originated credit-impaired financial assets shall be discounted by the Group according to credit-adjusted effective interest rateadjusted by credit of such financial assets.According to the general methods to measure expected credit losses, the Group evaluates whether the credit risk of the financial assets(including other applicable items; the same hereinafter) has increased significantly since the initial recognition at each balance sheetdate. If the credit risk of the financial instrument has increased significantly since the initial recognition, the Group measures its lossallowance according to the amount equivalent to the expected credit loss of the financial instrument over its expected lifetime; if thecredit risk has not increased significantly since initial recognition, the Group measures its loss allowance according to the amountequivalent to the expected credit loss of the financial instrument in the next 12 months. When assessing expected credit loss, the Groupgives consideration to all reasonable and well-founded information, including forward-looking information.For financial instruments with relatively low credit risks on the balance sheet date, the Group assumes that their credit risks have notincreased significantly since initial recognition, and measures loss allowance based on the expected credit loss within the next 12months.
(2) Criteria for judging whether the credit risks have increased significantly since initial recognitionWhen the default probability of a financial asset within the expected duration determined on the balance sheet date is significantlyhigher than that in initial recognition, it suggests that the credit risks of the financial asset have significantly increased. Except underspecial circumstances, the Group determines whether credit risks have increased significantly since initial recognition by estimatingthe changes in lifetime risk of default occurring based on the changes in 12-month risk of default occurring as reasonable.
(3) Grouping method for assessing the expected credit risks
The Group carries out separate credit risk evaluation for financial assets with significantly different credit risks, including receivablesin dispute with the other party or involving litigation or arbitration; accounts receivable where there are obvious signs that the debtormay not be able to fulfill the repayment obligation, etc.Except for the financial assets that are individually assessed for credit risks, the Group shall classify the financial assets into differentgroups in view of the common risk characteristics, and assess the credit risks on the basis of groups.
(4) Accounting treatment methods for impairment of financial assets
At the end of a period, the Group shall calculate the expected credit loss of all types of financial assets. If the expected credit loss isgreater than the carrying value of its current provision for impairment, the difference shall be recognized as impairment loss; if it isless than the carrying value of current provision for impairment, the difference shall be recognized as impairment gain.
(5) Determination method for measurement of expected credit losses of various financial assets
① Notes receivable
For note receivable, the Group measures loss allowance according to the amount equivalent to the expected credit loss over the lifetime.Depending on their credit risk characteristics, notes receivable are classified into different groups:
| Item | Basis for determining groups |
| Bank acceptance notes | The accepter is a bank with low credit risk |
| Commercial acceptance notes | By acceptor's credit risk (the same as that of accounts receivable) |
② Accounts receivable
For accounts receivable not containing significant financing components, the Group measures loss allowance according to the amountequivalent to the expected credit loss over the lifetime.Except for accounts receivable for which credit risk is assessed separately, depending on their credit risk characteristics, accountsreceivable is classified into different groups:
| Item | Basis for determining groups |
| Accounts receivable aging group | Except for the receivables for which the loss allowance of impairment has been calculated separately, the Group shall determine, through present situation analysis, the proportion of allowance for bad debt based on the expected credit loss rate of identical or similar receivables in previous years with similar credit risk characteristics classified by aging |
| Related party group | The parent and subsidiary companies included in the consolidated financial statements are divided into groups according to equity relationship. |
③ Other receivables and factoring receivables
The Group measures impairment losses based on whether the credit risk of other receivables and factoring receivables has increasedsignificantly since initial recognition, using an amount equivalent to expected credit loss within the next 12 months or entire duration.
④ Receivables financing
Receivables financing are primarily classified as notes receivable and accounts receivable which are measured at fair value throughother comprehensive income and are presented under "Receivables financing" if they have original maturity of up to one year (includingone year) or under other debt investments if they have original maturity more than one year as from the initial recognition date.Depending on their credit risk characteristics, receivables financing are classified into different portfolios:
| Item | Basis for determining groups |
| Bank acceptance notes | The accepter is a bank with low credit risk |
| Commercial acceptance notes | Classified by the acceptor's credit risk, the same as that of the "Accounts receivable" group |
| Accounts receivable | Same as that of the "Accounts Receivable" group |
12. Notes receivable
For further details, please see this Note V 10. "Financial instruments" and 11. "Impairment of financial assets".
13. Accounts receivable
For further details, please see this Note V 10. "Financial instruments" and 11. "Impairment of financial assets".
14. Receivables financing
For further details, please see this Note V 10. "Financial instruments" and 11. "Impairment of financial assets".
15. Other receivables
For further details, please see this Note V 10. "Financial instruments" and 11. "Impairment of financial assets".
16. Contract assets
The Group records the right where the customer has not paid the contract consideration but the Group has performed its contractobligation and the Group is not prevented from being unconditionally paid by the customer (depending on the lapse of time only) ascontract assets in the balance sheet. Contract assets and contract liabilities under the same contract are listed on a net basis. Contractassets and contract liabilities under different contracts will not be offset.Please refer to Note V 11. "Impairment of financial assets" for details of the method for determining and accounting the expected creditloss of contract assets.
17. Inventory
(1) Classification of inventory
Inventory types include among others raw materials, goods in stock, revolving materials and unfinished in process.
(2) Valuation methods of inventory acquired and sold
When inventory is acquired, it is measured based on actual cost, including purchase cost, processing cost and other costs. Wheninventory is acquired and sold, it is priced according to the monthly weighted average method.
(3) Determination method of the net realizable value of inventory and calculation method of depreciation allowanceNet realizable value means the estimated selling price of inventory less the estimated cost to be incurred by the time of completion, theestimated selling expenses and related taxes. In determining the net realizable value of inventory, based on obtained evidence, theGroup considers the purpose of the inventory and the impact of any matters occurring after the balance sheet date.On the balance sheet date, inventory is measured at cost or net realizable value (whichever is lower). If the net realizable value is lowerthan its cost, the Group will make provision for inventory depreciation. The provision for decline in the value of inventories is generallymade at the difference between an inventory item's cost and its net realizable value. For the inventory with a large quantity and relatively
low unit price, the inventory depreciation allowance is accrued based on the inventory category; for inventories associated with productseries manufactured and sold in the same area, with the same or similar end use or purpose, and are difficult to be measured separatelyfrom other items, the depreciation allowances are consolidated and accrued. For raw materials with a large quantity and low unit price,the provision of inventory depreciation is generally made according to the time the inventory has been kept.After the provision of inventory depreciation is made, if the original trigger for inventory write-down has disappeared so that the netrealizable value of the inventory is higher than the carrying value, the amount of provision of inventory depreciation shall be reversed,and the reversed amount shall be recognized in current profits and losses.
(4) The inventory system is a perpetual inventory system.
(5) Amortization method of revolving materials
The Group's revolving materials include low-value consumables and packaging materials. Large revolving materials are amortized atthe time of receipt over months of the expected service life. Other low-value consumables are amortized at the time of receipt usingthe one-off amortization method. Packaging materials are amortized at the time of receipt using the one-off amortization method.
18. Long-term equity investments
Long-term equity investments in this part refer to the long-term equity investments through which the Group has control, joint controlor significant influence over investee. The long-term equity investments through which the Group does not have control, joint controlor significant influence over investee, is taken as a financial asset at fair value recorded in current profits and losses. If it is non-trading,the Group can choose to designate it as a financial asset at fair value recorded in other comprehensive income at initial recognition.For details about the relevant accounting policy, please see this Note V 10. "Financial instrument".Joint control refers to the Group's common control of an arrangement in accordance with relevant agreement, and the relevant activitiesof the arrangement must be unanimously agreed by the participants sharing the control before a decision can be made. Significantinfluence refers to the Group's right to participate in the decision-making of an invested entity's financial and operational policies, butnot to control or jointly control the formulation of these policies with other parties.
(1) Determination of investment cost
For long-term equity investments arising from business combination under the same control, the proportion of the carrying value ofthe stakeholders' equity of the merged party in the consolidated financial statements of the final controlling party is regarded as theinitial investment cost of long-term equity investments on the combination date. If there is a difference between the initial investmentcost of long-term equity investments and the cash paid, non-cash assets transferred, and carrying value of liabilities assumed, the capitalsurplus shall be adjusted. Where the capital surplus is insufficient to absorb the difference, undistributed profits shall be adjusted. Theinvestments cost which adopts the equity securities issued as the consideration should be adopted as the initial investments cost of thelong-term equity investments according to the proportion of the carrying value of the stakeholders' equity of the merged party in theconsolidated financial statements of the final controlling party, and adjust the capital surplus by the difference between the initialinvestments cost of long-term equity investments and the amount of issued stock's face value (regarded as share capital). If the capitalsurplus is insufficient to absorb the difference, undistributed profits should be adjusted. If the equity of the acquiree under the samecontrol is acquired step by step through multiple transactions leading to a merger of enterprises under the same control, the transactionsshall be confirmed whether they belong to a "package transaction": If they belong to a "package transaction", all transactions shall betreated as one transaction over which the acquiree has control. If it is not a "package transaction", the Group regards the initial cost ofthe long-term equity investments as the proportion of the shareholder's equity/owner's equity of the acquired enterprise to the carryingamount in the consolidated financial statements of the final controller at the date of combination. If there is a difference between theinitial investments cost of long-term equity investments on the date of combination and the sum of the carrying value of the long-termequity investments before the merger plus the carrying value of the new share payment consideration on the date of combination, thecapital surplus shall be adjusted. Where the capital surplus is insufficient to absorb the difference, undistributed profits shall be adjusted.If the equity investment held before the combination date is measured using the equity method or recorded as a financial asset at fairvalue in other comprehensive income. The other comprehensive income recognized as a result will not be accounted temporarily.For the acquisition of long-term equity investments involving enterprises under common control, the Group regards the initial cost ofthe long-term equity investments at that date as business combination cost, including the sum of fair values of assets paid, liabilitiesincurred or borne, and equity securities issued, by the buyer. If the equity of the acquiree is acquired step by step through multipletransactions leading to a merger of enterprises under different control, the transactions shall be confirmed whether they belong to a"package transaction": If they belong to a "package transaction", all transactions shall be treated as one transaction over which theacquiree has control. If it is not a "package transaction", the sum of the carrying value of the original equity investments plus the newinvestments cost is regarded as the initial investments cost of long-term equity investments calculated by the cost method. If theprevious equity is measured using the equity method, the relevant other comprehensive income will not be accounted temporarily.
Acquisition-related costs including auditing fees, legal services fees, valuation advice fees and other relevant management fees aregenerally recognized in profit or loss as incurred.A long-term equity investments acquired other than through a business combination is initially measured at the cost, and such cost isdetermined at the amount of cash paid by the Group, the fair value of the equity securities issued by the Group, the value agreed in aninvestment contract or agreement, the fair value or carrying value of asset exchanged in the non-monetary asset exchange, or the fairvalue of the long-term equity investments. Costs, taxes and other necessary expenses directly related to the acquisition of the long-termequity investments are also included in the investment cost. If additional investments addition has a significant influence over investee,or jointly control other than the control over investee, the cost of long-term equity investments shall be the sum of the fair value of theoriginal equity investments determined according to Accounting Standards for Business Enterprises No. 22 - Recognition andMeasurement of Financial Instruments and the cost of the additional investment.
(2) Method of subsequent measurement and recognition of profits and losses
The long-term equity investments through which the Group has joint control (except for joint operation) or significant influence overinvestee shall be calculated by the equity method. The Group's financial statements use the cost method to calculate long-term equityinvestments that constitutes control over invested entities.
① Long-term equity investments calculated by cost method
Under the cost method, a long-term equity investments is measured at initial investments cost. Increasing or reducing investments willadjust the cost of long-term equity investments accordingly. Except for actual price paid when the investment is obtained or the cashdividends or profits that are included in the consideration that has been declared but not yet disbursed, the current investment incomeshall be recognized according to the cash dividends or profits declared by the invested entity.
② Long-term equity investments accounted for by equity method
When the initial investments cost of long-term equity investments accounted under equity method is greater than the investments, thedifference in the fair value share of the identifiable net assets of the invested entity is enjoyed, without adjusting the initial investmentscost of long-term equity investments; when the initial investments cost is less than the investments, the difference in the fair valueshare of the identifiable net assets of the invested entity is included in the current profits and losses, and the cost of long-term equityinvestments shall be adjusted accordingly.When the equity method is adopted, according to the share of the net profit and loss and other comprehensive income realized by theinvested entity, the investments income and other comprehensive income shall be recognized respectively, and the book value of thelong-term equity investments shall be adjusted; the book value of the long-term equity investments is reduced correspondingly inaccordance with the portion of the profits or cash dividends declared and distributed by the invested entity; for changes in owner'sequity other than net profit and loss, other comprehensive income and profit distribution of the invested entity, the book value of long-term equity investments shall be adjusted and included in capital surplus. The share of net profit and loss of the invested entity shall berecognized, based on the fair value of various identifiable assets of the invested entity when the investment is made, after adjustmentof the net profit of the invested entity. When the accounting policy and accounting period adopted by the invested entity are inconsistentwith those of the Group, the investment income and other comprehensive income shall be recognized based on the adjusted financialstatements of the invested entity in accordance with the Group's accounting policies and accounting period. For the Group's transactionswith its associates and joint ventures, if the invested or sold asset does not constitute a business, unrealized profits or losses resultingfrom the transactions are recognized as investment income or loss to the extent that those attributable to the Group's equity interest areeliminated. However, unrealized losses resulting from the Group's transactions with its invested entity in respect of impairment losseson the transferred assets should not be eliminated. If the asset invested by the Group to its associates and joint ventures constitutes abusiness, to the extent that the investor realizes long-term equity investments other than control, the fair value of the invested businessshall be the initial investments cost of the additional long-term equity investments, and the difference between the initial investmentscost and the carrying value of the invested business shall be recorded in the profit or loss of the current period. If the asset sold by theGroup to its associates and joint ventures constitutes a business, the difference between the consideration received and the carryingvalue of the invested business shall be recorded in the profit or loss of the current period. If the asset purchased by the Group from itsassociates or joint ventures constitutes a business, the accounting shall be made pursuant to the Accounting Standards for BusinessEnterprises No. 20 - Business Combination shall apply, the gain or loss from the transaction shall be fully recognized.The Group de-recognizes its share of net losses of the invested entity after the carrying amount of the long-term equity investmentstogether with any long-term interests that substantially constitute part of its net investments in the invested entity shall be written downto zero. In addition, if the Group has the obligation to bear additional losses to the invested entity, the provisions shall be recognizedaccording to the expected obligations and be recorded in the investment losses of the current period. Where net profits are subsequentlymade by the invested entity, the Group resumes recognizing its share of those profits only after its share of the profits exceeds the shareof losses previously not recognized.
③ Acquisition of minority equity
When preparing consolidated financial statements, if there is a difference between the new long-term equity investments acquired as aresult of the purchase of minority shares and the share of net assets continuously calculated from the date of purchase (or merger) ofthe subsidiary based on the new shareholding ratio, the capital surplus shall be adjusted. Where capital surplus is insufficient to offsetthe difference, the undistributed profits are adjusted.
④ Long-term equity investments disposal
In consolidated financial statements, where a parent company partially disposes of a long-term equity investments in a subsidiarywithout losing the control over it, the difference between the disposing price and the net assets of the subsidiary obtained from thedisposal of the long-term equity investments shall be recognized in the shareholder's equity. If it's partial disposal by a parent companyof a long-term equity investments in a subsidiary and the control over the subsidiary is lost, the accounting policy stipulated in thisNote V 7. (2) "Method for preparing the consolidated financial statements" shall apply.For disposal of long-term equity investments in other situations, the difference between the disposed equity's book value and the actualproceeds is included in the current profits and losses.When the Group reduces its ownership interest in investee but continues to use the equity method for long-term equity investments,other comprehensive income previously recorded as shareholders' equity is disposed in proportion, subject to the accounting treatmentapplicable to the assets or liabilities related to direct disposal of the invested entity. The equity recognized by the Group, other than thechange of the net profits and loss, other comprehensive income and profit distribution of the invested entity, is transferred to currentprofits and losses in proportion.When the Group reduces its ownership interest but the Group continues to use the cost method for long-term equity investments, forthe other comprehensive income recognized by the Group using equity method prior to the control over the investee or under financialinstrument recognition and measurement standard, other comprehensive income previously recorded as shareholder's equity is subjectto the accounting treatment applicable to the assets or liabilities related to direct disposal of the invested entity and is transferred tocurrent profits and losses in proportion. Then the other changes in shareholders' equity recognized by the Group using equity method,not arising from the change of the net profits and loss, other comprehensive income or profit distribution of the invested entity, arereclassified to profit and loss in proportion.If the Group loses its control over the invested entity due to the disposal of a portion of an equity investment, the equity method isadopted in the preparation of individual financial statements when the remaining equity allows the Group to exercise joint control orhold significant influence on the invested entity, and the remaining equity after disposal is regarded as being adjusted by the equitymethod at the time of acquisition; if the remaining equity after disposal does not allow the Group to exercise joint control or holdsignificant influence on the invested entity, it is calculated in accordance with the relevant provisions of financial instrument recognitionand measurement standards, and the difference between the fair value and the book value on the day when the control is lost is recordedin current profits and losses. If other comprehensive income recognized, using the equity method or under the standards for recognitionand measurement of financial instruments before the Group obtains the control over the invested entity, is subject to the accountingtreatment applicable to the assets or liabilities related to direct disposal of the invested entity when the control over the invested entityis lost, changes in the shareholder's equity of the net assets of the invested entity recognized using the equity method, except for netprofits and losses, other comprehensive income and profit distributions, shall be transferred to current profits and losses when thecontrol over the invested entity is lost. Other comprehensive income and other shareholder's equity are transferred in proportion whenthe remaining equity after disposal is calculated by the equity method. If the remaining equity after disposal is calculated in accordancewith the standards for recognition and measurement of financial instruments, other comprehensive income and other shareholders'equity are transferred in full.If joint control or significant influence on the invested entity is lost by the Group due to the disposal of some equity investments, theremaining equity after disposal is calculated according to the financial instrument recognition and measurement standards. Thedifference between the fair value and the book value on the day when joint control or significant influence is lost is recorded in currentprofits and losses. Other comprehensive income of the equity investment previously recognized using the equity method is subject tothe accounting treatment applicable to the assets or liabilities related to direct disposal of the invested entity when the Group stopsusing the equity method. Shareholder's equity recognized by the Group, other than the change of the net profits and loss, othercomprehensive income and profit distribution of the invested entity, is reclassified to profit and losses fully when the Group stops usingthe equity method.The equity investments in the subsidiary is disposed of step by step by the Group through multiple transactions until the control is lost.The aforementioned transactions, if belong to package transactions, are disposed as one transaction for disposal of the equityinvestments of the subsidiary and loss of control. The difference between the price of each disposal before the control is lost and the
carrying value of long-term equity investments related to the disposed equity are recorded in other comprehensive income, and thentransferred to the profit or loss of the current period when the control is lost.
19. Investment properties
Measurement of investment propertyMeasurement by cost methodDepreciation or amortization methodInvestment property means the property held for the purpose of rent earning or capital appreciation, or both. It includes the land userights that have been leased, the land use rights that are held for transfer upon appreciation, and the leased buildings. In addition, thevacant buildings held by the Group for the purpose of leases will also be reported as investment properties, if the board of directors (orsimilar authority) makes a resolution in written form that expressly indicates that the buildings will be used for leases and the intentionof holding will not change in the short term.Investment property is initially measured at cost. Subsequent expenses related to investment property shall, if economic profits relatedto the property are likely to be gained and its costs can be measured reliably, be recorded as the cost of investment property. Othersubsequent expenditures are recorded in the current profits and losses when incurred.The Group adopts the cost model for subsequent measurement of investment property. The investment property is depreciated oramortized in accordance with policies consistent with building or land use rights.When self-use properties or inventories are converted to investment property, or investment property is converted to self-use properties,the value after the conversion shall be recognized at the carrying value before the conversion.When investment property is disposed or permanently withdrawn from use and is not expected to obtain economic benefits from itsdisposal, the investment property shall be de-recognized. The disposal income from the sale, transfer, abandonment or destruction ofinvestment property less its carrying value and relevant taxes shall be recognized in current losses and profits.
20. Fixed assets
(1) Recognition criteria
Fixed assets mean the tangible assets held with a service life exceeding one fiscal year for the production of goods, provision of laborservices, leasing or management. Fixed assets may be recognized when they meet the following conditions: Economic benefits relatingto the fixed asset are likely to be gained by the Group, and the cost of the fixed asset can be measured reliably. Fixed assets are initiallymeasured at cost, with the influence of estimated abandonment cost taken into account.
(2) Depreciation methods
| Category | Depreciation methods | Estimated useful life | Residual value rate | Annual depreciation rate |
| Buildings | Straight-line method | 20-30 years | 5%-10% | 3%-4.75% |
| Production equipment | Straight-line method | 5-10 years | 5%-10% | 9%-19% |
| Measuring equipment | Straight-line method | 5-10 years | 5%-10% | 9%-19% |
| Office equipment | Straight-line method | 5 years | 5%-10% | 18%-19% |
| Transportation equipment | Straight-line method | 5 years | 5%-10% | 18%-19% |
Depreciation of a fixed asset shall be withdrawn within its useful life by straight-line method starting from the next month after itreaches the intended serviceable state.Estimated net residual value of a fixed asset is the estimated amount that the Group would currently obtain from the disposal of theasset, after deducting the estimated costs of disposal, if the asset were already of the age and in the condition expected at the end of itsuseful life.
(3) Explanation of other matters
The subsequent expenditure related to the fixed assets will be included in the cost of the fixed assets when the economic benefits inconnection therewith are likely to flow in and costs can be measured reliably; the book value of the replaced part will be derecognized.Other subsequent expenses related to the intangible assets are recognized in profit or loss for the period in which it is incurred.
When fixed assets in a disposal state or when no economic benefits can be expected through use or disposal thereof, such fixed assetswill be derecognized. The income from disposal of the fixed assets through sale, transfer, scrapping or damage with the book valuethereof and relevant taxes deducted is included in the current profit or loss.At the end of each year, the Group shall at least review the useful life, estimated net salvage value, and depreciation method of fixedassets, and any changes will be treated as changes in accounting estimates.
21. Construction in progress
The cost of construction in progress is determined at the actual construction expense, including various construction expendituresincurred during the period of construction, capitalized borrowing costs and other related expenses before the project reaches thepredetermined conditions for use. Where the fixed assets constructed have reached the predetermined usable state, but the final accountfor the completed project has not yet been handled, they are transferred into the fixed assets according to the estimated value inaccordance with the project budget, cost, or actual cost. Equipment to be installed will be transferred to fixed assets once it reaches thepredetermined usable state. Equipment that requires installation and debugging will also be transferred to fixed assets after reachingthe predetermined usable state.The specific standards and time for the conversion of the Company's various categories of construction in progress to fixed assets:
| Category | Standards and time for the conversion to fixed assets |
| Buildings | (1) The main construction project and supporting works have been substantially completed; (2) The construction works have met the intended design requirements, and acceptance has been completed by the survey, design, construction, and supervision units; (3) Acceptance by external departments such as fire safety and planning has been completed; (4) If the construction project has reached the predetermined usable state but the final settlement has not been processed, it shall be transferred to fixed assets based on the estimated value according to the actual construction cost from the date it reaches the predetermined usable state. |
| Machines and equipment that require installation and commissioning | (1) Relevant equipment and other supporting facilities have been installed; (2) The equipment has been debugged and can maintain normal and stable operation for a period of time; (3) The production equipment can stably produce qualified products for a period of time; (4) The equipment has been accepted by asset management personnel and users. |
22. Borrowing costs
Borrowing costs include interest on borrowing, amortization of discount or premium, auxiliary expenses and exchange differences dueto foreign currency borrowing, etc. Borrowing costs that can be directly attributable to the acquisition, construction or production ofassets eligible for capitalization shall be capitalized when the asset expenditure has been incurred, the borrowing cost has been incurred,and the acquisition, construction or production necessary to make the asset reach the predetermined conditions for use or sale hasstarted, and the capitalization shall discontinue when the constructed or produced assets eligible for capitalization reach thepredetermined conditions for use or sale. The remaining borrowing costs are recognized as costs at the time of occurrence.The amount to be capitalized is the actual interest expenses incurred on the specific borrowings less any bank interest earned fromunused funds of the designated borrowings or any investment income arising from the temporary investment of those funds. The amountto be capitalized on the general borrowings is calculated by applying a capitalization rate to the weighted average of the excess amountsof cumulative expenditures on the asset over and above the amounts of the specific borrowings. Capitalization rate is calculated anddetermined based on the weighted average interest rate of general borrowings.During the period of capitalization, exchange differences arising from special borrowings in a foreign currency shall be fully capitalized,and exchange differences arising from general borrowings in a foreign currency shall be recognized in profits and losses.Assets eligible for capitalization refer to fixed assets, investment property, inventories and other assets that need to go through quite along time of acquisition or production activities to reach the predetermined usable or salable state.If an abnormal interruption of assets eligible for capitalization occurs in the process of acquisition, construction or production andcontinues over 3 months, the capitalization of borrowing costs shall cease and shall not restart until the acquisition, construction orproduction of such assets resume.
23. Intangible assets
(1) Service life and its determination basis, estimation situation, amortization method, or review proceduresIntangible assets mean the identifiable non-monetary assets owned or controlled by the Group without physical substance.The intangible assets shall be initially measured at cost. Expenses related to the intangible assets are recognized in the cost of intangibleassets when it is likely that the associated economic benefits will be gained by the Group and the associated costs can be measuredreliably. Other expenses related to the intangible assets are recognized in profit or loss for the period in which it is incurred.The acquired land use right is generally recognized as intangible assets. Expenses related to land use right and construction cost frombuildings such as self-built factory, etc. are recognized as intangible assets and fixed assets, respectively. In the case of purchasedbuildings, related costs are shared between the cost of land use rights and the cost of buildings. The related costs that cannot be allocatedreasonably are recognized as fixed assets.When intangible assets with a finite useful life are available for use, their original cost is amortized over their estimated useful lifeusing the straight-line method. Intangible assets with uncertain service life shall not be amortized.The amortization method for intangible assets with limited service life is as follows:
| Category | Estimated useful life | Amortization method | Basis |
| Land-use right | 37-50 years | Straight-line method | Duration of registration of property right |
| Non-patent technology | 2-10 years | Straight-line method | Expected years of economic benefits |
| Patent right | 7-10 years | Straight-line method | Expected years of economic benefits |
| Trade mark | 5 years | Straight-line method | Expected years of economic benefits |
| Software | 3-10 years | Straight-line method | Expected years of economic benefits |
For intangible assets with a finite useful life, the Group reviews their useful life and amortization method at the end of the period, andaccounts for any change as a change in an accounting estimate. For intangible assets with uncertain service life, the Group reviewstheir useful life. If it is evident that the duration of associated economic benefits is predictable, the useful life is estimated and the assetis amortized pursuant to amortization policies for intangible assets with finite useful life.
(2) Scope of research and development expenditure and related accounting treatmentThe Group classifies all costs directly related to the conduct of research and development activities as research and developmentexpenditure. These expenditure include employee remuneration, direct input costs, depreciation expenses, design costs, andamortization of intangible assets.The expenditure for research and development projects in the Group is divided into research phase expenditure and development phaseexpenditure.The classification into the expenditure in the research phase or the expenditure in the development phase in relation to internal R&Dprojects of the Group conforms to the following standards:
Expenditures in the research phase are defined as those spent in an innovative, explorative and planned investigation to acquire andunderstand new scientific or technical knowledge. The research is the preparation in documents and other aspects for furtherdevelopment. It is very uncertain whether the completed research will move onto the development phase and whether the developmentwill lead to the emergence of an intangible asset. Therefore, the Group includes the expenditures in the research phase in expenses andrecognize them in the profit or loss of the current period.Expenditures in the development phase refer to the expenditures incurred during the stage of applying research results or otherknowledge to a project or design to produce new or substantially improved materials, devices and products before commercial massproduction or use. As the development phase comes after the research phase, the majority of basic conditions for a new product ortechnology have been established. Thus, the Group recognizes the expenditures in development phase eligible for capitalization asintangible assets. Gross expenditures incurred in the period from the point when the conditions for capitalization are satisfied to thepoint when intangible assets are ready for the intended purpose are capitalized. No adjustment will be made further for any expenditurethat has been included in expenses and recognized in profit or loss before the same intangible assets have met the conditions forcapitalization in the development phase.
Expenditures in the research phase are included in the current profits and losses when incurred.Expenditures in the development phase are recognized as intangible assets only when the following conditions are all satisfied, or areincluded in the profit or loss of the current period:
① It is technically feasible to complete such an intangible asset so that it will be available for use or for sale;
② There is the intention to complete the intangible asset for use or sale;
③ The intangible asset can produce economic benefits, including there is evidence that the products produced using the intangibleasset have a market or the intangible asset itself has a market; if the intangible asset is for internal use, there is evidence that there existsusage for the intangible asset;
④ There is sufficient support in terms of technology, financial resources, and other resources in order to complete the development ofthe intangible asset, and there is the capability to use or sell the intangible asset;
⑤ The expenditures attributable to the development stage of the intangible asset can be measured reliably.If it is impossible to distinguish between expenditures in the research phase and expenditures in the development phase, the R&Dexpenditures incurred shall be included in the profit or loss of the current period.
24. Impairment of long-term assets
For non-current and non-financial assets including fixed assets, construction in progress, intangible assets with finite useful life,investment property measured at cost, and long-term equity investments in subsidiaries, associates and joint ventures, the Groupassesses whether there is an indication of impairment at the date of balance sheet. If there is such an indication, the Group estimatesthe recoverable amount and carries out an impairment test. An impairment test shall be conducted every year for intangible assets withuncertain goodwill and service life and those have not yet reached the usable state, regardless of whether there are signs of impairment.If the impairment test results show that the recoverable amount of an asset is lower than its book value, the provision for impairmentis accrued according to the difference and is recorded in the impairment loss. The recoverable amount is the higher of the net amountof the fair value of the asset less the disposal expenses and the present value of the expected future cash flow of the asset. The fairvalue of an asset is measured as the price agreed in a sales contract concluded in good faith. In absence of any such sales contract, ifthere is an active market for the asset, the best information available is used as a basis to estimate the fair value of the asset. Disposalexpenses include legal fees, taxes and transportation fees related to the disposal of an asset, and direct expenses incurred to make theasset salable. The present value of expected future cash flows of an asset is measured by applying an appropriate discount rate to theexpected future cash flows generated during the continuous use of the asset at the time of final disposal. The asset impairment provisionis calculated and recognized on the basis of individual assets. In the case of difficulty in estimating the recoverable amount of anindividual asset, the recoverable amount of the asset group to which the individual asset belong is calculated. An asset group is thesmallest unit of combined assets that can generate cash inflows independently.For goodwill listed separately in the financial statements, the carrying amount of such goodwill arising from business combinations isallocated to relevant asset groups or asset group portfolios. If the test results show that the recoverable amount of asset groups or assetgroup portfolio containing allocated goodwill is lower than its book value, the corresponding impairment loss shall be recognized. Theamount of impairment loss shall firstly be deducted from the carrying amount of goodwill embodied in the asset groups or asset groupportfolios, then be deducted from the carrying amounts of other assets based on the proportions of their carrying amounts in the assetgroups or asset group portfolios.The impairment losses of assets will not be reversed in subsequent periods once recognized.
25. Long-term prepaid expenses
Long-term prepaid expenses refer to expenses that have already incurred but should be borne by the current and future instalments fora period of more than one year. Long-term prepaid expenses shall be amortized according to the straight-line method within theestimated period of benefit.
26. Contract liabilities
Contract liabilities are defined as the Group's obligation to transfer goods to a customer for received or receivable consideration fromthe customer. The Group presents as contract liabilities, at the earlier time point of actual payment by a customer or the payment due,if the Group has paid the contract consideration or the Group has acquired the right to collect unconditionally before the goods aretransferred by the Group to the customer. Contract assets and contract liabilities under the same contract are listed on a net basis.Contract assets and contract liabilities under different contracts will not be offset.
27. Employee remuneration
(1) Accounting treatment of short-term remuneration
The employee remuneration of the Group mainly includes short-term employee remuneration, post-employment benefits, dismissionwelfare, and other long-term employee benefit. Including:
Short-term employee benefits include employee wages or salaries, bonuses, allowances and subsidies, employee welfare fees, medicalinsurance contributions, maternity insurance contributions and work injury insurance contributions, housing provident fundcontributions, union running costs and employee education costs, and non-monetary benefits. During the accounting period when theemployees provide services for the Group, the short-term remuneration actually incurred is recognized as a liability and recorded inthe current profits and losses or related asset costs. The non-monetary welfare in short-term remuneration should be measured at fairvalue.
(2) Accounting treatment of post-employment benefits
Post-employment benefit mainly covers basic pension insurance and unemployment insurance. Most of post-employment benefit plansare mainly defined benefit plans. The defined benefit plans of the Group are basic pension insurance and unemployment insurance, andthe contributions thereto are recorded in the asset cost or the profit or loss of the current period when they occur.
(3) Accounting treatment of dismission welfare
Where the Group terminates the labor relationship with an employee before the labor contract expires, or offers proposed compensationfor encouraging the employee to accept the redundancies voluntarily, if the Group cannot unilaterally withdraw the termination benefitsprovided by the termination of labor relations plan or reduction proposal, and the Group recognizes the costs related to thereorganization involving the payment of the termination benefits (whichever comes first), the employee remuneration liabilities arisingfrom the termination benefits are recognized and recorded in the current profits and losses. However, termination benefits which areexpected not to be fully paid within twelve months after the end of the annual reporting period are accounted for as other long-termemployee remuneration.Internal employee retirement programs are accounted for, using the above method applicable to termination benefits. The Grouprecognizes in the profit or loss of the current period (termination benefits) employee salaries and contributions to the employee's socialinsurance covered by its internal retirement program from the day when the employees stop their services until their statutory retirementdates, when the conditions for provisions are satisfied.
(4) Accounting treatment of other long-term employee benefits
If other long-term employee benefit provided by the Group for its employees constitutes the defined contribution plan, the accountingtreatment for the defined contribution plan applies. In any other circumstance, the accounting treatment for the defined benefit planapplies.
28. Provisions
Obligation relating to a contingent are recognized as provisions when they meet the following conditions: (1) the Group has a presentobligation related to a contingency; (2) it is probable that an outflow of economic benefits will be required to settle the obligation; and
(3) the amount of the obligation can be measured reliably.
Provisions are measured against the best estimate of the consideration required to settle the present obligation at the balance sheet date,taking into account factors pertaining to a contingency such as the risks, uncertainties and time value of money.If all or part of the expenses required to settle the provisions are expected to be compensated by a third party, the amount ofcompensation is recognized separately as an asset when it is basically recognized that it can be received, and the recognizedcompensation amount doesn't exceed the book value of the provision.
29. Share-based payment
(1) Accounting treatment of share-based payment
Share-based payment is a transaction where equity instruments are granted or equity instrument-based liabilities are assumed for theconsideration of the services provided by employees or other parties. Share-based payment is classified into cash-settled share-basedpayment and equity-settled share-based payment.
① Equity-settled share-based payment
Equity-settled share-based payments made for the consideration of the services provided by the employees, is measured at the fairvalue of equity instruments on the date of grant to the employees. In the case that the right can be exercised after the completion ofservices in the waiting period or satisfaction of stipulated performance conditions, the fair value amount shall, on the basis of the bestestimate of the quantity of equity instruments with vesting in the waiting period, be recorded in relevant cost or expense using thestraight-line method. In the case that the right can be exercised immediately after the grant, it is recorded in relevant cost or expenseon the grant date, and the capital surplus is increased accordingly.On each balance sheet date during the waiting period, the Group makes the best estimate based on the latest available follow-upinformation such as changes in the number of employees with vested rights, and revises the estimated number of equity instrumentswith vesting. The impact of the above estimation is recorded in the cost or expense of the current period, and the capital surplus adjustedaccordingly.Equity-settled share-based payments made for the consideration of the services provided by other parties shall, if the fair value of theservices can be measured reliably, is measured at fair value at the date of acquisition, and if the fair value of the services cannot bemeasured reliably but the fair value of the equity instruments can be measured reliably, is measured at fair value at the date ofacquisition. They are recorded in the cost or expense, and the shareholder's equity is increased accordingly.
② Share-based payment settled in cash
Cash-settled share-based payment shall be measured according to the fair value of liabilities determined on the basis of shares or otherequity instruments undertaken by the Group. In the case that the right is exercised immediately after the grant, it is recorded in relevantcost or expense, and the liability is increased accordingly. If the right is exercised only after the completion of services in the waitingperiod and satisfaction of stipulated performance conditions, on each balance sheet date within the waiting period, based on the bestestimate of the vesting condition and according to the fair value of the liabilities assumed by the Group, the services acquired in thecurrent period are recorded in the costs or expense, and the liability is increased accordingly.On each balance sheet date and settlement date before the settlement of related liabilities, the fair value of liabilities shall be re-measured,and the changes shall be recorded in the current profits and losses.
(2) Accounting treatment related to modification and termination of share-based payment planWhen the Group modifies the share-based payment plan, if the fair value of the granted equity instruments is increased by modification,the increase of the services acquired shall be recognized according to the increase of the fair value of the equity instruments. Theincrease of fair value of equity instruments refers to the difference between the fair values of equity instruments before and aftermodification on the modification date. If the total fair value of share-based payment is reduced by modification or other ways that areunfavorable to employees, the accounting treatment of the acquired services will continue, as if the change never happened unless theGroup cancels some or all of the granted equity instruments.During the waiting period, if the granted equity instruments are canceled, the Group will treat the cancellation of the granted equityinstruments as accelerated exercise, and immediately record the amount to be recognized in the remaining waiting period into thecurrent profits and losses, and recognize the capital surplus at the same time. If the employee or other party can choose to meet thenon-vesting condition but fails to meet it during the waiting period, the Group will treat it as cancellation for granting equity instruments.
(3) Accounting treatment for share-based payment transactions involving our group and shareholders or actual controllers of theCompanyFor share-based payment transactions involving the Group and shareholders or actual controllers of the Company, if one of the settlingenterprises and the enterprise receiving the service is inside the Group and the other is outside the Group, the accounting treatment inthe consolidated financial statements of the Group shall be conducted as follows:
① If the settling enterprise settles with its own equity instruments, the share-based payment transaction shall be treated as an equity-settled share-based payment; Otherwise, it shall be treated as a cash-settled share-based payment.If the settling enterprise is an investor in the service-receiving enterprise, the share-based payment transaction shall be recognized as along-term equity investments of the service-receiving enterprise based on the fair value of the equity instruments granted at the grantdate or the fair value of the liability assumed to be assumed. In addition, capital reserves (other capital reserves) or liabilities shall berecognized.
② If the service-receiving enterprise has no settlement obligation or grants its own equity instruments to its employees, the share-based payment transaction shall be treated as an equity-settled share-based payment; If the service-receiving enterprise has a settlement
obligation and grants its employees an instrument other than its own equity instruments, the share-based payment transaction shall betreated as a cash-settled share-based payment.For share-based payment transactions occurring between enterprises within the Group, if the service-receiving enterprise and thesettling enterprise are not the same entity, the recognition and measurement of the share-based payment transaction in the individualfinancial statements of the service-receiving enterprise and the settling enterprise shall be handled in accordance with the aboveprinciples.
30. Revenue
Disclose the accounting policies adopted for revenue recognition and measurement according to the type of businessRevenue is defined as the total inflow of economic benefits arising from the Group's ordinary activities that would result in an increasein shareholders' equity. It is not related to the capital invested by shareholders. If a contract between the Group and a customer meetsthe following conditions, revenue is recognized when the customer obtains control over the goods (including services, the same asbelow): The parties to the contract have authorized the contract and undertaken to perform their obligations; The contract defines therights and obligations of the parties about transfer of the goods or provision of the services; The contract contains payment terms aboutthe proposed transferred goods; The contract is commercial substance, which means that the performance of the contract would changethe risks, time distribution or amount of the future cash flows of the Group; and The consideration to which the Group is entitled fortransferring the goods to the customer is very likely to be recovered. Among them, obtaining the control right of related goods refersto the ability to dominate the use of the goods and obtain almost all the economic benefits.At the contract commencement date, the Group identifies each individual performance obligation existing under the contract, andapportions the trading price to each individual performance obligation based on the proportion of the selling prices of the goodscommitted by the individual performance obligations. The trading price is determined by taking into account of the influence of variableconsideration, major financing components in the contract, non-cash consideration, consideration payable to customers and otherfactors.If each individual performance obligation under the contract meets any of the following conditions, the Group will, according to theprogress of performance in the relevant performance period, recognize the part of trading price apportioned to the individualperformance obligation as a revenue: the customer obtains and consumes economic benefits from the performance by the Group at thetime of performance; the customer has control over the goods in production during the performance by the Group; the goods producedduring the performance by the Group have irreplaceable use, and the Group is entitled to be paid for the completed part of the obligationup to now in the entire contract period. The performance schedule is determined by output method or input method according to thenature of the goods transferred. If the performance schedule cannot be reasonably determined and the incurred costs of the Group areexpected to be compensated, the revenue is recognized according to the amount of the incurred costs until the performance schedulecan be reasonably determined.If none of the above conditions is met, the Group will, at the point of time when the customer obtains control over the goods, recognizethe part of the trading price apportioned to the individual performance obligation as revenue. To determine whether the customerobtains the control over the goods, the Group considers the following indications: the Group enjoys the current right to be paid for thegoods, and the customer has the current obligation to pay for the goods; the Group has transferred legal ownership of the goods to thecustomer, and the customer has owned the legal ownership over the goods; the Group has delivered the goods physically to the customer,and the customer has possessed the goods in kind; the Group has passed on to the customer major risks and rewards of the ownershipof the goods, and the customer has received the major risks and rewards of the ownership of the goods; the customer has accepted thegoods; and any other indication that the customer has obtained the control over the goods.Specific methods for product sales revenue recognitionThe sales business of the Group is divided into domestic sales and overseas sales. Both domestic and overseas sales of the Group havea general model and a VMI model, with specific sales revenue recognition policies as follows:
① Domestic sales
A. General sales modeThe Group arranges production according to a sales contract or order with a customer; upon shipment from the warehouse, the productsare transported and delivered to the place of delivery designated by the customer; the customer's warehousing employee checks thequantity of the products and also carries out a spot check for the quality of the products; after the quantity and quality are accepted, theemployee will sign and stamp on the receipt for confirmation. The revenue is recognized when the Group obtains the signed andstamped receipt or when the Group obtains the signed and stamped receipt and makes a reconciliation with the customer.B. VMI sales mode
The Group arranges production according to a sales contract or order with the customer; upon shipment from the warehouse, theproducts will be transported and delivered to the delivery place designated by the customer; the customer's warehouse personnel checkthe quantity of the products and also carries out a spot check for the quality of the products; after the quantity and quality are accepted,the warehouse personnel will sign and stamp on the receipt for confirmation. Sales revenue will be recognized based on the actualreceipt of goods by the customer and reconciliation with the customer.
② Overseas sales
A. General sales modeThe Group arranges production according to a sales contract or order with a customer; the export delivery is made through customsclearance after the products are verified as qualified through inspection; for the purpose of delivering the products, the revenue isrecognized at the time of control transfer depending on specific terms of trade.B. VMI sales modeThe Group arranges production according to a sales contract or order with a customer; the export is made through customs clearanceafter the products are verified as qualified through inspection; after the Group completes export declaration formalities and obtains anexport declaration form, and the products are transported to the place designated by the customer, the revenue is recognized when thecustomer accepts the products.Different operating modes in the same kind of business involve different revenue recognition methods and measurement methodsNone
31. Contract costs
Contract costs include incremental costs incurred to obtain the contract and costs of contract performance.If the incremental cost incurred by the Group to acquire the contract is expected to be recovered, it is recognized as an asset as thecontract acquisition cost.A cost incurred for performing a contract which does not fall within the regulated scope of accounting standards for business enterprisesother than Accounting Standards for Business Enterprises No. 14 - Income (Revised in 2017) shall be recognized as an asset if: ①such cost directly relates to a current or expected contract, including direct labor, direct materials, manufacturing costs (or similarcosts), costs clearly borne by customers and other costs only incurred due to the contract; ② such cost increases the resources of theGroup for fulfilling its obligations in the future; and ③ such cost is expected to be recoverable.The assets related to contract costs are amortized on the same basis as the revenue recognition of goods related to the assets, and arerecorded in the current profits and losses. However, if the amortization period for the asset does not exceed one year, the asset shall berecorded in current profits and losses at the time of occurrence.In case the book value of assets related to contract costs is higher than the difference between the two items below, the Company willaccrue the impairment provision for the extra part, and recognize that part as an impairment loss:
① Estimated residual consideration to be obtained by the Group from the transfer of commodities or services related to the assets;
② The costs expected to be incurred for the transfer of the relevant goods or services.
If the impairment provision for the above assets is subsequently reversed, the carrying amount of the asset after reversal shall notexceed the carrying amount of the asset on the reversal date assuming no impairment provision was made.
32. Government grants
Government grants refer to the monetary assets and non-monetary assets obtained by the Group from the government free of charge,excluding the investment made by the government as an investor which enjoys the corresponding owner's equity. Government grantsare divided into asset-related government grants and income-related government grants. Asset-related government grants refer to thegovernment grants obtained by the Group and used for acquiring or forming long-term assets by other means. Other government grantsare defined as government grants related to income. If no target of grants is specified in government documents, government grants areclassified into government grants related to assets and government grants related to income as follows: (1) if the government documentstipulates grants for a defined project, the grants will be divided according to the proportion of expenditures transformed into assetsand expenditures recorded in expenses in the budget of the defined project, and the proportion will be reviewed at each balance sheetdate and be changed if necessary; and (2) if the government document contains general statement on the purpose of grants, other thana defined project, the grants will be treated as government grants related to income. Government grants in the form of monetary assetsshall be measured at the amount received or receivable. Government grants in the form of non-monetary assets shall be measured at
fair value. If the fair value cannot be reliably acquired, the government grants shall be measured at nominal amount. Government grantsmeasured at nominal amount shall be directly recorded in the current profits and losses.The Group recognizes and measures government grants generally at the time of receipt according to the actually received amounts.However, at the end of the period, the subsidy shall be measured according to the amount receivable when there is conclusive evidencethat it can meet the relevant conditions stipulated by the financial support policy and is expected to receive financial support funds. Agovernment grants measured at the amount receivable shall meet the following conditions: (1) the amount of grant receivable has beenconfirmed in a governmental document or can be reasonably estimated according to any officially issued measures for the managementof financial support funds, without significant uncertainty in the estimated amount; (2) the measurement is based on the financialsupport projects and its measures for the management of financial support funds officially released and proactively disclosed by localfiscal authority according to the Government Information Disclosure Regulations, and the measures are inclusive (applicable to anyeligible enterprise), other than for specific enterprises; (3) the relevant grant approval document has clearly stated the period of payment,and as the payment of the grant is guaranteed by corresponding fiscal budgets, there is reasonable assurance that the payment will bemade within certain time of period; and (4) other relevant conditions should be met according to the actual situation of the Group andthe grant (if any).Asset-related government grants are recognized as deferred income, and shall be recorded in current profits and losses in stagesaccording to a reasonable and systematic method within the service life of the relevant assets. If income-related government grants arereceived as compensation for related costs or losses in future periods, they are recognized as deferred income, and are recorded incurrent profits and losses during the period when the related costs or losses are recognized; those received as compensation for relatedcosts or losses incurred are directly included in the profit or loss of the current period.If a government grant contains an asset-related component and an income-related component, the two components are subject toseparate accounting treatment. If it is difficult to distinguish them, the subsidy shall be classified as income-related government grants.Government grants related to the daily operating activities of the Group shall be recorded in other income according to the nature ofoperating business. Government grants unrelated to the daily activities are recorded in non-operating income.Where any recognized government grants need to be returned, in the case of related deferred income balance, the carrying amount ofthe deferred income balance shall be written down, and any excess shall be recognized in the profit or loss of the current period. Inother circumstances, the returned subsidy is directly recorded in the profit or loss of the current period.
33. Deferred tax assets/liabilities
(1) Current income taxes
At the balance sheet date, current income tax liabilities (or assets) for the current and prior periods are measured at the amount expectedto be paid (or returned) according to the requirements of tax laws. The taxable income as a basis for the current income tax expense iscalculated after appropriate adjustment is made to the pre-tax accounting profit of the reporting period according to the requirementsof tax laws.
(2) Deferred tax assets and liabilities
For temporary differences between the carrying amounts of certain assets or liabilities and their tax bases, or between the carryingamounts of those items that are not recognized as assets or liabilities and of which the tax bases can be determined according to taxlaws and tax bases, deferred tax assets and liabilities are recognized using the balance sheet liability method.For the temporary difference arising from the initial recognition of goodwill, the corresponding deferred income tax liability shall notbe recognized. For temporary differences arising from the initial recognition of assets or liabilities in transactions other than businesscombinations that affect neither accounting profit nor taxable income (or deductible losses) and that its initial recognition of assets andliabilities does not result in equivalent taxable temporary differences and temporary differences, the corresponding deferred tax assetsand deferred tax liabilities are not recognized. In addition, for the taxable temporary differences associated with investments insubsidiaries, associates, and joint ventures, if the Group is able to control the timing of the reversal of the temporary difference and itis probable that the temporary difference will not reverse in the foreseeable future, no deferred tax liability is recognized. Except forthe above exceptions, the Group recognizes deferred tax liabilities arising from all other taxable temporary differences. For thedeductible temporary differences associated with investments in subsidiaries, associates, and joint ventures, the corresponding deferredtax asset shall not be recognized if it is not probable that the temporary difference will reverse in the foreseeable future, or if it is notprobable that taxable profits will be available in the future against which the temporary difference can be utilized. For the aboveexceptions, deferred tax assets for deductible temporary differences are recognized by the Group to the extent that it is probable thattaxable profits will be available against which the deductible temporary differences can be utilized.
For deductible losses and tax credits that can be carried forward to later years, the corresponding deferred tax assets are recognized tothe extent that the future taxable income that can be used to offset the deductible losses and tax credits is likely to be obtained.At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates, according to tax laws, that are expected to beapplicable when the asset is realized or the liability is settled.On the balance sheet date, the carrying amount of deferred tax assets shall be reviewed. If it is unlikely to obtain sufficient taxableincome in the future to offset against the profits arising from deferred tax assets, the carrying amount of the deferred tax assets shall bewritten down. When it is probable that sufficient taxable income will be available, such written-down amount shall be subsequentlyreversed.
(3) Income tax expenses
Income tax expenses include current income tax and deferred income tax.Except that current income taxes and deferred taxes arising from transactions or events recognized in other comprehensive income ordirectly recorded in shareholders' equity are recorded in other comprehensive income or shareholders' equity, and that deferred taxesarising from business combinations adjust the carrying amount of goodwill, all other current income taxes and deferred tax expensesor gains are recorded in the profit or loss of the current period.
(4) Income tax offset
When there is a legal right to settle on a net basis and the intention is to settle on a net basis or to realize assets and to settle liabilitiessimultaneously, the current income tax assets and current income tax liabilities of the Group are offset and presented as net amount.When there is a legal right to settle current income tax assets and current income tax liabilities on a net basis, and the deferred taxassets and deferred tax liabilities are related to the income tax levied by the same tax administration department on the same tax payeror to different tax payers, but in each future period of reversing material deferred tax assets and liabilities, the tax payers involvedintend to settle the current income tax assets and liabilities on a net basis or realize assets and settle liabilities at the same time, thedeferred tax assets and deferred tax liabilities of the Group are offset and presented as net amount.
34. Lease
(1) Accounting treatment method for leasing by the lessee
Leasing refers to a contract in which the Group transfers or acquires the right to control the use of one or more identified assets for aspecified period of time in exchange for or payment of consideration. On the commencement of a contract, the Group will assesswhether the contract is a lease or contains the lease.The Group acts as a lessee:
The categories of leased assets in our group mainly include buildings and structures.
① Initial measurement
On the lease commencement date, the Group recognizes the right to use the leased asset during the lease term as a right-of-use assetand recognizes the present value of the unpaid lease payments as a lease liability, except for short-term leases and low-value assetleases. When measuring the present value of the lease payments, the Group uses the interest rate implicit in the lease as the discountrate, and adopts the incremental borrowing rate of the lessee as the discount rate if the interest rate implicit in the lease is notdeterminable.
② Subsequent measurement
The Group calculates depreciation on right-of-use assets in accordance with the depreciation provisions set forth in the AccountingStandards for Enterprises No. 4 - Fixed Assets (see Note V 20. "Fixed assets"). If it can be reasonably determined that the ownershipof the leased asset can be acquired at the end of the lease term, the Group shall depreciate the asset over its remaining service life. Ifthe Group cannot reasonably determine that it will obtain the ownership of leased assets when the lease term expires, the right-of-useasset is depreciated over the shorter of the lease term and the remaining service life of the leased assets.For lease liabilities, the Group calculates its interest expenses for each period of the lease term at a fixed periodic interest rate andrecords it in current profits and losses or related asset costs. Variable lease payments not included in the measurement of lease liabilities,when actually incurred, shall be recorded in the current profits and losses or related asset costs.From the lease commencement date, if there is any change to the in-substance fixed payments, the estimated amount to be paidaccording to the residual value of the guarantee, the index or rate referred to for calculating the lease payment, the assessment resultsof the call option, renewal option or termination option or the actual exercise of the aforesaid options, in which cases the Group willre-measure the lease liability according to the changed lease payment and the present value, and the carrying amount of the right-of-
use asset will be adjusted accordingly. If the carrying amount of the right-of-use asset has already been reduced to zero but the leaseliability is subject to further reduction, the Group recognizes the remaining amount in current profit or loss.
③ Short-term lease and low-value asset lease
For short-term leases (leases with a lease term not exceeding 12 months at the lease commencement date) and low-value asset leases,the Group adopts a simplified approach. Under this approach, right-of-use assets and lease liabilities are not recognized. Instead, leasepayments are recognized as part of the relevant asset costs or current profit and loss on a straight-line basis or other systematic andreasonable methods over the lease term.
(2) Accounting treatment method for leasing by the lessor
On commencement of the lease term, the Group will divide the lease into a financial lease and operating lease based on the substanceof the transaction. A finance lease is a lease that transfers almost all the risks and rewards incidental to ownership of a leased asset.Operating lease refers to leases other than financing leases.
① Operating lease
The Group adopts the straight-line method in each period of the lease term, and recognizes the lease receipts arising from operatingleases in rental income. The variable lease amount under an operating lease which is not included in the lease receipt is included in theprofit or loss of the current period at the time of actual occurrence.
② Financial lease
On the commencement date of the lease term, the Group recognizes finance lease receivables and derecognizes the finance lease assets.Accounts receivable from finance leases are initially measured at the net amount of the lease investment (the sum of the unguaranteedresidual value and the present value of the unreceived lease receipts discounted according to the interest rate implicit in the lease onthe commencement of the lease term), and the interest income for the lease term is recognized based on a fixed periodic interest rate.Variable lease payments obtained by the Group and not included in the measurement of lease net investment shall be included in thecurrent profits and losses when they are actually incurred.
35. Specific reserve
According to the relevant regulations of the Ministry of Finance and the Ministry of Emergency Management, the Group accruesspecific reserve for production safety. The specific reserves are mainly used for safety expenditure in the process of production andoperation.The provision for specific reserve is recognized as relevant cost or profit or loss for the current period, and it is also included in specificreserve. The specific reserve is written down when withdrawal of safety fund is of expense expenditure. If it is capital expenditure, theexpenditure incurred is recorded in construction in progress and recognized as fixed assets when the project is completed and is readyfor the intended use, and meanwhile, specific reserve is written down at the cost of the fixed assets and accumulated depreciation isrecognized at the same amount. Consequently, such fixed assets are not depreciated in subsequent periods.
36. Other significant accounting policies and accounting estimates
While using accounting policies, due to the uncertainty in operating activities, the Group needs to make judgment, estimates andassumptions on the carrying value of accounts which cannot be measured accurately. The judgment, estimates and assumptions aremade based on the historical experience of the Group's management and other factors that are considered to be relevant. The judgments,estimates and assumptions would affect the reported amounts of incomes, expenses, assets and liabilities, as well as the disclosure ofcontingent liabilities at the balance sheet date. However, the actual results from the uncertainty in the estimates may differ from thecurrent estimates made by the Group's management, subject to further significant adjustments to the carrying amounts of the affectedassets or liabilities.The above judgments, estimates and assumptions will be reviewed periodically by the Group on the going-concern basis. If a changein accounting estimates only affects the period in which the change occurs, the affected amount will be recognized in the period inwhich the change occurs. If the change affects both the period in which the change occurs and future periods, the affected amount willbe recognized in the period in which the change occurs.At the balance sheet date, the major fields in which the Group is required to make the judgments, estimates and assumptions on theamounts in the financial statements are shown below:
(1) Revenue recognition
As stated in this Note V. 30. ''Revenue'', the Group's revenue recognition involves the following significant accounting judgments andestimates: identification of customer contracts; estimation of the recoverability of the considerations enjoyed due to the transfer ofgoods to customers; identification of performance obligations in contracts; estimation of the variable consideration in a contract andthe amount of accumulated recognized income that is unlikely to be significantly reversed when the relevant uncertainty is eliminated;whether there is material financing component in a contract; estimation of separate selling prices of individual performance obligationsin a contract; determination on whether the performance obligation shall be performed in a time span or at a point of time; anddetermination of performance progress.The Group makes judgments based on historical experience and practices, and major changes in judgments and estimates would haveimpact (and even significant impact) on the change of operating income, operating cost, and profit and loss during the current or futureperiods.
(2) Lease
① Identification of a lease
While identifying that a contract is or contains a lease, the Group needs to assess whether there is an identified asset and the customerhas the right to use the asset for a certain period. During assessment, the Groups shall consider the nature or substantial replacement ofthe asset, and whether the customer has the right to obtain almost all economic benefits arising from the use of the asset during theperiod and can control the use of the asset.
② Classification of a lease
The Group as the lessor classifies leases into operating leases and financing leases. In the classification process, the management needsto make appropriate analysis and judgment on whether all risks and rewards related to the ownership of leased assets have beensubstantially transferred to the lessee.
③ Lease liabilities
The Group, as a lessee, initially measures the lease liabilities at the present value of lease payments that are unpaid at the leasecommencement date. For measuring the present value of the lease payment, the Group estimates the discounting rate in use and thelease term of the lease contract with an option of renewal or termination. For assessing the lease term, the Group considers all the factsand circumstances related to the economic benefits brought by the exercise of the option by the Group, including expected changes inthe facts and circumstances from the lease commencement date to the option exercise date. Different judgments and estimates wouldaffect the recognition of lease liabilities and right-of-use assets and further affect the profit or loss of subsequent periods.
(3) Impairment of financial assets
The Group assesses impairments of financial instruments using the expected credit loss model, where the Group is required to makesignificant judgments and estimates, as well as consider all reasonable and evidence-based information, including forward-lookinginformation. In making the judgments and estimates, the Group predicts expected changes in debtor's credit risk based on historicaldata, as well as economic policies, macroeconomic indicators, industry risks, external market conditions, technical conditions, changesin customer conditions and other factors.
(4) Provisions for the decline in value of inventories
Under accounting policies for inventories, the Group measures inventories according to the lower of cost and net realizable value. Forthe inventories with cost higher than net realizable value as well as obsolete and unsalable inventories, the Group calculates provisionsfor the impairment of inventories. The inventories are impaired to their net reliable value, depending on the assessment of salability ofinventories and their net realizable value. To identify inventory impairment, the management is required to make judgments andestimates after obtaining conclusive evidence, as well as considering the purpose of inventories held, the impact of events occurringafter the balance sheet date and other factors. Any difference between actual results and prior estimates will, in the period when relevantestimates are changed, affect the carrying amount of inventories and the provision for inventory impairment or reversal thereof.
(5) Fair value of financial instruments
If there is no financial instrument in an active trading market, its fair value is determined by the Group through various valuationmethods. The valuation techniques include disclosed cash flow modeling, etc. In the valuation process, the Group needs to estimatefuture cash flow, credit risk, market volatility and correlation, etc. and choose an appropriate discounting rate. These relevantassumptions are uncertain, and their changes would affect the fair value of financial instruments. For equity instrument investments orcontracts with public quotes, the Group will not regard costs as the best fair value estimate.
(6) Impairment provision for long-term assets
For non-current assets other than financial assets, the Group will, at the balance sheet date, judges whether there is an indication ofimpairment. For intangible assets with an uncertain service life, the impairment test will be carried out annually and when there is an
indication of impairment. The impairment test will be carried out for non-current assets other than financial assets, when there is anindication that the carrying amount cannot be recovered.When the carrying value of an asset or group of assets is higher than the recoverable amount, the higher of the net of the fair value lessdisposal costs and the present value of estimated future cash flows represents the impairment.The net of the fair value less disposal costs is determined by the sales agreement price or observable market price of similar assets infair trade reduced by incremental costs directly attributable to the disposal of the asset.Important judgments shall be made on the output, selling price, related operating costs and discount rate used in calculating presentvalue of the asset (or a group of assets) in estimation of present value of future cash flows. When estimating the recoverable amount,the Group uses all relevant information available, including the output, selling price and related operating costs predicted on the basisof reasonable and evidence-based assumptions.The Group tests whether goodwill annually at least. This requires estimating the present value of future cash flows of an asset groupor combination of asset groups to which goodwill has been allocated. When estimating the present value of future cash flows, theGroup needs to predict cash flows generating from an asset group or combination of asset groups in the future, and chooses anappropriate discount rate to determine the present value of future cash flows.
(7) Depreciation and amortization
The Group depreciates and amortizes investment property, fixed assets and intangible assets over their respective service life, usingthe straight-line method, with their respective residual value taken into account. The Group periodically reviews the service life ofassets to determine the amounts of depreciation and amortization expenses for each reporting period. The service life is determined bythe Group based on its historic experience acquired on similar assets and expected technical development. For significant changes inprior estimates, depreciation and amortization expenses will be adjusted in the coming periods.
(8) Development expense
When determining capitalized amounts, the Group's management needs to assume estimated future cash flows, appropriate discountrates and expected return periods of relevant assets.The Group's management believes that the products with its self-developed proprietary technology have a broad market and goodprospects, and the market reaction to the products produced with these intangible assets also supports the management's pre-estimatedincome arising from the project. However, the increasing competition makes the management reconsider the assumptions about marketshare and estimated gross profits of the products. After a thorough review, the Group's management believes that the carrying value ofintellectual properties can be fully recovered notwithstanding a lowered rate of return of the products. The Group will continue to keepclose attention on relevant developments. Once there is an indication that it is necessary to adjust the assumptions of relevant accountingestimates, the Group will make adjustment in the period when that indication appears.
(9) Deferred tax assets
To the extent that it is likely that there will be sufficient taxable profits to cover the losses, the Group recognizes deferred tax assets forall unused tax losses. In this case, the Group's management shall make important judgments to estimate the time and amount of futuretaxable profits and, by taking into account of its tax plan, to determine the amount of deferred tax assets that should be recognized.
(10) Income tax
In normal operating activities of the Group, there are some transactions with certain uncertainties in final tax treatment and calculation.Tax deductible expenses for some items are subject to review and approval by tax authority. Any difference between final results andinitially estimated amounts due to these tax matters exerts impact on income taxes and deferred income taxes of the period when thefinal results are determined.
37. Changes in significant accounting policies and accounting estimates
(1) Significant changes in accounting policy
? Applicable ? Not applicable
| Contents and causes of changes in accounting policy | Name of report items that are significantly affected | Amount affected |
| Accounting Standards for Business Enterprises Interpretation No. 17 of the Ministry of Finance | See explanation of other matters | See explanation of other matters |
| Accounting Standards for Business Enterprises Interpretation No. 18 of the Ministry of Finance |
Explanation of other matters:
On October 25, 2023, the Ministry of Finance issued Interpretation No. 17 of the Accounting Standards for Business Enterprises (C.K. [2023] No. 21) (hereinafter referred to as "Interpretation No. 17"), which regulates "the classification of current and non-currentliabilities", "the disclosure of supplier financing arrangements", and "the accounting treatment of sale and leaseback transactions". TheCompany implemented this Interpretation on January 1, 2024, and the adoption of Interpretation No. 17 had no significant impact onthe Company's financial statements.On December 6, 2024, the Ministry of Finance issued the Interpretation No. 18 of the Accounting Standards for Business Enterprises(C. K.[2024] No. 24) (hereinafter referred to as "Interpretation No. 18"), which regulates "subsequent measurement of investmentproperty held as a basic project under the floating charging method" and "the accounting treatment of quality guarantees that do notconstitute a single performance obligation". The Company implemented this Interpretation on December 6, 2024, and the adoption ofInterpretation No. 18 had no significant impact on the Company's financial statements.
(2) Changes in significant accounting estimates
? Applicable ? Not applicable
(3) Adjustments to related items of financial statements at the beginning of the current year upon initial implementation ofthe new accounting standards since 2024? Applicable ? Not applicable
38. Others
NoneVI. Taxable Items
1. Main tax types and rates
| Tax types | Taxation basis | Tax rate |
| VAT | Output taxes on taxable income shall be calculated at the rate of 13%, 9% and 6%, and value added taxes are calculated and paid according to the difference resulting from the deduction of the allowed deductible input tax in the period. | 13%, 9%, 6% |
| City maintenance and construction tax | 7% and 5% of actually-paid turnover tax | 7%, 5% |
| Enterprise income tax | 15%, 20%, or 25%, or (in case of an overseas subsidiary) the national or local statutory tax rate prevailing in the overseas subsidiary's jurisdiction. | 15%, 20%, or 25% |
| Education surcharge | 3% of the amount of actually-paid turnover tax | 3% |
| Local education surcharges | 2% of the amount of actually-paid turnover tax | 2% |
Disclose the specific information in the case of tax payers with different tax rates of enterprise income tax
| Name of taxpayer | Rate of income tax |
| Goertek Inc. | 15% |
| Weifang Goertek Electronics Co., Ltd. | 15% |
| Goertek Microelectronics Inc. | 15% |
| Qingdao Goertek Microelectronics Research Institute Co., Ltd. | 25% |
| Qingdao Goertek Intelligent Sensor Co., Ltd. | 25% |
| Weifang Goertek Microelectronics Co., Ltd. | 15% |
| Rongcheng Goertek Microelectronics Co., Ltd. | 15% |
| Beijing Goertek Microelectronics Co., Ltd. | 20% |
| Shenzhen Goertek Microelectronics Co., Ltd. | 20% |
| Name of taxpayer | Rate of income tax |
| Wuxi Goertek Microelectronics Co., Ltd. | 20% |
| Shanghai Goertek Microelectronics Co., Ltd. | 20% |
| Goertek Microelectronics Holdings Co., Ltd. | 16.5% |
| Goertek Microelectronics (Hong Kong) Co., Limited | 16.5% |
| GOERTEK MICROELECTRONICS CORPORATION | The federal tax rate for enterprise income tax is 21%, and the local enterprise income tax rate in California is 8.84%. |
| GOERTEK MICROELECTRONICS KOREA Co., LTD. | Corporation tax: The tax rate shall be 9% if the income is less than KRW 200 million; 19% if the income is KRW 200 million-20 billion; 21% if the income is KRW 20 billion-300 billion; and 24% if the income is more than KRW 300 billion; Corporate local tax: 10% of the amount of corporate tax. |
| Goertek Microelectronics Vietnam Company Limited | 20% |
| GMI Technology GmbH | 24% |
| GMI Semiconductor Sdn. Bhd. | 24% |
| Goermicro Technology Development Company Limited | 16.5% |
| Qingdao MicroSense Intelligent Technology Co., Ltd. | 20% |
| Weifang Goertek Trading Co., Ltd. | 25% |
| Yishui Goertek Electronics Co., Ltd. | 25% |
| Yili Precision Manufacturing Co., Ltd. | 15% |
| Weifang Goertek Communication Technology Co., Ltd. | 25% |
| Goertek Optical Technology Co., Ltd. | 15% |
| Goertek Optical Technology (Qingdao) Co., Ltd. | 20% |
| Goertek Optical Technology (Shanghai) Co., Ltd. | 25% |
| Uphoton Technology (Shaoxing) Co., Ltd. | 25% |
| Uphoton Technology (Beijing) Co., Ltd. | 20% |
| Jiaxing Uphoton Optoelectronics Technology Co., Ltd. | 15% |
| Shaoxing UPhoton Precision Technology Co., Ltd. | 25% |
| Hangzhou Uphoton Optoelectronics Technology Co., Ltd. | 20% |
| Tianjin Uphoton Technology Co., Ltd. | 20% |
| Nanjing Uphoton Technology Co., Ltd. | 20% |
| Dongguan Yili Precision Manufacturing Co., Ltd. | 15% |
| Goertek Optical Technology (Hong Kong) Holdings Co., Limited | 16.5% |
| Goertek Optical Technology (Hong Kong) Co., Limited | 16.5% |
| Goertek Technology Co., Ltd. | 15% |
| Beijing Goertek Technology Co., Ltd. | 15% |
| Qingdao Goertek Acoustics Technology Co., Ltd. | 25% |
| Shenzhen Goertek Technology Co., Ltd. | 15% |
| Shanghai Goertek Technology Co., Ltd. | 25% |
| Nanjing Goertek Technology Co., Ltd. | 25% |
| Weifang Lokomo Precision Industry Co., Ltd. | 15% |
| Goertek Investment Co., Ltd. | 25% |
| Beijing Goertek Investment Management Co., Ltd. | 20% |
| Olive Smart Hardware Investment Center LP | - |
| Goertek Intelligence Technology Co., Ltd. | 15% |
| Name of taxpayer | Rate of income tax |
| Rongcheng Goertek Technology Co., Ltd. | 25% |
| Qingdao Goertek Commercial Factoring Co., Ltd. | 25% |
| Nanning Goertek Electronics Co., Ltd. | 25% |
| Nanning Goertek Trading Co., Ltd. | 25% |
| Xi'an Goertek Electronic Technology Co., Ltd. | 15% |
| Yishui TECO Electronics Technology Co., Ltd. | 25% |
| Qingdao Resonance I Venture Capital Fund LP | - |
| Weifang Goertek Electronic Technology Co., Ltd. | 25% |
| Qingdao Goertek Horizons Technology Co., Ltd. | 25% |
| Weifang High-tech Zone Goertek Education Center | 25% |
| Chongqing Goertek Auto Technology Co., Ltd. | 15% |
| Shanghai Goertek Technology Development Co., Ltd. | 25% |
| Qingdao Goertek Alpha Pixels Technology Co., Ltd. | 20% |
| Chengdu Goertek Technology Co., Ltd. | 20% |
| Xi'an Goertek Shijie Technology Co., Ltd. | 20% |
| Goertek Starshine (Qingdao) Inc. | 20% |
| Goertek Vina Co., Ltd. | 20% |
| Goertek (Korea) Technology Inc. | Corporation tax: The tax rate shall be 9% if the income is less than KRW 200 million; 19% if the income is KRW 200 million-20 billion; 21% if the income is KRW 20 billion-300 billion; and 24% if the income is more than KRW 300 billion; Corporate local tax: 10% of the amount of corporate tax. |
| Goertek (Hong Kong) Co., Limited | The tax rate of 8.25% is applied to the taxable profit which does not exceed HKD 2,000,000, and the tax rate of 16.5% is applied to the part of taxable profit which exceeds HKD 2,000,000. |
| Goertek Technology Vina Co., Ltd. | 20% |
| Goertek Precision Industry Vietnam Co., Ltd. | 20% |
| Goertek Smart Technology Vina Co., Ltd. | 20% |
| Goertek Electronics Vietnam Co., Ltd. | 20% |
| Goertek Europe ApS | 22% |
| Goertek Seiki Technology Co., Ltd. | Comprehensive tax rate 37.1% |
| Optimas Capital Partners Fund LP | - |
| Goertek Singapore Pte. Ltd. | 17% |
| Goertek Electronics, Inc. | The federal tax rate for enterprise income tax is 21%, and the local enterprise income tax rate in California is 8.84%. |
| Goertek Technology Taiwan Co., Ltd. | 20% |
| Goertek Technology Japan Co., Ltd. | Comprehensive tax rate 32.94% |
| Goertek Technology (Hong Kong) Co., Limited | 16.5% |
2. Tax incentives
(1) According to the Announcement on Filing the First Batch of High-Tech Enterprises by the Recognition Institutions in ShandongProvince in 2023 issued by the Office of Leading Group for the Recognition and Management of National High-Tech Enterprises onDecember 18, 2023, the Company has been recognized as a high-tech enterprise for a validity period of 3 years, and its preferentialperiod for enterprise income tax is from January 1, 2023, to December 31, 2025. The enterprise income tax rate of 15% applied to theCompany for the year 2024.
(2) According to the Announcement on Filing the Second Batch of High-Tech Enterprises by the Recognition Institutions in ShandongProvince in 2023, issued by the Office of Leading Group for the Recognition and Management of National High-Tech Enterprises onDecember 28, 2023, three subsidiaries, Weifang Goertek Electronics Co., Ltd., Weifang Goertek Microelectronics Co., Ltd., andWeifang Lokomo Precision Industry Co., Ltd., have been recognized as a high-tech enterprise for a validity period of 3 years, and thepreferential period for enterprise income tax is from January 1, 2023, to December 31, 2025. The enterprise income tax rate of 15%applied to its subsidiaries, Weifang Goertek Electronics Co., Ltd., Weifang Goertek Microelectronics Co., Ltd., and Weifang LokomoPrecision Industry Co., Ltd., for the year 2024.
(3) According to the Announcement on Filing the Second Batch of High-Tech Enterprises in Qingdao in 2022, issued by the Office ofLeading Group for the Recognition and Management of National High-Tech Enterprises on January 6, 2023, the subsidiary GoertekMicroelectronics Inc., has been recognized as a high-tech enterprise for a validity period of 3 years, and its preferential period forenterprise income tax is from January 1, 2022, to December 31, 2024. The enterprise income tax rate of 15% applied to the subsidiaryGoertek Microelectronics Inc. for the year 2024.
(4) According to the Announcement on Filing the First Batch of High-Tech Enterprises in Shandong Province in 2022, issued by theOffice of Leading Group for the Recognition and Management of National High-Tech Enterprises on January 4, 2023, two subsidiaries,Rongcheng Goertek Microelectronics Co., Ltd. and Yili Precision Manufacturing Co., Ltd., have been recognized as a high-techenterprise for a validity period of 3 years, and the preferential period for enterprise income tax is from January 1, 2022 to December31, 2024. The enterprise income tax rate of 15% applied to Rongcheng Goertek Microelectronics Co., Ltd. and Yili PrecisionManufacturing Co., Ltd. for year 2024.
(5) According to the Announcement on Filing the First Batch of High-Tech Enterprises by the Recognition Institutions in ShandongProvince in 2024 issued by the Office of Leading Group for the Recognition and Management of National High-Tech Enterprises onJanuary 2, 2025, a subsidiary, Goertek Optical Technology Co., Ltd., has been recognized as a high-tech enterprise for a validity periodof 3 years, and its preferential period for enterprise income tax is from January 1, 2024 to December 31, 2026. The enterprise incometax rate of 15% applied to the subsidiary, Goertek Optical Technology Co., Ltd., for year 2024.
(6) According to the Announcement on Filing High-Tech Enterprises by the Recognition Institutions in Zhejiang Province in 2024issued by the Office of Leading Group for the Recognition and Management of National High-Tech Enterprises on December 26, 2024,Jiaxing Uphoton Optoelectronics Technology Co., Ltd. has been recognized as a high-tech enterprise for a validity period of 3 years,and its preferential period for enterprise income tax is from January 1, 2024 to December 31, 2026. The enterprise income tax rate of15% applied to the subsidiary, Jiaxing Uphoton Optoelectronics Technology Co., Ltd. for the year 2024.
(7) According to the Notice on Publishing the Filings of the Third Batch of High-Tech Enterprises by the Recognition Institutions inGuangdong Province in 2024 issued by the Office of Leading Group for the Recognition and Management of National High-TechEnterprises on December 11, 2024, Dongguan Yili Precision Manufacturing Co., Ltd. a subsidiary of the Company, has been recognizedas a high-tech enterprise for a validity period of 3 years, and its preferential period for enterprise income tax is from January 1, 2024to December 31, 2026. The enterprise income tax rate of 15% applies to the subsidiary, Dongguan Yili Precision Manufacturing Co.,Ltd. for year 2024.
(8) According to the Announcement on Filing the First Batch of High-Tech Enterprises in Qingdao in 2022 issued by the Office ofLeading Group for the Recognition and Management of National High-Tech Enterprises on December 14, 2022, Goertek TechnologyCo., Ltd., has been recognized as a high-tech enterprise for a validity period of 3 years, and its preferential period for enterprise incometax is from January 1, 2022 to December 31, 2024. The enterprise income tax rate of 15% applied to the subsidiary, Goertek TechnologyCo., Ltd., for year 2024.
(9) According to the Announcement on Filing the Fourth Batch of High-Tech Enterprises by the Recognition Institutions in Beijing in2023 issued by the Office of Leading Group for the Recognition and Management of National High-Tech Enterprises on January 9,2024, a subsidiary, Beijing Goertek Technology Co., Ltd., has been recognized as a high-tech enterprise for a validity period of 3 years,and its preferential period for enterprise income tax is from January 1, 2023, to December 31, 2025. The enterprise income tax rate of15% applies to the subsidiary, Beijing Goertek Technology Co., Ltd., for year 2024.
(10) According to the Announcement on Filing the Third Batch of High-Tech Enterprises in Shenzhen in 2022 issued by the Office ofLeading Group for the Recognition and Management of National High-Tech Enterprises on December 19, 2022, a subsidiary, ShenzhenGoertek Technology Co., Ltd., has been recognized as a high-tech enterprise for a validity period of 3 years, and its preferential periodfor enterprise income tax is from January 1, 2022 to December 31, 2024. The enterprise income tax rate of 15% applied to the subsidiary,Shenzhen Goertek Technology Co., Ltd., for year 2024.
(11) According to the Announcement on Filing the Second Batch of High-Tech Enterprises in Guangdong Province in 2022 issued bythe Office of Leading Group for the Recognition and Management of National High-Tech Enterprises on December 22, 2022, GoertekIntelligence Technology Co., Ltd., a subsidiary of the Company, has been recognized as a high-tech enterprise for a validity period of
3 years, and its preferential period for enterprise income tax is from January 1, 2022 to December 31, 2024. The enterprise income taxrate of 15% applied to the subsidiary, Goertek Intelligence Technology Co., Ltd., for year 2024.
(12) According to the Announcement of the Ministry of Finance, the State Taxation Administration and the National Development andReform Commission on Continuing the Enterprise Income Tax Policies for the Large-Scale Development of Western China (C.Z.B.S.W.Z.J. G.J.F.Z.G.G.W. Announcement No. [2020] 23) issued by the Ministry of Finance, the State Taxation Administration and theNational Development and Reform Commission on April 23, 2020, from January 1, 2021 to December 31, 2030, enterprise income taxwill be levied at a reduced rate of 15% for encouraged industrial enterprises located in the western region. The enterprise income taxrate of 15% applied to the subsidiaries, Xi'an Goertek Electronic Technology Co., Ltd. and Chongqing Goertek Auto Technology Co.,Ltd., for the year 2024.
(13) The subsidiary, Goertek (Hong Kong) Co., Limited is an entity eligible for the two-tier profit tax system. The tax rate of 8.25% isapplied to the taxable profit which does not exceed HKD 2,000,000, and the tax rate of 16.5% is applied to the part of the taxable profitwhich exceeds HKD 2,000,000.
(14) According to the Announcement of the Ministry of Finance and the State Taxation Administration on the Relevant Tax and FeePolicies for Further Supporting the Development of Micro and Small Enterprises and Individual Industrial and CommercialHouseholds (Announcement No.12/2023 of the Ministry of Finance and the State Taxation Administration), from January 1, 2023, toDecember 31, 2027, for small and low-profit enterprises, the portion of annual taxable income not exceeding RMB 3 million shall beincluded in the taxable income at a rate of 25%, and enterprise income tax will be levied at the rate of 20%. The subsidiaries, BeijingGoertek Microelectronics Co., Ltd., Wuxi Goertek Microelectronics Co., Ltd., Shenzhen Goertek Microelectronics Co., Ltd., ShanghaiGoertek Microelectronics Co., Ltd., Qingdao MicroSense Intelligent Technology Co., Ltd., Goertek Optical Technology (Qingdao)Co., Ltd., Uphoton Technology (Beijing) Co., Ltd., Hangzhou Uphoton Optoelectronics Technology Co., Ltd., Tianjin UphotonTechnology Co., Ltd., Nanjing Uphoton Technology Co., Ltd., Beijing Goertek Investment Management Co., Ltd., Qingdao GoertekAlpha Pixels Technology Co., Ltd., Chengdu Goertek Technology Co., Ltd., Xi'an Goertek Shijie Technology Co., Ltd., and GoertekStarshine (Qingdao) Inc., Ltd. are eligible for the aforementioned preferential tax policies.
(15) According to the laws of Vietnam, GOERTEK MICROELECTRONICS VIETNAM COMPANY LIMITED, Goertek SmartTechnology Vina Co., Ltd., Goertek Electronics Vietnam Co., Ltd. and Goertek Precision Industry Vietnam Co., Ltd., the subsidiariesof the Company, enjoy tax exemption for 4 years and a 50% reduction of payable tax amounts for 9 subsequent years. The preferentialCIT rate is 10% for 15 years from the first year of income generation. At the same time, starting from the first profitable year, the firstto fourth years are exempt from corporate income tax, and the fifth to thirteenth years are subject to a 50% reduction in corporateincome tax. If the enterprise has no taxable profit within three years from the start of tax incentive activities, the tax holiday and taxreduction period will be calculated from the fourth year of operation. The subsidiary is exempt from corporate income tax in 2024.
(16) According to the laws of Vietnam, Goertek Technology Vina Co., Ltd., a subsidiary of the Company, enjoys tax exemption for 4years and a 50% reduction of payable tax amounts for 9 subsequent years. The preferential CIT rate is 10% for 15 years from the firstyear of income generation. At the same time, starting from the first profitable year, the first to fourth years are exempt from corporateincome tax, and the fifth to thirteenth years are subject to a 50% reduction in corporate income tax. If the enterprise has no taxableprofit within three years from the start of tax incentive activities, the tax holiday and tax reduction period will be calculated from thefourth year of operation. The halved preferential tax policy applied in 2024.
3. Others
NoneVII. Notes to consolidated financial statements
1. Cash and cash equivalents
Unit: RMB
| Item | Closing balance | Opening balance |
| Cash on hand | 104,171.55 | 60,959.92 |
| Bank deposits | 12,314,315,531.64 | 13,158,606,545.21 |
| Other monetary funds | 5,152,073,165.86 | 1,578,644,824.58 |
| Total | 17,466,492,869.05 | 14,737,312,329.71 |
| Including: Total amounts deposited abroad | 1,232,148,802.12 | 1,235,686,922.34 |
Explanation of other matters:
Other monetary funds that mainly consist of various types of deposits such as notes, bonds, and funds held in the Company's securitiesaccount at the end of the period.
2. Financial assets held for trading
Unit: RMB
| Item | Closing balance | Opening balance |
| Financial assets at fair value through profit and loss | 1,100,984,000.31 | 587,445,091.69 |
| Including: | ||
| Investment in debt instruments | 3,053,700.00 | |
| Investments in equity instruments | 548,668,959.95 | 480,161,497.26 |
| Derivative financial assets | 552,315,040.36 | 104,229,894.43 |
| Total | 1,100,984,000.31 | 587,445,091.69 |
3. Notes receivable
(1) Notes receivable listed by classification
Unit: RMB
| Item | Closing balance | Opening balance |
| Bank acceptance notes | 149,898,502.69 | 139,468,321.29 |
| Total | 149,898,502.69 | 139,468,321.29 |
(2) Classification and disclosure by bad debt provision method
Unit: RMB
| Category | Closing balance | Opening balance | ||||||||
| Book balance | Bad-debt provision | Book value | Book balance | Bad-debt provision | Book value | |||||
| Amount | Proportion | Amount | Proportion of accrual | Amount | Proportion | Amount | Proportion of accrual | |||
| Notes receivable with bad debt provision by group | 149,898,502.69 | 100.00% | 149,898,502.69 | 139,468,321.29 | 100.00% | 139,468,321.29 | ||||
| Including: | ||||||||||
| Bank acceptance notes | 149,898,502.69 | 100.00% | 149,898,502.69 | 139,468,321.29 | 100.00% | 139,468,321.29 | ||||
| Total | 149,898,502.69 | 100.00% | 149,898,502.69 | 139,468,321.29 | 100.00% | 139,468,321.29 | ||||
Provision for bad debts accrued on a portfolio basis: bank acceptance notes
Unit: RMB
| Name | Closing balance | ||
| Book balance | Bad-debt provision | Proportion of accrual | |
| Bank acceptance notes | 149,898,502.69 | 0.00 | 0.00% |
| Total | 149,898,502.69 | 0.00 | |
Description for basis of determining the group:
For details, please see Note V. 11. ''Impairment of financial assets''.If the provision for bad debts on notes receivable is based on the general model of expected credit losses:
? Applicable ? Not applicable
(3) Accrual, recovery or return of bad debt provision in current period
None
(4) Notes receivable pledged at the end of the period
Unit: RMB
| Item | Amount pledged at the end of the period |
| Bank acceptance notes | 13,923,842.731 |
| Total | 13,923,842.73 |
Note: 1 The note pledge amount is a splitting of a large denomination note into multiple bank acceptance notes in a smalldenomination.
(5) Notes receivable endorsed or discounted by the Group at the end of the period and not yet due on thebalance sheet date
Unit: RMB
| Item | Amount derecognized at the end of the period | Amount not derecognized at the end of the period |
| Bank acceptance notes | 100,000,000.00 | |
| Total | 100,000,000.00 |
(6) No notes that have been transferred to accounts receivable at the end of the period due to the non-performance of the contract of the drawerNone
(7) Notes receivable actually written off in the current period
None
4. Accounts receivable
(1) Disclosure by aging
Unit: RMB
| Aging | Closing book balance | Opening book balance |
| Within 1 year (including 1 year) | 18,059,400,488.90 | 12,543,107,806.98 |
| 1 to 2 years | 4,544,895.30 | 4,839,100.06 |
| 2 to 3 years | 186,898.40 | 6,516,243.34 |
| Over 3 years | 6,748,813.47 | 1,281,318.57 |
| 3 to 4 years | 6,348,865.09 | 470,416.03 |
| 4 to 5 years | 318,499.98 | 643,084.98 |
| Over 5 years | 81,448.40 | 167,817.56 |
| Total | 18,070,881,096.07 | 12,555,744,468.95 |
(2) Classification and disclosure by bad debt provision method
Unit: RMB
| Category | Closing balance | Opening balance | ||||||||
| Book balance | Bad-debt provision | Book value | Book balance | Bad-debt provision | Book value | |||||
| Amount | Proportion | Amount | Proportion of accrual | Amount | Proportion | Amount | Proportion of accrual | |||
| Accounts receivable for provision for bad debts accrued on a single basis | 3,028,367.32 | 0.02% | 3,028,367.32 | 100.00% | ||||||
| Including: | ||||||||||
| Company 1 | 3,028,367.32 | 0.02% | 3,028,367.32 | 100.00% | ||||||
| Accounts receivable | 18,067,852,728.75 | 99.98% | 186,480,696.81 | 1.03% | 17,881,372,031.94 | 12,555,744,468.95 | 100.00% | 131,125,792.14 | 1.04% | 12,424,618,676.81 |
| Category | Closing balance | Opening balance | ||||||||
| Book balance | Bad-debt provision | Book value | Book balance | Bad-debt provision | Book value | |||||
| Amount | Proportion | Amount | Proportion of accrual | Amount | Proportion | Amount | Proportion of accrual | |||
| for provision for bad debts accrued on a portfolio basis | ||||||||||
| Including: | ||||||||||
| Accounts receivable aging group | 17,785,746,898.57 | 98.42% | 185,070,167.66 | 1.04% | 17,600,676,730.91 | 12,496,453,228.93 | 99.53% | 130,829,335.94 | 1.05% | 12,365,623,892.99 |
| Portfolio of factoring receivables | 282,105,830.18 | 1.56% | 1,410,529.15 | 0.50% | 280,695,301.03 | 59,291,240.02 | 0.47% | 296,456.20 | 0.50% | 58,994,783.82 |
| Total | 18,070,881,096.07 | 100.00% | 189,509,064.13 | 1.05% | 17,881,372,031.94 | 12,555,744,468.95 | 100.00% | 131,125,792.14 | 1.04% | 12,424,618,676.81 |
Provision for bad debts accrued on a single basis: Unit 1
Unit: RMB
| Name | Opening balance | Closing balance | ||||
| Book balance | Bad-debt provision | Book balance | Bad-debt provision | Proportion of accrual | Reason for accrual | |
| Company 1 | 3,028,367.32 | 3,028,367.32 | 100.00% | Expected as unable to recover | ||
| Total | 3,028,367.32 | 3,028,367.32 | ||||
Provision for bad debts accrued on a portfolio basis: accounts receivable aging portfolio
Unit: RMB
| Name | Closing balance | ||
| Book balance | Bad-debt provision | Proportion of accrual | |
| Within 1 year | 17,777,294,658.72 | 177,772,946.59 | 1.00% |
| 1 to 2 years | 1,516,527.98 | 454,958.40 | 30.00% |
| 2 to 3 years | 186,898.40 | 93,449.20 | 50.00% |
| Over 3 years | 6,748,813.47 | 6,748,813.47 | 100.00% |
| Total | 17,785,746,898.57 | 185,070,167.66 | |
Description for basis of determining the group:
For further details, please see Note V. 11. ''Impairment of financial assets''
Provision for bad debts accrued on a portfolio basis: factoring receivables portfolio
Unit: RMB
| Name | Closing balance | ||
| Book balance | Bad-debt provision | Proportion of accrual | |
| Undue | 282,105,830.18 | 1,410,529.15 | 0.50% |
| Overdue 1-90 days | |||
| Overdue 91-180 days | |||
| Overdue 181-360 days | |||
| Overdue more than 360 days | |||
| Total | 282,105,830.18 | 1,410,529.15 | |
Description for basis of determining the group:
For further details, please see Note V. 11. ''Impairment of financial assets''If the provision for bad debts on accounts receivable is based on the general model of expected credit losses:
? Applicable ? Not applicableBad debt provision for factoring receivables accrued, reversed or recovered during the period
| Bad-debt provision | First stage | Second stage | Third stage | Total |
| Expected credit loss over the next 12 months | Expected credit loss for the entire duration (credit impairment not occurred) | Expected credit loss for the entire duration (credit impairment has occurred) | ||
| Balance as of January 1, 2024: | 296,456.20 | 296,456.20 | ||
| The balance as of January 1, 2024 is in the current period: | ||||
| - Transferred to second stage | ||||
| - Transferred to third stage | -13,884.13 | 13,884.13 | ||
| - Reversed to second stage | ||||
| - Reversed to first stage | ||||
| Accrual in the current period | 1,127,957.08 | 3,014,483.19 | 4,142,440.27 | |
| Current reverse | ||||
| Current resale | ||||
| Amount written off in the current period | ||||
| Other changes | ||||
| Balance as of December 31, 2024: | 1,410,529.15 | - | 3,028,367.32 | 4,438,896.47 |
(3) Accrual, recovery or return of bad debt provision in current period
Provision for bad debts of the current period:
Unit: RMB
| Category | Opening balance | Changes in amount of the current period | Closing balance | |||
| Accrual | Withdrawal or write-back | Write-off | Other | |||
| Provision for bad debts accrued on a single basis | 3,028,367.32 | 3,028,367.32 | ||||
| Category | Opening balance | Changes in amount of the current period | Closing balance | |||
| Accrual | Withdrawal or write-back | Write-off | Other | |||
| Provision for bad debts accrued on a portfolio basis | 131,125,792.14 | 54,737,211.70 | 3,510.00 | -621,202.97 | 186,480,696.81 | |
| Total | 131,125,792.14 | 57,765,579.02 | 3,510.00 | -621,202.97 | 189,509,064.13 | |
Among them, significant information of bad debt provision withdrawn or written back in the current period:
None
(4) Accounts receivable actually written off in current period
Unit: RMB
| Item | Written off amount |
| Accounts receivable actually written off | 3,510.00 |
Among them, information on accounts receivable significantly written off:
None
(5) The status of accounts receivable and contract assets in the top five of the closing balance collectedaccording to debtors
Unit: RMB
| Company name | Closing balance of accounts receivable | Closing balance of contract assets | Closing balance of accounts receivable and contract assets | Proportion of total balance of accounts receivable and contract assets at the end of the period | Closing balance of allowance for bad debts on accounts receivable and impairment provision for contract assets |
| Company 1 | 4,375,471,986.38 | 4,375,471,986.38 | 24.21% | 43,754,719.86 | |
| Company 2 | 4,059,760,774.72 | 4,059,760,774.72 | 22.47% | 40,597,607.75 | |
| Company 3 | 3,086,494,741.13 | 3,086,494,741.13 | 17.08% | 30,864,947.41 | |
| Company 4 | 1,491,475,297.93 | 1,491,475,297.93 | 8.25% | 14,914,752.98 | |
| Company 5 | 804,219,440.34 | 804,219,440.34 | 4.45% | 8,042,194.40 | |
| Total | 13,817,422,240.50 | 13,817,422,240.50 | 76.46% | 138,174,222.40 |
(6) Accounts receivable terminating confirmation due to transfer of financial assets at the end of the period
Unit: RMB
| Transfer method of financial assets | Amount of receivables whose recognition has been stopped | Gains or losses related to derecognition |
| Buyout factoring | 539,130,000.00 | -419,765.68 |
5. Receivables financing
(1) Receivables financing by classification
Unit: RMB
| Item | Closing balance | Opening balance |
| Notes receivable | 8,710,031.89 | 9,059,230.11 |
| Total | 8,710,031.89 | 9,059,230.11 |
(2) Classification and disclosure by bad debt provision method
Unit: RMB
| Category | Closing balance | Opening balance | ||||||||
| Book balance | Bad-debt provision | Book value | Book balance | Bad-debt provision | Book value | |||||
| Amount | Proportion | Amount | Proportion of accrual | Amount | Proportion | Amount | Proportion of accrual | |||
| Provision for bad debts accrued on a portfolio basis | 8,710,031.89 | 100.00% | 8,710,031.89 | 9,059,230.11 | 100.00% | 9,059,230.11 | ||||
| Including: | ||||||||||
| Bank acceptance notes | 8,710,031.89 | 100.00% | 8,710,031.89 | 9,059,230.11 | 100.00% | 9,059,230.11 | ||||
| Total | 8,710,031.89 | 100.00% | 8,710,031.89 | 9,059,230.11 | 100.00% | 9,059,230.11 | ||||
Provision for bad debts accrued on a portfolio basis: bank acceptance notes
Unit: RMB
| Name | Closing balance | ||
| Book balance | Bad-debt provision | Proportion of accrual | |
| Bank acceptance notes | 8,710,031.89 | 0.00% | |
| Total | 8,710,031.89 | ||
Description for basis of determining the group:
For further details, please see Note V. 11. ''Impairment of financial assets''If bad debt provision is accrued according to the general model of expected credit lossNone
(3) Provision, recovery, or return of bad debt provision in the current period
None
(4) Receivables financing pledged at the end of the period
None
(5) Receivables financing endorsed or discounted by the Company at the end of the period and not yet dueon the balance sheet date
Unit: RMB
| Item | Amount derecognized at the end of the period | Amount not derecognized at the end of the period |
| Bank acceptance notes | 6,741,628.18 | |
| Total | 6,741,628.18 |
(6) Receivables financing actually written off in the current period
None
(7) Changes in the current period of receivables financing and changes in fair value
Unit: RMB
| Item | Opening balance | Profit and loss from changes in fair value in the reporting period | Cumulative changes in fair value included in equity | Impairment accrued in current period | Purchase amount in the reporting period | Sales amount in the reporting period | Other changes | Closing balance |
| Receivables financing | 9,059,230.11 | -349,198.22 | 8,710,031.89 |
(8) Explanation of other matters
None
6. Other receivables
Unit: RMB
| Item | Closing balance | Opening balance |
| Other receivables | 99,984,370.19 | 89,261,417.90 |
| Total | 99,984,370.19 | 89,261,417.90 |
(1) Interest receivable
None
(2) Dividends receivable
None
(3) Other receivables
1) Classification of other receivables by nature of payment
Unit: RMB
| Nature of payment | Closing book balance | Opening book balance |
| Tax refund for export receivable | 12,485,724.69 | |
| Security deposit | 48,496,384.51 | 49,771,093.46 |
| Current account | 6,444,475.39 | 14,229,621.87 |
| Withholding and remitting social insurance and housing provident fund | 57,173,463.61 | 51,391,844.67 |
| Other | 1,733,206.73 | 578,282.97 |
| Total | 126,333,254.93 | 115,970,842.97 |
2) Disclosure by aging
Unit: RMB
| Aging | Closing book balance | Opening book balance |
| Within 1 year (including 1 year) | 94,618,978.76 | 80,649,301.96 |
| 1 to 2 years | 6,118,303.61 | 10,178,400.76 |
| 2 to 3 years | 4,440,519.74 | 5,017,037.63 |
| Over 3 years | 21,155,452.82 | 20,126,102.62 |
| 3 to 4 years | 3,675,514.27 | 10,157,378.27 |
| 4 to 5 years | 9,755,224.64 | 782,527.91 |
| Over 5 years | 7,724,713.91 | 9,186,196.44 |
| Total | 126,333,254.93 | 115,970,842.97 |
3) Classification and disclosure by bad debt provision method
? Applicable ? Not applicable
Unit: RMB
| Category | Closing balance | Opening balance | ||||||||
| Book balance | Bad-debt provision | Book value | Book balance | Bad-debt provision | Book value | |||||
| Amount | Proportion | Amount | Proportion of accrual | Amount | Proportion | Amount | Proportion of accrual | |||
| Provision for bad debts accrued on a single basis | ||||||||||
| Provision for bad debts accrued on a portfolio basis | 126,333,254.93 | 100.00% | 26,348,884.74 | 20.86% | 99,984,370.19 | 115,970,842.97 | 100.00% | 26,709,425.07 | 23.03% | 89,261,417.90 |
| Including: | ||||||||||
| Other receivables - credit risk portfolio | 126,333,254.93 | 100.00% | 26,348,884.74 | 20.86% | 99,984,370.19 | 115,970,842.97 | 100.00% | 26,709,425.07 | 23.03% | 89,261,417.90 |
| Total | 126,333,254.93 | 100.00% | 26,348,884.74 | 20.86% | 99,984,370.19 | 115,970,842.97 | 100.00% | 26,709,425.07 | 23.03% | 89,261,417.90 |
Provision for bad debts accrued on a portfolio basis: other receivables - credit risk portfolio
Unit: RMB
| Name | Closing balance | ||
| Book balance | Bad-debt provision | Proportion of accrual | |
| Other receivables - credit risk portfolio | 126,333,254.93 | 26,348,884.74 | 20.86% |
| Total | 126,333,254.93 | 26,348,884.74 | |
If bad debt provision is accrued according to the general model of expected credit loss:
Unit: RMB
| Bad-debt provision | First stage | Second stage | Third stage | Total |
| Expected credit loss over the next 12 months | Expected credit loss for the entire duration (credit impairment not occurred) | Expected credit loss for the entire duration (credit impairment has occurred) | ||
| Balance as of January 1, 2024: | 26,207,765.07 | 501,660.00 | 26,709,425.07 | |
| Balance as of January 1, 2024 in the current period | ||||
| - Transferred to second stage | ||||
| - Transferred to third stage | -20,000.00 | 20,000.00 |
| Bad-debt provision | First stage | Second stage | Third stage | Total |
| Expected credit loss over the next 12 months | Expected credit loss for the entire duration (credit impairment not occurred) | Expected credit loss for the entire duration (credit impairment has occurred) | ||
| - Reversed to second stage | ||||
| - Reversed to first stage | ||||
| Accrual in the current period | 649,448.67 | 649,448.67 | ||
| Current reverse | ||||
| Current resale | ||||
| Amount written off in the current period | 20,000.00 | 20,000.00 | ||
| Other changes | 989,989.00 | 989,989.00 | ||
| Balance as of December 31, 2024: | 25,847,224.74 | 501,660.00 | 26,348,884.74 |
Criteria for dividing each stage and the bad-debt reserves calculation and withdrawal proportionFor further details, please see Note V. 11. ''Impairment of financial assets''
4) Accrual, recovery or return of bad debt reserve in current period
Provision for bad debts of the current period:
Unit: RMB
| Category | Opening balance | Changes in amount of the current period | Closing balance | |||
| Accrual | Withdrawal or write-back | Charge-off or write-off | Other | |||
| Provision for bad debts reserve based on aging portfolio | 26,709,425.07 | 649,448.67 | 20,000.00 | 989,989.00 | 26,348,884.74 | |
| Total | 26,709,425.07 | 649,448.67 | 20,000.00 | 989,989.00 | 26,348,884.74 | |
Among them, significant amount in bad debt reserves written back or withdrawn in the current period:
None
5) Other receivables actually written off in the current period
Unit: RMB
| Item | Written off amount |
| Other receivables actually written off | 20,000.00 |
Among them, write-off of other significant receivables:
None
6) Other receivables of the 5 highest closing balance by debtor
Unit: RMB
| Company name | Nature of payment | Closing balance | Aging | Ratio in the total closing balance of other receivables | Closing balance of bad debt provision |
| Company 1 | Withholding and remitting social insurance and housing provident fund | 57,173,463.61 | Within 1 year | 45.26% | 571,734.64 |
| Company 2 | Refund of tax for export | 11,524,109.29 | Within 1 year | 9.12% | 115,241.09 |
| Company 3 | Security deposit | 5,942,151.35 | Over 3 years | 4.70% | 5,942,151.35 |
| Company name | Nature of payment | Closing balance | Aging | Ratio in the total closing balance of other receivables | Closing balance of bad debt provision |
| Company 4 | Earnest money | 5,759,208.01 | Over 3 years | 4.56% | 5,759,208.01 |
| Company 5 | Security deposit | 5,750,720.00 | Within 1 year | 4.55% | 57,507.20 |
| Total | 86,149,652.26 | 68.19% | 12,445,842.29 |
7) Reported under other receivables due to centralized management of fundsNone
7. Prepayments
(1) Presentation of prepayments by aging
Unit: RMB
| Aging | Closing balance | Opening balance | ||
| Amount | Proportion | Amount | Proportion | |
| Within 1 year | 179,117,151.92 | 75.60% | 253,097,169.07 | 99.40% |
| 1 to 2 years | 57,797,282.72 | 24.40% | 850,916.46 | 0.33% |
| 2 to 3 years | 605,114.54 | 0.24% | ||
| Over 3 years | 80,600.00 | 0.03% | ||
| Total | 236,914,434.64 | 254,633,800.07 | ||
Explanation of reasons why prepayments aged more than 1 year with significant amount are not settled in time:
| Company name | Closing balance | Reasons for no settlement in a timely manner |
| Company 1 | 56,205,204.72 | Payments made in advance to relevant major suppliers to ensure the supply of key raw materials |
(2) Advance payment in the five highest closing balance by seller
| Company name | Closing balance (RMB) | Percentage of the total balance of prepayment at the end of the period (%) |
| Company 1 | 159,182,320.68 | 67.19 |
| Company 2 | 9,454,560.00 | 3.99 |
| Company 3 | 4,860,468.56 | 2.05 |
| Company 4 | 4,000,000.00 | 1.69 |
| Company 5 | 3,471,799.50 | 1.47 |
| Total | 180,969,148.74 | 76.39 |
8. Inventory
Whether the Company needs to comply with disclosure requirements of real estate industryNo
(1) Inventory classification
Unit: RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Inventory provision or provision for impairment of contract performance cost | Book value | Book balance | Inventory provision or provision for impairment of contract performance cost | Book value | |
| Raw materials | 4,144,196,623.67 | 116,145,737.92 | 4,028,050,885.75 | 5,294,238,418.73 | 126,412,070.17 | 5,167,826,348.56 |
| Products in process | 1,405,943,985.47 | 22,258,003.80 | 1,383,685,981.67 | 1,175,295,870.64 | 3,985,092.59 | 1,171,310,778.05 |
| Goods in stock | 4,635,256,717.16 | 105,879,302.13 | 4,529,377,415.03 | 4,120,631,607.08 | 82,093,360.33 | 4,038,538,246.75 |
| Revolving materials | 537,754,596.18 | 537,754,596.18 | 417,219,021.06 | 417,219,021.06 | ||
| Total | 10,723,151,922.48 | 244,283,043.85 | 10,478,868,878.63 | 11,007,384,917.51 | 212,490,523.09 | 10,794,894,394.42 |
(2) Data resources recognized as inventory
None
(3) Inventory provision or provision for impairment of contract performance cost
Unit: RMB
| Item | Opening balance | Increased amount in the current period | Decreased amount in the current period | Closing balance | ||
| Accrual | Other | Write-back or resale | Other | |||
| Raw materials | 126,412,070.17 | 246,837,780.51 | 255,598,814.15 | 1,505,298.61 | 116,145,737.92 | |
| Products in progress | 3,985,092.59 | 29,551,289.65 | 11,128,665.13 | 149,713.31 | 22,258,003.80 | |
| Goods in stock | 82,093,360.33 | 124,801,684.61 | 100,210,198.22 | 805,544.59 | 105,879,302.13 | |
| Total | 212,490,523.09 | 401,190,754.77 | 366,937,677.50 | 2,460,556.51 | 244,283,043.85 | |
Provision for inventory obsolescence accrued on a portfolio basis
Unit: RMB
| Portfolio name | End of the period | Beginning of the period | ||||
| Closing balance | Falling price reserves | Calculation and withdrawal proportion of falling price reserves | Opening balance | Falling price reserves | Calculation and withdrawal proportion of falling price reserves | |
| Inventory age portfolio | 8,216,929,847.58 | 130,374,194.59 | 1.59% | 8,999,461,128.51 | 145,516,023.37 | 1.62% |
| Total | 8,216,929,847.58 | 130,374,194.59 | 1.59% | 8,999,461,128.51 | 145,516,023.37 | 1.62% |
Accrual standard on provision for inventory obsolescence accrued on a portfolio basisFor the accrual standard of provision for inventory obsolescence based on inventory age portfolio, please refer to Note V, 17(3).Note: The Company's individual provision for inventory obsolescence: The book balance at the end of the period was RMB
2,506,222,074.90, with a provision for inventory obsolescence of RMB 113,908,849.26. The book balance at the beginning of theperiod was RMB 2,007,923,789.00, with a provision for inventory obsolescence of RMB 66,974,499.72.
(4) Explanation of the closing balance of inventory containing the capitalized amount of borrowing costsNone
(5) Explanation of amortization amount of contract performance cost in current periodNone
9. Non-current assets due within one year
Unit: RMB
| Item | Closing balance | Opening balance |
| Certificate of deposit of large amount | 358,821,194.44 | 494,634,708.33 |
| Guarantee deposit | 30,000,000.00 | |
| Total | 388,821,194.44 | 494,634,708.33 |
(1) Debt investments that mature within one year
? Applicable ? Not applicable
(2) Other debt investments that mature within one year
? Applicable ? Not applicable
10. Other current assets
Unit: RMB
| Item | Closing balance | Opening balance |
| Input tax retained for VAT | 418,805,679.49 | 330,575,153.58 |
| Input tax to be verified and to be deducted | 245,124,511.75 | 82,547,638.67 |
| Advance payment of enterprise income tax | 26,071,641.51 | 81,283,426.42 |
| Certificate of deposit of large amount | 904,138,083.33 | |
| Other | 33,339,146.60 | 15,427,845.82 |
| Total | 1,627,479,062.68 | 509,834,064.49 |
11. Investments in other equity instruments
Unit: RMB
| Name of project | Closing balance | Opening balance | Gains included in other comprehensive income in the current period | Losses included in other comprehensive income in the current period | Gains included in other comprehensive income at the end of the current period | Losses included accumulated in other comprehensive income at the end of the current period | Dividend income recognized in the current period | Reasons for designation of financial assets at fair value through other comprehensive income |
| Item 1 | 397,123,388.03 | 287,540,812.75 | 104,314,424.19 | 55,906,332.92 | Non-trading equity instrument | |||
| Item 2 | 84,024,083.70 | 141,654,000.00 | 55,578,551.41 | 55,578,551.41 | Non-trading equity |
| Name of project | Closing balance | Opening balance | Gains included in other comprehensive income in the current period | Losses included in other comprehensive income in the current period | Gains included in other comprehensive income at the end of the current period | Losses included accumulated in other comprehensive income at the end of the current period | Dividend income recognized in the current period | Reasons for designation of financial assets at fair value through other comprehensive income |
| instrument | ||||||||
| Item 3 | 18,691,855.90 | 20,000,000.00 | 1,308,144.10 | 1,308,144.10 | Non-trading equity instrument | |||
| Item 4 | 59,963,319.92 | 50,000,000.00 | 9,963,319.92 | 9,963,319.92 | Non-trading equity instrument | |||
| Item 5 | 9,528,885.53 | 35,413,500.00 | 26,168,031.46 | 26,168,031.46 | Non-trading equity instrument | |||
| Item 6 | 56,330,406.36 | 56,661,570.96 | 1,165,845.17 | 1,165,845.17 | Non-trading equity instrument | |||
| Total | 625,661,939.44 | 591,269,883.71 | 114,277,744.11 | 84,220,572.14 | 65,869,652.84 | 84,220,572.14 |
Derecognition in the current period
Unit: RMB
| Name of project | Cumulative gains transferred to retained earnings | Cumulative losses transferred to retained earnings | Reasons for derecognition |
| Item 2 | 481,132.08 | Equities sold |
Disclose investments in non-trading equity instruments of the period by item
Unit: RMB
| Name of project | Dividend income recognized | Accumulative gains | Accumulative losses | Amount of other comprehensive income transferred to undistributed profits | Reasons for designation of financial assets at fair value through other comprehensive income | Reasons for other comprehensive income transferred to undistributed profits |
| Item 1 | 55,906,332.92 | Non-trading equity instrument | ||||
| Item 2 | 56,059,683.49 | -481,132.08 | Non-trading equity instrument | Equities sold | ||
| Item 3 | 1,308,144.10 | Non-trading equity instrument | ||||
| Item 4 | 9,963,319.92 | Non-trading equity instrument | ||||
| Item 5 | 26,168,031.46 | Non-trading equity instrument | ||||
| Item 6 | 1,165,845.17 | Non-trading equity instrument |
12. Long-term equity investments
Unit: RMB
| Invested entity | Opening balance (book value) | Opening balance of impairment provision | Increase or decrease in the current period | Closing balance (book value) | Closing balance of impairment provision | |||||||
| Investment addition | Investment reduction | Recognized investment gain and loss under equity method | Other comprehensive income adjustments | Other changes in equity | Cash dividends or profits declared | Provision for impairment | Other | |||||
| I. Joint Venture | ||||||||||||
| II. Affiliated enterprises | ||||||||||||
| Joint ventures | 760,220,882.07 | -26,835,728.84 | 436.41 | 1,026,051.86 | 734,411,641.50 | |||||||
| Sub-total | 760,220,882.07 | -26,835,728.84 | 436.41 | 1,026,051.86 | 734,411,641.50 | |||||||
| Total | 760,220,882.07 | -26,835,728.84 | 436.41 | 1,026,051.86 | 734,411,641.50 | |||||||
The recoverable amount is determined based on the net of fair value less disposal costs.? Applicable ? Not applicableThe recoverable amount is determined based on the present value of estimated future cash flow.? Applicable ? Not applicable
13. Other non-current financial assets
Unit: RMB
| Item | Closing balance | Opening balance |
| Financial assets classified as measured at fair value with changes recorded in current profits and losses | ||
| Including: Debt instrument investment | ||
| Investments in equity instruments | 418,003,302.41 | 322,640,244.40 |
| Derivative financial assets | ||
| Mixed instrument investment | 14,719,479.87 | |
| Total | 432,722,782.28 | 322,640,244.40 |
14. Fixed assets
Unit: RMB
| Item | Closing balance | Opening balance |
| Fixed assets | 21,803,396,794.34 | 22,305,456,354.63 |
| Liquidation of fixed assets | ||
| Total | 21,803,396,794.34 | 22,305,456,354.63 |
(1) Overview of fixed assets
Unit: RMB
| Item | Houses and buildings | Production equipment | Test equipment | Office equipment | Transportation equipment | Total |
| I. Original book value: | ||||||
| 1. Opening balance | 11,442,765,337.22 | 21,058,184,980.38 | 2,939,374,764.18 | 697,933,149.06 | 21,256,702.42 | 36,159,514,933.26 |
| 2. Amount increased in current period | 1,250,386,165.61 | 2,034,579,160.07 | 487,851,430.71 | 78,971,181.94 | 2,486,730.63 | 3,854,274,668.96 |
| (1) Purchase | 1,301,881,557.42 | 241,736,505.87 | 82,962,339.91 | 2,541,538.32 | 1,629,121,941.52 | |
| (2) Transfer from construction in progress | 1,312,888,406.64 | 888,853,894.30 | 258,958,698.73 | 2,460,700,999.67 | ||
| (3) Increase in business mergers | ||||||
| (4) Impact of difference from translation of statements in foreign currency | -63,285,753.08 | -156,156,291.65 | -12,843,773.89 | -3,991,157.97 | -54,807.69 | -236,331,784.28 |
| (5) Provisional estimate adjustment | 783,512.05 | 783,512.05 | ||||
| 3. Amount decreased in current period | 402,998,846.26 | 1,003,164,866.04 | 422,131,471.47 | 22,291,043.65 | 1,395,819.25 | 1,851,982,046.67 |
| (1) Disposal or scrapping | 387,230,410.53 | 962,136,191.69 | 356,312,955.81 | 22,291,043.65 | 1,395,819.25 | 1,729,366,420.93 |
| (2) Transfer to construction in progress | 41,028,674.35 | 65,818,515.66 | 106,847,190.01 | |||
| (3) Provisional estimate adjustment | 15,768,435.73 | 15,768,435.73 | ||||
| 4. Closing balance | 12,290,152,656.57 | 22,089,599,274.41 | 3,005,094,723.42 | 754,613,287.35 | 22,347,613.80 | 38,161,807,555.55 |
| II. Accumulated depreciation | ||||||
| 1. Opening balance | 1,975,017,721.84 | 9,585,481,875.18 | 1,248,234,698.47 | 470,038,899.78 | 14,921,019.54 | 13,293,694,214.81 |
| 2. Amount increased in current period | 385,260,178.00 | 2,096,957,752.37 | 305,507,836.63 | 82,744,762.31 | 1,520,134.37 | 2,871,990,663.68 |
| (1) Accrual | 390,456,819.29 | 2,136,737,169.48 | 308,287,210.36 | 84,640,562.12 | 1,540,020.11 | 2,921,661,781.36 |
| (2) Impact of | -5,196,641.29 | -39,779,417.11 | -2,779,373.73 | -1,895,799.81 | -19,885.74 | -49,671,117.68 |
| Item | Houses and buildings | Production equipment | Test equipment | Office equipment | Transportation equipment | Total |
| difference from translation of statements in foreign currency | ||||||
| 3. Amount decreased in current period | 13,592,093.12 | 333,332,766.45 | 185,181,243.72 | 19,075,487.19 | 1,128,762.66 | 552,310,353.14 |
| (1) Disposal or scrapping | 13,592,093.12 | 318,847,946.99 | 172,237,781.34 | 19,075,487.19 | 1,128,762.66 | 524,882,071.30 |
| (2) Transfer to construction in progress | 14,484,819.46 | 12,943,462.38 | 27,428,281.84 | |||
| 4. Closing balance | 2,346,685,806.72 | 11,349,106,861.10 | 1,368,561,291.38 | 533,708,174.90 | 15,312,391.25 | 15,613,374,525.35 |
| III. Impairment provision | ||||||
| 1. Opening balance | 551,593,070.50 | 6,850,837.43 | 1,920,455.89 | 560,364,363.82 | ||
| 2. Amount increased in current period | 224,727,037.79 | 17,103,793.61 | 241,830,831.40 | |||
| (1) Accrual | 224,770,079.41 | 17,104,743.55 | 241,874,822.96 | |||
| (2) Impact of difference from translation of statements in foreign currency | -43,041.62 | -949.94 | -43,991.56 | |||
| 3. Amount decreased in current period | 55,686,766.14 | 1,051,708.70 | 420,484.52 | 57,158,959.36 | ||
| (1) Disposal or scrapping | 55,686,766.14 | 1,051,708.70 | 420,484.52 | 57,158,959.36 | ||
| 4. Closing balance | 720,633,342.15 | 22,902,922.34 | 1,499,971.37 | 745,036,235.86 | ||
| IV. Book value | ||||||
| 1. Closing book value | 9,943,466,849.85 | 10,019,859,071.16 | 1,613,630,509.70 | 219,405,141.08 | 7,035,222.55 | 21,803,396,794.34 |
| 2. Opening book value | 9,467,747,615.38 | 10,921,110,034.70 | 1,684,289,228.28 | 225,973,793.39 | 6,335,682.88 | 22,305,456,354.63 |
(2) Fixed assets temporarily idle
Unit: RMB
| Item | Original book value | Accumulated depreciation | Impairment provision | Book value | Notes |
| Buildings | 671,191,063.98 | 89,460,986.84 | 581,730,077.14 | ||
| Production equipment | 804,865,588.66 | 179,925,954.40 | 613,600,733.28 | 11,338,900.98 |
| Item | Original book value | Accumulated depreciation | Impairment provision | Book value | Notes |
| Measuring equipment | 37,510,469.66 | 17,644,026.56 | 19,769,072.20 | 97,370.90 | |
| Office equipment | 1,513,567,122.30 | 287,030,967.80 | 633,369,805.48 | 593,166,349.02 |
(3) Fixed assets leased out through operating leases
Unit: RMB
| Item | Closing book value |
| Buildings | 533,066,064.25 |
| Production equipment and other equipment | 459,372,451.13 |
| Total | 992,438,515.38 |
(4) Overview of the fixed assets for which certificates of title to be obtained
Unit: RMB
| Item | Book value | Reasons for not obtaining the certificate of title |
| 9# Factory building | 131,467,134.45 | Property rights certificate under processing |
| 83# Factory building | 50,433,378.85 | Property rights certificate under processing |
| 5# Office building | 17,504,970.84 | Property rights certificate under processing |
| 23# Apartment | 2,376,886.92 | Property rights certificate under processing |
| Total | 201,782,371.06 |
(5) Impairment testing of fixed assets
? Applicable ? Not applicableThe recoverable amount is determined based on the net of fair value less disposal costs.? Applicable ? Not applicable
Unit: RMB
| Item | Book value | Recoverable amount | Impairment amount | Determination of fair value and cost of disposal | Key parameters | Basis for determining key parameters |
| Machinery and equipment | 243,151,272.36 | 1,276,449.40 | 241,874,822.96 | Market Approach | Market Price, Disposal Costs | 1. Fair value is based on market price or the market price of similar and comparable assets. 2. Disposal costs refer to relevant taxes and fees related to the disposal of assets |
| Total | 243,151,272.36 | 1,276,449.40 | 241,874,822.96 |
The recoverable amount is determined based on the present value of estimated future cash flow.? Applicable ? Not applicable
(6) Liquidation of fixed assets
None
15. Construction in progress
Unit: RMB
| Item | Closing balance | Opening balance |
| Construction in progress | 1,359,277,841.73 | 2,014,541,273.09 |
| Construction materials | 38,139,057.93 | 56,739,070.46 |
| Total | 1,397,416,899.66 | 2,071,280,343.55 |
(1) Overview of construction in progress
Unit: RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Equipment to be installed | 668,183,310.03 | 668,183,310.03 | 853,544,230.09 | 853,544,230.09 | ||
| Infrastructure construction | 138,194,880.68 | 138,194,880.68 | 94,544,059.28 | 94,544,059.28 | ||
| 80# Factory building | 128,224,538.27 | 128,224,538.27 | 70,498,165.12 | 70,498,165.12 | ||
| Sporadic projects | 84,422,222.32 | 84,422,222.32 | 92,314,664.82 | 92,314,664.82 | ||
| A3 factory building | 57,853,025.99 | 57,853,025.99 | 45,591,287.12 | 45,591,287.12 | ||
| C7 factory building | 55,813,526.84 | 55,813,526.84 | 49,204,958.23 | 49,204,958.23 | ||
| A2 factory building | 50,057,057.35 | 50,057,057.35 | ||||
| A1 factory building | 49,096,180.09 | 49,096,180.09 | ||||
| B1 factory building | 35,916,877.46 | 35,916,877.46 | ||||
| Qingdao 2# Office building | 32,737,064.37 | 32,737,064.37 | ||||
| B6 factory building | 25,089,291.21 | 25,089,291.21 | ||||
| C6 factory building | 21,912,349.66 | 21,912,349.66 | ||||
| 78# Factory building | 7,697,938.03 | 7,697,938.03 | 5,870,826.50 | 5,870,826.50 | ||
| IT Room | 4,079,579.43 | 4,079,579.43 | ||||
| A8 factory building | 81,270,534.70 | 81,270,534.70 | ||||
| C8 factory building | 73,918,047.41 | 73,918,047.41 | ||||
| A5 factory building | 69,865,450.61 | 69,865,450.61 | ||||
| A1 Power Center | 61,274,301.68 | 61,274,301.68 | ||||
| B4 factory building | 90,019,857.17 | 90,019,857.17 | ||||
| A2 Carport | 52,070,864.72 | 52,070,864.72 | ||||
| 83# Factory building | 47,193,044.87 | 47,193,044.87 | ||||
| 5# Office building | 16,549,975.01 | 16,549,975.01 | ||||
| C Power Center | 12,648,040.32 | 12,648,040.32 | ||||
| A7 factory building | 82,278,754.04 | 82,278,754.04 | ||||
| A6 factory building | 59,116,843.41 | 59,116,843.41 | ||||
| B5 factory building | 69,399,452.46 | 69,399,452.46 | ||||
| B3 factory building | 87,367,915.53 | 87,367,915.53 | ||||
| Total | 1,359,277,841.73 | 1,359,277,841.73 | 2,014,541,273.09 | 2,014,541,273.09 | ||
(2) Increase or decrease of significant construction in progress in current period
Unit: RMB
| Name of project | Budget amount | Opening balance | Increased amount in the current period | Amount transferred to fixed assets in current period | Other amount decreased in current period | Closing balance | Proportion of total project input to budget | Project progress | Accumulated amount of interest capitalization | Including: Amount of interest capitalization in current period | Interest capitalization rate for current period | Source of funds |
| 80# Factory building | 187,000,000.00 | 70,498,165.12 | 57,726,373.15 | 128,224,538.27 | 68.57% | 70.00% | Other | |||||
| A3 factory building | 116,508,000.00 | 45,591,287.12 | 13,945,629.40 | 1,683,890.53 | 57,853,025.99 | 49.66% | 60.00% | Other | ||||
| C7 factory building | 119,543,340.00 | 49,204,958.23 | 8,367,195.37 | 1,758,626.76 | 55,813,526.84 | 46.69% | 60.00% | Other | ||||
| A2 factory building | 150,803,730.00 | 50,500,825.59 | 443,768.24 | 50,057,057.35 | 33.19% | 40.00% | Other | |||||
| Total | 573,855,070.00 | 165,294,410.47 | 130,540,023.51 | 3,886,285.53 | 291,948,148.45 |
(3) Provision for impairment of construction in progress in current period
None
(4) Impairment testing of construction in progress
? Applicable ? Not applicable
(5) Construction materials
Unit: RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Construction materials | 38,139,057.93 | 38,139,057.93 | 56,739,070.46 | 56,739,070.46 | ||
| Total | 38,139,057.93 | 38,139,057.93 | 56,739,070.46 | 56,739,070.46 | ||
16. Bearer biological assets
(1) Bearer biological assets with cost measurement mode
? Applicable ? Not applicable
(2) Impairment testing of bearer biological assets with cost measurement mode? Applicable ? Not applicable
(3) Bearer biological assets with fair value econometric mode
? Applicable ? Not applicable
17. Oil and gas assets
? Applicable ? Not applicable
18. Right-of-use assets
(1) Situation of the right-of-use assets
Unit: RMB
| Item | Houses and buildings | Other | Total |
| I. Original book value | |||
| 1. Opening balance | 880,961,125.40 | 229,830.81 | 881,190,956.21 |
| 2. Amount increased in current period | 405,162,157.48 | 405,162,157.48 | |
| (1) New leases in the current period | 412,674,877.83 | 412,674,877.83 | |
| (2) Business combination | |||
| (3) Impact of difference from translation of statements in foreign currency | -7,512,720.35 | -7,512,720.35 | |
| 3. Amount decreased in current period | 50,972,499.44 | 50,972,499.44 | |
| (1) Disposal | 50,972,499.44 | 50,972,499.44 | |
| 4. Closing balance | 1,235,150,783.44 | 229,830.81 | 1,235,380,614.25 |
| II. Accumulated depreciation | |||
| 1. Opening balance | 265,755,091.79 | 4,014.51 | 265,759,106.30 |
| 2. Amount increased in current period | 188,890,620.21 | 36,130.56 | 188,926,750.77 |
| (1) Accrual | 193,852,745.73 | 36,130.56 | 193,888,876.29 |
| (2) Impact of difference from translation of statements in foreign currency | -4,962,125.52 | -4,962,125.52 | |
| 3. Amount decreased in current period | 50,413,424.23 | 50,413,424.23 | |
| (1) Disposal | 50,413,424.23 | 50,413,424.23 | |
| 4. Closing balance | 404,232,287.77 | 40,145.07 | 404,272,432.84 |
| III. Impairment provision | |||
| 1. Opening balance | |||
| 2. Amount increased in current period | |||
| (1) Accrual | |||
| 3. Amount decreased in current period | |||
| (1) Disposal | |||
| 4. Closing balance | |||
| IV. Book value | |||
| 1.Closing book value | 830,918,495.67 | 189,685.74 | 831,108,181.41 |
| 2. Opening book value | 615,206,033.61 | 225,816.30 | 615,431,849.91 |
(2) Impairment testing of the right-of-use assets
? Applicable ? Not applicable
19. Intangible assets
(1) Overview of intangible assets
Unit: RMB
| Item | Land-use right | Patent right | Non-patent technology | Software | Trademark | Total |
| I. Original book value | ||||||
| 1. Opening balance | 2,159,725,273.80 | 146,964,410.00 | 3,866,663,551.74 | 343,068,352.71 | 76,000,000.00 | 6,592,421,588.25 |
| 2. Amount increased in current period | -28,550,411.93 | 746,592,398.48 | 42,482,753.61 | 760,524,740.16 | ||
| (1) Purchase | 42,580,537.01 | 42,580,537.01 | ||||
| (2) Internal R&D | 746,592,398.48 | 746,592,398.48 | ||||
| (3) Increase in business combinations | ||||||
| (4) Impact of difference from translation of statements in foreign currency | -28,550,411.93 | -97,783.40 | -28,648,195.33 | |||
| 3. Amount decreased in current period | 101,547,264.00 | 162,330,010.61 | 836,847.99 | 264,714,122.60 | ||
| (1) Disposal | 101,547,264.00 | 162,330,010.61 | 836,847.99 | 264,714,122.60 | ||
| 4. Closing balance | 2,029,627,597.87 | 146,964,410.00 | 4,450,925,939.61 | 384,714,258.33 | 76,000,000.00 | 7,088,232,205.81 |
| II. Accumulated amortization | ||||||
| 1. Opening balance | 246,335,434.16 | 6,274,468.97 | 2,848,822,707.20 | 209,651,286.84 | 1,266,666.67 | 3,312,350,563.84 |
| 2. Amount increased in current period | 47,678,072.16 | 20,610,726.72 | 764,461,123.47 | 48,152,943.24 | 15,200,000.00 | 896,102,865.59 |
| (1) Accrual | 49,230,120.63 | 20,610,726.72 | 764,461,123.47 | 48,242,077.93 | 15,200,000.00 | 897,744,048.75 |
| (2) Impact of difference from translation of statements in foreign currency | -1,552,048.47 | -89,134.69 | -1,641,183.16 | |||
| 3. Amount decreased in current period | 8,450,298.09 | 162,330,010.61 | 830,626.74 | 171,610,935.44 | ||
| (1) Disposal | 8,450,298.09 | 162,330,010.61 | 830,626.74 | 171,610,935.44 | ||
| 4. Closing balance | 285,563,208.23 | 26,885,195.69 | 3,450,953,820.06 | 256,973,603.34 | 16,466,666.67 | 4,036,842,493.99 |
| III. Impairment |
| Item | Land-use right | Patent right | Non-patent technology | Software | Trademark | Total |
| provision | ||||||
| 1. Opening balance | ||||||
| 2. Amount increased in current period | ||||||
| (1) Accrual | ||||||
| 3. Amount decreased in current period | ||||||
| (1) Disposal | ||||||
| 4. Closing balance | ||||||
| IV. Book value | ||||||
| 1. Book value at the end of the reporting period | 1,744,064,389.64 | 120,079,214.31 | 999,972,119.55 | 127,740,654.99 | 59,533,333.33 | 3,051,389,711.82 |
| 2. Opening book value | 1,913,389,839.64 | 140,689,941.03 | 1,017,840,844.54 | 133,417,065.87 | 74,733,333.33 | 3,280,071,024.41 |
At the end of this period, the proportion of intangible assets created through internal research and development of the Company tothe balance of intangible assets is 57.74%.
(2) Data resources determined as intangible assets
? Applicable ? Not applicable
(3) Overview of land-use right without certificates of title
None
(4) Impairment testing of intangible assets
? Applicable ? Not applicable
20. Development expense
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance | ||
| Internal development expense | Increase in business mergers | Recognized as intangible assets | Transfer to current profit and loss | |||
| Self-developed technologies for electroacoustic products | 446,804,705.86 | 469,838,453.38 | 746,592,398.48 | 170,050,760.76 | ||
21. Goodwill
(1) Original book value of goodwill
Unit: RMB
| Name of the invested entity or matter forming goodwill | Opening balance | Increase in the current period | Decrease in the current period | Closing balance | ||
| Formed by business combinations | Other | Disposal | Other | |||
| Goertek Electronics, Inc. | 1,743,540.56 | 1,743,540.56 | ||||
| Weifang Goertek Communication Technology Co., Ltd. | 15,115,644.52 | 15,115,644.52 | ||||
| Goertek Europe ApS | 8,831,473.29 | 8,831,473.29 | ||||
| Uphoton Technology (Shaoxing) Co., Ltd. | 588,174,794.48 | 588,174,794.48 | ||||
| Total | 613,865,452.85 | 613,865,452.85 | ||||
(2) Impairment provision for goodwill
Unit: RMB
| Name of the invested entity or matter forming goodwill | Opening balance | Increase in the current period | Decrease in the current period | Closing balance | ||
| Accrual | Other | Disposal | Other | |||
| Goertek Europe ApS | 8,831,473.29 | 8,831,473.29 | ||||
| Total | 8,831,473.29 | 8,831,473.29 | ||||
(3) Information about the asset group or combination of asset groups of goodwill
| Name | Composition and Basis of the Asset Group or combination of asset groups to Which It Belongs | Operating Division and Basis | Consistency with Previous Years |
| Uphoton Technology (Shaoxing) Co., Ltd.- System Business | Including long-term assets related to the system business operations of Uphoton Technology (Shaoxing) Co., Ltd., with cash inflows generated being largely independent of cash inflows from other assets or asset groups. | For internal management purposes, this asset group belongs to the precision components business. | Yes |
| Uphoton Technology (Shaoxing) Co., Ltd. - Component Business | Including long-term assets related to the component business operations of Uphoton Technology (Shaoxing) Co., Ltd., with cash inflows generated being largely independent of cash inflows from other assets or asset groups. | For internal management purposes, this asset group belongs to the precision components business. | Yes |
Explanation of other mattersComposition of the asset group or combination of asset groups of important goodwill:
Unit: RMB
| Composition of the asset group or combination of asset groups | Uphoton Technology (Shaoxing) Co., Ltd.- System Business | Uphoton Technology (Shaoxing) Co., Ltd. - Component Business |
| Book value of the asset group or combination of asset groups | 52,378,960.51 | 149,078,579.90 |
| Book value of goodwill allocated to this asset group or combination of asset groups | 152,925,446.56 | 435,249,347.92 |
| Book value of the asset group or combination of asset groups that include goodwill | 205,304,407.07 | 584,327,927.82 |
Note: Method of goodwill apportionment to the asset group or combination of asset groups: The apportionment is based on theproportion of the fair value of each asset group or combination of asset groups to the total fair value of the relevant asset group orcombination of asset groups.
(4) Specific methods for determining the recoverable amount
The recoverable amount is determined based on the net of fair value less disposal costs.? Applicable ? Not applicableThe recoverable amount is determined based on the present value of estimated future cash flow.? Applicable ? Not applicable
Unit: RMB
| Item | Book value | Recoverable amount | Impairment amount | Forecast period duration | Key parameters of the forecast period | Key parameters of the stable period | Basis for determining the key parameters of the stable period |
| Uphoton Technology (Shaoxing) Co., Ltd.- System Business | 205,304,407.07 | 222,927,400.00 | 7 years (from 2025 to 2031), followed by a stable period. | Revenue growth rate, discount rate 1 | Revenue growth rate, discount rate 2 | Based on the past performance of the asset group and expectations for market development. | |
| Uphoton Technology (Shaoxing) Co., Ltd. - Component Business | 584,327,927.82 | 638,303,300.00 | 7 years (from 2025 to 2031), followed by a stable period. | Revenue growth rate, discount rate 3 | Revenue growth rate, discount rate 4 | ||
| Total | 789,632,334.89 | 861,230,700.00 |
Remarks:
1. Uphoton Technology (Shaoxing) Co., Ltd. - System Business: The product revenue forecast for 2025 is based on market salesconditions and the Company's production and sales plan by product category, with an expected revenue growth rate of 176.89%. From2026 to 2031, the estimated revenue growth rate is between 5.99% and 168.54%, while the discount rate is 13.205%.
2. Uphoton Technology (Shaoxing) Co., Ltd. - System Business: The revenue growth rate in the stable period is 0% and the discountrate is 13.205%.
3. Uphoton Technology (Shaoxing) Co., Ltd. - Component Business: The product revenue forecast for 2025 is based on market salesconditions and the Company's production and sales plan by product category, with an expected revenue growth rate of 135.10%. From2026 to 2031, the estimated revenue growth rate is between 6.89% and 114.45%, while the discount rate is 13.205%.
4. Uphoton Technology (Shaoxing) Co., Ltd. - Component Business: The revenue growth rate in the stable period is 0% and the discountrate is 13.205%.Reasons for significant discrepancies between the foregoing information and the information used in previous years' impairment tests
or external information:
NoneReasons for significant discrepancies between the information used in the Company's previous years' impairment tests and the actualsituation of the yearNone
(5) Performance commitment completion and corresponding goodwill impairment situationThere is performance commitment when goodwill is formed and the reporting period or the previous period of the reporting period iswithin the performance commitment period? Applicable ? Not applicable
22. Long-term prepaid expenses
Unit: RMB
| Item | Opening balance | Increased amount in the current period | Amortized amount in the current period | Other decreased amount | Closing balance |
| Expenditure on house improvement | 366,977,276.54 | 33,217,306.18 | 81,014,703.75 | 1,322,303.93 | 317,857,575.04 |
| IT project service fee | 33,868,077.94 | 36,506,337.39 | 25,544,354.62 | 8,165.05 | 44,821,895.66 |
| Design fee | 4,381,029.00 | 518,680.27 | 2,468,138.10 | 2,431,571.17 | |
| Financing guarantee fee | 6,250,000.00 | 750,000.00 | 4,541,666.66 | 2,458,333.34 | |
| Other | 570,276.19 | 29,451.33 | 591,876.17 | 7,851.35 | |
| Total | 412,046,659.67 | 71,021,775.17 | 114,160,739.30 | 1,330,468.98 | 367,577,226.56 |
23. Deferred tax assets/liabilities
(1) Deferred tax assets not offset
Unit: RMB
| Item | Closing balance | Opening balance | ||
| Deductible temporary difference | Deferred tax assets | Deductible temporary difference | Deferred tax assets | |
| Provision for impairment of assets | 143,628,975.01 | 24,177,569.09 | 187,791,490.61 | 29,792,145.97 |
| Unrealized profit from intra-group transactions | 979,902,150.39 | 170,237,500.96 | 1,131,161,206.27 | 188,180,881.90 |
| Deductible loss | 8,037,120,227.11 | 1,257,849,925.00 | 7,949,926,507.37 | 1,253,526,618.03 |
| Government grants | 79,705,626.84 | 13,595,397.46 | 123,854,596.87 | 20,310,571.81 |
| Financial assets held for trading - changes in fair value of equity instrument | 599,094,647.11 | 98,845,541.48 | 97,304,476.36 | 15,034,908.60 |
| Temporary differences of fixed assets | 35,034,933.57 | 5,255,240.04 | 38,356,112.38 | 5,753,416.86 |
| Lease liabilities | 538,997,523.83 | 117,320,296.73 | 630,560,463.73 | 96,756,559.56 |
| Advance payment for factoring business | 2,540,682.67 | 635,170.67 | ||
| Total | 10,416,024,766.53 | 1,687,916,641.43 | 10,158,954,853.59 | 1,609,355,102.73 |
(2) Deferred tax liabilities not offset
Unit: RMB
| Item | Closing balance | Opening balance | ||
| Taxable temporary difference | Deferred tax liabilities | Taxable temporary difference | Deferred tax liabilities | |
| Asset appreciation after business combination not involving enterprises under common control | 214,282,338.95 | 35,836,053.80 | 251,185,339.82 | 41,487,520.22 |
| Changes in the fair value of derivative financial instruments | 552,247,360.34 | 87,858,549.32 | 104,229,894.43 | 17,197,932.59 |
| Difference in time point for recognition of interest income of factoring business | 5,836,382.08 | 1,459,095.52 | 5,935,766.66 | 1,483,941.67 |
| Difference between the book value of fixed assets and their tax bases | 2,510,836,299.47 | 446,327,317.74 | 3,454,994,983.11 | 596,025,479.50 |
| Financial assets held for trading - changes in fair value of equity instrument | 56,623,367.90 | 8,493,505.19 | 47,858,392.97 | 7,178,758.95 |
| Right-of-use assets | 830,782,037.83 | 155,691,505.72 | 615,431,849.91 | 94,606,542.41 |
| Total | 4,170,607,786.57 | 735,666,027.29 | 4,479,636,226.90 | 757,980,175.34 |
(3) Deferred tax assets or liabilities presented in net amount after offsetting
Unit: RMB
| Item | Amount of deferred tax assets and liabilities mutually offset at the end of the period | Closing balance of deferred tax assets or liabilities after offsetting | Amount of deferred tax assets and liabilities mutually offset at the beginning of the period | Opening balance of deferred tax assets or liabilities after offsetting |
| Deferred tax assets | 14,299,328.51 | 1,673,617,312.92 | 1,609,355,102.73 | |
| Deferred tax liabilities | 14,299,328.51 | 721,366,698.78 | 757,980,175.34 |
(4) Details of unrecognized deferred tax assets
Unit: RMB
| Item | Closing balance | Opening balance |
| Deductible temporary difference | 2,194,524,181.06 | 1,368,219,823.12 |
| Deductible loss | 2,484,134,842.82 | 987,684,531.31 |
| Government grants | 270,483,447.14 | 201,469,460.92 |
| Intra-group transaction | 421,204,796.22 | 355,291,930.95 |
| Lease liabilities | 408,989,822.79 | 14,603,113.98 |
| Total | 5,779,337,090.03 | 2,927,268,860.28 |
(5) Deductible loss of unrecognized deferred tax assets will expire in the following years
Unit: RMB
| Year | Closing balance | Opening balance | Notes |
| 2024 | 18,696,741.06 | ||
| 2025 | 38,992,037.06 | 55,803,979.86 | |
| 2026 | 92,712,000.00 | 100,932,581.25 | |
| 2027 | 124,300,130.51 | 132,003,790.64 | |
| 2028 | 211,774,431.14 | 226,015,025.30 | |
| 2029 | 570,656,537.68 | 34,117,796.46 | |
| 2030 | 40,430,198.27 | 40,430,198.27 | |
| 2031 | 33,727,365.38 | 163,633,635.10 | |
| 2032 | 145,949,988.44 | 164,201,128.77 | |
| 2033 | 57,317,581.45 | 51,849,654.60 | |
| 2034 and beyond | 1,168,274,572.89 | ||
| Total | 2,484,134,842.82 | 987,684,531.31 |
24. Other non-current assets
Unit: RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Prepayment for long-term assets | 195,782,708.85 | 195,782,708.85 | 150,258,931.39 | 150,258,931.39 | ||
| Certificates of deposit issued by banks | 1,737,898,965.71 | 1,737,898,965.71 | 998,012,152.77 | 998,012,152.77 | ||
| Guarantee deposit | 30,000,000.00 | 30,000,000.00 | 30,000,000.00 | 30,000,000.00 | ||
| The portion due within one year (Note VII. 9) | -388,821,194.44 | -388,821,194.44 | -494,634,708.33 | -494,634,708.33 | ||
| Total | 1,574,860,480.12 | 1,574,860,480.12 | 683,636,375.83 | 683,636,375.83 | ||
25. Assets with restricted ownership or right to use
Unit: RMB
| Item | End of the period | Beginning of the period | ||||||
| Book balance | Book value | Type of restriction | Restriction situations | Book balance | Book value | Type of restriction | Restriction situations | |
| Cash and cash equivalents | 5,012,975,983.79 | 5,012,975,983.79 | Pledged | Mainly deposits for handling bills, letters of guarantee, etc. | 1,456,289,098.94 | 1,456,289,098.94 | Pledged | Mainly deposits for handling bills, letters of guarantee, etc. |
| Notes receivable | 113,923,842.73 | 113,923,842.73 | Pledged | Bill pledges, unconfirmed bill discounts, etc. | 100,866,907.03 | 100,866,907.03 | Pledged | Bill pledges, unconfirmed bill discounts, etc. |
| Intangible assets | 61,897,657.63 | 60,553,375.19 | Mortgage | For mortgage loan | 61,897,657.63 | 61,897,657.63 | Mortgage | For mortgage loan |
| Non-current assets due within one year | 388,821,194.44 | 388,821,194.44 | Pledged | Mainly for pledging large-denomination deposits, issuing financing guarantees, notes and so on | 453,106,027.78 | 453,106,027.78 | Pledged | Mainly for pledging large-denomination deposits, issuing financing guarantees, notes and so on |
| Other current assets | 592,758,666.66 | 592,758,666.66 | Pledged | |||||
| Other non-current assets | 731,674,555.99 | 731,674,555.99 | Pledged | 533,377,444.44 | 533,377,444.44 | Pledged | ||
| Total | 6,902,051,901.24 | 6,900,707,618.80 | 2,605,537,135.82 | 2,605,537,135.82 |
26. Short-term borrowings
(1) Types of Short-term borrowings
Unit: RMB
| Item | Closing balance | Opening balance |
| Pledge borrowings | ||
| Mortgage borrowings | ||
| Secured borrowings | 101,014,894.49 | 191,949,621.83 |
| Credit borrowings | 7,512,265,275.42 | 4,922,541,694.79 |
| Discounted borrowings | 100,000,000.00 | 100,000,000.00 |
| Total | 7,713,280,169.91 | 5,214,491,316.62 |
Explanation of the types of Short-term borrowings:
The year-end balance of the guaranteed loan is RMB 101,014,894.49, consisting of RMB 100,000,000.00 of principal and RMB1,014,894.49 of interest. The loan is secured by a guarantee provided by Goertek Group
(2) Short-term borrowings that are overdue and not repaid
None
27. Financial liabilities held for trading
Unit: RMB
| Item | Closing balance | Opening balance |
| Financial liabilities held for trading | 604,980,242.99 | 129,579,785.95 |
| Including: | ||
| Derivative financial liabilities | 604,980,242.99 | 129,579,785.95 |
| Total | 604,980,242.99 | 129,579,785.95 |
28. Notes payable
Unit: RMB
| Type | Closing balance | Opening balance |
| Commercial acceptance notes | 70,000,000.00 | 30,000,000.00 |
| Bank acceptance notes | 3,766,921,742.97 | 4,223,514,820.18 |
| Domestic letter of credit | 123,344,349.30 | 284,839,800.50 |
| Total | 3,960,266,092.27 | 4,538,354,620.68 |
The amount of notes payable due and unpaid at the end of this period is RMB 0.00.
29. Accounts Payable
(1) Presentation of accounts payable
Unit: RMB
| Item | Closing balance | Opening balance |
| Material cost and others | 20,606,964,237.50 | 16,626,231,694.18 |
| Payment for equipment | 789,803,137.19 | 234,749,834.37 |
| Payment for construction projects | 565,456,881.68 | 721,281,830.62 |
| Total | 21,962,224,256.37 | 17,582,263,359.17 |
(2) Important accounts payable aged above 1 year or overdue
None
30. Other payables
Unit: RMB
| Item | Closing balance | Opening balance |
| Other payables | 96,306,705.81 | 87,474,942.48 |
| Total | 96,306,705.81 | 87,474,942.48 |
(1) Interest payable
None
(2) Dividends payable
None
(3) Other payables
1) Presentation of other payables by nature of payment
Unit: RMB
| Item | Closing balance | Opening balance |
| Current accounts payable | 52,875,646.83 | 30,601,293.49 |
| Employee benefits payable | 2,528,015.07 | 2,959,471.15 |
| Margin and deposit payable | 40,903,043.91 | 53,914,177.84 |
| Total | 96,306,705.81 | 87,474,942.48 |
2) Other important payables aged above 1 year or overdue
None
31. Contract liabilities
Unit: RMB
| Item | Closing balance | Opening balance |
| Advance payment received for products | 4,052,359,576.04 | 3,472,638,215.20 |
| Total | 4,052,359,576.04 | 3,472,638,215.20 |
32. Employee benefits payable
(1) Presentation of employee benefits payable
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| I. Short-term payroll | 1,214,890,196.49 | 8,496,738,944.61 | 8,426,327,469.29 | 1,285,301,671.81 |
| II. Post-employment benefits—defined contribution plans | 180,397.56 | 683,130,395.15 | 683,310,792.71 | |
| III. Termination benefits | 4,474,946.60 | 16,546,686.09 | 21,021,632.69 | |
| Total | 1,219,545,540.65 | 9,196,416,025.85 | 9,130,659,894.69 | 1,285,301,671.81 |
(2) Presentation of short-term payroll
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| 1. Salaries, bonuses, allowances and subsidies | 1,207,315,382.67 | 7,488,695,610.38 | 7,413,119,592.43 | 1,282,891,400.62 |
| 2. Employee welfare fee | 421,031,413.42 | 421,031,413.42 | ||
| 3. Social insurance premium | 113,563.67 | 309,431,695.14 | 309,545,258.81 | |
| Incl.: Medical insurance premium | 103,895.38 | 284,799,300.51 | 284,903,195.89 | |
| Work injury insurance premium | 7,399.07 | 23,974,334.44 | 23,981,733.51 | |
| Maternity insurance premium | 2,269.22 | 658,060.19 | 660,329.41 | |
| 4. Housing provident fund | 30,300.00 | 258,748,513.70 | 258,764,702.87 | 14,110.83 |
| 5. Labor union expenditure and employee education expenses | 7,430,950.15 | 18,831,711.97 | 23,866,501.76 | 2,396,160.36 |
| Total | 1,214,890,196.49 | 8,496,738,944.61 | 8,426,327,469.29 | 1,285,301,671.81 |
(3) Presentation of defined contribution plans
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| 1. Basic endowment insurance premium | 174,372.34 | 653,843,811.46 | 654,018,183.80 | |
| 2. Unemployment insurance premium | 6,025.22 | 29,286,583.69 | 29,292,608.91 | |
| Total | 180,397.56 | 683,130,395.15 | 683,310,792.71 |
Explanation of other matters:
The Group contributes to mandatory pension program and unemployment benefit programs established by government authority. Underthese programs, the Group makes monthly contributions to these programs at certain percentages according to the social insurancecontribution base for 2024. Except the above monthly contributions, the Group is not under other payment obligations. Correspondingexpenditures are recorded in the current profits and losses, or related asset costs when incurred.
33. Tax payable
Unit: RMB
| Item | Closing balance | Opening balance |
| VAT | 16,078,207.99 | 20,391,817.39 |
| Enterprise income tax | 212,212,744.22 | 29,601,348.32 |
| Personal income tax | 74,590,634.96 | 13,907,551.43 |
| City maintenance and construction tax | 6,711,168.43 | 4,043,865.01 |
| Education surcharges | 2,401,322.71 | 816,335.64 |
| Local education surcharges | 1,677,581.81 | 732,968.31 |
| Housing property tax | 18,691,456.42 | 22,511,435.33 |
| Land use tax | 3,200,462.36 | 6,287,778.70 |
| Stamp duties tax | 18,914,484.44 | 21,505,223.06 |
| Other taxes | 1,099,386.81 | 1,057,730.83 |
| Total | 355,577,450.15 | 120,856,054.02 |
34. Non-current liabilities due within one year
Unit: RMB
| Item | Closing balance | Opening balance |
| Long-term borrowings due within one year | 4,638,235,268.67 | 945,537,351.58 |
| Lease liabilities due within one year (Notes VII, 37) | 285,209,271.77 | 126,507,675.26 |
| Long-term employee benefits payable due within one year | 124,233.89 | |
| Total | 4,923,444,540.44 | 1,072,169,260.73 |
35. Other current liabilities
Unit: RMB
| Item | Closing balance | Opening balance |
| VAT payable—tax on items to be resold | 3,214,059.97 | 4,718,260.10 |
| Total | 3,214,059.97 | 4,718,260.10 |
36. Long-term borrowings
(1) Types of long-term borrowings
Unit: RMB
| Item | Closing balance | Opening balance |
| Mortgage borrowings | 106,119,838.88 | 150,213,125.00 |
| Secured borrowings | 2,090,077,963.83 | 3,269,566,929.13 |
| Credit borrowings | 3,783,239,449.86 | 4,157,228,049.31 |
| Long-term borrowings due within one year (Note VII, 34) | -4,638,235,268.67 | -945,537,351.58 |
| Total | 1,341,201,983.90 | 6,631,470,751.86 |
Description of types of long-term borrowings:
The period-end balance of secured borrowing is RMB 2,090,077,963.83, consisting of RMB 2,095,490,093.84 principle and RMB -5,412,130.01 adjusted interest. A part of the amount, RMB 1,480,000,000.00, is secured by a guarantee provided by Goertek Groupand the remaining is secured by a guarantee provided by its subsidiaries.Explanation of other matters, including interest rate range:
The interest rate range for long-term borrowings is 2.20%-6.29% on December 31, 2024. (2.40%-7.21% on December 31, 2023).
37. Lease liabilities
Unit: RMB
| Item | Closing balance | Opening balance |
| Lease payment | 1,040,151,234.91 | 718,922,935.00 |
| Plus: Unrecognized financing fees | -85,976,762.48 | -74,255,700.11 |
| Lease liabilities due within one year (Notes VII, 34) | -285,209,271.77 | -126,507,675.26 |
| Total | 668,965,200.66 | 518,159,559.63 |
38. Deferred income
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance | Cause of formation |
| Government grants | 519,084,658.34 | 83,689,225.00 | 84,859,893.15 | 517,913,990.19 | See Note XI "Government Grants" |
| Total | 519,084,658.34 | 83,689,225.00 | 84,859,893.15 | 517,913,990.19 | - |
39. Other non-current liabilities
Unit: RMB
| Item | Closing balance | Opening balance |
| Equity of other partners of the fund company | 452,293,738.43 | 348,058,624.72 |
| Total | 452,293,738.43 | 348,058,624.72 |
40. Share capital
Unit: RMB
| Opening balance | Increase or decrease in the change (+, -) | Closing balance | |||||
| New shares | Bonus shares | Transferred from reserves | Other | Sub-total | |||
| Total shares | 3,420,403,200 | 69,210,155 | -3,268,611 | 65,941,544 | 3,486,344,744 | ||
Explanation of other matters:
The Company's stock options under the 2021 and 2023 Incentive Plan are currently in the exercise period. Due to employees' exerciseof the right, the Company issued 69,210,155 Class A Shares to the incentive targets.The Company has a remaining 3,268,611 shares from its share repurchase that have not been used for the stock incentive plan oremployee stock ownership plan, and the three-year holding period is about to expire. The Company convened the 13th meeting of thesixth Board of Directors on January 15, 2024, and the first extraordinary general meeting of shareholders in 2024 on February 1, 2024,where it reviewed and approved the Proposal to Cancel a Portion of the Company's Repurchased Shares. The proposal stipulates thatthe Company will cancel the remaining 3,268,611 shares deposited in the repurchase specific securities account at the conclusion ofthe three-year holding period, thereby reducing the Company's registered capital accordingly.
As of December 31, 2024, the 65,000,000 shares of the Company held by the controlling shareholders and their persons acting inconcert have been pledged to China Merchants Securities Co., Ltd. for a period from June 1, 2023 to May 30, 2025, representing 1.86%of total shares of the Company.
41. Capital surplus
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| Capital premium (Share capital premium) | 8,044,733,215.98 | 1,938,825,750.55 | 307,526,292.04 | 9,676,032,674.49 |
| Other capital surplus | 953,639,154.63 | 332,593,042.37 | 669,077,606.90 | 617,154,590.10 |
| Total | 8,998,372,370.61 | 2,271,418,792.92 | 976,603,898.94 | 10,293,187,264.59 |
Explanation of other matters, including the increase and decrease in the current period and explanation of reasons for changes:
① The capital reserve - share premium increased by RMB 1,938,825,750.55 this period. Reasons for the increase: (1) stock optionexercises, which increased the share premium by RMB 1,190,949,093.49; (2) the employee stock ownership plan and stock optionunlock, which transferred RMB 669,077,606.90 from other capital reserves to share premium; (3) due to individual performanceevaluation, the actual share of unlocked shares granted to the grantees of the Company's "Home No. 6" Employee Stock Purchase Planwas less than the target share of unlocked shares. As a result, the sale price of the corresponding share increased the capital surplus -equity premium by RMB 78,347,662.97; (4) changes of shareholding of subsidiaries Dongguan Yili Precision Manufacturing Co., Ltd.and Jiaxing Guochao Optoelectronics Technology Co., Ltd., which increased the capital reserve by RMB 451,387.19.
② The capital reserve - share premium decreased by RMB 307,526,292.04 during the reporting period. Reasons for the decrease: (1)The remaining shares of the Company's repurchased shares were not used in the Stock Incentive Plan or the Employee Stock OwnershipPlan and the three-year holding period was about to expire, so the remaining shares were canceled and the share premium was reducedby RMB 97,606,944.70; (2) changes of shareholding of subsidiaries Goertek Microelectronics Inc. and Qingdao Resonance I VentureCapital Fund LP which reduced the capital reserve by RMB 209,919,347.34.
③ The capital reserve - other capital reserves increased by RMB 332,593,042.37 this period, mainly due to (1) share-based paymentsamounting to RMB 331,566,990.51; (2) the impact of changes in other owner's equity in invested entities under the equity method,which increased by RMB 1,026,051.86.
④ Capital reserve – other capital reserve decreased by RMB 669,077,606.90 for the current period, and all belonged to the employeestock ownership plan and stock option unlocking, with other capital reserve of RMB 669,077,606.90 being transferred into equitypremium.
42. Treasury stock
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| Shares of the Company repurchased for employee stock programs or stock option incentives | 278,530,746.47 | 497,162,992.63 | 100,875,555.70 | 674,818,183.40 |
| Total | 278,530,746.47 | 497,162,992.63 | 100,875,555.70 | 674,818,183.40 |
Explanation of other matters, including the increase and decrease in the current period and explanation of reasons for changes:
As of December 31, 2024, there were 39,434,946 treasure stock, representing 1.13% of the total share capital of the Company.
(1) Treasure stock stocks repurchase situation for the current period
At the 10th meeting of the 6th Board of Directors of the Company held on October 26, 2023, the Proposal on the Plan to Re-purchaseShares of the Company through Centralized Bidding and other related proposals was deliberated and adopted, approving the Companyto repurchase its own shares at a price of no more than RMB 25.49/share for employee stock programs or equity incentives throughcentralized bidding, where the total amount of funding for share repurchase shall be no less than RMB 500 million and no more thanRMB 0.7 billion. The proposals shall be implemented no later than the end of 12 months after they were reviewed and adopted by the
Board of Directors of the Company. As of the end of the period, the Company repurchased a total of 29,802,246 shares, and this sharerepurchase plan has been completed.
(2) Transferred treasure stock for the current period
The Company has a remaining 3,268,611 shares from its share repurchase that have not been used for the stock incentive plan oremployee stock ownership plan, and the three-year holding period is about to expire. The Company convened the 13th meeting of thesixth Board of Directors on January 15, 2024, and the first extraordinary general meeting of shareholders in 2024 on February 1, 2024,where it reviewed and approved the Proposal to Cancel a Portion of the Company's Repurchased Shares. The proposal stipulates thatthe Company will cancel the remaining 3,268,611 shares deposited in the repurchase specific securities account at the conclusion ofthe three-year holding period, thereby reducing the Company's treasure stock accordingly.
43. Other comprehensive income
Unit: RMB
| Item | Opening balance | 2024 | Closing balance | |||||
| Amount incurred before income tax in the current period | Less: Recorded in other comprehensive income for the previous period and transferred in profit or loss for the current period | Less: Recorded in other comprehensive income for the previous period and transferred in undistributed profits for the current period | Less: Income tax expenses | Amount after tax attributable to the parent company | Attributed after tax to minority shareholders | |||
| I. Other comprehensive income that cannot be reclassified into profit and loss | -43,034,531.24 | 30,057,171.97 | 9,082,795.67 | 20,974,376.30 | -33,951,735.57 | |||
| Including: Changes in the fair value of other equity instruments | -43,034,531.24 | 30,057,171.97 | 9,082,795.67 | 20,974,376.30 | -33,951,735.57 | |||
| II. Other comprehensive income that will be reclassified into profit and loss | 2,099,591.35 | -412,890,617.25 | -413,368,849.78 | 478,232.53 | -411,269,258.43 | |||
| Including: other comprehensive income that can be reversed through profit and loss under the equity method | -12,650.40 | 436.41 | 436.41 | -12,213.99 | ||||
| Difference from translation of financial statements in foreign currency | 2,112,241.75 | -412,891,053.66 | -413,369,286.19 | 478,232.53 | -411,257,044.44 | |||
| Total other comprehensive income | -40,934,939.89 | -382,833,445.28 | -404,286,054.11 | 21,452,608.83 | -445,220,994.00 |
Explanation of other matters, including the adjustment of the effective part of cash flow hedging gains and losses into the initiallyrecognized amount of the hedged item:
① Other comprehensive income that cannot be reclassified into profit and loss: Under the item of changes in the fair value of otherequity instruments, RMB 20,974,376.30 is attributable to minority shareholders after tax, of which RMB 24,075,769.10 is the equityof other partners of the fund company. The statement is presented in other non-current liabilities.
② Other comprehensive income that will be reclassified into profit and loss: Under the item of difference from translation of financialstatements in foreign currency, RMB 478,232.53 is attributable to minority shareholders after tax. Of which, RMB 1,291,023.79 is theequity of other partners of the fund company. The statement is presented in other non-current liabilities.
44. Specific reserve
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| Safety production expenses | 1,551,313.67 | 8,193,801.30 | 6,732,757.04 | 3,012,357.93 |
| Total | 1,551,313.67 | 8,193,801.30 | 6,732,757.04 | 3,012,357.93 |
45. Surplus reserve
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| Statutory surplus reserve | 1,665,066,603.96 | 140,430,167.05 | 1,805,496,771.01 | |
| Total | 1,665,066,603.96 | 140,430,167.05 | 1,805,496,771.01 |
Explanation of surplus reserve, including the increase and decrease in the current period and explanation of reasons for changes:
According to Company Law and Articles of Association, the Company allocates 10% of net profits to the statutory surplus reserve. TheCompany does not need to allocate further amounts if the cumulative amount of the statutory surplus reserve reaches more than 50%of the registered capital.
46. General risk reserve
| Item | Opening balance (RMB) | Increase in the current period | Decrease in the current period | Closing balance (RMB) |
| Reserve for risks in financing factoring business | 6,081,200.00 | 6,081,200.00 |
Note: According to Notice by the General Office of the China Banking and Insurance Regulatory Commission of Strengthening theSupervision and Administration of Commercial Factoring Enterprises (YBJBF [2019] No. 205), the Group allocates 1% of the closingbalance of financing factoring business to the provision for risks.
47. Undistributed profits
Unit: RMB
| Item | 2024 | 2023 |
| Undistributed profits at the end of last period before adjustment | 17,038,581,549.12 | 16,507,798,239.34 |
| Total undistributed profits at the beginning of the adjustment period (increase+, decrease-) | 1,753,356.25 | |
| Undistributed profits at the beginning of the period after adjustment | 17,038,581,549.12 | 16,509,551,595.59 |
| Plus: net profit attributable to the owner of the parent company in the current period | 2,665,044,826.06 | 1,088,076,730.88 |
| Less: Withdrawal of statutory surplus reserve | 140,430,167.05 | 218,530,482.45 |
| Withdrawal of any surplus reserve | ||
| Appropriation of general risk reserve | ||
| Common stock dividends payable | 850,462,393.45 | 340,516,294.90 |
| Common stock dividends converted to share capital | ||
| Add: Disposal of investments in other equity instruments | -481,132.08 | |
| Undistributed profits at the end of the period | 18,712,252,682.60 | 17,038,581,549.12 |
Details of the adjustment of the undistributed profits at the beginning of the period:
1). The undistributed profit affected by the retroactive adjustment in accordance with Accounting Standards for Business Enterprisesand its related new regulations at the beginning of the period is RMB 0.00.
2). The undistributed profit affected by the change of accounting policy at the beginning of the period is RMB 0.00.
3). The undistributed profit affected by the correction of major accounting errors at the beginning of the period is RMB 0.00.
4). The undistributed profit affected by the change of combination scope caused by the common control at the beginning of theperiod is RMB 0.00.
5). The undistributed profit affected by other adjustments at the beginning of the period is RMB 0.00.
48. Revenue and cost of sales
Unit: RMB
| Item | 2024 | 2023 | ||
| Revenue | Cost of sales | Revenue | Cost of sales | |
| Main business | 98,545,585,814.34 | 87,572,307,509.64 | 95,885,691,189.51 | 87,326,051,000.75 |
| Other business | 2,408,262,341.74 | 2,187,079,259.28 | 2,688,211,083.63 | 2,427,013,209.24 |
| Total | 100,953,848,156.08 | 89,759,386,768.92 | 98,573,902,273.14 | 89,753,064,209.99 |
Whether the lower of the audited net profit before and the audited net profit after deducting non-recurring profits and losses isnegative? Yes ? NoBreakdown of the revenue and cost of sales:
Unit: RMB
| Classification of contracts | Division 1 | Total | ||
| Revenue | cost of sales | Revenue | cost of sales | |
| Business Type | ||||
| Including: | ||||
| Electronic components | 98,545,585,814.34 | 87,572,307,509.64 | 98,545,585,814.34 | 87,572,307,509.64 |
| Other business income | 2,408,262,341.74 | 2,187,079,259.28 | 2,408,262,341.74 | 2,187,079,259.28 |
| As per Product Classification | ||||
| Precision components | 15,050,929,866.12 | 11,813,778,081.46 | 15,050,929,866.12 | 11,813,778,081.46 |
| Smart audio device | 26,296,149,936.78 | 23,806,494,507.31 | 26,296,149,936.78 | 23,806,494,507.31 |
| Smart hardware | 57,198,506,011.44 | 51,952,034,920.87 | 57,198,506,011.44 | 51,952,034,920.87 |
| Other business income | 2,408,262,341.74 | 2,187,079,259.28 | 2,408,262,341.74 | 2,187,079,259.28 |
| By business regions | ||||
| Including: | ||||
| Domestic | 9,379,102,600.90 | 8,502,078,394.19 | 9,379,102,600.90 | 8,502,078,394.19 |
| Overseas | 91,574,745,555.18 | 81,257,308,374.73 | 91,574,745,555.18 | 81,257,308,374.73 |
| By sales channel | ||||
| Including: | ||||
| Direct selling | 100,398,975,571.86 | 89,298,248,810.35 | 100,398,975,571.86 | 89,298,248,810.35 |
| Distribution | 554,872,584.22 | 461,137,958.57 | 554,872,584.22 | 461,137,958.57 |
| Total | 100,953,848,156.08 | 89,759,386,768.92 | 100,953,848,156.08 | 89,759,386,768.92 |
49. Taxes and surcharges
Unit: RMB
| Item | 2024 | 2023 |
| City maintenance and construction tax | 78,180,147.00 | 46,734,999.87 |
| Education surcharge | 27,507,986.59 | 14,688,215.43 |
| Housing property tax | 80,510,788.10 | 77,267,139.98 |
| Land use tax | 3,206,159.64 | 20,383,547.91 |
| Vehicle and vessel use tax | 28,453.49 | 30,785.06 |
| Stamp duties tax | 68,080,467.43 | 71,773,016.90 |
| Local education surcharges | 21,068,467.00 | 12,871,438.36 |
| Other | 149,514.51 | 295,698.78 |
| Total | 278,731,983.76 | 244,044,842.29 |
Explanation of other matters:
For the details on calculation and payment standards of taxes and surcharges, please see Note VI. Tax.
50. General and administrative expenses
Unit: RMB
| Item | 2024 | 2023 |
| Employee benefits | 1,214,180,410.70 | 1,378,056,739.51 |
| Share-based apportioned payment | 226,233,694.12 | 123,216,341.40 |
| Office expenses | 124,376,341.65 | 150,877,872.27 |
| Consulting fees | 139,157,208.02 | 101,711,188.82 |
| Depreciation cost | 121,760,834.33 | 123,107,194.98 |
| Amortization of intangible assets | 103,221,179.79 | 77,773,070.95 |
| Recruitment and training fees | 32,940,278.91 | 28,411,122.33 |
| Rental | 13,562,954.48 | 13,213,201.57 |
| Entertainment expenses | 39,931,530.17 | 32,629,383.74 |
| Travel expenses | 34,498,480.16 | 24,076,778.72 |
| Item | 2024 | 2023 |
| Security expenses | 38,746,591.02 | 33,212,938.64 |
| Property insurance | 11,374,008.26 | 11,593,701.38 |
| Other | 100,039,204.09 | 104,934,819.24 |
| Total | 2,200,022,715.70 | 2,202,814,353.55 |
51. Selling expenses
Unit: RMB
| Item | 2024 | 2023 |
| Employee benefits | 456,730,979.35 | 384,050,131.79 |
| Share-based apportioned payment | 23,908,479.89 | 16,712,392.29 |
| Rental | 1,510,770.81 | 5,501,255.44 |
| Sales commission | 13,029,519.39 | 14,212,724.06 |
| Insurance expenses | 12,147,635.78 | 15,520,423.96 |
| Entertainment expenses | 30,107,643.14 | 23,518,137.66 |
| Travel expenses | 35,830,730.04 | 27,461,090.78 |
| Office expenses | 21,124,158.84 | 22,905,403.44 |
| Depreciation cost | 18,132,437.60 | 15,677,618.00 |
| Other | 7,312,126.83 | 2,591,126.00 |
| Total | 619,834,481.67 | 528,150,303.42 |
52. Research and development expenses
Unit: RMB
| Item | 2024 | 2023 |
| Employee benefits | 2,435,505,872.20 | 2,284,730,251.52 |
| Direct input cost | 999,319,580.06 | 1,119,216,253.90 |
| Amortization of intangible assets | 784,505,601.75 | 686,732,187.64 |
| Depreciation cost | 234,335,890.89 | 220,771,853.79 |
| Share-based apportioned payment | 84,752,120.36 | 44,742,283.43 |
| Design fees | 94,128,678.10 | 76,956,945.55 |
| Other expenses | 249,564,744.16 | 282,819,675.59 |
| Total | 4,882,112,487.52 | 4,715,969,451.42 |
53. Financial expenses
Unit: RMB
| Item | 2024 | 2023 |
| Interest expenses | 572,194,609.11 | 544,691,878.33 |
| Interest income | -400,653,329.10 | -279,661,791.52 |
| Exchange gains and losses | -115,270,882.48 | -10,282,609.82 |
| Other | 14,437,439.44 | 97,027,671.65 |
| Total | 70,707,836.97 | 351,775,148.64 |
54. Other income
Unit: RMB
| Sources of other income | 2024 | 2023 |
| Government grants | 196,876,242.50 | 331,548,590.64 |
| Tax benefit included | 53,573,394.07 | 36,245,618.91 |
| Return of individual tax handling fee, etc. | 5,671,131.37 | 5,066,847.41 |
| Total | 256,120,767.94 | 372,861,056.96 |
55. Gains on changes in fair value
Unit: RMB
| Sources of gains on changes in fair value | 2024 | 2023 |
| Financial assets held for trading | 536,792,832.96 | 8,036,980.76 |
| Including: Gains on changes in fair value of derivative financial instruments | 445,298,402.32 | -82,278,125.54 |
| Financial liabilities held for trading | -486,709,669.91 | 77,483,472.73 |
| Other non-current financial assets | -9,039,275.08 | 30,388,698.95 |
| Total | 41,043,887.97 | 115,909,152.44 |
56. Investment income
Unit: RMB
| Item | 2024 | 2023 |
| Return on long-term equity investments measured by the equity method | -26,835,728.84 | -28,435,998.08 |
| Investment income from disposal of long-term equity investments | 24,822,113.27 | |
| Investment income from disposal of financial assets held for trading | 70,976,205.49 | -142,047,909.35 |
| Investment income from products such as certificates of deposit | 101,319,375.81 | 85,249,228.88 |
| Income recognized at the termination of financial assets measured at amortized cost | -36,419,794.69 | -5,724,287.70 |
| Other | -7,257,012.91 | |
| Total | 109,040,057.77 | -73,393,865.89 |
57. Credit impairment losses
Unit: RMB
| Item | 2024 | 2023 |
| Credit impairment losses on bad debts of accounts receivable | -57,765,579.02 | 19,420,684.72 |
| Credit impairment losses on bad debts of other receivables | -649,448.67 | -2,025,618.66 |
| Total | -58,415,027.69 | 17,395,066.06 |
58. Asset impairment losses
Unit: RMB
| Item | 2024 | 2023 |
| I. Loss on inventory falling price and impairment loss of contract performance cost | -401,190,754.77 | -299,626,936.00 |
| II. Loss on impairment of fixed assets | -241,874,822.96 | |
| III. Loss on impairment of contract assets | 1,194.69 | |
| Total | -643,065,577.73 | -299,625,741.31 |
59. Gains on disposal of assets
Unit: RMB
| Source of income from disposal of assets | 2024 | 2023 |
| Gains on disposal of fixed assets | -403,379.46 | -7,467,928.73 |
| Income from disposal of intangible assets | 2,600,000.00 | |
| Income from disposal of right-of-use assets | 95,905.77 | 2,830,270.21 |
| Total | -307,473.69 | -2,037,658.52 |
60. Non-operating income
Unit: RMB
| Item | 2024 | 2023 | Amount recorded in current non-recurring profits and losses |
| Gains from damage and liquidation of non-current assets | 21,927.79 | ||
| Government grants unrelated to the daily activities of enterprises | 47,012.69 | 47,012.69 | |
| Other | 33,536,209.57 | 34,795,207.29 | 33,536,209.57 |
| Total | 33,583,222.26 | 34,817,135.08 | 33,583,222.26 |
Explanation of other matters:
Non-operating income - other incomes that are mainly unpayable amounts and liquidated damages collected, etc
61. Non-operating expenses
Unit: RMB
| Item | 2024 | 2023 | Amount recorded in current non-recurring profits and losses |
| Losses from damage and liquidation of non-current assets | 85,692,278.90 | 146,689,062.70 | 85,692,278.90 |
| Donation given | 3,833,756.31 | 3,204,356.82 | 3,833,756.31 |
| Other | 17,688,358.06 | 2,959,378.43 | 17,688,358.06 |
| Total | 107,214,393.27 | 152,852,797.95 | 107,214,393.27 |
62. Income tax expenses
(1) Income tax expenses statement
Unit: RMB
| Item | 2024 | 2023 |
| Current income tax expenses | 287,703,579.00 | 73,435,975.15 |
| Deferred income tax expenses | -100,155,359.30 | -301,690,868.04 |
| Total | 187,548,219.70 | -228,254,892.89 |
(2) Adjustment process of accounting profit and income tax expenses
Unit: RMB
| Item | 2024 |
| Total profit | 2,773,837,345.10 |
| Income tax expenses calculated at statutory/applicable tax rate | 416,075,601.77 |
| Impact of different tax rates applied to subsidiaries | -100,530,858.69 |
| Impact of adjusting income tax in previous periods | 3,725,590.55 |
| Impact of non-taxable income | -4,433,282.73 |
| Impact of non-deductible costs, expenses and losses | 12,661,563.39 |
| Impact of deductible loss of unrecognized deferred tax assets in previous period | -28,133,367.16 |
| Impact of deductible temporary differences or deductible losses of unrecognized deferred tax assets in current period | 437,709,787.10 |
| Impact of the weighted deduction of research and development expenses | -420,795,029.49 |
| Impact of share-based payment | -125,651,994.88 |
| Other | -3,079,790.16 |
| Income tax expenses | 187,548,219.70 |
63. Other comprehensive income
See Note VII 43 for details.
64. Cash flow statement items
(1) Cash relating to operating activities
Cash received relating to other operating activities
Unit: RMB
| Item | 2024 | 2023 |
| Interest income | 400,621,921.85 | 276,592,905.39 |
| Government grants | 195,752,587.04 | 318,295,104.60 |
| Receivables and payables and others | 1,471,108,554.08 | 1,380,303,535.78 |
| Total | 2,067,483,062.97 | 1,975,191,545.77 |
Cash paid relating to other operating activities
Unit: RMB
| Item | 2024 | 2023 |
| Research and development expenses | 1,334,160,699.49 | 1,471,298,287.84 |
| Office expenses | 145,500,500.49 | 173,783,275.71 |
| Item | 2024 | 2023 |
| Consulting fees | 117,161,125.32 | 101,711,188.82 |
| Travel expenses | 70,329,210.20 | 51,537,869.50 |
| Entertainment expenses | 70,039,173.31 | 56,147,521.40 |
| Insurance expenses | 23,521,644.04 | 27,114,125.34 |
| Rental | 15,073,725.29 | 18,714,457.01 |
| Sales commission | 13,029,519.39 | 14,212,724.06 |
| Receivables and payables and others | 1,710,223,753.89 | 1,332,981,018.70 |
| Total | 3,499,039,351.42 | 3,247,500,468.38 |
(2) Cash relating to investing activities
Cash received relating to other investing activities
Unit: RMB
| Item | 2024 | 2023 |
| Option premiums received | 16,150,465.60 | 37,885,965.58 |
| Recovery of margin of investment in foreign exchange derivative trading | 12,000,000.00 | 72,806,657.72 |
| Total | 28,150,465.60 | 110,692,623.30 |
Important cash received from investing activities
Unit: RMB
| Item | 2024 | 2023 |
| Recovery of structured deposits upon maturity | 10,573,715,076.99 | |
| Recovery of principal from time deposits upon maturity | 2,229,768,495.62 | 3,902,853,504.00 |
| Recovery of principal from large certificates of deposit upon maturity | 1,475,800,000.00 | 70,000,000.00 |
| Total | 14,279,283,572.61 | 3,972,853,504.00 |
Cash paid relating to other investing activities
Unit: RMB
| Item | 2024 | 2023 |
| Payment of margin of investment in foreign exchange derivative trading | 12,000,000.00 | 72,806,657.72 |
| Total | 12,000,000.00 | 72,806,657.72 |
Important cash paid from investing activities
Unit: RMB
| Item | 2024 | 2023 |
| Cash paid for purchasing structured deposits | 10,558,000,000.00 | |
| Principal deposited in time deposits | 3,733,376,366.56 | 3,498,371,185.32 |
| Principal for purchasing large certificates of deposit | 3,118,596,844.19 | 390,000,000.00 |
| Total | 17,409,973,210.75 | 3,888,371,185.32 |
(3) Cash relating to financing activities
Cash received relating to other financing activities
Unit: RMB
| Item | 2024 | 2023 |
| Various securities in other currencies recovered | 4,440,673,565.42 | 2,758,448,774.94 |
| Proceeds from the sale of treasury shares not meeting the exercise conditions | 78,347,662.97 | 39,355,486.02 |
| Contributions from other partners of the fund company | 49,847,000.00 | 188,082,000.00 |
| Borrowings from non-financial institutions, etc. | 26,941,948.42 | 11,000,000.00 |
| Interest income on raised funds | 31,407.25 | 3,068,886.13 |
| Subscription of employee stock ownership plan | 504,990,652.00 | |
| Total | 4,595,841,584.06 | 3,504,945,799.09 |
Cash paid relating to other financing activities
Unit: RMB
| Item | 2024 | 2023 |
| Various security deposit payments for other monetary capital | 7,011,225,625.91 | 2,813,467,201.78 |
| Repurchase of treasure stock | 497,162,992.63 | 177,655,190.77 |
| Rental payment | 131,360,091.14 | 111,526,372.99 |
| Repayment of borrowings from non-financial institutions and interest, etc. | 15,950,662.59 | 14,205,910.21 |
| Listing expense of Goermicro | 3,794,789.25 | 2,180,318.91 |
| Cash paid for acquisition of minority interests in subsidiaries | 23,273,750.00 | |
| Financing expense paid with borrowings | 9,000,000.00 | |
| Total | 7,659,494,161.52 | 3,151,308,744.66 |
Changes in various liabilities generated from financing activities? Applicable ? Not applicable
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance | ||
| Changes in cash | Non-cash changes | Changes in cash | Non-cash changes | |||
| Short-term borrowings | 5,214,491,316.62 | 27,607,466,967.04 | 354,469,964.52 | 25,363,148,078.27 | 100,000,000.00 | 7,713,280,169.91 |
| Other payables - dividends payable | 850,462,393.45 | 850,462,393.45 | ||||
| Long-term borrowings (including the part due within one year) | 7,577,008,103.44 | 248,000,000.00 | 283,027,841.65 | 2,128,598,692.52 | 5,979,437,252.57 | |
| Lease liabilities (including those maturing within one year) | 644,667,234.89 | 444,517,699.82 | 131,360,091.14 | 3,650,371.14 | 954,174,472.43 | |
| Other non-current | 348,058,624.72 | 49,847,000.00 | 54,388,113.71 | 452,293,738.43 | ||
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance | ||
| Changes in cash | Non-cash changes | Changes in cash | Non-cash changes | |||
| liabilities | ||||||
| Total | 13,784,225,279.67 | 27,905,313,967.04 | 1,986,866,013.15 | 28,473,569,255.38 | 103,650,371.14 | 15,099,185,633.34 |
(4) Notes to cash flow reported on a net basis
None
(5) Significant activities and financial impacts that do not involve cash receipts and payments for thecurrent period but may affect the Company's financial position or cash flow in the futureNone
65. Supplementary information for cash flow statement
(1) Supplementary information for cash flow statement
Unit: RMB
| Supplementary information | Amount of current period | Amount in previous period |
| 1. Reconciliation of net profit to cash flow from operating activities | ||
| Net profit | 2,586,289,125.40 | 1,019,411,203.59 |
| Add: Provision for impairment of assets | 643,065,577.73 | 299,625,741.31 |
| Credit impairment losses | 58,415,027.69 | -17,395,066.06 |
| Depreciation of fixed assets, depletion of oil and gas assets and depreciation of bearer biological assets | 2,876,162,266.47 | 2,938,786,849.35 |
| Depreciation of right-of-use assets | 192,954,092.19 | 128,357,416.63 |
| Amortization of intangible assets | 896,019,467.06 | 775,354,156.85 |
| Long-term prepaid expenses | 114,160,739.30 | 226,069,725.83 |
| Losses on disposal of fixed assets, intangible assets and other long-term assets (Use "-" for gain) | 307,473.69 | 2,037,658.52 |
| Loss on retirement of fixed assets (Use "-" for gain) | 85,692,278.90 | 146,667,134.91 |
| Loss on changes in fair value (Use "-" for gain) | -41,043,887.97 | -115,909,152.44 |
| Financial expenses (Use "-" for gain) | 452,782,389.67 | 458,210,031.50 |
| Investment loss (Use "-" for gain) | -145,459,852.46 | 60,412,565.28 |
| Decrease in deferred tax assets (Use "-" for gain) | -64,262,210.19 | -111,839,854.19 |
| Increase in deferred tax liabilities (Use "-" for decrease) | -36,613,476.56 | -190,279,710.41 |
| Decrease in inventory (Use "-" for increase) | 284,232,995.03 | 7,430,247,429.32 |
| Decrease of operating receivable items (Use "-" for increase) | -5,964,502,796.08 | 2,106,126,474.60 |
| Increase in operational payables (Use "-" for decrease) | 3,909,499,681.99 | -7,184,440,025.66 |
| Other | 352,753,289.981 | 180,445,664.45 |
| Net cash flow generated from operating activities | 6,200,452,181.84 | 8,151,888,243.38 |
| 2. Significant investing and financing activities that do not involve cash receipts and payments: | ||
| Debts transferred to capital | ||
| Convertible corporate bonds due within one year | ||
| Fixed assets under finance lease | ||
| 3. Net changes in cash and cash equivalents: |
| Supplementary information | Amount of current period | Amount in previous period |
| Closing balance of cash | 11,790,891,094.95 | 13,152,726,641.78 |
| Less: Opening balance of cash | 13,152,726,641.78 | 10,799,993,468.81 |
| Add: Closing balance of cash equivalents | ||
| Less: Opening balance of cash equivalents | ||
| Net Increase in cash and cash equivalents | -1,361,835,546.83 | 2,352,733,172.97 |
Note: 1 The other RMB 352,753,289.98 results from share-based payment. For the details, please see Note XV. Share-based Payment
4. Share-based payment expense for this period.
(2) Net cash paid for the acquisition of subsidiaries in the current period
None
(3) Net amount of cash received for disposal of subsidiaries in the current period
None
(4) Composition of cash and cash equivalents
Unit: RMB
| Item | Closing balance | Opening balance |
| I. Cash | 11,790,891,094.95 | 13,152,726,641.78 |
| Including: Cash on hand | 104,171.55 | 60,959.92 |
| Bank deposits that can be used for payment at any time | 11,645,703,672.76 | 13,030,309,956.22 |
| Other monetary funds that can be used for payment at any time | 145,083,250.64 | 122,355,725.64 |
| III. Cash and cash equivalents at the end of the period | 11,790,891,094.95 | 13,152,726,641.78 |
(5) Situations where the scope of use is restricted but still listed as cash and cash equivalentsNone
(6) Monetary funds that do not belong to cash and cash equivalents
Unit: RMB
| Item | Amount of current period | Amount in previous period | Reasons for not being classified as cash and cash equivalents |
| Bank deposits | 668,611,858.88 | 128,296,588.99 | Mainly for time deposits with maturities of more than three months and accrued interest |
| Other monetary funds | 5,006,989,915.22 | 1,456,289,098.94 | Usage restriction |
| Total | 5,675,601,774.10 | 1,584,585,687.93 |
(7) Description of other significant activities
Supplier financing arrangements:
① Terms and conditions of supplier financing arrangements
As of December 31, 2024, the Group provided early payment services for individual suppliers through a supply chain financing program.According to the agreement, suppliers can transfer their accounts receivable from the Group to financial institutions to obtain earlypayment, and the Group has paid the financial institutions on the due date according to the original contract terms.
② Items presented in the balance sheet and related information
| Reported items | Closing balance (RMB) |
| Short-term borrowings | 15,850,840.53 |
③ Current period changes not involving cash receipts and disbursements
The derecognition of accounts payable, along with the recognition of short-term borrowings of RMB 78,678,729.17 in fiscal year 2024due to supplier financing arrangements, did not involve a current change in cash receipts and disbursements.
66. Notes on items in the change statement of owner's equity
Explanation of the names of "other" items for adjusting the closing balance of last year and adjustment amounts:
None
67. Foreign currency monetary items
(1) Foreign currency monetary items
Unit: RMB
| Item | Closing foreign currency balance | Converted exchange rate | Closing converted RMB balance |
| Monetary funds | 4,745,429,993.83 | ||
| Including: USD | 610,825,356.52 | 7.1884 | 4,390,856,992.81 |
| EUR | 81,600.15 | 7.5257 | 614,098.25 |
| HKD | 8,658,241.57 | 0.92604 | 8,017,878.02 |
| JPY | 75,095,110.00 | 0.046233 | 3,471,872.22 |
| KRW | 1,088,992,419.00 | 0.004938 | 5,377,444.57 |
| TWD | 87,629,129.00 | 0.219366 | 19,222,851.51 |
| VND | 1,102,710,794,282.00 | 0.000282 | 310,964,443.99 |
| DKK | 6,847,109.00 | 1.008369 | 6,904,412.46 |
| Accounts receivable | 14,929,862,172.05 | ||
| Including: USD | 2,076,196,210.47 | 7.1884 | 14,924,528,839.34 |
| EUR | |||
| HKD | |||
| JPY | 24,143,690.00 | 0.046233 | 1,116,235.22 |
| KRW | 169,084,141.00 | 0.004938 | 834,937.49 |
| TWD | 5,237,231.00 | 0.219366 | 1,148,870.42 |
| VND | 7,919,466,590.00 | 0.000282 | 2,233,289.58 |
| Long-term borrowings | 306,336,930.76 | ||
| Including: USD | 42,615,454.17 | 7.1884 | 306,336,930.76 |
| EUR | |||
| HKD | |||
| Other receivables | 33,258,414.82 | ||
| Including: USD | 951,711.25 | 7.1884 | 6,841,281.15 |
| EUR | 960.00 | 7.5257 | 7,224.67 |
| JPY | 152,575,605.00 | 0.046233 | 7,054,027.95 |
| KRW | 96,448,000.00 | 0.004938 | 476,260.22 |
| HKD | 29,200.00 | 0.92604 | 27,040.37 |
| Item | Closing foreign currency balance | Converted exchange rate | Closing converted RMB balance |
| TWD | 1,747,793.00 | 0.219366 | 383,406.36 |
| VND | 65,493,525,186.85 | 0.000282 | 18,469,174.10 |
| Short-term borrowings | 374,683,376.07 | ||
| Including: USD | 52,123,334.27 | 7.1884 | 374,683,376.07 |
| Accounts payable | 15,951,068,968.37 | ||
| Including: USD | 2,164,327,478.49 | 7.1884 | 15,558,051,646.38 |
| EUR | 416,986.92 | 7.5257 | 3,138,118.46 |
| HKD | 234,000.01 | 0.92604 | 216,693.37 |
| JPY | 86,578,604.20 | 0.046233 | 4,002,788.61 |
| KRW | 467,244,341.00 | 0.004938 | 2,307,252.56 |
| VND | 1,359,404,674,048.28 | 0.000282 | 383,352,118.08 |
| DKK | 348.00 | 1.008369 | 350.91 |
| Other payables | 7,642,363.20 | ||
| Including: USD | 358,157.55 | 7.1884 | 2,574,579.73 |
| JPY | 21,480,413.00 | 0.046233 | 993,103.93 |
| KRW | 287,562,235.00 | 0.004938 | 1,419,982.32 |
| TWD | 2,938,148.00 | 0.219366 | 644,529.77 |
| VND | 4,944,816,251.00 | 0.000282 | 1,394,438.18 |
| DKK | 610,619.00 | 1.008369 | 615,729.27 |
| Non-current liabilities due within one year | 341,120,668.57 | ||
| Including: USD | 46,870,417.28 | 7.1884 | 336,923,307.58 |
| JPY | 87,367,996.09 | 0.046233 | 4,039,284.56 |
| KRW | 26,077,686.18 | 0.004938 | 128,771.61 |
| HKD | 31,645.31 | 0.92604 | 29,304.82 |
| Lease liabilities | 26,100,302.03 | ||
| Including: USD | 3,542,314.90 | 7.1884 | 25,463,576.43 |
| JPY | 6,221,966.70 | 0.046233 | 287,660.19 |
| KRW | 50,682,928.53 | 0.004938 | 250,272.30 |
| HKD | 106,683.42 | 0.92604 | 98,793.11 |
(2) Explanation of overseas operating entities, including, the main overseas operating places, bookkeepingbase currency and selection basis for important overseas operating entities, and the reasons for changes inbookkeeping base currency.
? Applicable ? Not applicable
| Name of the important overseas operating entity | Main location of business operation | Accounting base currency | Accounting base currency selection basis | Whether there is any change in the accounting base currency |
| Goertek Technology Vina Co., Ltd. | Vietnam | VND | Legal currency of the country where it is registered | No |
| Name of the important overseas operating entity | Main location of business operation | Accounting base currency | Accounting base currency selection basis | Whether there is any change in the accounting base currency |
| Goertek (Hong Kong) Co., Limited | Hong Kong | USD | Currency adopted in business receipts and payments | No |
| Goertek Electronics Vietnam Co., Ltd. | Vietnam | VND | Legal currency of the country where it is registered | No |
68. Lease
(1) The Company acts as the lessee
? Applicable ? Not applicableVariable lease payments not included in the measurement of lease liabilities? Applicable ? Not applicableRental expense for simplified treatment of short-term leases or low-value asset leases? Applicable ? Not applicable
① For the information on right-of-use assets and lease liabilities, please see Note VII 18 and 37.
② Information on items recorded in current profit or loss and relevant asset costs
| Item | Amount of current period | Amount in previous period |
| Short-term lease expense (simplified treatment applies) | 66,361,239.17 | 32,797,509.77 |
| Interest on lease liabilities included in financial expenses | 31,948,563.01 | 18,846,223.92 |
| Income derived from the sublease of the right-of-use assets | 3,630,981.59 | 661,958.40 |
③ Cash outflow related to leases
| Item | Category of cash flow | Amount of current period | Amount in previous period |
| Cash for repayment of principal and interest of lease liabilities | Cash outflow from financing activities | 131,360,091.14 | 111,526,372.99 |
| Payment for short-term leases and leases for low-value assets (simplified treatment applies) | Cash outflow from operating activities | 66,361,239.17 | 32,797,509.77 |
| Total | 197,721,330.31 | 144,323,882.76 |
Situations involving sale and leaseback transactionsNone
(2) The Company acts as the lessor
Operating lease as a lessor? Applicable ? Not applicable
Unit: RMB
| Item | Lease income | Including: Income related to variable lease payments not included in rental receipts |
| Other business income | 153,831,580.00 | |
| Total | 153,831,580.00 |
Financial lease as a lessor? Applicable ? Not applicableUndiscounted lease receipts for each of the next five years
? Applicable ? Not applicableReconciliation table of undiscounted lease receivables and net lease investmentsNone
(3) Profit or loss on sales of finance leases recognized as a producer or distributor? Applicable ? Not applicable
69. Data resources
None
70. Others
None
VIII. Research and Development Expenditures
Unit: RMB
| Item | 2024 | 2023 |
| Employee benefits | 2,622,012,895.11 | 2,582,668,704.22 |
| Direct input cost | 1,167,429,669.48 | 1,317,327,855.54 |
| Amortization of intangible assets | 786,230,183.44 | 686,736,441.00 |
| Depreciation cost | 278,706,582.13 | 261,114,008.41 |
| Share-based apportioned payment | 85,127,680.30 | 44,742,283.43 |
| Design fees | 104,854,459.01 | 79,996,429.65 |
| Other expenses | 307,589,471.43 | 286,173,001.41 |
| Total | 5,351,950,940.90 | 5,258,758,723.66 |
| Including: Expensed R&D expenditure | 4,882,112,487.52 | 4,715,969,451.42 |
| Capitalized R&D expenditure | 469,838,453.38 | 542,789,272.24 |
1. R&D projects eligible for capitalization
Unit: RMB
| Item | Opening balance | Increased amount in the current period | Decreased amount in the current period | Closing balance | ||||
| Internal development expense | Other | Increase in business mergers | Recognized as intangible assets | Transfer to current profit and loss | Other | |||
| Item 1 | 24,546,845.39 | 24,546,845.39 | ||||||
| Item 2 | 17,590,499.33 | 17,590,499.33 | ||||||
| Item 3 | 12,851,753.76 | 12,851,753.76 | ||||||
| Item 4 | 11,059,135.69 | 11,059,135.69 | ||||||
| Item 5 | 3,483,268.03 | 6,397,219.39 | 9,880,487.42 | |||||
| Other | 443,321,437.83 | 397,392,999.82 | 746,592,398.48 | 94,122,039.17 | ||||
| Total | 446,804,705.86 | 469,838,453.38 | 746,592,398.48 | 170,050,760.76 | ||||
Significant capitalized R&D projectsNone
2. Significant outsourced R&D projects
NoneIX. Change of Combination Scope
1. Business combination not under common control
None
2. Business combination under common control
None
3. Counter purchase
None
4. Disposal of subsidiaries
Whether there were any transactions or events during the period in which control of the subsidiary was lost? Yes ? NoWhether there is any step-by-step disposal of investment in a subsidiary through multiple transactions and loss of control in thecurrent period? Yes ? No
5. Change of combination scope for other reasons
Explain the changes in the combination scope caused by other reasons (such as newly established subsidiaries, liquidationsubsidiaries, etc.) and relevant information:
During the reporting period, the Company established 12 subsidiaries, including Shanghai Goertek Technology Development Co., Ltd.,Qingdao Goertek Alpha Pixels Technology Co., Ltd., Chengdu Goertek Technology Co., Ltd., Xi'an Goertek Shijie Technology Co.,Ltd., Goertek Starshine (Qingdao) Inc., Goertek Electronics Vietnam Co., Ltd., Goertek Optical Technology (Hong Kong) HoldingsCo., Limited, Goertek Optical Technology (Hong Kong) Co., Limited, Goermicro Technology Development Company Limited,Qingdao MicroSense Intelligent Technology Co., Ltd., Goertek Singapore Pte. Ltd., and GMI Semiconductor Sdn. Bhd.During the reporting period, the Company deregistered 2 subsidiaries, namely Hefei 3D OptoLink Technology Co., Ltd. and JiaxingGuochao Optoelectronics Technology Co., Ltd.
6. Others
None
X. Interests in Other Entities
1. Interests in subsidiaries
(1) Composition of the Group
| Name of subsidiary | Registered capital | Main location of business operation | Registration place | Business nature | Percentage | Acquisition method | |
| Direct | Indirect | ||||||
| Weifang Goertek Electronics Co., Ltd. | RMB 1,802,201,925 | Weifang | Weifang | R&D, production & sales | 77.99% | 22.01% | Business combination under common control: |
| Goertek | RMB | Qingdao | Qingdao | R&D, | 83.40% | Establishment | |
| Name of subsidiary | Registered capital | Main location of business operation | Registration place | Business nature | Percentage | Acquisition method | |
| Direct | Indirect | ||||||
| Microelectronics Inc. | 612,438,891 | production & sales | |||||
| Qingdao Goertek Microelectronics Research Institute Co., Ltd. | RMB 100,000,000 | Qingdao | Qingdao | R&D, production & sales | 83.40% | Establishment | |
| Qingdao Goertek Intelligent Sensor Co., Ltd. | RMB 500,000,000 | Qingdao | Qingdao | R&D, production & sales | 83.40% | Establishment | |
| Weifang Goertek Microelectronics Co., Ltd. | RMB 500,000,000 | Weifang | Weifang | R&D, production & sales | 83.40% | Business combination not involving enterprises under common control | |
| Rongcheng Goertek Microelectronics Co., Ltd. | RMB 300,000,000 | Rongcheng | Rongcheng | R&D, production & sales | 83.40% | Establishment | |
| Beijing Goertek Microelectronics Co., Ltd. | RMB 5,000,000 | Beijing | Beijing | Sales | 83.40% | Establishment | |
| Shenzhen Goertek Microelectronics Co., Ltd. | RMB 5,000,000 | Shenzhen | Shenzhen | R&D and sales | 83.40% | Establishment | |
| Wuxi Goertek Microelectronics Co., Ltd. | RMB 5,000,000 | Wuxi | Wuxi | R&D | 83.40% | Establishment | |
| Shanghai Goertek Microelectronics Co., Ltd. | RMB 10,000,000 | Shanghai | Shanghai | R&D | 83.40% | Establishment | |
| Goertek Microelectronics Holdings Co., Ltd. | USD 22,903,500 | Hong Kong | Hong Kong | Investment | 83.40% | Establishment | |
| Goertek Microelectronics (Hong Kong) Co., Limited | USD 500,000 | Hong Kong | Hong Kong | Trade | 83.40% | Establishment | |
| Goertek Microelectronics Corporation | USD 1,000,000 | USA | USA | R&D and sales | 83.40% | Establishment | |
| Goertek Microelectronics Korea Co., Ltd. | KRW 300,000,000 | Korea | Korea | R&D and sales | 83.40% | Establishment | |
| Goertek Microelectronics Vietnam Company Limited | VND 487,494,000,000 | Vietnam | Vietnam | Production & sales | 83.40% | Establishment | |
| GMI Technology | EUR 50,000 | Austria | Austria | R&D and | 83.40% | Establishment | |
| Name of subsidiary | Registered capital | Main location of business operation | Registration place | Business nature | Percentage | Acquisition method | |
| Direct | Indirect | ||||||
| GmbH | sales | ||||||
| GMI Semiconductor Sdn. Bhd. | MYR 4,000,000 | Malaysia | Malaysia | Production & sales | 83.40% | Establishment | |
| Goermicro Technology Development Company Limited | USD 500,000 | Hong Kong | Hong Kong | R&D and sales | 83.40% | Establishment | |
| Qingdao MicroSense Intelligent Technology Co., Ltd. | RMB 10,000,000 | Qingdao | Qingdao | R&D, production & sales | 83.40% | Establishment | |
| Weifang Goertek Trading Co., Ltd. | RMB 50,000,000 | Weifang | Weifang | Import and export trade | 100.00% | Establishment | |
| Yishui Goertek Electronics Co., Ltd. | RMB 30,000,000 | Yishui | Yishui | Production & sales | 100.00% | Establishment | |
| Yili Precision Manufacturing Co., Ltd. | RMB 675,850,000 | Weifang | Weifang | Production & sales | 78.69% | 21.31% | Establishment |
| Weifang Goertek Communication Technology Co., Ltd. | RMB 10,500,000 | Weifang | Weifang | Production & sales | 100.00% | Business combination not involving enterprises under common control | |
| Goertek Optical Technology Co., Ltd. | RMB 981,960,745 | Weifang | Weifang | Production & sales | 61.10% | Business combination not involving enterprises under common control | |
| Goertek Optical Technology (Qingdao) Co., Ltd. | RMB 100,000,000 | Qingdao | Qingdao | R&D, production & sales | 61.10% | Establishment | |
| Goertek Optical Technology (Shanghai) Co., Ltd. | RMB 100,000,000 | Shanghai | Shanghai | R&D, production & sales | 61.10% | Establishment | |
| Uphoton Technology (Shaoxing) Co., Ltd. | RMB 213,988 | Shaoxing | Shaoxing | R&D and sales | 61.10% | Business combination not involving enterprises under common control | |
| Uphoton Technology (Beijing) Co., Ltd. | RMB 10,000,000 | Beijing | Beijing | R&D | 61.10% | Business combination not involving enterprises under common control | |
| Jiaxing Uphoton Optoelectronics Technology Co., Ltd. | RMB 250,000,000 | Jiaxing | Jiaxing | R&D, production & sales | 61.10% | Business combination not involving enterprises under common control | |
| Name of subsidiary | Registered capital | Main location of business operation | Registration place | Business nature | Percentage | Acquisition method | |
| Direct | Indirect | ||||||
| Shaoxing UPhoton Precision Technology Co., Ltd. | RMB 115,000,000 | Shaoxing | Shaoxing | R&D, production & sales | 61.10% | Business combination not involving enterprises under common control | |
| Hangzhou Uphoton Optoelectronics Technology Co., Ltd. | RMB 45,000,000 | Hangzhou | Hangzhou | R&D and sales | 61.10% | Business combination not involving enterprises under common control | |
| Tianjin Uphoton Technology Co., Ltd. | RMB 20,000,000 | Tianjin | Tianjin | R&D and sales | 61.10% | Business combination not involving enterprises under common control | |
| Nanjing Uphoton Technology Co., Ltd. | RMB 10,000,000 | Nanjing | Nanjing | R&D and sales | 61.10% | Business combination not involving enterprises under common control | |
| Dongguan Yili Precision Manufacturing Co., Ltd. | RMB 180,000,000 | Dongguan | Dongguan | R&D, production & sales | 61.10% | Establishment | |
| Goertek Optical Technology (Hong Kong) Holdings Co., Limited | USD 1,000,000 | Hong Kong | Hong Kong | Investment | 61.10% | Establishment | |
| Goertek Optical Technology (Hong Kong) Co., Limited | USD 500,000 | Hong Kong | Hong Kong | Trade | 61.10% | Establishment | |
| Goertek Technology Co., Ltd. | RMB 950,000,000 | Qingdao | Qingdao | R&D | 100.00% | Establishment | |
| Beijing Goertek Technology Co., Ltd. | RMB 10,000,000 | Beijing | Beijing | R&D | 100.00% | Business combination under common control: | |
| Qingdao Goertek Acoustics Technology Co., Ltd. | RMB 20,000,000 | Qingdao | Qingdao | R&D and trading | 100.00% | Establishment | |
| Shenzhen Goertek Technology Co., Ltd. | RMB 50,000,000 | Shenzhen | Shenzhen | R&D and design | 100.00% | Business combination under common control: | |
| Shanghai Goertek Technology Co., Ltd. | RMB 10,000,000 | Shanghai | Shanghai | R&D | 100.00% | Establishment | |
| Nanjing Goertek Technology Co., Ltd. | RMB 50,000,000 | Nanjing | Nanjing | R&D | 100.00% | Establishment | |
| Weifang Lokomo | RMB 50,000,000 | Weifang | Weifang | Production & | 100.00% | Business | |
| Name of subsidiary | Registered capital | Main location of business operation | Registration place | Business nature | Percentage | Acquisition method | |
| Direct | Indirect | ||||||
| Precision Industry Co., Ltd. | sales | combination under common control: | |||||
| Goertek Investment Co., Ltd. | RMB 100,000,000 | Shanghai | Shanghai | Investment | 100.00% | Establishment | |
| Beijing Goertek Investment Management Co., Ltd. | RMB 50,000,000 | Beijing | Beijing | Investment asset management | 100.00% | Establishment | |
| Olive Smart Hardware Investment Center LP | RMB 300,000,000 | Qingdao | Qingdao | Investment | 100.00% | Establishment | |
| Goertek Intelligence Technology Co., Ltd. | RMB 350,000,000 | Dongguan | Dongguan | R&D, production & sales | 100.00% | Establishment | |
| Rongcheng Goertek Technology Co., Ltd. | RMB 2,100,000,000 | Rongcheng | Rongcheng | R&D, production & sales | 100.00% | Establishment | |
| Qingdao Goertek Commercial Factoring Co., Ltd. | RMB 50,000,000 | Qingdao | Qingdao | Commercial factoring | 100.00% | Establishment | |
| Nanning Goertek Electronics Co., Ltd. | RMB 80,000,000 | Nanning | Nanning | R&D, production & sales | 100.00% | Establishment | |
| Nanning Goertek Trading Co., Ltd. | RMB 10,000,000 | Nanning | Nanning | Trade | 100.00% | Establishment | |
| Xi'an Goertek Electronic Technology Co., Ltd. | RMB 8,000,000 | Xi'an | Xi'an | R&D | 100.00% | Establishment | |
| Yishui TECO Electronics Technology Co., Ltd. | RMB 145,000,000 | Yishui | Yishui | R&D, production & sales | 100.00% | Establishment | |
| Qingdao Resonance I Venture Capital Fund LP | RMB 878,790,000 | Qingdao | Qingdao | Investment | 45.52% | Establishment | |
| Weifang Goertek Electronic Technology Co., Ltd. | RMB 2,070,000,000 | Weifang | Weifang | Production & sales | 100.00% | Establishment | |
| Qingdao Goertek Horizons Technology Co., Ltd. | RMB 100,000,000 | Qingdao | Qingdao | Production & sales | 100.00% | Establishment | |
| Weifang High-tech Zone Goertek Education Center | RMB 300,000 | Weifang | Weifang | Education and training | 100.00% | Establishment | |
| Chongqing Goertek Auto Technology Co., Ltd. | RMB 10,000,000 | Chongqing | Chongqing | R&D, production & sales | 100.00% | Establishment | |
| Shanghai Goertek Technology Development Co., | RMB 100,000,000 | Shanghai | Shanghai | R&D and trading | 100.00% | Establishment | |
| Name of subsidiary | Registered capital | Main location of business operation | Registration place | Business nature | Percentage | Acquisition method | |
| Direct | Indirect | ||||||
| Ltd. | |||||||
| Qingdao Goertek Alpha Pixels Technology Co., Ltd. | RMB 50,000,000 | Qingdao | Qingdao | R&D, production & sales | 100.00% | Establishment | |
| Chengdu Goertek Technology Co., Ltd. | RMB 5,000,000 | Chengdu | Chengdu | R&D and trading | 100.00% | Establishment | |
| Xi'an Goertek Shijie Technology Co., Ltd. | RMB 5,000,000 | Xi'an | Xi'an | R&D and trading | 100.00% | Establishment | |
| Goertek Starshine (Qingdao) Inc. | RMB 20,000,000 | Qingdao | Qingdao | R&D and trading | 100.00% | Establishment | |
| Goertek Vina Co., Ltd. | USD 40,000,000 | Vietnam | Vietnam | Production & sales | 98.00% | 2.00% | Establishment |
| Goertek (Korea) Technology Inc. | KRW 1,535,135,000 | Korea | Korea | R&D and trading | 100.00% | Establishment | |
| Goertek (Hong Kong) Co., Limited | USD 1,000,000 | Hong Kong | Hong Kong | Trade investment | 100.00% | Establishment | |
| Goertek Technology Vina Co., Ltd. | USD 120,000,000 | Vietnam | Vietnam | Production & sales | 100.00% | Establishment | |
| Goertek Precision Industry Vietnam Co., Ltd. | USD 100,000,000 | Vietnam | Vietnam | Production & sales | 100.00% | Establishment | |
| Goertek Smart Technology Vina Co., Ltd. | USD 90,000,000 | Vietnam | Vietnam | Production & sales | 100.00% | Establishment | |
| Goertek Electronics Vietnam Co., Ltd. | USD 60,000,000 | Vietnam | Vietnam | Production & sales | 100.00% | Establishment | |
| Goertek Europe ApS | DKK 1,000,000 | Denmark | Denmark | Sales services | 100.00% | Establishment | |
| Goertek Seiki Technology Co., Ltd. | JPY 80,000,000 | Japan | Japan | R&D, production & sales | 100.00% | Establishment | |
| Optimas Capital Partners Fund LP | USD 56,488,691.9 | Hong Kong | Hong Kong | Investment | 76.92% | Establishment | |
| Goertek Singapore Pte. Ltd. | USD 10,000,000 | Singapore | Singapore | R&D, investment, and trading | 100.00% | Establishment | |
| Goertek Electronics, Inc. | USD 100,000 | USA | USA | R&D and trading | 100.00% | Business combination not involving enterprises under common control | |
| Goertek Technology Taiwan Co., Ltd. | TWD 28,899,000 | Taiwan | Taiwan | Trade | 100.00% | Establishment | |
| Goertek Technology Japan Co., Ltd. | JPY 50,000,000 | Japan | Japan | R&D and trading | 100.00% | Establishment | |
| Goertek Technology (Hong Kong) Co., | USD 1,000,000 | Hong Kong | Hong Kong | Trade investment | 100.00% | Establishment | |
| Name of subsidiary | Registered capital | Main location of business operation | Registration place | Business nature | Percentage | Acquisition method | |
| Direct | Indirect | ||||||
| Limited | |||||||
Explanation of the shareholding ratio in subsidiaries different from the voting ratio:
NoneBasis for holding half or less of the voting power but still controlling the investee, and holding more than half of the voting rights butnot controlling the investee:
The Company holds less than half of the voting rights in Qingdao Resonance I Venture Capital Fund LP, but it has the ability todominate the relevant activities of Qingdao Resonance I Venture Capital Fund LP, thus including it in the scope of consolidation.Basis for controlling important structured entities included in the combination scope:
NoneBasis for determining whether a company is an agent or a principal:
NoneExplanation of other matters:
None
(2) Important non-wholly-owned subsidiary
None
(3) Main financial information of major non-wholly-owned subsidiaries
None
(4) Major restrictions on using the Group's assets and paying off the Group's debts
None
(5) Financial support or other support provided to structured entities included in consolidated financial statementsNone
2. The share of owner's equity in the subsidiary has changed and still controls the transactions of thesubsidiary
(1) Explanation of changes in the share of owner's equity in subsidiaries
① In May and December 2024, the subsidiary Qingdao Resonance I Venture Capital Fund LP received unilateral capital increasesfrom minority shareholders, with a total increase amount of RMB 121,210,000 and a total paid-in capital of RMB 49,847,000. Afterthe completion of the above capital increase, the Company's shareholding in Qingdao Resonance I Venture Capital Fund LP changedfrom 52.80% to 45.52%, resulting in a total reduction of capital reserve by RMB 3,217,273.18.
② In November 2024, the subsidiary Goertek Microelectronics Inc. conducted a conversion of capital reserve to share capital, and theCompany, along with its controlling shareholder Goertek Group Co., Ltd. and Song Qinglin, chairman and general manager of GoertekMicroelectronics Inc., all waived their rights to participate in this conversion. Upon completion of this transaction, the Company'sequity in Goertek Microelectronics Inc. was changed from 87.75% to 83.40%. This transaction reduces the capital reserve by RMB206,702,074.16.
③ In February 2024, the subsidiary Dongguan Yili Precision Manufacturing Co., Ltd. was changed to a wholly-owned subsidiary ofthe Company's subsidiary Goertek Optical Technology Co., Ltd. After the completion of this transaction, the Company's shareholdingin Dongguan Yili Precision Manufacturing Co., Ltd. changed from 100.00% to 61.10%, resulting in an increase in capital reserve ofRMB 420,110.70.
④ In August 2024, the subsidiary Jiaxing Guochao Optoelectronics Technology Co., Ltd. was changed to a wholly-owned subsidiaryof the Company's subsidiary Goertek Optical Technology Co., Ltd. After the completion of this transaction, the Company's
shareholding in Jiaxing Guochao Optoelectronics Technology Co., Ltd. changed from 42.77% to 61.10%, resulting in an increase incapital reserve of RMB 31,276.49.
(2) The impact of transactions on minority owner's equity and the equity attributable to the parent company
Unit: RMB
| Qingdao Resonance I Venture Capital Fund LP | Goertek Microelectronics Inc. | Dongguan Yili Precision Manufacturing Co., Ltd. | Jiaxing Guochao Optoelectronics Technology Co., Ltd. | |
| Purchase cost/disposal consideration | ||||
| —Cash | 49,847,000.00 | |||
| —Fair value of non-cash assets | ||||
| Total purchase cost/disposal consideration | 49,847,000.00 | |||
| Less: The net asset share of a subsidiary calculated according to the proportion of the equity acquired/disposed | 53,064,273.18 | 206,702,074.16 | -420,110.70 | -31,276.49 |
| Difference | -3,217,273.18 | -206,702,074.16 | 420,110.70 | 31,276.49 |
| Including: Adjustment of capital reserve | -3,217,273.18 | -206,702,074.16 | 420,110.70 | 31,276.49 |
| Adjusted surplus reserve | ||||
| Undistributed profits after adjustment |
3. Rights and interests in joint venture arrangements and associated enterprises
(1) Important joint ventures and associated enterprises
None
(2) Main financial information of important joint ventures
None
(3) Main financial information of important associated enterprises
None
(4) Summary of financial information of unimportant joint ventures and associates
Unit: RMB
| Closing balance/amount incurred in current period | Opening balance/amount incurred in previous period | |
| Joint ventures: | ||
| Total book value of investment | ||
| The total of the following items calculated according to the shareholding ratio | ||
| Associated enterprises: | ||
| Total book value of investment | 734,411,641.50 | 760,220,882.07 |
| The total of the following items calculated |
| according to the shareholding ratio | ||
| —Net profit | -26,835,728.84 | -28,435,998.08 |
| —Other comprehensive income | 436.41 | -12,650.40 |
| —Total comprehensive income | -26,835,292.43 | -28,448,648.48 |
(5) Statement of important restrictions on the ability of joint ventures or associates to transfer capital to theCompanyNone
(6) Excess losses incurred by joint ventures or associated enterprises
None
(7) Unrecognized commitments related to the investment in joint ventures
None
(8) Contingent liabilities related to the investment in joint ventures or associatesNone
4. Important joint operation
None
5. Rights and interests in structured entities not included in consolidated financial statementsExplanation of structured entities not recorded in the consolidated financial statements:
None
6. Others
None
XI. Government Grants
1. Government subsidies recognized based on receivable amounts at the end of the reporting period? Applicable ? Not applicableReasons for not receiving the expected amount of government subsidies at the anticipated time? Applicable ? Not applicable
2. Liability items involving government subsidies
? Applicable ? Not applicable
Unit: RMB
| Accounting items | Opening balance | Amount of new subsidies in current period | Amount included in non-operating income of the current period | Amount transferred in other income in the current period | Other variations in the current period | Closing balance | Asset-related/income-related |
| Special funding | 469,487,246.87 | 83,689,225.00 | 70,482,642.35 | 482,693,829.52 | Asset-related |
| Accounting items | Opening balance | Amount of new subsidies in current period | Amount included in non-operating income of the current period | Amount transferred in other income in the current period | Other variations in the current period | Closing balance | Asset-related/income-related |
| for corporate innovation, technical transformation and industrial upgrading | |||||||
| Awards and subsidies for public leasehold houses | 37,029,843.95 | 1,809,683.28 | 35,220,160.67 | Asset-related | |||
| Subsidies for R&D projects, etc. | 12,567,567.52 | 12,567,567.52 | Income-related | ||||
| Total | 519,084,658.34 | 83,689,225.00 | 84,859,893.15 | 517,913,990.19 |
3. Government subsidies included in current profit and loss
? Applicable ? Not applicable
Unit: RMB
| Accounting items | 2024 | 2023 |
| Other income - directly included | 112,016,349.35 | 239,774,534.60 |
| Other income - Deferred income transferred in | 84,859,893.15 | 91,774,056.04 |
| Non-operating income | 47,012.69 | |
| Total | 196,923,255.19 | 331,548,590.64 |
XII. Risks Related to Financial Instruments
1. Various risks arising from financial instruments
The major financial instruments of the Group include equity investments, accounts receivable, borrowings and accounts payable, etc.For details on the financial instruments, please see this Note VII. Relevant Items. Risks related to the financial instruments and theGroup's risk management policy used for reducing these risks is stated as follows. The Group's management manages and monitorsthese exposures to ensure that these risks are controlled within a limited scope.The Group analyzes the reasonableness of risk variables and the impact of potential changes on current loss or profit or shareholder'sequity using sensitivity analysis techniques. As risk variables rarely change in isolation, and the correlation between any two of therisk variables will have a great effect on the final impact amount of a certain risk variable, the following disclosures are made assumingthat each variable changes in isolation.(I) Risk management goals and policiesThe Group's risk management aims to reach appropriate balancing between risks and benefits, to minimize the negative impact of riskson the Group's operating results, and to maximize the interests of shareholders and other equity investors. Based on these riskmanagement goals, the Group's basic strategy for risk management is to determine and analyze various risks faced by the Group,establish an appropriate risk tolerance bottom line and conduct risk management, and supervise various risks in a timely and reliablemanner to control the risks within a limited scope.
1. Market risk
(1) Exchange rate risk
Exchange risk refers to the risk of loss due to exchange rate change. The Group's exposure to exchange mainly involves USD. Exceptthat the Company and its subsidiaries purchase and sell in USD, EUR, JPY, VND, DKK, HKD, TWD and KRW, other main businessof the Group is measured and settled in RMB. As of December 31, 2024, the foreign currency monetary items of the Company aredetailed in Note VII. 67. Except that the assets or liabilities, part trading financial assets, part financial liabilities held for trading, someinvestments in other equity instruments, some other non-current financial assets, and some other non-current assets mentioned in thetable are foreign currency balances, the Group's assets and liabilities are mainly recorded in RMB. The exchange risks arising from theassets and liabilities denominated in foreign currencies may have an impact on the operating results of the Group.The Group closely monitors the impact of exchange rate changes on the Group's exchange risks. The Company has large volume ofexport sales, and needs to import some raw materials. Some equipment for research, development, production and testing of theCompany also needs to be purchased from abroad. The Company's export sales and imported raw materials are mainly settled in USD.The depreciation of USD and the appreciation of RMB will reduce the procurement cost of imported raw materials, but adversely affectthe competitiveness of the Company's products in overseas markets. Considering the import of raw materials and export of products,the appreciation of RMB against USD will affect the Company's profitability to some extent.Exchange rate risk sensitivity analysis:
When other variables remain unchanged, the possible reasonable changes in USD currency rate may have the following effects oncurrent profits and losses, as well as shareholder's equity:
Unit: RMB
| Item | Change in exchange rate | 2024 | 2023 | ||
| Impact on net profit | Impact on shareholder's equity | Impact on net profit | Impact on shareholder's equity | ||
| USD | 3% appreciation against RMB | 64,758,442.82 | 61,834,110.57 | -51,954,213.77 | -53,372,215.77 |
| USD | 3% depreciation against RMB | -64,758,442.82 | -61,834,110.57 | 51,954,213.77 | 53,372,215.77 |
(2) Interest rate risk
The Group's interest rate risk arises primarily from long-term bank loans and other long-term interest-bearing debts. Floating-ratefinancial liabilities expose the Group to cash flow interest rate risk, while fixed-rate financial liabilities expose the Group to fair valueinterest rate risk. The Group determined the relative proportion of fixed-rate and floating-rate contracts based on the prevailing marketconditions. As of December 31, 2024, the Group's long-term interest-bearing debts were mainly floating-rate contracts denominated inUSD or RMB, including RMB 3,064,000,000 and USD 85,927,000 (as of December 31, 2023: RMB 3,645,000,000 and USD225,000,000).The Group continuously monitors the interest rate levels. An increase in interest rates will raise the cost of newly incurred interest-bearing debts and the Group's outstanding interest expenses on floating-rate interest-bearing debts, significantly adversely affecting theGroup's financial performance. Management will make timely adjustments based on the latest market conditions, which may includearrangements for interest rate swaps to reduce interest rate risk.As of December 31, 2024, if the borrowing rate calculated at floating interest rate increases or decreases by 50 base points with otherfactors unchanged, the net profit of the Group will decrease or increase by about RMB 12,890,000 (December 31, 2023: Net profit willdecrease or increase by approximately RMB 25,193,000).
(3) Other price risks
None
2. Credit risk
As of December 31, 2024, the maximum credit risk exposure that may cause the Group's financial loss resulted from the loss in theGroup's financial assets caused by the counterparty's failure to perform its contractual obligations.In order to reduce credit risk, the Group sets up a team to determine the credit limit, conduct credit approval, and implement othermonitoring procedures to ensure that necessary measures are taken to recover overdue claims. Additionally, the Company cooperateswith commercial insurance institutions to insure for high-risk customers, so as to reduce the risk of bad debts from credit sale. Inaddition, the Group reviews the recovery of each individual receivable on each balance sheet date to ensure that adequate bad debt
provision is made for unrecoverable amounts. Therefore, the Group's management believes that the credit risk undertaken by the Grouphas been greatly reduced.The Group has put in place necessary policies to ensure that all its customers have good credit records.The Group's non-cash monetary funds are mainly deposited with financial institutions with good credit. The management believes thatthere is no significant credit risk, and it is expected that the default of counterparty will not cause significant losses to the Group.
(1) There is no overdue and undepreciated amount in the Group's receivables;
(2) The analysis of financial assets with individual impairment involves the judgment on the factors to be considered in the impairmentof the financial assetsNone
3. Liquidity risk
When managing liquidity risk, the Group maintains and monitors cash and cash equivalents the management deems sufficient to meetthe Group's business needs and reduce the impact of cash flow fluctuations. The management of the Group monitors the use of bankborrowings and ensure the compliance with borrowing agreements.The Group uses bank borrowings and equity instruments as its main sources of funds. As of December 31, 2024, the unused bank creditline of the Group was RMB 48.758 billion (December 31, 2023: RMB 40.933 billion).(II) Transfer of financial assets
1. Transferred financial assets with termination of recognition that have not yet matured
| Items | Transfer method | Amount derecognized (RMB) | Gains or losses related to derecognition (RMB) |
| Receivables financing | Notes endorsed, discount | 6,741,628.18 | |
| Accounts receivable | Buyout factoring | 539,130,000.00 | -419,765.68 |
2. The amount of assets and liabilities formed by transferring financial assets and continuing to be involved
| Items | Transfer method of assets | The amount of assets formed by continuing to be involved (RMB) | The amount of liabilities formed by continuing to be involved (RMB) |
| Notes receivable | Notes discount | 100,000,000.00 | 100,000,000.00 |
2. Hedging
(1) The Company conducts hedging activities for risk management.
? Applicable ? Not applicable
| Item | Corresponding risk management strategies and objectives | Qualitative and quantitative information on the hedged risks | Economic relationship between the hedged items and related hedging instruments | Effective achievement of expected risk management objectives | Impact of corresponding hedging activities on risk exposure. |
| Exchange rate risk | Locking in the exchange rate risk of foreign currency assets and foreign currency liabilities held by the Company | Exchange rate fluctuations lead to corresponding foreign exchange gains and losses on the foreign currency assets and liabilities held by the Company | There is an economic relationship between the hedged item and the hedging instrument. This economic relationship causes the values of the hedging instruments and hedged items to change in opposite directions due to facing the same hedged risk. | The expected risk management objectives can be achieved. | Exchange rate risk |
(2) The Company conducts qualified hedging activities and applies hedge accounting.
None
(3) The Company engages in hedging activities for risk management purposes and expects to achieve its risk managementobjectives, but has not applied hedge accounting.? Applicable ? Not applicable
| Item | Reasons for not applying hedge accounting | Impact on financial statements |
| Exchange rate risk | The Company has not yet designated any hedging instruments or hedged items in light of the Company's current business situation and a comprehensive assessment of the costs and benefits. | Gains and losses on derivative financial instruments are recognized directly in the accounts of gains and losses on changes in fair value and investment income. |
3. Financial assets
(1) Classification of transfer method
? Applicable ? Not applicable
Unit: RMB
| Transfer method | Nature of transferred financial assets | Amount of transferred financial assets | Derecognition situation | Basis for determining derecognition |
| Notes discount, endorsement | Receivables financing | 6,741,628.18 | Derecognition | Transfer of risk premium |
| Buyout factoring | Accounts receivable | 539,130,000.00 | Derecognition | Transfer of risk premium |
| Notes discount | Notes receivable | 100,000,000.00 | Recognition not terminated | |
| Total | 645,871,628.18 |
(2) Financial assets derecognized due to transfer
? Applicable ? Not applicable
Unit: RMB
| Item | Transfer method of financial assets | Amount of financial assets with termination of recognition | Gains or losses related to derecognition |
| Receivables financing | Notes discount, endorsement | 6,741,628.18 | |
| Accounts receivable | Buyout factoring | 539,130,000.00 | -419,765.68 |
| Total | 545,871,628.18 | -419,765.68 |
(3) Financial assets resulting from ongoing involvement in asset transfers
? Applicable ? Not applicable
Unit: RMB
| Item | Transfer method of assets | The amount of assets formed by continuing to be involved | The amount of liabilities formed by continuing to be involved |
| Notes receivable | Notes discount | 100,000,000.00 | 100,000,000.00 |
| Total | 100,000,000.00 | 100,000,000.00 |
XIII. Disclosure of Fair Value
1. The closing fair value of assets and liabilities measured at fair value
Unit: RMB
| Item | Fair value of closing | |||
| The first level of fair | The second level of | The third level of fair | Total | |
| value measurement | fair value measurement | value measurement | ||
| I. Continuous fair value measurement | - | - | - | - |
| (I) Financial assets held for trading | 552,315,040.36 | 548,668,959.95 | 1,100,984,000.31 | |
| 1. Financial assets measured at fair value through profit and loss | 552,315,040.36 | 548,668,959.95 | 1,100,984,000.31 | |
| (1) Equity instrument investment | 548,668,959.95 | 548,668,959.95 | ||
| (2) Derivative financial assets | 552,315,040.36 | 552,315,040.36 | ||
| (II) Investments in other equity instruments | 84,024,083.70 | 541,637,855.74 | 625,661,939.44 | |
| (III) Receivables financing | 8,710,031.89 | 8,710,031.89 | ||
| (IV) Other non-current financial assets | 432,722,782.28 | 432,722,782.28 | ||
| Total assets consistently measured at fair value | 84,024,083.70 | 552,315,040.36 | 1,531,739,629.86 | 2,168,078,753.92 |
| (V) Financial liabilities held for trading | 604,980,242.99 | 604,980,242.99 | ||
| Derivative financial liabilities | 604,980,242.99 | 604,980,242.99 | ||
| Total liabilities continuously measured at fair value | 604,980,242.99 | 604,980,242.99 | ||
| II. Non-continuous fair value measurement | - | - | - | - |
2. Determination basis for the market price of continuous and non-continuous first-level fair valuemeasurement items
The closing price at the end of the year is used as the basis for determining the market price of the shares of foreign-listed companiesheld by the Company.
3. Qualitative and quantitative information on the valuation techniques and important parameters used incontinuous and non-continuous second-level fair value measurement itemsDirectly or indirectly observable input values of related assets or liabilities except first-level inputs.
4. Qualitative and quantitative information on the valuation techniques and important parameters used incontinuous and non-continuous third-level fair value measurement itemsBasis for determining fair value according to the value assessed under the income method and the asset-based method and the net bookasset.
5. Adjustment information and sensitivity analysis of non-observable parameters between opening andclosing book value for continuous third-level fair value measurement itemsNone
6. Conversion among different levels in the current period, reasons for conversion and the policy fordetermining conversion time points in continuous fair value measurement itemsNone
7. Changes in valuation techniques during the current period and reasons for changesNone
8. Fair value of financial assets and financial liabilities not measured at fair valueNone
9. Others
None
XIV. Related Parties and Related Transactions
1. Information about the parent company of the Company
| Parent company name | Registration place | Business nature | Registered capital | Shareholding ratio of the Company to the Company | Proportion of voting rights of the Company in the Company |
| Goertek Group Co., Ltd. | Weifang | Equity investment management, etc. | RMB 100,000,000 | 14.56% | 14.56% |
Explanation of the parent company of the CompanyThe Company's parent Company and final parent Company is Goertek Group Co., Ltd.The ultimate controlling parties of the Company are Jiang Bin and Hu Shuangmei.
2. Information on subsidiaries of the Company
See Note X.1."Interests in subsidiaries" for details of the subsidiaries of Company
3. Information on joint ventures and associated enterprises of the Company
See Note X.3. "Rights and interests in joint venture arrangements and affiliated enterprises" for details of the important joint venturesor associated enterprises of the Company.Information about other joint ventures or associated enterprises that have related transactions with the Company in the current period,or have a balance resulting from related transactions with the Company in the previous period is as follows:
| Name of joint ventures and associated enterprises | Relationship with the Company |
| Qingdao Virtual Reality Institute Co., Ltd. | Associate of the Company |
| SeeYA Technology Co., Ltd. | Associate of the Company |
4. Information on other related parties
| Name of other related parties | Relationship between other related parties and the Company |
| Jiang Bin | Actual controller and board chairman of the Company |
| Hu Shuangmei | Actual controller |
| Jiang Long | Person acting in concert with the actual controller |
| Weifang Goer Farm Co., Ltd. | Business of the same actual controller |
| Goerlife Co., Ltd | Business of the same actual controller |
| Qingdao Resonance Venture Capital Management Co., Ltd. | Enterprise controlled by an affiliated natural person |
| Weifang Goer Property Service Co., Ltd. | Business of the same actual controller |
| Wemake (Qingdao) Digital Creative Technology Co., Ltd. | Business of the same actual controller |
| Qingdao Point Hotel Management Co., Ltd. | Business of the same actual controller |
| GravityXR Electronics and Technology Co., Ltd. | Enterprises with affiliated natural persons serving as directors |
| Jiaxing Zeray New Material Technology Co., Ltd | Enterprises with affiliated natural persons serving as directors |
| Weifang Goer Manor Food & Beverage Co., Ltd. | Business of the same actual controller |
| Name of other related parties | Relationship between other related parties and the Company |
| Weifang Point Hotel Management Co., Ltd. | Business of the same actual controller |
| Weihai Goer Ecological Agriculture Co., Ltd. | Business of the same actual controller |
| Weifang Goerdyna Technology Co., Ltd. | Enterprise controlled by an affiliated natural person |
| Weifang Goertek Health Management Co., Ltd. | Business of the same actual controller |
| Little Bird Co., Ltd | Enterprise controlled by an affiliated natural person |
| Weifang Dotcom Catering Management Co., Ltd. | Enterprise controlled by an affiliated natural person |
| Dotcom Investment Co., Ltd. | Enterprise controlled by an affiliated natural person |
| Qingdao Guochuang Virtual Reality Testing Co., Ltd. | Subsidiary of a joint venture of the Company |
| Qingdao Qiaoshi Catering Management Co., Ltd. | Enterprise controlled by an affiliated natural person |
| Wemake (Weihai) Digital Creative Technology Co., Ltd. | Business of the same actual controller |
| Dan Audio Trading Co.,Ltd. | Enterprise controlled by an affiliated natural person |
| Bei Ge (Weifang) Intelligent technology Co., Ltd. | Business of the same actual controller |
| Qingdao Dotcom Catering Management Co., Ltd. | Enterprise controlled by an affiliated natural person |
| Weihai Point Hotel Management Co., Ltd. | Business of the same actual controller |
| Beijing Bubble Lab Co., Ltd. | Enterprise controlled by an affiliated natural person |
| Weifang Goer Manor Trading Co., Ltd. | Business of the same actual controller |
| Dynaudio (Shanghai) Co,. Ltd | Enterprise controlled by an affiliated natural person |
| Weifang Daozao Catering Company Co., Ltd. | Actual controller of the same person for the past 12 months |
| Weifang Dotcom Garden Floriculture Co., Ltd. | Enterprise controlled by an affiliated natural person |
| Goertek Robotics Co., Ltd. | Business of the same actual controller |
| GoerDyna Technology Co., Ltd. | Enterprise controlled by an affiliated natural person |
| Wemake (Beijing) Digital Creative Technology Co., Ltd. | Business of the same actual controller |
| Wemake (Weifang) Digital Creative Technology Co., Ltd | Business of the same actual controller |
| Goerdyna Holding A/S | Enterprise controlled by an affiliated natural person |
| Shenzhen Goerdyna Technology Co., Ltd. | Enterprise controlled by an affiliated natural person |
| Weifang High-Tech Zone Zhuohe Kindergarten | Business of the same actual controller |
| Weifang High-Tech Zone Goer Kindergarten | Business of the same actual controller |
| Shandong Goer Education Group Co., Ltd. | Business of the same actual controller |
| Weifang High-Tech Zone Yasong Linju Kindergarten | Business of the same actual controller |
Explanation of other matters:
Weifang Point Hotel Management Co., Ltd. was deregistered on December 19, 2024; Weifang Goer Manor Trading Co., Ltd. wasderegistered on January 19, 2024.
5. Related party transactions
(1) Related transactions involving commodity purchase, and rendering and receipt of servicesStatement of purchasing goods/accepting labor services
Unit: RMB
| Related parties | Related transactions | 2024 | Approved trading limit | Exceed the trading limit or not | 2023 |
| Weifang Goer Farm Co., Ltd. | Purchasing goods and services | 37,320,556.67 | 85,000,000.00 | Yes, but it does not exceed 0.5% of the latest audited net assets. | 30,152,987.69 |
| Goerlife Co., Ltd | Purchasing goods and services | 30,002,550.67 | 5,740,373.09 | ||
| Weifang Goer | Purchasing goods | 12,830,388.87 | 8,537,213.68 |
| Related parties | Related transactions | 2024 | Approved trading limit | Exceed the trading limit or not | 2023 |
| Property Service Co., Ltd. | and services | ||||
| Goertek Group Co., Ltd. | Purchasing goods and services | 11,445,715.30 | 10,560,575.44 | ||
| Wemake (Qingdao) Digital Creative Technology Co., Ltd. | Purchasing goods and services | 5,443,242.50 | 388,732.33 | ||
| Qingdao Point Hotel Management Co., Ltd. | Purchasing goods and services | 4,997,653.93 | 3,420,930.82 | ||
| Weifang Goer Manor Food & Beverage Co., Ltd. | Purchasing goods | 2,668,788.64 | 2,722,466.87 | ||
| Weifang Point Hotel Management Co., Ltd. | Purchasing goods and services | 2,717,367.22 | 18,459,368.72 | ||
| Weihai Goer Ecological Agriculture Co., Ltd. | Purchasing goods | 2,032,066.46 | 1,278,997.98 | ||
| Weifang Goertek Health Management Co., Ltd. | Purchasing goods and services | 1,830,334.17 | |||
| Wemake (Weihai) Digital Creative Technology Co., Ltd. | Purchasing goods and services | 74,191.66 | 160,610.11 | ||
| Bei Ge (Weifang) Intelligent technology Co., Ltd. | Purchasing goods and services | 58,086.04 | 930,387.64 | ||
| Weihai Point Hotel Management Co., Ltd. | Purchasing goods | 13,178.00 | 6,520.00 | ||
| Goertek Robotics Co., Ltd. | Purchasing goods and services | 6,509.43 | |||
| Weifang Goer Manor Trading Co., Ltd. | Purchasing goods | 9,106,065.56 | |||
| Weifang Goerdyna Technology Co., Ltd. | Purchasing goods and services | 1,870,577.70 | 500,000.00 | Yes, but it does not exceed 0.5% of the latest audited net assets. | 1,164,161.55 |
| Little Bird Co., Ltd | Purchasing goods | 1,795,727.74 | 3,707,246.20 | ||
| Dan Audio Trading Co.,Ltd. | Purchasing goods | 66,703.80 | |||
| Dynaudio (Shanghai) Co,. Ltd | Purchasing goods | 154,867.26 | |||
| Qingdao Resonance | Receiving labor | 16,622,559.13 |
| Related parties | Related transactions | 2024 | Approved trading limit | Exceed the trading limit or not | 2023 |
| Venture Capital Management Co., Ltd. | service | ||||
| Qingdao Virtual Reality Institute Co., Ltd. | Receiving labor service | 5,720,943.39 | 5,978,660.00 | ||
| GravityXR Electronics and Technology Co., Ltd. | Receiving labor service | 2,664,900.00 | |||
| SeeYA Technology Co., Ltd. | Purchasing goods and services | 4,608,299.35 | |||
| Weifang Dotcom Catering Management Co., Ltd. | Purchasing goods and services | 640,714.70 | 1,509,999.78 | ||
| Jiaxing Zeray New Material Technology Co., Ltd | Purchasing goods and services | 562,151.31 | |||
| Dotcom Investment Co., Ltd. | Purchasing goods | 527,670.27 | 1,961,849.91 | ||
| Qingdao Guochuang Virtual Reality Testing Co., Ltd. | Purchasing goods | 459,254.72 | |||
| Qingdao Qiaoshi Catering Management Co., Ltd. | Receiving labor service | 258,491.00 | |||
| Qingdao Dotcom Catering Management Co., Ltd. | Purchasing goods | 49,631.50 | 25,751.20 | ||
| Beijing Bubble Lab Co., Ltd. | Purchasing goods | 10,446.00 | 77,080.00 | ||
| AKM Industrial Company Limited | Purchasing raw materials | 45,308,209.26 | |||
| Weifang Daozao Catering Company Co., Ltd. | Purchasing goods and services | 90,943.71 | |||
| Weifang Dotcom garden floriculture Co., Ltd. | Purchasing goods | 56,865.00 | |||
| Jiaxing Uphoton Optoelectronics Technology Co., Ltd. | Purchasing goods | 2,982.00 |
The approved transaction limits in the table above can be referenced in the Company's announcement titled Announcement on the
Forecast of Daily Related Party Transactions in 2024 disclosed on designated information disclosure media on March 28, 2024.Statement of sales of goods/rendering of services
Unit: RMB
| Related parties | Related transactions | 2024 | 2023 |
| Weifang Goerdyna Technology Co., Ltd. | Sales of goods and services | 129,119,994.92 | 69,547,848.39 |
| Little Bird Co., Ltd | Sales of goods | 5,928,705.14 | 18,577,049.95 |
| Qingdao Virtual Reality Institute Co., Ltd. | Sales of goods and services | 4,205,778.83 | 2,274,163.05 |
| GoerDyna Technology Co., Ltd. | Rendering of service | 1,899,104.88 | 14,695,747.58 |
| Goerlife Co., Ltd | Sales of goods and services | 1,294,670.73 | 794,500.99 |
| Goertek Group Co., Ltd. | Sales of goods and services | 1,067,608.65 | 1,969,742.55 |
| GravityXR Electronics and Technology Co., Ltd. | Sales of goods and services | 803,381.24 | |
| Bei Ge (Weifang) Intelligent technology Co., Ltd. | Sales of goods and services | 657,711.13 | 22,950.00 |
| Goertek Robotics Co., Ltd. | Sales of goods | 388,545.79 | 1,781,327.65 |
| Qingdao Point Hotel Management Co., Ltd. | Rendering of service | 150,943.40 | 294,339.63 |
| Shandong Goer Education Group Co., Ltd. | Sales of goods | 55,752.21 | |
| Wemake (Weihai) Digital Creative Technology Co., Ltd. | Rendering of service | 37,361.38 | |
| Wemake (Qingdao) Digital Creative Technology Co., Ltd. | Rendering of service | 30,171.00 | 14,000.00 |
| Wemake (Beijing) Digital Creative Technology Co., Ltd. | Rendering of service | 1,017.00 | |
| Wemake (Weifang) Digital Creative Technology Co., Ltd | Rendering of service | 1,017.00 | |
| Jiaxing Uphoton Optoelectronics Technology Co., Ltd. | Sales of goods | 928,504.68 | |
| AKM Industrial Company Limited | Sales of goods | 806,403.77 | |
| Dotcom Investment Co., Ltd. | Rendering of service | 252,283.71 | |
| Weifang Dotcom Catering Management Co., Ltd. | Sales of goods and services | 173,954.04 | |
| Weifang Goer Manor Trading Co., Ltd. | Sales of goods | 39,374.10 | |
| Dynaudio (Shanghai) Co,. Ltd | Sales of goods and services | 14,908.64 | |
| Goerdyna Holding A/S | Sales of goods | 933.11 |
(2) Related entrusted management/contracting and entrusted management/outsourcing
None
(3) Information of related lease
The Company acts as the lessor:
Unit: RMB
| Name of lessee | Type of leased assets | Lease income recognized in current period | Lease income recognized in last period |
| Weifang Goerdyna Technology Co., Ltd. | Building | 11,912,629.15 | 10,454,141.23 |
| Shenzhen Goerdyna Technology Co., Ltd. | Building | 1,376,141.31 | 1,834,855.07 |
| Wemake (Weihai) Digital Creative Technology Co., Ltd. | Building | 641,331.97 | 39,633.03 |
| Bei Ge (Weifang) Intelligent technology Co., Ltd. | Building | 265,628.00 | 196,812.00 |
| Goerlife Co., Ltd | Building | 55,950.62 | 285,057.26 |
| Dotcom Investment Co., Ltd. | Building | 39,633.03 | 39,633.03 |
| Weifang High-Tech Zone Zhuohe Kindergarten | Building | 25,667.26 | 24,000.00 |
| Weifang Goer Farm Co., Ltd. | Building | 18,180.97 | 51,185.84 |
| Shandong Goer Education Group Co., Ltd. | Building | 9,805.31 | 53,175.80 |
| Weifang Goertek Health Management Co., Ltd. | Building | 5,713.27 | |
| Goertek Group Co., Ltd. | Building | 5,541.15 | 7,217.70 |
| Weifang High-Tech Zone Goer Kindergarten | Building | 778.76 | |
| Weifang High-Tech Zone Yasong Linju Kindergarten | Building | 209,885.71 | |
| Weifang Point Hotel Management Co., Ltd. | Building | 52,283.19 |
The Company acts as the lessee:
Unit: RMB
| Name of lessor | Type of leased assets | Rental charges for simplified treatment of short-term leases and low-value asset leases (if applicable) | Variable lease payments not included in the measurement of lease liabilities (if applicable) | Rent paid | Interest expenses incurred on lease liabilities | Increased right-of-use assets | |||||
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | ||
| Qingdao Virtual Reality Institute Co., Ltd. | Equipment | 564,889.38 | 564,889.38 | 638,325.00 | 638,325.00 | ||||||
| Goertek Group Co., Ltd. | Building | 406,260.00 | 293,970.88 | 320,428.26 | 224,177.95 | ||||||
| GoerDyna Technology Co., Ltd. | Building | 313,850.26 | 342,096.77 | ||||||||
(4) Related guarantees
The Company acts as the guarantor
Unit: RMB
| Guaranteed party | Guarantee amount | Starting date of guarantee | Maturity date of guarantee | Whether the guarantee has been performed fully |
| Goertek Technology Vina Co., Ltd. | 49,806,813.40 | September 1, 2023 | August 30, 2024 | Yes |
| Qingdao Goertek Horizons | 5,000,000.00 | July 6, 2023 | July 5, 2024 | Yes |
| Guaranteed party | Guarantee amount | Starting date of guarantee | Maturity date of guarantee | Whether the guarantee has been performed fully |
| Technology Co., Ltd. | ||||
| Goertek Microelectronics Inc. | 10,782,600.00 | November 16, 2023 | November 15, 2024 | Yes |
| Goertek Technology Vina Co., Ltd. | 64,169,000.00 | July 19, 2024 | July 18, 2025 | No |
| Goertek Technology Vina Co., Ltd. | 38,525,070.67 | July 19, 2024 | July 18, 2025 | No |
| Goertek Technology Vina Co., Ltd. | 215,652,000.00 | July 19, 2024 | July 18, 2025 | No |
| Goertek Technology Vina Co., Ltd. | 71,884,000.00 | July 19, 2024 | July 18, 2025 | No |
| Goertek Technology Vina Co., Ltd. | 30,545,000.00 | July 19, 2024 | July 18, 2025 | No |
| Goertek Technology Vina Co., Ltd. | 3,560,000.00 | July 19, 2024 | July 18, 2025 | No |
| Goertek Technology Vina Co., Ltd. | 21,012,100.06 | July 19, 2024 | July 18, 2025 | No |
| Goertek Technology Vina Co., Ltd. | 107,826,000.00 | July 19, 2024 | July 18, 2025 | No |
| Goertek Smart Technology Vina Co., Ltd. | 4,101,724.19 | July 19, 2024 | July 18, 2025 | No |
| Goertek Smart Technology Vina Co., Ltd. | 21,565,926.68 | July 19, 2024 | July 18, 2025 | No |
| Goertek Smart Technology Vina Co., Ltd. | 5,137,949.01 | July 19, 2024 | July 18, 2025 | No |
| Goertek Intelligence Technology Co., Ltd. | 17,895,000.00 | July 19, 2024 | July 18, 2025 | No |
| Goertek Intelligence Technology Co., Ltd. | 625,000.00 | July 19, 2024 | July 18, 2025 | No |
| Goertek (Hong Kong) Co., Limited | 81,781,000.00 | July 19, 2024 | July 18, 2025 | No |
| Goertek (Hong Kong) Co., Limited | 17,540,000.00 | July 19, 2024 | July 18, 2025 | No |
| Goertek (Hong Kong) Co., Limited | 14,000,000.00 | November 8, 2024 | May 31, 2025 | No |
| Goertek Technology Vina Co., Ltd. | 926,516,564.15 | April 1, 2023 | December 15, 2026 | No1 |
| Goertek Precision Industry Vietnam Co., Ltd. | 690,873,435.85 | April 1, 2023 | December 15, 2026 | No2 |
Notes: 1. The subsidiary Goertek Technology Vina Co., Ltd. borrowed RMB 926,516,564.15 and repaid RMB 154,419,427.30 on June15, 2024, and RMB 154,419,427.30 on December 15, 2024, respectively, leaving a balance of RMB 617,677,709.55 for the guaranteeof the borrowing as of the end of the period.
2. The subsidiary Goertek Precision Industry Vietnam Co., Ltd. borrowed RMB 690,873,435.85 and repaid RMB 115,145,572.70 onJune 15, 2024, and RMB 575,727,863.15 on July 25, 2024, respectively, leaving a balance of RMB 0.00 for the guarantee of theborrowing as of the end of the period.The Company acts as the guaranteed party
Unit: RMB
| Guarantor | Guarantee amount | Starting date of guarantee | Maturity date of guarantee | Whether the guarantee has been performed fully |
| Goertek Group Co., Ltd. | 200,000,000.00 | March 29, 2022 | March 29, 2027 | No1 |
| Goertek Group Co., Ltd. | 200,000,000.00 | June 24, 2022 | March 29, 2027 | No |
| Goertek Group Co., Ltd. | 200,000,000.00 | July 29, 2022 | July 28, 2025 | No |
| Goertek Group Co., Ltd. | 500,000,000.00 | September 19, 2022 | September 19, 2025 | No |
| Goertek Group Co., Ltd. | 600,000,000.00 | November 20, 2023 | November 16, 2028 | No2 |
| Goertek Group Co., Ltd. | 194,086,800.00 | December 11, 2023 | June 10, 2024 | Yes |
| Goertek Group Co., Ltd. | 20,000,000.00 | January 23, 2024 | July 23, 2024 | Yes |
| Goertek Group Co., Ltd. | 30,000,000.00 | January 29, 2024 | July 28, 2024 | Yes |
| Guarantor | Guarantee amount | Starting date of guarantee | Maturity date of guarantee | Whether the guarantee has been performed fully |
| Goertek Group Co., Ltd. | 50,000,000.00 | January 29, 2024 | March 28, 2024 | Yes |
| Goertek Group Co., Ltd. | 30,000,000.00 | February 1, 2024 | August 1, 2024 | Yes |
| Goertek Group Co., Ltd. | 10,000,000.00 | February 1, 2024 | August 1, 2024 | Yes |
| Goertek Group Co., Ltd. | 50,000,000.00 | May 28, 2024 | July 25, 2024 | Yes |
| Goertek Group Co., Ltd. | 50,000,000.00 | June 19, 2024 | December 19, 2024 | Yes |
| Goertek Group Co., Ltd. | 50,000,000.00 | July 18, 2024 | October 26, 2024 | Yes |
| Goertek Group Co., Ltd. | 50,000,000.00 | August 15, 2024 | October 24, 2024 | Yes |
| Goertek Group Co., Ltd. | 40,000,000.00 | September 19, 2024 | November 21, 2024 | Yes |
| Goertek Group Co., Ltd. | 30,000,000.00 | September 19, 2024 | March 18, 2025 | No |
| Goertek Group Co., Ltd. | 10,000,000.00 | October 16, 2024 | December 26, 2024 | Yes |
| Goertek Group Co., Ltd. | 50,000,000.00 | December 18, 2024 | June 18, 2025 | No |
| Goertek Group Co., Ltd. | 20,000,000.00 | December 18, 2024 | February 20, 2025 | No |
| Goertek Group Co., Ltd. | 252,000,000.00 | June 1, 2023 | May 31, 2024 | Yes |
| Goertek Group Co., Ltd. | 12,000,000.00 | June 14, 2023 | May 31, 2024 | Yes |
| Goertek Group Co., Ltd. | 610,237,307.76 | July 31, 2023 | July 30, 2024 | Yes |
| Goertek Group Co., Ltd. | 50,000,000.00 | September 6, 2023 | September 5, 2024 | Yes |
| Goertek Group Co., Ltd. | 30,000,000.00 | December 27, 2023 | February 22, 2024 | Yes |
| Goertek Group Co., Ltd. | 57,507,200.00 | July 25, 2024 | July 24, 2025 | No |
| Goertek Group Co., Ltd. | 50,000,000.00 | July 25, 2024 | July 24, 2025 | No |
| Goertek Group Co., Ltd. | 215,652,000.00 | July 25, 2024 | July 24, 2025 | No |
| Goertek Group Co., Ltd. | 585,880,197.89 | July 25, 2024 | July 24, 2025 | No |
| Goertek Group Co., Ltd. | 119,000,000.00 | July 25, 2024 | July 24, 2025 | No |
| Goertek Group Co., Ltd. | 70,000,000.00 | November 19, 2024 | January 23, 2025 | No |
Remarks:
1. The Company borrowed RMB 200,000,000.00 and repaid RMB 22,000,000.00 on March 29, 2024, RMB 54,000,000.00 on April20, 2024, and RMB 54,000,000.00 on September 13, 2024, respectively, leaving a balance of RMB 70,000,000.00 for the guarantee ofthe borrowing as of the end of the period.
2. The subsidiary Goertek Optical Technology Co., Ltd. borrowed RMB 600,000,000.00 and repaid RMB 10,000,000.00 on May 16,2024, and RMB 80,000,000.00 on November 16, 2024, respectively, leaving a balance of RMB 510,000,000.00 for the guarantee ofthe borrowing as of the end of the period.Explanation of related guaranteeNone
(5) Funds borrowed from related parties
Unit: RMB
| Related parties | Borrowing amount | Starting date | Maturity date | Explanation |
| Borrowing | ||||
| Goertek Group Co., Ltd. | 11,000,000.00 | November 15, 2023 | August 21, 2024 | The annual interest rate is 3.45%, and the interest for this period is RMB 246,675.01. |
| Goertek Group Co., Ltd. | 27,000,000.00 | August 19, 2024 | August 18, 2025 | The annual interest rate is 2.8%, and the interest for this period is RMB 283,500.00. |
(6) Transfer of assets and debt restructuring of related parties
Unit: RMB
| Related parties | Related transactions | 2024 | 2023 |
| Weifang Goer Farm Co., Ltd. | Purchasing fixed assets, etc. | 2,309,222.83 | 6,508,282.21 |
| Weifang Point Hotel Management Co., Ltd. | Purchasing fixed assets, etc. | 727,674.09 | |
| Beijing Bubble Lab Co., Ltd. | Purchasing fixed assets, etc. | 249,096.00 | |
| Wemake (Weihai) Digital Creative Technology Co., Ltd. | Purchasing fixed assets, etc. | 156,747.89 | 2,607,860.92 |
| Goertek Group Co., Ltd. | Purchasing fixed assets, etc. | 144,786.52 | 466,429.41 |
| Bei Ge (Weifang) Intelligent technology Co., Ltd. | Purchasing fixed assets, etc. | 80,000.00 | 3,559,740.00 |
| Qingdao Point Hotel Management Co., Ltd. | Purchasing fixed assets, etc. | 899.80 | |
| Weifang Dotcom Catering Management Co., Ltd. | Purchasing fixed assets, etc. | 7,281.42 | |
| Weifang Goerdyna Technology Co., Ltd. | Disposal of fixed assets | 13,190,653.76 | 12,574.24 |
| Weifang Goertek Health Management Co., Ltd. | Disposal of fixed assets | 93,569.29 | |
| Weifang Goer Manor Food & Beverage Co., Ltd. | Disposal of fixed assets | 28,318.59 | |
| Goerlife Co., Ltd | Disposal of fixed assets | 126.55 | |
| Weifang Point Hotel Management Co., Ltd. | Disposal of fixed assets | 72,902.23 | |
| Weifang Goer Farm Co., Ltd. | Disposal of fixed assets | 5,270.97 |
(7) Remuneration of key managers
Unit: RMB
| Item | 2024 | 2023 |
| Remuneration of key managers | 16,409,214.23 | 14,754,040.68 |
(8) Other related transactions
Unit: RMB
| Item | Related transactions | Amount of current period | Amount in previous period |
| SeeYA Technology Co., Ltd. | Government subsidy collection and payment on behalf | 6,500,000.00 | |
| Jiang Long | Purchase of shares | 23,273,750.00 | |
| Shareholders of Uphoton Technology (Shaoxing) Co., Ltd. related to the Company | Purchase of shares | 12,267,043.01 |
6. Receivables and payables of related parties
(1) Items with accounts receivable
Unit: RMB
| Name of project | Related parties | Closing balance | Opening balance | ||
| Book balance | Bad-debt provision | Book balance | Bad-debt provision | ||
| Accounts receivables: | |||||
| Accounts receivable | Weifang Goerdyna Technology Co., Ltd. | 27,878,139.85 | 278,781.40 | 19,811,361.10 | 198,113.61 |
| Accounts | Little Bird Co., Ltd | 975,911.46 | 9,759.11 | 4,517,594.90 | 45,175.95 |
| Name of project | Related parties | Closing balance | Opening balance | ||
| Book balance | Bad-debt provision | Book balance | Bad-debt provision | ||
| receivable | |||||
| Accounts receivable | Shandong Goer Education Group Co., Ltd. | 63,000.00 | 630.00 | 1,064.00 | 10.64 |
| Accounts receivable | GoerDyna Technology Co., Ltd. | 6,761.00 | 67.61 | 1,570,053.86 | 15,700.54 |
| Accounts receivable | Weifang High-Tech Zone Zhuohe Kindergarten | 1,884.00 | 18.84 | ||
| Accounts receivable | Goertek Robotics Co., Ltd. | 836,487.15 | 8,364.87 | ||
| Accounts receivable | Goertek Group Co., Ltd. | 345,666.71 | 3,456.67 | ||
| Accounts receivable | Dotcom Investment Co., Ltd. | 251,597.26 | 2,515.97 | ||
| Accounts receivable | Goerlife Co., Ltd | 123,888.38 | 1,238.88 | ||
| Accounts receivable | Weifang High-Tech Zone Yasong Linju Kindergarten | 86,400.00 | 864.00 | ||
| Accounts receivable | Bei Ge (Weifang) Intelligent technology Co., Ltd. | 25,933.50 | 259.34 | ||
| Accounts receivable | Weifang Goer Farm Co., Ltd. | 1,636.00 | 16.36 | ||
| Total | 28,925,696.31 | 289,256.96 | 27,571,682.86 | 275,716.83 | |
| Prepayment: | |||||
| Prepayment | Qingdao Resonance Venture Capital Management Co., Ltd. | 9,454,560.00 | |||
| Prepayment | Weifang Goer Farm Co., Ltd. | 4,000,000.00 | |||
| Total | 13,454,560.00 | ||||
(2) Items with accounts payable
Unit: RMB
| Name of project | Related parties | Closing book balance | Opening book balance |
| Accounts payable: | |||
| Accounts payable | SeeYA Technology Co., Ltd. | 3,301,711.73 | |
| Accounts payable | Weifang Goer Farm Co., Ltd. | 2,687,807.40 | 1,584,580.35 |
| Accounts payable | Qingdao Virtual Reality Institute Co., Ltd. | 1,980,142.50 | 1,980,142.50 |
| Accounts payable | Goerlife Co., Ltd | 1,884,205.22 | 615,481.70 |
| Accounts payable | Wemake (Weihai) Digital Creative Technology Co., Ltd. | 973,038.06 | 1,380,241.71 |
| Accounts payable | Goertek Group Co., Ltd. | 815,730.15 | 641,304.60 |
| Accounts payable | Weihai Goer Ecological Agriculture Co., Ltd. | 420,532.04 | 2,680.00 |
| Accounts payable | Weifang Goer Manor Food & Beverage Co., Ltd. | 308,942.60 | 37,573.87 |
| Accounts payable | Wemake (Qingdao) Digital Creative Technology Co., Ltd. | 95,044.30 | |
| Accounts payable | Little Bird Co., Ltd | 82,506.59 | 931,430.20 |
| Accounts payable | Weifang Dotcom Catering Management Co., Ltd. | 43,735.48 | 9,083.59 |
| Name of project | Related parties | Closing book balance | Opening book balance |
| Accounts payable | Qingdao Point Hotel Management Co., Ltd. | 26,016.77 | 37,894.08 |
| Accounts payable | Bei Ge (Weifang) Intelligent technology Co., Ltd. | 20,736.63 | 7,775.53 |
| Accounts payable | Beijing Bubble Lab Co., Ltd. | 550.00 | 550.00 |
| Accounts payable | Dotcom Investment Co., Ltd. | 163,401.79 | |
| Accounts payable | Weifang Goerdyna Technology Co., Ltd. | 118,359.31 | |
| Accounts payable | Weifang Point Hotel Management Co., Ltd. | 20,181.00 | |
| Total | 12,640,699.47 | 7,530,680.23 | |
| Contract liabilities: | |||
| Contract liabilities | Goertek Group Co., Ltd. | 8,114.95 | |
| Contract liabilities | Weifang Goertek Health Management Co., Ltd. | 568.14 | |
| Contract liabilities | Little Bird Co., Ltd | 24,277.58 | |
| Total | 8,683.09 | 24,277.58 | |
| Other payables: | |||
| Other payables | Goertek Group Co., Ltd. | 27,000,000.00 | 11,000,000.00 |
| Other payables | Wemake (Weihai) Digital Creative Technology Co., Ltd. | 302,302.36 | |
| Other payables | Bei Ge (Weifang) Intelligent technology Co., Ltd. | 28,248.00 | |
| Total | 27,302,302.36 | 11,028,248.00 |
7. Commitment of related parties
None
8. Others
None
XV. Share-based Payment
1. Overview of share-based payment
? Applicable ? Not applicable
Unit: RMB
| Category of grant recipients | Granted in the current period | Exercised in the current period | Unlocked in the current period | Invalidated in the current period | ||||
| Number | Amount | Number | Amount | Number | Amount | Number | Amount | |
| Production staff | 3,386,600 | 7,433,587.00 | 18,531,669 | 4,737,947.11 | 14,874,782 | 6,738,252.33 | 2,874,978 | -1,801,395.53 |
| Sales staff | 393,900 | 864,610.50 | 5,230,733 | 15,078,407.70 | 6,836,172 | 17,670,873.11 | 564,358 | -688,853.81 |
| Management staff | 2,568,100 | 5,636,979.50 | 32,405,074 | 119,964,116.85 | 41,624,230 | 130,411,110.49 | 12,830,900 | -11,646,110.58 |
| R&D staff | 8,735,100 | 19,173,544.50 | 29,628,063 | 45,070,534.33 | 33,900,972 | 53,065,634.79 | 2,754,008 | -5,792,091.61 |
| Total | 15,083,700 | 33,108,721.50 | 85,795,539 | 184,851,005.99 | 97,236,156 | 207,885,870.72 | 19,024,244 | -19,928,451.53 |
Stock options and other equity instruments outstanding at the end of the period? Applicable ? Not applicable
| Category of grant recipients | Stock options outstanding at the end of the period | Other outstanding equity instruments at the end of the period | ||
| Range of exercise prices | Remaining duration of the contract | Range of exercise prices | Remaining duration of the contract | |
| Production staff | RMB 14/share, RMB 18.12/share, RMB 28.78/share | 4 months, 6 months, 8 months, 16 months, 18 months, 20 months | RMB 1.5 /RMB 1 registered capital, RMB 2/share | 9 months, 36 months |
| Sales staff | ||||
| Management staff | ||||
| R&D staff | ||||
Explanation of other matters:
The exercise price for the 2023 Stock Option Incentive Plan is RMB 18.12 per share, with a remaining contract term of 8 months and20 months;The exercise price of the reserved portion of the 2023 Stock Option Incentive Plan is RMB 18.12 per share, with a remaining contractterm of 6 months and 18 months;The exercise price of the reserved portion of the 2021 Stock Option Incentive Plan is RMB 28.78 per share, and this option is currentlyin the exercise period;The exercise price for Goertek Microelectronics Inc.'s 2020 Stock Option Incentive Plan is RMB 14 per share, with a remaining contractterm of 4 months and 16 months;The exercise price for Goertek Microelectronics Inc.'s capital increase equity incentive is RMB 2 per share, with a remaining contractterm of 9 months;The exercise price for Goertek Optical Technology Co., Ltd.'s capital increase equity incentive is RMB 1.5 per RMB 1 of registeredcapital, with a remaining contract term of 36 months.
2. Share-based payment settled with equity
? Applicable ? Not applicable
Unit: RMB
| Determination method of the fair value of equity instruments at the date of grant | The stock option is based on the BS model, the employee stock ownership plan is based on the closing price on the date of grant, and the capital increase in equity is based on the appraised value. |
| Key parameters for the fair value of equity instruments at the grant date | Historical volatility, risk-free rate of return, dividend yield. |
| Basis for determining the quantity of equity instruments with vesting | Management's best estimate |
| Reason for significant difference in estimation in the current period and estimation in the last period | None |
| Accumulative amount of equity-settled share-based payment included in capital surplus | 884,103,154.55 |
| Total amount of share-based payment settled with equity in current period | 352,753,289.98 |
Explanation of other matters:
None
3. Cash-settled payment settled in cash
? Applicable ? Not applicable
4. Expense of share-based payment in the current period
? Applicable ? Not applicable
Unit: RMB
| Category of grant recipients | Expense of equity-settled share-based payment | Expense of share-based payment settled in cash |
| Production staff | 17,483,435.67 | |
| Sales staff | 23,908,479.89 | |
| Management staff | 226,233,694.12 | |
| R&D staff | 85,127,680.30 | |
| Total | 352,753,289.98 |
5. Modification and termination of share-based payment
(1) 2023 Stock Option Incentive Plan
On June 27, 2024, the Company convened the 17th meeting of the 6th Board of Directors and the 14th meeting of the 6th Board ofSupervisors, at which the Proposal on Adjusting Matters Related to the Company's 2023 Stock Option Incentive Plan was approved.The Board of Directors agreed that the Company should adjust the Company's performance evaluation indexes, date of exercise, andother relevant provisions of the 2023 Stock Option Incentive Plan for the years 2024-2025.
(2) Home No. 6 ESOP
On June 27, 2024, the Company convened the 17th meeting of the 6th Board of Directors and the 14th meeting of the 6th Board ofSupervisors, at which the Proposal on Adjustment of Matters Related to the "Home No. 6" Employee Stock Ownership Plan wasapproved. According to the above resolution and the authorization from the shareholders' meeting, the Board of Directors agreed toadjust the performance assessment indicators, the period of restriction on the purchase and sale of shares, and the status of holders forthe years 2024-2026 set forth in the "Home No. 6" Employee Stock Ownership Plan of Goertek Inc. (Draft) (Revised) and its summary,as well as the "Home No. 6" Employee Stock Ownership Plan Management Measures of Goertek Inc. (Revised), while other termsremain unchanged.
(3) Home No. 7 ESOP
On June 27, 2024, the Company convened the 17th meeting of the 6th Board of Directors and the 14th meeting of the 6th Board ofSupervisors, at which the Proposal on Adjustment of Matters Related to the "Home No. 7" Employee Stock Ownership Plan wasapproved. According to the above resolution and the authorization from the shareholders' meeting, the Board of Directors agreed toadjust the performance assessment indicators and the period of restriction on the purchase and sale of shares for the years 2024-2026set forth in the "Home No. 7" Employee Stock Ownership Plan of Goertek Inc. (Draft) and its summary, as well as the "Home No. 7"Employee Stock Ownership Plan Management Measures of Goertek Inc., while other terms remain unchanged.
6. Others
None
XVI. Commitments and Contingencies
1. Important commitments
Important commitments on the balance sheet dateNone
2. Contingencies
(1) Important contingencies on the balance sheet date
① Contingent liability arising from pending litigations and arbitrations and financial impacts therefromNone
②Contingent liabilities arising from guarantees of debts provided to other parties, and financial impacts therefromAs of the reporting date, except that the securities provided by the Company to its subsidiaries Goertek Technology Vina Co., Ltd.,Goertek Smart Technology Vina Co., Ltd., Goertek Intelligence Technology Co., Ltd., and Goertek (Hong Kong) Co., Limited are notfulfilled as specified in Note XIV-5, there is no debt security of the Company provided to other entities.
③ Contingent liabilities related to investments in joint ventures or associates
None
④ Other contingent liabilities and financial impacts therefrom
None
(2) The Company shall make a statement even if it does not have important contingencies to be disclosedThere are no important contingencies to be disclosed in the Company.
3. Others
NoneXVII. Events after Balance Sheet Date
1. Important non-adjustment matters
None
2. Profit distribution
| Dividend to be distributed per 10 shares (RMB) | 1.50 |
| Dividend shares to be distributed per 10 shares (shares) | 0 |
| Conversion of capital surplus into share capital per 10 shares (shares) | 0 |
| Dividend per 10 shares declared after deliberation and approval (RMB) | 1.50 |
| Dividend shares per 10 shares declared after deliberation and approval (shares) | 0 |
| Conversion of capital surplus into share capital per 10 shares declared after deliberation and approval (shares) | 0 |
| Profit distribution plan | Based on the total share capital registered on the record date of equity distribution minus the repurchased shares in the Company's specific securities repurchase account, the Company will distribute the cash dividend of RMB 1.50 (tax inclusive) for every 10 shares to all the shareholders, as well as 0 bonus shares, and there is no conversion of capital surplus into share capital. |
3. Sales return
None
4. Explanation of other matters after the balance sheet date
None
XVIII. Other important matters
1. Correction of early accounting errors
None
2. Debt restructuring
None
3. Asset replacement
None
4. Annuity plan
None
5. Discontinued operation
None
6. Segment information
(1) Basis for determining reportable segments and accounting policies
None
(2) Financial information of reportable segments
None
(3) If the Company has no reportable segments, or cannot disclose the total assets and liabilities of eachreportable segments, the reasons shall be explained
The Group determines its operating segments based on its internal organizational structure, management requirements, and internalreporting system, and determines its reportable segments and discloses segment information on the basis of operating segments.An operating segment is a component of the Group that meets all of the following conditions: (1) The component can generate incomeand expense in daily activities; (2) The management of the Group can regularly evaluate the operating results of such component so asto determine the allocation of resources to it and evaluate its performance; (3) The Group can obtain the accounting information of thecomponent, such as the financial status, operating results, cash flow, etc. If two or more operating segments have similar economiccharacteristics and meet certain conditions, they will be combined into one operating segment.Since over 90% of the Group's revenue and performance comes from the electronic components business, segment information wasnot presented.
(4) Explanation of other matters
None
7. Other important transactions and matters that have an impact on investors' decisionsNone
8. Others
None
XIX. Notes to Major Items in the Financial Statements of the Parent Company
1. Accounts receivable
(1) Disclosure by aging
Unit: RMB
| Aging | Closing book balance | Opening book balance |
| Within 1 year (including 1 year) | 6,912,190,537.36 | 6,620,847,221.89 |
| 1 to 2 years | 48,590.00 | |
| 2 to 3 years | 780,660.09 | |
| Over 3 years | 780,660.09 | |
| 3 to 4 years | 780,660.09 | |
| 4 to 5 years | ||
| Over 5 years | ||
| Total | 6,913,019,787.45 | 6,621,627,881.98 |
(2) Classification and disclosure by bad debt provision method
Unit: RMB
| Category | Closing balance | Opening balance | ||||||||
| Book balance | Bad-debt provision | Book value | Book balance | Bad-debt provision | Book value | |||||
| Amount | Proportion | Amount | Proportion of accrual | Amount | Proportion | Amount | Proportion of accrual | |||
| Accounts receivable for provision for bad debts accrued on a portfolio basis | 6,913,019,787.45 | 100.00% | 26,702,422.15 | 0.39% | 6,886,317,365.30 | 6,621,627,881.98 | 100.00% | 22,926,746.45 | 0.35% | 6,598,701,135.53 |
| Including: | ||||||||||
| Group by aging | 2,591,547,759.02 | 37.49% | 26,702,422.15 | 1.03% | 2,564,845,336.87 | 2,254,422,300.81 | 34.05% | 22,926,746.45 | 1.02% | 2,231,495,554.36 |
| Category | Closing balance | Opening balance | ||||||||
| Book balance | Bad-debt provision | Book value | Book balance | Bad-debt provision | Book value | |||||
| Amount | Proportion | Amount | Proportion of accrual | Amount | Proportion | Amount | Proportion of accrual | |||
| Related party group | 4,321,472,028.43 | 62.51% | 4,321,472,028.43 | 4,367,205,581.17 | 65.95% | 4,367,205,581.17 | ||||
| Total | 6,913,019,787.45 | 100.00% | 26,702,422.15 | 0.39% | 6,886,317,365.30 | 6,621,627,881.98 | 100.00% | 22,926,746.45 | 0.35% | 6,598,701,135.53 |
Provision for bad debts accrued on a portfolio basis: aging portfolio
Unit: RMB
| Name | Closing balance | ||
| Book balance | Bad-debt provision | Proportion of accrual | |
| Within 1 year | 2,590,718,508.93 | 25,907,185.06 | 1.00% |
| 1 to 2 years | 48,590.00 | 14,577.00 | 30.00% |
| 2 to 3 years | |||
| Over 3 years | 780,660.09 | 780,660.09 | 100.00% |
| Total | 2,591,547,759.02 | 26,702,422.15 | |
Description for basis of determining the group:
For further details, please see Note V. 11. ''Impairment of financial assets''Provision for bad debts accrued on a portfolio basis: related party portfolio
Unit: RMB
| Name | Closing balance | ||
| Book balance | Bad-debt provision | Proportion of accrual | |
| Within 1 year | 4,321,472,028.43 | ||
| 1 to 2 years | |||
| 2 to 3 years | |||
| Over 3 years | |||
| Total | 4,321,472,028.43 | ||
Description for basis of determining the group:
For further details, please see Note V. 11. ''Impairment of financial assets''If bad-debt provision for accounts receivable is based on the general model of expected credit losses:
? Applicable ? Not applicable
(3) Accrual, recovery or reversal of bad debt provision in current period
Provision for bad debts of the current period:
Unit: RMB
| Category | Opening balance | Changes in amount of the current period | Closing balance | |||
| Accrual | Withdrawal or write-back | Write-off | Other | |||
| Accounts receivable for provision for bad debts accrued on a portfolio basis | 22,926,746.45 | 3,775,675.70 | 26,702,422.15 | |||
| Total | 22,926,746.45 | 3,775,675.70 | 26,702,422.15 | |||
Among them, significant information of bad debt provision withdrawn or written back in the current period:
None
(4) Accounts receivable actually written off in current period
None
(5) The status of accounts receivable and contract assets in the top five of the closing balance collectedaccording to debtors
Unit: RMB
| Company name | Closing balance of accounts receivable | Closing balance of contract assets | Closing balance of accounts receivable and contract assets | Proportion of total balance of accounts receivable and contract assets at the end of the period | Closing balance of allowance for bad debts on accounts receivable and impairment provision for contract assets |
| Company 1 | 2,157,038,783.78 | 2,157,038,783.78 | 31.20% | ||
| Company 2 | 1,438,016,157.04 | 1,438,016,157.04 | 20.80% | ||
| Company 3 | 1,205,008,071.98 | 1,205,008,071.98 | 17.43% | 12,050,080.72 | |
| Company 4 | 277,975,052.91 | 277,975,052.91 | 4.02% | 2,779,750.53 | |
| Company 5 | 223,575,293.99 | 223,575,293.99 | 3.23% | ||
| Total | 5,301,613,359.70 | 5,301,613,359.70 | 76.68% | 14,829,831.25 |
2. Other receivables
Unit: RMB
| Item | Closing balance | Opening balance |
| Other receivables | 4,119,484,430.97 | 5,265,145,730.57 |
| Total | 4,119,484,430.97 | 5,265,145,730.57 |
(1) Interest receivable
None
(2) Dividends receivable
None
(3) Other receivables
1) Classification of other receivables by nature of payment
Unit: RMB
| Nature of payment | Closing book balance | Opening book balance |
| Current account | 4,094,350,933.30 | 5,239,987,500.43 |
| Security deposit | 931,636.57 | 2,244,358.04 |
| Withholding and remitting social insurance and housing provident fund | 24,623,431.33 | 23,468,164.65 |
| Total | 4,119,906,001.20 | 5,265,700,023.12 |
2) Disclosure by aging
Unit: RMB
| Aging | Closing book balance | Opening book balance |
| Within 1 year (including 1 year) | 3,989,607,956.14 | 5,135,306,494.91 |
| 1 to 2 years | 176,078.65 | 41,976.80 |
| 2 to 3 years | 21,000.00 | 130,321,400.00 |
| Over 3 years | 130,100,966.41 | 30,151.41 |
| 3 to 4 years | 130,100,000.00 | 966.41 |
| 4 to 5 years | 966.41 | 29,185.00 |
| Over 5 years | ||
| Total | 4,119,906,001.20 | 5,265,700,023.12 |
3) Classification and disclosure by bad debt provision method
Bad debt provision is accrued according to the general model of expected credit loss:
Unit: RMB
| Bad-debt provision | First stage | Second stage | Third stage | Total |
| Expected credit loss over the next 12 months | Expected credit loss for the entire duration (credit impairment not occurred) | Expected credit loss for the entire duration (credit impairment has occurred) | ||
| Balance as of January 1, 2024: | 554,292.55 | 554,292.55 | ||
| Balance as of January 1, 2024 in the current period | ||||
| Accrual in the current period | -132,722.32 | -132,722.32 | ||
| Balance as of December 31, 2024: | 421,570.23 | 421,570.23 |
Criteria for dividing each stage and the bad-debt reserves calculation and withdrawal proportionFor further details, please see Note V. 10. "Financial Instruments" and 11. "Impairment of Financial Assets"Significant changes in the carrying value of changes in the allowances for losses in the current period? Applicable ? Not applicable
4) Accrual, recovery or return of bad debt reserve in current period
Provision for bad debts of the current period:
Unit: RMB
| Category | Opening balance | Changes in amount of the current period | Closing balance | |||
| Accrual | Withdrawal or write-back | Charge-off or write-off | Other | |||
| Group by aging | 554,292.55 | -132,722.32 | 421,570.23 | |||
| Total | 554,292.55 | -132,722.32 | 421,570.23 | |||
Among them, significant amount in bad debt provision written back or withdrawn in the current period:
None
5) Other receivables actually written off in the current period
None
6) Other receivables of the 5 highest closing balance by debtor
Unit: RMB
| Company name | Nature of payment | Closing balance | Aging | Ratio in the total closing balance of other receivables | Closing balance of bad debt provision |
| Company 1 | Current account | 1,699,645,091.75 | Within 1 year | 41.25% | |
| Company 2 | Current account | 673,601,919.69 | Within 1 year | 16.35% | |
| Company 3 | Current account | 614,333,151.79 | Within 1 year | 14.91% | |
| Company 4 | Current account | 500,000,000.00 | Within 1 year | 12.14% | |
| Company 5 | Current account | 130,000,000.00 | Over 3 years | 3.16% | |
| Total | 3,617,580,163.23 | 87.81% |
7) Reported under other receivables due to centralized management of funds
None
3. Long-term equity investments
Unit: RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Depreciation reserves | Book value | Book balance | Depreciation reserves | Book value | |
| Investment in subsidiaries | 8,602,917,083.52 | 8,602,917,083.52 | 8,536,527,729.83 | 8,536,527,729.83 | ||
| Investment in associated businesses and joint ventures | 576,207,714.95 | 576,207,714.95 | 589,873,101.81 | 589,873,101.81 | ||
| Total | 9,179,124,798.47 | 9,179,124,798.47 | 9,126,400,831.64 | 9,126,400,831.64 | ||
(1) Investment in subsidiaries
Unit: RMB
| Invested entity | Opening balance (book value) | Opening balance of impairment provision | Increase or decrease in the current period | Closing balance (book value) | Closing balance of impairment provision | |||
| Investment addition | Investment reduction | Provision for impairment | Other | |||||
| Weifang Goertek Electronics Co., Ltd. | 1,480,446,066.00 | 4,020,133.37 | 1,484,466,199.37 | |||||
| Weifang Goertek Trading Co., Ltd. | 50,791,528.30 | 342,337.51 | 51,133,865.81 | |||||
| Yishui Goertek Electronics Co., Ltd. | 30,000,000.00 | 30,000,000.00 | ||||||
| Yili Precision Manufacturing Co., Ltd. | 337,791,460.95 | 791,459.77 | 338,582,920.72 | |||||
| Goertek Optical Technology Co., Ltd. | 604,737,095.72 | 604,737,095.72 | ||||||
| Goertek Technology Co., Ltd. | 985,853,117.16 | 8,400,387.50 | 994,253,504.66 | |||||
| Beijing Goertek Technology Co., Ltd. | 54,576,813.63 | 1,724,815.84 | 56,301,629.47 | |||||
| Qingdao Goertek Acoustics Technology Co., Ltd. | 88,947,844.55 | 88,947,844.55 | ||||||
| Shenzhen Goertek Technology Co., Ltd. | 81,046,989.92 | 256,523.53 | 81,303,513.45 | |||||
| Shanghai Goertek Technology Co., Ltd. | 29,129,941.11 | 2,883,206.88 | 32,013,147.99 | |||||
| Nanjing Goertek Technology Co., Ltd. | 51,291,484.20 | 694,933.43 | 51,986,417.63 | |||||
| Weifang Lokomo Precision Industry Co., Ltd. | 52,058,798.90 | 390,419.71 | 52,449,218.61 | |||||
| Goertek Investment Co., Ltd. | 84,915,886.26 | 3,997,968.25 | 88,913,854.51 | |||||
| Invested entity | Opening balance (book value) | Opening balance of impairment provision | Increase or decrease in the current period | Closing balance (book value) | Closing balance of impairment provision | |||
| Investment addition | Investment reduction | Provision for impairment | Other | |||||
| Beijing Goertek Investment Management Co., Ltd. | 5,121,933.89 | 5,121,933.89 | ||||||
| Dongguan Yili Precision Manufacturing Co., Ltd. | 31,319,771.88 | 150,000,000.00 | 181,319,771.88 | |||||
| Goertek Vina Co., Ltd. | 247,634,379.61 | 247,634,379.61 | ||||||
| Goertek (Korea) Technology Inc. | 66,743,212.77 | 66,743,212.77 | ||||||
| Goertek Electronics, Inc. | 204,938,128.90 | 204,938,128.90 | ||||||
| Goertek Technology Taiwan Co., Ltd. | 129,098,963.28 | 129,098,963.28 | ||||||
| Goertek Technology Japan Co., Ltd. | 134,228,936.73 | 134,228,936.73 | ||||||
| Goertek Seiki Technology Co., Ltd. | 1,024,111.56 | 1,024,111.56 | ||||||
| Goertek Intelligence Technology Co., Ltd. | 354,885,167.15 | 942,256.51 | 355,827,423.66 | |||||
| Goertek Microelectronics Inc. | 842,719,493.75 | 842,719,493.75 | ||||||
| Beijing Goertek Microelectronics Co., Ltd. | 5,053,458.52 | 5,053,458.52 | ||||||
| Qingdao Goertek Microelectronics Research Institute Co., Ltd. | 460,436.04 | 460,436.04 | ||||||
| Qingdao Goertek Intelligent Sensor Co., Ltd. | 842,096.78 | 842,096.78 | ||||||
| Rongcheng Goertek Microelectronics Co., Ltd. | 524,895.84 | 524,895.84 | ||||||
| Invested entity | Opening balance (book value) | Opening balance of impairment provision | Increase or decrease in the current period | Closing balance (book value) | Closing balance of impairment provision | |||
| Investment addition | Investment reduction | Provision for impairment | Other | |||||
| Shanghai Goertek Microelectronics Co., Ltd. | 2,758,811.23 | 2,758,811.23 | ||||||
| Shenzhen Goertek Microelectronics Co., Ltd. | 1,206,995.30 | 1,206,995.30 | ||||||
| Weifang Goertek Microelectronics Co., Ltd. | 17,208,205.72 | 17,208,205.72 | ||||||
| Wuxi Goertek Microelectronics Co., Ltd. | 940,460.62 | 940,460.62 | ||||||
| Qingdao Goertek Commercial Factoring Co., Ltd. | 51,651,753.50 | 58,768.50 | 51,710,522.00 | |||||
| Rongcheng Goertek Technology Co., Ltd. | 2,104,657,890.33 | 1,449,480.26 | 2,106,107,370.59 | |||||
| Nanning Goertek Electronics Co., Ltd. | 80,185,548.43 | 33,461.13 | 80,219,009.56 | |||||
| Xi'an Goertek Electronic Technology Co., Ltd. | 8,836,051.30 | 456,008.35 | 9,292,059.65 | |||||
| Weifang High-tech Zone Goertek Education Center | 300,000.00 | 300,000.00 | ||||||
| Qingdao Resonance I Venture Capital Fund LP | 280,000,000.00 | 280,000,000.00 | ||||||
| Qingdao Goertek Horizons Technology Co., Ltd. | 30,000,000.00 | 921,338.33 | 30,921,338.33 | |||||
| Chongqing Goertek Auto Technology Co., Ltd. | 2,600,000.00 | 7,743,131.10 | 10,343,131.10 | |||||
| Invested entity | Opening balance (book value) | Opening balance of impairment provision | Increase or decrease in the current period | Closing balance (book value) | Closing balance of impairment provision | |||
| Investment addition | Investment reduction | Provision for impairment | Other | |||||
| Chengdu Goertek Technology Co., Ltd. | 5,239,665.20 | 5,239,665.20 | ||||||
| Qingdao Goertek Alpha Pixels Technology Co., Ltd. | 50,000,000.00 | 50,000,000.00 | ||||||
| Shanghai Goertek Technology Development Co., Ltd. | 6,000,000.00 | 6,000,000.00 | ||||||
| Xi'an Goertek Shijie Technology Co., Ltd. | 1,362,830.40 | 1,362,830.40 | ||||||
| Total | 8,536,527,729.83 | 247,709,125.57 | 181,319,771.88 | 8,602,917,083.52 | ||||
(2) Investment in associated businesses and joint ventures
Unit: RMB
| Invested entity | Opening balance (book value) | Opening balance of impairment provision | Increase or decrease in the current period | Closing balance (book value) | Closing balance of impairment provision | |||||||
| Investment addition | Investment reduction | Recognized investment gain and loss under equity method | Other comprehensive income adjustments | Other changes in equity | Cash dividends or profits declared | Provision for impairment | Other | |||||
| I. Joint Venture | ||||||||||||
| II. Affiliated enterprises | ||||||||||||
| Joint ventures | 589,873,101.81 | -14,691,875.13 | 436.41 | 1,026,051.86 | 576,207,714.95 | |||||||
| Sub-total | 589,873,101.81 | -14,691,875.13 | 436.41 | 1,026,051.86 | 576,207,714.95 | |||||||
| Total | 589,873,101.81 | -14,691,875.13 | 436.41 | 1,026,051.86 | 576,207,714.95 | |||||||
The recoverable amount is determined based on the net of fair value less disposal costs.? Applicable ? Not applicableThe recoverable amount is determined based on the present value of estimated future cash flow.? Applicable ? Not applicableReasons for significant discrepancies between the foregoing information and the information used in previous years' impairment testsor external information:
NoneReasons for significant discrepancies between the information used in the Company's previous years' impairment tests and the actualsituation of the yearNone
(3) Explanation of other matters
None
4. Operating revenue and cost of sales
Unit: RMB
| Item | 2024 | 2023 | ||
| Revenue | Cost of sales | Revenue | Cost of sales | |
| Main business | 18,993,488,747.47 | 14,632,725,631.61 | 20,835,240,359.16 | 17,348,440,379.48 |
| Other business | 5,848,049,331.50 | 4,933,739,714.84 | 7,926,650,258.39 | 6,992,953,710.46 |
| Total | 24,841,538,078.97 | 19,566,465,346.45 | 28,761,890,617.55 | 24,341,394,089.94 |
5. Investment income
Unit: RMB
| Item | 2024 | 2023 |
| Return on long-term equity investments measured by the equity method | -14,691,875.13 | -23,010,602.53 |
| Investment income from disposal of long-term equity investments | -74,786,971.88 | -183,130,911.21 |
| Investment income from disposal of financial assets held for trading | 26,973,005.40 | 96,188,704.20 |
| Dividend income from long-term equity investments of subsidiaries | 470,771,040.21 | 2,337,367,940.73 |
| Investment income from products such as certificates of deposits | 60,385,535.40 | 74,716,107.04 |
| Gains or losses arising from derecognized financial assets at amortized cost | -313,191.66 | |
| Income recognized at the termination of financial assets measured at amortized cost | -2,120,899.52 | |
| Other | 468,650,734.00 | 2,299,697,147.05 |
6. Others
None
XX. Supplementary Information
1. Statement of non-recurring profits and losses for the current period
? Applicable ? Not applicable
Unit: RMB
| Item | Amount | Explanation |
| Gains or losses from disposal of non-current assets | -85,999,752.59 | Mainly for the loss on scrapping fixed assets |
| Government grants included in the current gains and losses (except for those that are closely related to the normal business operations of the Company, comply with national policy regulations, are enjoyed according to established standards, and have a continuous impact on the Company's gains and losses) | 196,923,255.19 | Mainly special funds for enterprise innovation and development and other government subsidies |
| Gains and losses from changes in the fair value of financial assets and liabilities, and from the disposal of financial assets and liabilities, held by non-financial enterprises, except for effective hedging businesses related to the normal operating | 112,020,093.46 | Mainly for changes in fair value of equity investments held by the Company and the investment income from foreign exchange derivatives |
| business of the Company. | ||
| Other non-operating income and expenditures other than those mentioned above | 12,014,095.20 | |
| Other profit and loss items that meet the definition of non-recurring profit and loss | 62,609,433.16 | Mainly for investment income from products such as certificates of deposit |
| Less: Impact of income tax | 18,834,375.42 | |
| Impact of minority interests (after tax) | 6,894,099.59 | |
| Total | 271,838,649.41 | -- |
Details of other profit and loss items that meet the definition of non-recurring profit and loss:
? Applicable ? Not applicableMainly for investment income from products such as certificates of depositNote for the definition of non-recurring gains and losses set out in the No. 1 Explanatory Announcement on Information Disclosurefor Companies Issuance Their Securities to the Public - Non-recurring gains and losses, as recurring gains and losses.? Applicable ? Not applicable
2. Net assets income rate and earnings per share
| Profit during the reporting period | Weighted average return on net assets | Earnings per share | |
| Basic earnings per share (RMB / share) | Diluted earnings per share (RMB / share) | ||
| Net profit attributable to ordinary shareholders of the Company | 8.46% | 0.79 | 0.78 |
| Net profit attributable to ordinary shareholders of the Company after deducting non-recurring gains and losses | 7.60% | 0.71 | 0.70 |
3. Differences in accounting data under domestic and foreign accounting standards
(1) Differences in net profits and net assets in the financial reports disclosed pursuant to internationalaccounting standards and Chinese accounting standards at the same time? Applicable ? Not applicable
(2) Differences in net profits and net assets in the financial reports disclosed pursuant to foreign accountingstandards and Chinese accounting standards at the same time? Applicable ? Not applicable
(3) Explanation of reasons for differences in accounting data under domestic and foreign accountingstandards; if the data audited by an overseas audit firm is adjusted for differences, the name of the overseasfirm shall be indicated.
4. Others
None
| Goertek Inc. | |||
| Legal Representative: Jiang Bin | |||
| March 26, 2025 |